Reverse Repos Finally Bottoming Out, Spare Dollar Tank Almost Empty

Last weekend's selloff freaked out enough Wall Street derivative paper pushers to the point that an emergency Fed rate cut was actually being discussed.

That was the big news, but behind the scenes, the scare helped propel the reverse repo spare dollar tank to new lows.

This is the final spare liquidity tank, and once it's finally emptied, Treasury bill auction funding is going to have to come directly from bank reserves, which are also used to fund overnight repos around $2 trillion a night.

You can't have your repos and fund your debt too, so a crisis is coming. It's unclear how gold and silver will perform once the crisis hits, but afterwards, they'll go up. Bigly.

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Arcadia Economics

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