{"id":49531,"date":"2019-11-11T17:18:03","date_gmt":"2019-11-11T22:18:03","guid":{"rendered":"https:\/\/olduvai.ca\/?p=49531"},"modified":"2019-11-11T17:18:09","modified_gmt":"2019-11-11T22:18:09","slug":"is-the-mother-of-all-bubbles-about-to-pop","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=49531","title":{"rendered":"Is The \u2018Mother of all Bubbles\u2019 About to Pop?"},"content":{"rendered":"\n

Is The \u2018Mother of all Bubbles\u2019 About to Pop?<\/a><\/h3>\n\n\n\n

When the New York Federal Reserve began pumping billions of dollars a day into the repurchasing (repo) markets (the market banks use to make short-term loans to each other) in September, they said this would only be necessary for a few weeks. Yet, last Wednesday, almost two months after the Fed\u2019s initial intervention, the New York Federal Reserve pumped 62.5 billion dollars into the repo market.<\/p>\n\n\n\n

The New York Fed continues these emergency interventions to ensure \u201ccash shortages\u201d among banks don\u2019t ever again cause interest rates for overnight loans to rise to over 10 percent, well above the Fed\u2019s target rate.<\/p>\n\n\n\n

The Federal Reserve\u2019s bailout operations have increased its balance sheet by over 200 billion dollars since September. Investment advisor Michael Pento describes the Fed\u2019s recent actions as Quantitative Easing (QE) \u201con steroids.\u201d<\/p>\n\n\n\n

One cause of the repo market\u2019s sudden cash shortage was the large amount of debt instruments issued by the Treasury Department in late summer and early fall. Banks used resources they would normally devote to private sector lending and overnight loans to purchase these Treasury securities. This scenario will likely keep recurring as the Treasury Department will have to continue issuing new debt instruments to finance continuing increases in in government spending.<\/p>\n\n\n\n

Even though the federal deficit is already over one trillion dollars (and growing), President Trump and Congress have no interest in cutting spending, especially in an election year. Should he win reelection, President Trump is unlikely to reverse course and champion fiscal restraint. Instead, he will likely take his victory as a sign that the people support big federal budgets and huge deficits. None of the leading Democratic candidates are even pretending to care about the deficit. Instead they are proposing increasing spending by trillions on new government programs.<\/p>\n\n\n\n

 \u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Is The \u2018Mother of all Bubbles\u2019 About to Pop? When the New York Federal Reserve began pumping billions of dollars a day into the repurchasing (repo) markets (the market banks use to make short-term loans to each other) in September, they said this would only be necessary for a few weeks. Yet, last Wednesday, almost […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1806,195,6934,692,14830,3650],"class_list":["post-49531","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble","tag-debt","tag-repo-market","tag-ron-paul","tag-ron-paul-institute-for-peace-and-prosperity","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=49531"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49531\/revisions"}],"predecessor-version":[{"id":49532,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49531\/revisions\/49532"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=49531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=49531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=49531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}