[I want the USA back]

I need an explanation. I’m not an economist. Is this the government “creating” money and thus diluting the value of the dollar? Is the government creating inflation to inflate the numbers and give the illusion that the economy is expanding?

[buckalfa]

The text book definition is that the Fed repo program is a tool to influence short term interest rates. The Red buys securities to put more cash into banks keeping money loose and rates artificially low. Perhaps this event is to prevent the dreaded inverted yield curve.

[Freeport]

For a straight up repo, a bank gives another bank or the Federal Reserve U.S. or other country’s treasury notes that have not matured as collateral on a “short term loan”. Then the bank repays that loan with the interest and they get the notes back. The length of a repo loan is typically 24 hours, but as the article states, there are other lengths such as a 13-day loan period.

As to what’s going on, that’s my question as well. Is this truly banks not willing to lend to each other and the Fed forced to be the lender of last resort, or is there a long-term flight of capital out of the U.S. system underway.

The first explanation was that the September action was banks covering for corporate customers pulling cash to pay taxes, but that was three months ago. So something else is driving the repo spike now... and what that “something” else is has not been explained.

[ExSES]

As Alfred E. Neuman often quiped..., "What me worry?" The Fed Chairman Powell assures me that they are not in a QE posture now and everything is under control!

[rollo tomasi]

"I need an explanation."

In short, there are so many economic bubbles to keep afloat and prevent bursting into "all hell breaks loose" scenarios. The price discovery mechanism of the market is one of the biggest jokes mainly due to government spending, inflation rates in several industries (Academia, housing, medicine, etc...), constant "wars"/incursions that solve nothing, and poor economic planning by the voters over the last 90 or so years. Enjoy this credit/pension morphing into Ponzi schemes because the investment has been spent already/debt policy schemes because eventually, all house of cards implode.

[Rockingham]

On the net, it matters less than you think because the global demand for and supply of dollars are so vast and the US engages in routine dollar creation to meet that demand. My guess is that the US repo market is stressed because of imbalances in the international financial markets arising out of the US trade conflict with China and China’s economic problems and political uncertainty leading to capital flight and risk avoidance.

[maine-iac7]

” Is this the government “creating” money ...”

The FED is NOT a GOV’t operation - it’s the Rothschilds, Rockefellers etc

‘am I missing something?

[backwoods-engineer]

They are creating dollars out of nothing. Whether this “money” moves in the economy is what controls whether it actually devalues the dollar or not. Very few people know, I think.

[Toddsterpatriot]

Is this the government “creating” money and thus diluting the value of the dollar?

Yes.

Is the government creating inflation to inflate the numbers and give the illusion that the economy is expanding?

Real GDP numbers are adjusted for inflation.