(the article has crypto spin/agenda but was reposted and quoted by several financial websites) https://cointelegraph.com/news/us-fed-to-print-425b-for-new-years-3-times-bitcoins-market-cap https://www.newyorkfed.org/markets/opolicy/operating_policy_191212 “ The United States central bank will inject at least $425 billion of nonexistent money into the economy by the middle of next month. In a statement released Dec. 11, the Federal Reserveconfirmed it would ramp up so-called repurchase, or “repo,” operations on key dates over the new year period. The time of year required extra assurances for banks, the Fed claims, with repo operations designed to support their day-to-day operations. “The Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has released the schedule of repurchase agreement (repo) operations for the monthly period from December 13, 2019 through January 14, 2020,” the statement reads. The Fed then confirms: “In accordance with the most recent FOMC directive, the Desk will conduct repo operations to ensure that the supply of reserves remains ample and to mitigate the risk of money market pressures around year end that could adversely affect policy implementation.” Repo offerings on Dec. 31 and Jan. 2 will be $150 billion. By the Jan. 14 deadline, the minimum the Fed expects to generate is $425 billion. “Everything’s fine” While common, such moves involve conjuring vast new liquidity based on zero backing — essentially money printing without physically printing any money. Critics, especially in Bitcoin (BTC) circles, have long highlighted the policy as an example of the failure of central banks to “manage” economies. The argument forms a central tenet of Saifedean Ammous’ popular book, “The Bitcoin Standard,” in which he argues that the fall of nations and empires stems from the fall of a currency that is not allowed to operate free of manipulation. Similar calls in favor of Bitcoin surfaced in September during a previous repo spike. Commenting on the most recent Fed announcement, Bitcoin advocate known as Rhythm on Twitter noted that $425 billion is over three times the size of Bitcoin’s market cap. “Everything is fine though,” he ironically summarized. “
The man behind the curtain, JP Morgan, withdrew liquidity forcing the Feds hand. They want lower reserve requirements. The Fed will allow lower reserve requirements in exchange for lending more to low income people. In the words of some famous posters here, yes this is indeed a prediction.
WTF does ‘Bitcoin’ have to do with the Fed exchanging very short term loans (aka Repo agreements) for US Sovereign Debt that the Banks post as collateral? At least if you hold a Treasury Note it’s not going to get stolen by some hacker.
Nothing. Other news sources simply didn’t summarize this information in a clear way and instead simply pointed to and quoted this article. I’m actually waiting for any other news source to clearly summarize the same info without referring to bitcoin.
Just imagine for a second that the US dollar was actually backed by something tangible, instead of just being a bunch of made up electronic numbers on a computer screen somewhere. Under such a scenario (where the currency was backed by something tangible), where would the Fed possibly get $500B dollars from in an emergency? Selling off national parks to the Saudis?
And what would that "something'" be? An arbitrarily mineral that you can't eat, drink, use for shelter, or do much else with whose practical functions are extremely limited and whose main value is decorative? That you're going to smelt into bars you move around from vault to vault and assign an arbitrary value to vis a vis useful things like food, shelter, transportation..... Oh, and the supply of this store of value is also increasing in a completely random manner based on how much is discovered in the ground? That "something"? Sounds like madness to me (and everyone else who has taken any econ courses).
Like Bitcoin ? And SIG is 100% correct - fundamental economics explains quite nicely how currencies are valued. And it has everything to do with intrinsic economic power, military power, and the ability to create wealth through innovation and to project that power through global markets. Which explains why about half the world’s commerce gets transacted in US Dollars - more if you include illicit activity because cartels and gangsters insist on $$$.
It is. GDP. You use them in exchange for any goods that you wish. Print too many dollars in relation to goods = dollar be a bad boy. Not enough dollars relative to goods = dollar be a good boy. There's a bunch more to it than that, but I want to go play video games. So much fun to shoot and kill people. One day I must try it in real life.