M2 Money StockWe are witnessing a Crisis on par with LTCM, similar to the Russian Bond collapse.
The Reverse Repo pool can be used in Net Effect to raise Rates.
"Net" as it has another insidious component to it - Money Markets will again come under duress as the DX moves below Par at 100 Basis.
Money Market Funds are seeing large inflows as Primary Institutions are telling Corporate Depositors to stop placing Liabilities on their Balance Sheets (Deposits are a Liability) - Interest Rates are relatively low for Money Market Accounts.
We are watching a liquidity crisis begin to unfold. Wells Fargo cutting off personal loans - banks will be in trouble beginning in August.
Loans are how Banks profit.
The moratorium of eviction and mortgage defaults is lifted on July 31st.
Defaults on loans are assured. Wells Fargo calling in all personal loans now in order to buffer the approaching defaults.
When cash in Banks is reduced - the ability for Banks to weather a series of defaults is impaired - the impairment only serves accelerates the liquidity crisis merely weeks away.
