Another look at the Federal Reserve’s panic in September 2019 Archived Message Posted by Gerard on November 2, 2019, 11:55 am, in reply to "Fed Reserve Interventions Suggest Significant Problems.." "Who provides the cash for this short-term lending? The lenders are their counterparts on the interbank market(2) or other financial institutions such as Money Market Funds.(3) From 16 September, there has been a crisis situation: banks financing themselves on the repo market found themselves facing abnormally high interest rates, the interbank market had almost dried up, a situation called credit crunch, in other words banks were not ready to lend one another cash even overnight. Other lenders such as Money Market Funds took advantage of the situation to demand very high returns. While the normal rate was 2%, lenders were demanding up to 10%. So the big banks knocked at the Fed’s door, asking it to substitute as a lender at rates they would consider normal, that is, about 2%. The Fed hesitated for a moment before massively intervening, in a highly uncertain climate bordering on panic,(4) by injecting over 50 billion dollars of liquidity on 17 September 2019.(5) Thus the Fed acted as a substitute for the markets. It is striking to note how, among finance commentators of both private and public media, none have pointed out that the markets, which are supposed to be self-regulating, do not actually function as they should. Indeed, the mainstream media, with their strong links to the world of banking and large investment funds, have remained silent about the fact that once again*, the public authorities are forced to come to the rescue of big banks and help the market to keep going. After having injected, on 17 September, 53 billion dollars into the banks, substituting for the interbank market and other private lenders, the Fed has made fresh injections of liquidity every day, bringing the amount from the second day on to a daily maximum of 75 billion dollars, then up again to a maximum of 100 billion dollars. On the date of writing, the Fed continues its daily interventions and has announced that it will continue to do so until 4 November at the earliest. (See the televised interview by the Bloomberg agency: https://www.bloomberg.com). In short, the crisis is still with us. The markets concerned have not returned to ‘normal’. The explanations put forward to justify the Fed’s interventions as ‘one-offs’ – such as a tax bill to be paid by banks at this time of year or the fluctuating price of petroleum due to the closure of two Saudi refineries– cannot explain a situation that has lasted for more than three weeks*. Further on we will see that the other explanation produced, namely that liquidity regulations are far too restrictive, is no more convincing but directly serves the interests of the big private banks*." Go to: https://mronline.org/2019/11/01/another-look-at-the-federal-reserves-panic-in-september-2019-and-solutions-to-the-crisis/ for full article. *Italics mine. Message Thread: Fed Reserve Interventions Suggest Significant Problems.. - Gerard November 2, 2019, 11:33 am Another look at the Federal Reserve’s panic in September 2019 - Gerard November 2, 2019, 11:55 am FYI #PublicOwnership - Gerard November 2, 2019, 12:27 pm No-One? Anyone actually read this? nm - Gerard November 3, 2019, 9:08 am I read it, G. Couldn't make head or tail of it, sorry. NOM - Rhisiart Gwilym November 3, 2019, 4:43 pm Imperialism.. - Gerard November 3, 2019, 8:07 pm Hmmphh, should be no "and" there..apologies.. nm - Gerard November 3, 2019, 8:08 pm   Searching