"Once consumers start to spend, the banks will need to withdraw the funds they lent to the Fed through the RRP. " why is this true? so I spend money but thats just moving money around accounts in the banking system. The money is excess for the banks as they have no offsetting loan, its base money.
surely the reason the banks put the money with the fed is because its surplus to capital requirements.
However, I am just asking, I don't know. So my question is withdraw the funds, fine, but what do with the funds? I mean collectively its either in the banking system or with the fed.
You make good points. It is surplus to their capital requirements and money would just move around in accounts. The reason we would see a reversal of the rrp use would be new loans or margin calls.
When you say you think "this fall will be a wild one" are you referring to gold?
If so, I'm tempted to take profits from RW's recommendations. And then get back in after 30 days. But he's also always made the point things can move fast.
What I see coming is a red hot economy. People will be put to work, wages will be up, and the stock market will be on fire. I think SOG will be the place to be. If you already have a position, I wouldnt liquidate. Like you said, these things can move fast.
"Once consumers start to spend, the banks will need to withdraw the funds they lent to the Fed through the RRP. " why is this true? so I spend money but thats just moving money around accounts in the banking system. The money is excess for the banks as they have no offsetting loan, its base money.
surely the reason the banks put the money with the fed is because its surplus to capital requirements.
However, I am just asking, I don't know. So my question is withdraw the funds, fine, but what do with the funds? I mean collectively its either in the banking system or with the fed.
Any expansion appreciated!
You make good points. It is surplus to their capital requirements and money would just move around in accounts. The reason we would see a reversal of the rrp use would be new loans or margin calls.
When you say you think "this fall will be a wild one" are you referring to gold?
If so, I'm tempted to take profits from RW's recommendations. And then get back in after 30 days. But he's also always made the point things can move fast.
What I see coming is a red hot economy. People will be put to work, wages will be up, and the stock market will be on fire. I think SOG will be the place to be. If you already have a position, I wouldnt liquidate. Like you said, these things can move fast.