Recent comments in /f/wallstreetbets

DYTTIGAF t1_jdgxt5p wrote

Reply to comment by nyse125 in Fed Balance Sheet by Mega-Lithium

No. It's confidence in the currency that cannot remanufactured with policy statements.

Please document in the last 30 years when the Federal Reserves "toolkit" has reversed the dollars decline in purchasing power. You can submit 1 example (not hard).

The truth is you cannot. It's just one on acronym after another (QE #1-#4, Operation Twits, PPP supported check dispersonal, Corpirate Debt Purchading Normalization, etc).

The destruction of the currency will occur with a 25% decline (its the 1 to 100 leverage in the currency futures markets that would create the choas).

We shall find out soon. I personally give the Federal Reserve 60 days before price discovery in the currency markets concludes the Russian ruble, or Chinese yuan will offer a better store of value than the US Dollar.

We fund our national debt with short term sovereign debt products such as T-Bills and Notes. You have investors worldwide who are watching the principle destruction occurring on the balance sheets of the banks.

They're not stupid. Why would they roll over that debt for another 6 months to a year? They won't (resulting in a no bid at the debt auctions).

This is the real dilemma the Treasury is staring down tonight.

We shall see.

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nyse125 t1_jdgvzdf wrote

Reply to comment by DYTTIGAF in Fed Balance Sheet by Mega-Lithium

Unless the fed, for whatever reason, stop or cannot provide temporary liquidity then sure you can debate ifs and how's. The fact of the matter remains, BTFP is here to give temporary ease while their balance sheet should reduce a year from now.

Considering the fact that BTFP is a new isntallment in their toolkit, assumptions regarding this is nothing but a baseless conspiracy. US dollar can absolutely not be destroyed in this process because while BTFO is a deflationary process, as rate cuts kick in eventually everyone will conveniently forget about the possible problems this "would've" caused.

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DYTTIGAF t1_jdgv8tx wrote

Reply to comment by nyse125 in Fed Balance Sheet by Mega-Lithium

No. That would be the nationalization of the banking system for the $19 trillion sitting in deposits (if people lose confidence). You can only play this game for so long. The FDIC as of last week had $128 billion and the balance sheet of the Fed is at almost $10 trillion. This would make the US Dollar worthless.

The US Dollar would be crushed. We are at risk of losing Reserve Currency Status if this gets out of control.

It's the mentality the Fed can : lend, promise, backstop, and securitize their way out of this jam.

Remember in 2008 they had a balance sheet of less than $1 trillion. Now in 2023 it's $10 trillion.

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