A foreign central bank borrows Federal Reserve Notes ("US Dollars") from the Federal Reserve.
The foreign central bank now has US dollars and the FR has an IOU from the foreign central bank. Years later, the foreign central bank is supposed to pay back the IOU (basically, a loan).
The foreign central bank then lends these US dollars to insider buddies who own banks in that country so they have US dollars (think of Venezuela, where the currency is not very tradable on the world markets).
These banks then lend money to local companies in US dollars rather than the local currency.
The story is that it helps foreign countries get US dollars into their economy when they have a currency that is weak due to stupidity by their government, destroying their economy and their currency.
In reality, the Federal Reserve has never been audited in any meaningful way, so we don't know what those agreements really do or who they are with.
It could be done with any foreign central bank, even countries with good currencies.
It could be a good way to gain leverage over other countries ("you owe us a gazillion dollars, but we will let some payments slide if you require everyone to get the experimental vaxx").
It could be a good way to inflate the US dollar even more by flooding the world with US dollars, causing hyperinflation, and leading to a "reset" with a one world government currency.
The Federal Reserve is a private business, and only the federal government has constitutional authority to coin money.
One of the apes on /r/superstonk posted some good DD that the growth of reverse repos aren’t about not having enough liquidity, they’re due to a need for quality collateral. This is from the ballooning costs of the massive naked shorting of GME and other meme stocks. It could be an interesting week with GME going on the Russel 1000 which means loads of index funds are gonna buy it
Haven't had a chance to get over to superstonk of late, too busy trying to keep up here.
Was thinking of buying another share in GME, sounds like I had best be quick, or maybe that boat sailed already. Last of the big spenders, it would bring me to a total of 5 rocket tickets :)
Yes, I get that the dollar is Fucked, totally Cactus Rootus.
But what exactly is a "reverse repo"? Sounds to me a bit like someone being given their car back after it was repossessed for missing payments. Im sure that cant be right tho.
So you're saying the Aussie CB & others borrowed more than what they needed from the Fed & then lends it back to the Fed, so the Aussie CB collects interest on the portion lent back while the Fed collects interest on the portion not lent back?
Far out why not just payout that portion of the loan?
Someone posted this yesterday & there were lots of us non financial types asking what it means for your average Joe Blow. Unfortunately there were no answers any smooth brained ape could comprehend.
It sounds like a big deal, but I have no idea how or why, or how it could potentially effect us all....Hyperinflation maybe?
Personally Im trying to follow the financial shenanigans as best I can in order to see the big picture. Up until this year never bothered taking any notice of that world so am learning on the run, Im thinking Im not alone.
This is the same concept as the LIBOR scandal issue. Central banks need reserves vs lending ratio. Clearly the FED is in short supply and the Bank for International Settlements system is collapsing. They are opening the liquidity on a global scale to cover the fiat fractional reserve lending operations.
Why oh why would any bank want to do this? Who benefits other than the Fed who is collecting interest?
Only 2 reasons a central bank in a country with a strong currency would do this:
(1) Their currency is not really strong, they are on the verge of fuckupedness, and need a bailout.
(2) They are part of a scheme to push towards massive global liquidity for the ultimate purpose of crashing the system (and using that as an excuse to implement a new one).
A foreign central bank borrows Federal Reserve Notes ("US Dollars") from the Federal Reserve.
The foreign central bank now has US dollars and the FR has an IOU from the foreign central bank. Years later, the foreign central bank is supposed to pay back the IOU (basically, a loan).
The foreign central bank then lends these US dollars to insider buddies who own banks in that country so they have US dollars (think of Venezuela, where the currency is not very tradable on the world markets).
These banks then lend money to local companies in US dollars rather than the local currency.
The story is that it helps foreign countries get US dollars into their economy when they have a currency that is weak due to stupidity by their government, destroying their economy and their currency.
In reality, the Federal Reserve has never been audited in any meaningful way, so we don't know what those agreements really do or who they are with.
It could be done with any foreign central bank, even countries with good currencies.
It could be a good way to gain leverage over other countries ("you owe us a gazillion dollars, but we will let some payments slide if you require everyone to get the experimental vaxx").
It could be a good way to inflate the US dollar even more by flooding the world with US dollars, causing hyperinflation, and leading to a "reset" with a one world government currency.
The Federal Reserve is a private business, and only the federal government has constitutional authority to coin money.
It is a scam.
Thank you MAG768720. Now Im getting the gist.
Great reply, much appreciated.
Very nice explanation. I might add that it’s a clever way to delay inflation domestically, as it takes time for the USD to make it back to US economy
One of the apes on /r/superstonk posted some good DD that the growth of reverse repos aren’t about not having enough liquidity, they’re due to a need for quality collateral. This is from the ballooning costs of the massive naked shorting of GME and other meme stocks. It could be an interesting week with GME going on the Russel 1000 which means loads of index funds are gonna buy it
Haven't had a chance to get over to superstonk of late, too busy trying to keep up here.
Was thinking of buying another share in GME, sounds like I had best be quick, or maybe that boat sailed already. Last of the big spenders, it would bring me to a total of 5 rocket tickets :)
Thanks for the heads up :)
Moooooooooom, NoNameJames said a baaaaaaad woooooooord!!!!!
Yes, I get that the dollar is Fucked, totally Cactus Rootus.
But what exactly is a "reverse repo"? Sounds to me a bit like someone being given their car back after it was repossessed for missing payments. Im sure that cant be right tho.
So you're saying the Aussie CB & others borrowed more than what they needed from the Fed & then lends it back to the Fed, so the Aussie CB collects interest on the portion lent back while the Fed collects interest on the portion not lent back?
Far out why not just payout that portion of the loan?
Someone posted this yesterday & there were lots of us non financial types asking what it means for your average Joe Blow. Unfortunately there were no answers any smooth brained ape could comprehend.
It sounds like a big deal, but I have no idea how or why, or how it could potentially effect us all....Hyperinflation maybe?
Personally Im trying to follow the financial shenanigans as best I can in order to see the big picture. Up until this year never bothered taking any notice of that world so am learning on the run, Im thinking Im not alone.
Super short answer = more money printing
My plan is to hold gold, real estate and stocks.
There is zero chance of deflation.
At this point a financial reset is already baked into the cake. Let’s all pray that it’s the White Hat controlled reset and not the NWO reset
This is the same concept as the LIBOR scandal issue. Central banks need reserves vs lending ratio. Clearly the FED is in short supply and the Bank for International Settlements system is collapsing. They are opening the liquidity on a global scale to cover the fiat fractional reserve lending operations.
In short the US is in economic collapse.
I suggest looking up George Gammon or Lynette Zang on You Tube. They do a great job of explaining the FED and how it applies to you.
George Gammon is suing the FED for its business practices. I am sure he could use the support and recognition for this lawsuit.
Bolton, is that you?!
I have no idea who Bolton is, but I pray he has more of an idea about this than me :)
one of the biggest idiots Trump worked with https://duckduckgo.com/?q=john+bolton&ia=web
OK, have I got this correct?...
The Fed swaps USD with say the Australian Central Bank at the current exchange rate.
The Fed now has AU dollars that are questionably more stable than USD?
Australian Central bank auctions said USD to highest bidding Aussie bank, theoretically at a profit to the CB?
Then the CB collects interest from Aussie banks & at the end of the contract swaps the USD back to AUD & pays back the Fed with interest?
Why oh why would any bank want to do this? Who benefits other than the Fed who is collecting interest?
It sounds to me like shenanigans. Or have I completely mis understood?
You got it all right!
Remy will give you a nice education on this in a few funny videos: https://www.youtube.com/watch?v=PhgGixOLn_Q ( All I Want For Christmas Is....)
https://www.youtube.com/watch?v=EoS52fVtVQM (Raise the Debt Ceiling Rap)
https://www.youtube.com/watch?v=Q4TKTPv2hqQ (Twenty Trillion Reasons!)
Those were great! TY for introducing Remy to me.
Great stuff, thanks :)
Only 2 reasons a central bank in a country with a strong currency would do this:
(1) Their currency is not really strong, they are on the verge of fuckupedness, and need a bailout.
(2) They are part of a scheme to push towards massive global liquidity for the ultimate purpose of crashing the system (and using that as an excuse to implement a new one).
Is the coin shortage a part of this scheme?