Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
US Coronavirus Infections & Deaths Trend Trajectory - How Bad Will it Get? - 2nd Apr 20
Silver Looks Bearish Short to Medium Term - 2nd Apr 20
Mickey Fulp: 'Never Let a Good Crisis Go to Waste' - 2nd Apr 20
Stock Market Selloff Structure Explained – Fibonacci On Deck - 2nd Apr 20
COVID-19 FINANCIAL LOCKDOWN: Can PAYPAL Be Trusted to Handle US $1200 Stimulus Payments? - 2nd Apr 20
Day in the Life of Coronavirus LOCKDOWN - Sheffield, UK - 2nd Apr 20
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Illiquidity & Gold And Silver In The End Game

Commodities / Gold & Silver 2019 Nov 11, 2019 - 12:42 PM GMT

By: Darryl_R_Schoon

Commodities

the financial system experienced some serious liquidity shortages in August 2007, and the Fed injected funds to help keep financial markets operating effectively so that they would continue to support ongoing economic activity
Federal Reserve Bank of San Francisco, August 2007

In August 2007, a credit crunch swept global markets forcing central banks to provide billions in emergency liquidity to ensure markets remained functioning. Despite the emergency infusion, financial markets and investment banks collapsed one year later in the greatest financial crisis since the 1929 stock market crash and the Great Depression of the 1930s.


The financial market turmoil in 2007 and 2008 has led to the most severe repercussions on the real economy…money market participants had become reluctant to lend to each otherRepurchase agreements, or “repos,” allow market participants to obtain collateralized funding by selling their own [and/or their clients’] securities and agreeing to repurchase them when the loan matures.
Deciphering the liquidity and credit crunch 2007-2008, Markus K. Brunnermeir, Princeton University, 2009

The repo market is, in fact, the bankers’ pawnshop, where banks—and, now, money market and hedge funds—in need of quick cash can pawn their (or their clients’) securities when they need quick overnight loans to meet cash obligations the next day.


Illustration by Martha Schoon

 

SEPTEMBER 2019 - THE RETURN OF THE REPO CRISIS
September's repo operations on September 17th were the first from the Fed since the 2008 financial crisis, and marked another government action meant to relieve pressure on the nation's economy.
Business Insider, September 26, 2019


The Fed has been forced to provide hundreds of billions of dollars in emergency liquidity to keep overnight repo rates from spiking since September 17th when they reached 8.5 %, i.e. the Fed’s target rate is 2 %.

Had the New York Fed not stepped in to offer a $75 billion injection on Sept. 17 and repeated its operations daily since then, trouble in repo could’ve spread and caused tighter credit conditions elsewhere,
Gennadiy Goldberg, TD Securities senior rates strategist, Bloomberg News, October 1, 2019
Of the Fed’s serial repo interventions, George Selgin wrote, "perfect storm" is not the right metaphor, since such a storm is a freak event that's unlikely to be repeated. What happened in the repo market is, in contrast, quite likely to repeat itself, and might be repeating itself as I write this were the Fed not repeatedly offering fresh reserves to the money market. Perhaps "climate change" is more like it.
Reflections on the Repo-Market Imbroglio, October 3, 2019

On October 4th, Reuters noted: The New York Federal Reserve will continue to boost liquidity in money markets into November... The bank will offer daily repurchase agreement, or repo operations, offering at least $75 billion a day in daily cash injections through November 4,

On November 5th, the Wall Street Journal reported the New York Fed had added permanent liquidity to the repo markets by purchasing more than $42 billion in Treasuries in addition to open-ended interventions.
New York Fed Adds $102.14 billion to Markets, Buys More Treasury Bills

-----------------------------------

On September 17th, the financial system suffered a severe and inexplicable setback and was sent to urgent care. There, monetary specialists recommended a massive injection of liquidity to bring rapidly rising indicators of systemic stress back down to normal.

The specialists soon discovered the financial system was in need of even more liquidity and announced the massive daily injections of liquidity involving hundreds of billions of dollars would continue through October 4th.

On October 4th, they announced the injections would continue for one more month. On November 5th, it was announced liquidity injections would continue perhaps ad infinitum and some would become permanent.

Throughout the crisis, the Fed has issued explanations regarding possible causes for the unexpected bout of severe systemic distress. Many observers found the Fed’s explanations to be confusing, inadequate and, perhaps, intentionally obfuscatory.

Some believe the underlying conditions are, in fact, fatal, that the temporary stay in urgent care will be followed not by a return to health, but by hospice. Some even suspect the financial system is already on life-support and has artificially been kept alive since 2008 by a reinsurance company that would be bankrupted by the historic death benefit due at its demise.

With no viable alternative, the reinsurance company has clearly opted to pay for the increasingly expensive end-of-life care the financial system demands…until it can’t.

PROFESSOR ANTAL E. FEKTE, SANDEEP JAITLY AND THE ARMAGEDDON ALERT

I have had the pleasure and honor of knowing Professor Antal E. Fekete for twenty years. A monetary scientist by nature and a mathematician by training, Professor Fekete’s understanding of gold and money is perhaps more critically relevant today than at any other time in history.

It was Professor Fekete who introduced the idea of gold backwardation after having bought a seat on the Winnipeg Commodity Exchange (on a professor’s salary) in 1972 to observe how the world’s first futures market in gold would operate.

It was from this unique vantage that Professor Fekete saw the importance of the gold basis in signaling when fiat capital markets might implode—A POINT WHICH WE ARE NOW APPROACHING—should gold not be reintroduced into today’s increasingly unstable monetary system.

Sandeep Jaitly, like Professor Fekete, a mathematician, in addition to then being a London fund manager and expert in gold and silver derivatives, was introduced to the Mengerian school of Austrian economics by Professor Fekete.

 In 2010, Jaitly made a seminal contribution to Professor Fekete’s study of the gold basis with his concept of the co-basis, a contribution so important Professor Fekete called it “the Armageddon Alert”.

I interviewed Professor Fekete and Sandeep Jaitly on the co-basis and Armageddon alert at Professor Fekete’s Gold Standard University in Hungary in March 2010., see https://www.youtube.com/watch?v=rFTPHqQzDg8,

 


The Gold Basis as a Trading Tool and Armageddon Alert with Sandeep Jaitly

On April 4 & 5, 2020, Sandeep Jaitly, I, and others will be speaking on the topic Money: Rock, Paper, Scissors to be held at the Royal School of Mines at Imperial College in London. To register, see https://purelytheoreticalresearch.com/register.php.

These are most interesting times. They are about to become even more interesting. Join us in London.

Buy gold, buy silver, have faith.

By Darryl Robert Schoon
www.drschoon.com

About Darryl Robert Schoon
In college, I majored in political science with a focus on East Asia (B.A. University of California at Davis, 1966). My in-depth study of economics did not occur until much later.

In the 1990s, I became curious about the Great Depression and in the course of my study, I realized that most of my preconceptions about money and the economy were just that - preconceptions. I, like most others, did not really understand the nature of money and the economy. Now, I have some insights and answers about these critical matters.

In October 2005, Marshall Thurber, a close friend from law school convened The Positive Deviant Network (the PDN), a group of individuals whom Marshall believed to be "out-of-the-box" thinkers and I was asked to join. The PDN became a major catalyst in my writings on economic issues.

When I discovered others in the PDN shared my concerns about the US economy, I began writing down my thoughts. In March 2007 I presented my findings to the Positive Deviant Network in the form of an in-depth 148- page analysis, " How to Survive the Crisis and Prosper In The Process. "

The reception to my presentation, though controversial, generated a significant amount of interest; and in May 2007, "How To Survive The Crisis And Prosper In The Process" was made available at www.survivethecrisis.com and I began writing articles on economic issues.

The interest in the book and my writings has been gratifying. During its first two months, www.survivethecrisis.com was accessed by over 10,000 viewers from 93 countries. Clearly, we had struck a chord and www.drschoon.com , has been created to address this interest.

Darryl R Schoon Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules