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To: Sun Tzu who wrote (3198)	1/8/2022 8:35:30 AM
From: Real Man	Read Replies (1) \| Respond to of 10599

fred.stlouisfed.org it is the chart of reverse repos. So, Fed created more liquidity in 2020, but part of that liquidity effectively is coming back to sit at the Fed. Say, they increased monetary base from $4 billion to $8 billion. $2.2 billion of that got into the economy, 1.8 billion went back to the Fed earning 0.25%, so effectively this drains liquidity (Compared to what it would be without the reverse repos) Just FWIW. Fed started cranking up repos in the Summer of 2019 since money markets got short of cash. In response to CoVid 19 Fed flooded the system with liquidity, now the liquidity is getting drained by Fed primary dealers. This is a sell signal for the everything asset bubble. It signals that a liquidity drain is very likely future course of action at the Fed that will follow the current increased tapering (reduced purchases) … until something breaks and they flood the system with liquidity again. I am watching if they dare to do so, inflation being where it is. The Canadian central bank never printed In response to 2008, but they increased the base 5 fold responding to CoVid 19. Now draining it. You can bet they will do more reverse repos when the Fed raises rates. Risk free income.