Good evening.

I’ve been getting a lot of questions re: The Fed and QT.

Going to make this as simple as possible for everyone.

The Reverse Repo (RRF) is basically a slush fund where excess cash has been parked since QE 2020.

The Treasury has been using the RRF to fund its needs by issuing short term T-Bills.

The RRF is down to $500B from a peak of $2.5T.

When the RRF is drained, the Treasury needs to find new capital. It will do this by issuing longer dated Treasuries.

This will cause the banks to use their reserves.

There are currently $3.5T in bank reserves.

When bank reserves drop to $2.5T the Fed and Treasury get nervous.

Why?

Because they worry about another liquidity crisis like Sept 2019 when the overnight rates spiked when banks basically ran out of liquidity at the same time that the Treasury issued a pile of unexpected debt.

There are a number of reasons for this I won’t go into.

And so, when the RRF is drained or near drained, the Fed slows QT (selling the bonds they bought in 2020-2021 to add liquidity in the markets. This is also what helped create the excess slush fund of RRF).

And then, when the reserves hit $2.5T, QT ends.

Why?

The Fed cannot compete with the Treasury for liquidity at that point.

Because the last thing the Treasury can have is disfunction in a Treasury auction.

And so, QT ends.

And the next step will be?

QE.

More cowbell. More. slush fund.

Wheee.

Hope this helps. Have a great night.

Yep. That's what I do. I grazed through all my paddocks at the start of winter to delay having to feed hay as long as possible.

Now I need to give the fresh grass a bit of a head start before I start rotating the cattle for this season.

Just spent some time on WebMD because of my sore throat and discovered I probably have at least 3 kinds of cancer

Fed my last bale of hay this evening.

That means grazing season starts tomorrow.

The grass has just started growing. I would have liked to have another week worth of hay, but I do have one pasture with enough grass to graze now. That should buy enough time to let the other pastures grow some more.

Hopefully no drought this year.

#grownostr #beef #regenerative #proofofwork #tractor

Bitcoin taught me a lot about scarcity, but having close friends or family get life threateningly sick will reframe what scarcity really is.

The family and friends around us are perfectly scarce. Value them as such. 💎🧡

#nostr

Not yet. This one is open source..no fees. Was recommended by the guy from thesolomining company that builds those. Such an awsome guy..this unit is so well made..the stand flashes with light when active.. thing of a beauty...then he told me he was theater and concert lighting guy hahaha

The slogan that kills

#solomining #bitcoin #bitcoinmining

The Federal Government views it's citizens - their greatest asset to borrow against

And, when the loan comes due, your freedom and property will be seized

Got #Bitcoin?

GM to all the unvaccinated legends out there. Everybody else, good luck!

Hermosísima 🥰🥰🥰🥰

Yep! I first wrote this on my private facebook to let the normies see a glimpse of my journey, but liked what I wrote so I wanted to share it here too.

I'm not in bitcoin because I can get more dollars for it. I'm in it because it's real!

I wanna keep all my sats, but I also want a house at some point, so the higher bitcoin goes, the less of my stack do I need to give up for the house!

Wow, that is a well cultivated stand of happy right there! You're going out on top 😄

Tienes 🐕?