YEAR END LIQUIDITY CRISIS: Quantitative Easing and Repo Market Explained

First, this video is not with the intention to scare anyone. I also and not making a recommendation to do anything with your financial assets. We have been through multiple, massive quantitative easing programs over the last decade and it appears there’s a good chance we could be headed for another one soon. Practically, it could be argued the Fed is participating in one already, but they refuse to call it that.

The market was largely caught off guard in September when liquidity issues caused the Fed to intervene in the overnight Repo Market. This was discussed as a temporary measure to keep banks solvent.

Fast forward a few months later and the Fed is not only still having to intervene, they have increased their participation by hundreds of billions of dollars.

This is expected to continue through early 2020.

My attempt in this video is to inform those interested in what’s going on a basis with which to begin further research. These are very complicated issues and most of the analysis I’ve seen has begun with a premise that the reader is well versed in macroeconomics.

By no means was I attempting to encapsulate the full scope of the issues and all nuances in a 5 plus minute video. This is only meant to be a very high level introduction as I expect it will be in the news more soon.

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Some of my favorite books:
Freakonomics – Levitt & Dubier https://amzn.to/2MDKJU4
Applied Economics: Thinking Beyond Stage One – Thomas Sowell https://amzn.to/2VDVl9u
Capitalism and Freedom – Milton Friedman – https://amzn.to/33vMZU8
The Intelligent Investor – Benjamin Graham https://amzn.to/2Bbrn37
Liar’s Poker – Michael Lewis – https://amzn.to/2IP4IxS

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The information discussed on this channel is for educational and entertainment purposes only. It should not be considered advice. Please do your own research and I encourage you to seek professional tax, legal, and financial advisors, before taking any actions or making decisions.

#quantitativeeasing #repomarket #fed

17 thoughts on “YEAR END LIQUIDITY CRISIS: Quantitative Easing and Repo Market Explained”

  1. Thanks for watching! I attempted to pair this down to as basic as possible so a lot of nuance is missed, but hopefully this can be an intro if you are new to the subject and want to learn more.

  2. Would this mean its a good idea to invest in Real Estate since it appears to me asset prices will inflate as result of this Massive liquidity Injection??? I am just trying to understand the short term and long term effects of this on the markets. Particularly Real Estate.

  3. Glad to see the algorithm showed you some love ❤️ hear. Your videos are hitting a new level! Glad to see the growth!! Great explanation!

  4. The money will freeze up. The banks will stop lending money. Their only option will be "On Demand Liquidity" ! With " a Level Playing field"

  5. I find myself taking sides with the bears in the market. That doesn't mean I would be surprised to see the market hit 35k. I will just be even less surprised to see it hit 15k or less. People are mad about wealth inequality, yet they have no idea what causes it. Even worse they are to lazy to research it.

  6. There is no repo crisis. The Fed is going to print itself rich and print you poor. That simple. They will own everything, including you.

  7. Michael Patterson

    Which means the fed, has no rules, so this flies in the face of capitolism, democracy, and America, which makes our constuition a joke !

  8. Time to buy more physical silver and cryptos. Gold won't hurt if you can afford it. Silver is where it will be at though. Expect silver to hit over 1k easily once this collapse begins.

  9. Hidden Freedom Investing

    Congrats on 1K. I think it's crazy we are talking QE already. Not even in a recession. Remember operation twist?

  10. MINDS in Motion

    Thanks for sharing the info. Very new to me but I will be paying attention to the economy and Fed through the rest of 2019.

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