FED Prints 12.7 Million Bitcoin Worth as Repo Bailout Intensifies

The financial dominoes are stacked and seem ready to fall. US Federal Reserve banking bailouts are intensifying as the central bank adds the equivalent of 12.7 million bitcoin to the financial system this week.

YOU CAN’T PRINT BITCOIN

The New York FED added a whopping $111.9 billion to financial markets this week which is the equivalent of 12.7 million BTC. According to the WSJ, the intervention came in two parts; overnight repurchase agreements totaling $76.9 billion, and a 14 day repo totaling $34.9 billion.

Crypto industry observer ‘Rhythm Trader’ didn’t miss the irony;

The Federal Reserve had to loan banks the equivalent of 12,700,000 bitcoin last night to stabilize the financial system.

— Rhythm (@Rhythmtrader) November 13, 2019

These repo interventions take in Treasury and mortgage securities from banks in what is effectively a short-term loan of central bank cash, collateralized by the bonds. The aim is to ensure that the financial system has enough liquidity and that short-term borrowing rates remain under control.

The report added that the FED is also buying Treasury bills to increase the size of its balance sheet and to add permanent liquidity to the financial system. These repurchase agreements have been going on this year since the financial system started springing leaks in September.

The situation arises when piles of cash and pools of securities meet, resulting in more than $3 trillion in debt being financed each day. The banks are clearly running low on cash reserves and the current repo market mess is a sign that the banking system lacks the buffers needed in times of turmoil.

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