Fed Drains $1.9 Trillion in Liquidity from Market via Overnight Reverse Repos

by Wolf Richter

Banks unloaded cash today for quarter-end window dressing. Money markets funds are biggest counterparties, Fidelity, Vanguard, Blackrock on top.

By Wolf Richter for WOLF STREET.

The New York Fed disclosed today that its overnight reverse repos (RRPs) spiked by $208 billion from yesterday, to a record $1.904 trillion. With these RRPs, the Fed took in $1.9 trillion in cash from 103 counterparties, and in exchange handed out Treasury securities, temporarily draining $1.9 trillion in liquidity from the market and financial system.

The RRPs mature on Monday, January 3, when the Fed gets its securities back and counterparties get their cash back. Then they’ll engage in another round of RRPs. Today’s RRPs replaced $1.70 trillion in RRPs from yesterday that matured and were unwound this morning.

Why Commodities Could Absolutely Soar in the Next Decade

By Dan Ferris

Stocks have been the best way for most folks to build real wealth with their savings over the long term...

Since the day before I was born, the S&P 500 has risen annually by an average of 7.2%. It doesn't sound like much, but it's a great return if you can keep it up for 60 years.

Every $10,000 invested 60 years ago is worth about $640,000 today. That's not bad for doing absolutely nothing for 60 years... though I must admit that someone probably doesn't have a lot of capital on hand the day they're born.

My point is... equities are near all-time-high valuations today, and anybody who has held them for decades knows they've been a tremendous long-term investment.

Get in Crash Positions

Everyone with some gray in their ponytails knows the stock market has ticked every box for a bubble top, so everybody get in crash positions.

Let’s run through the requirements for a bubble top:

1. Retail investors (i.e., dumb money) are all in and buying the dip with absolute confidence. As the gray-ponytail traders know, there are many moving parts to the retail dumb money going all in:

— The pain of the last bubble bursting has finally faded and been replaced by greed as retail punters watch everyone else mint fortunes by buying the dip and gambling with abandon at the casino’s trendy tables: crypto, NFTs, Mega-Tech, EVs, uranium, etc.

— Prudence and caution (i.e., holding cash in low-risk accounts) are thrown to the wind as the more money you put into the bet, the bigger the rewards

Golden Alpha

The beautiful thing about the stock market is that there is a never-ending source of opportunity.

Trillions of dollars are constantly on the hunt for one thing: alpha.

Alpha is known as the return of a portfolio over a benchmark.

Searching for the next source of alpha can lead to massive profit windfalls for hedge fund managers and their clients.

These sources are exploited as fast as possible and the investment strategies which reap this alpha are treated like wartime trade secrets.

Today the stock markets are supposed to be efficient.

This means that stock prices accurately reflect publicly available information.

Sometimes, however, there are exceptions.

When these exceptions last for long periods of time, they are known as market anomalies.

The “January Effect” is a Market Anomaly

Money Printing Gone Off the Rails – James Turk

By Greg Hunter’s USAWatchdog.com 

Renowned gold expert James Turk says, “Federal Reserve money printing has gone off the rails, and they are in a situation of inflate or die.”

Inflation is not the only problem because as the money loses buying power, the general public loses liberty.  In Turk’s new book “Money and Liberty,” he lays out a direct link between sound quality money and liberty.  What we have now is basically increasing inflation, or a decrease in the quality of money, and increasing tyranny.  Just look at what has been happening with the CV19 pandemic.  Turk explains, “In the system that we have, in order to make it work, you need inflation and regimentation.  When you have regimentation, that means cutting back on liberty. . . .

Bitcoin Touches New Milestone With 90% of Total Supply Mined

Ninety percent of all bitcoins have been mined as of Monday morning, according to data from blockchain tracker Blockchain.com. The feat means 18.89 million bitcoins – of a maximum of 21 million – are now on the open market.

Reaching the milestone took nearly 12 years since the first bitcoins were mined on Jan. 9, 2009. However, the remaining supply is not expected to be mined until February 2140, based on network activity estimates and Bitcoin’s halving schedules.

Prices have mirrored the increasing supply as demand for newer bitcoin heats up. The asset exchanged hands for less than $0.10 when 10% of the supply was mined in early 2010, and hovered at $7.50 when 50% of the supply was mined in December 2012. As of press time, bitcoin trades at over $49,000, having declined 28% from its peak of $69,000 earlier this year, as per data from CoinGecko.