FED is going to realign FED policy with the needs of the United States. No longer going to be the Central Bank of the World the way we were under Bernanke and Yellen.

because there's no appetite for that $6.5 trillion dollars.   Tom Luongo

I just did @ThomasMullen's show. look for it soon.
Tomorrow I'm doing Mel K's show, i'll post these when they happen.@AroundTheEmpire dropped our latest chat as well   https://t.co/RxAas0okko

— Tom Luongo (#2ndAmendmentAir) (@TFL1728) July 13, 2022

33:00  They had to flood some money into the Repos.  This is 6 months before COVID, so September 2019?   JP Morgan started the Repo Crisis, I think, on purpose because it put a countdown timer on a sovereign debt crisis in Europe because Europe was deteriorating because they couldn't go get dollars because none of the New York banks wouldn't do business with them anymore.  It was the beginning of the split between Europe and American banks.  And that persisted.  None of the American banks would repo--to take as collateral--any American debt.  That meant that the ECB was forced to amplify all of its QE programs and shuffle deck chairs around the Titanic.  

This is Episode 263 from Around The Empire, dated 7/12/2022, hosted by Joanne Leon. 

For legit reasons, right . . . ?  

Yeah, who would want that stuff?  Remember, the ECB has been at negative interest rates.  For legitimate reasons, right, why would I want to buy a 5-year German bond at negative .05%?   Why would I want to buy some massively overpriced German bund?  Or some massively over-valued Italian bond or Greek debt?  Really?  This stuff is all trading at a premium to U.S. debt.  It's all garbage.  It's all toxic.  It's all worthless.  If it actually all hit the market at once it would go bidless.  The ECB is functionally bankrupt.  What we're living through right now is, that the TLDR on this is the ECB is functionally bankrupt.  The European banking system is functionally bankrupt.  And now the FED is going "Yeah, we're going to prove it to everybody that the ECB is functionally bankrupt.  And we're not going to allow them to take us down at the same time.  We're going to realign FED policy with the needs of the United States.  

35:11  We are no longer the Central Bank of the World the way we were under Bernanke and Yellen, bailing everybody out.  We are the Central Bank of the United States, which is exactly what Powell said a month before he raised . . . he started stealthy tightening a year ago today at a major central bankers' conference.  Where Christine Lagarde stood up there and announced to the world that "we were going to coordinate central bank policy to fight climate change," and Jerome Powell stood up and said, "I won't."  I have a dual mandate: stable prices and full employment.  I work for the United States people, and Lagarde lost her mind and yelled at him.  And he doesn't say that if he doesn't have the backing of his banking sector. 

36:09  If he doesn't have the shareholders and the New York Fed having his back, he doesn't say that.  That was a month before June 2021.  Now, in the interim, we have this COVID thing and all the governments got together and mandated through congress their various legislatures to print trillions of dollars, but notice, something that Peter Boockvar [Episode #96, February 11, 2022] brought up to me, well, yeah, the Fed printed up $6.5 trillion.  The ECB only printed $650 billion.  Again feeding this argument that the Euro is a better currency than the dollar because there's no appetite for that $6.5 trillion dollars that the FED was forced to monetize under COVID.  It's also the recipe for you're going to wind up with inflation a year after you open an economy back up.  So what Powell did very astutely, and I'm going to say, very skillfully, on the day that Biden and Putin are delaying WWIII for another year, I'm going to raise the rate on the payout rate on the standing reverse repo contracts to 5 basis points above the FED's fund rate.  So I'm creating a positive yield spread.  It's only .05%, but it's a positive yield spread, and markets are so frickin' starved for yield that they'll take that .05 basis points.  They were so starved for yield that the standing reverse repo facility balance went from $450 billion to $1.7 trillion by Jackson Hole in September, removing $1.3 trillion dollars of base money from the off-shore dollar system.  

38:50  What is the Reverse Repo?