The Federal Reserve "pulled" about thirty billion dollars ($30 Billion) of available credit from its Bank Term Funding Program, and many people are saying this lack of liquidity for banks, is going to cause a "crash.."
Financial Gurus are sounding the alarm on social media:
🚨BREAKING NEWS🚨
— Mike Investing (@MrMikeInvesting) November 15, 2024
THE FEDERAL RESERVES BTFP DROPPED BY OVER $30B THIS WEEK WHICH LEAVES ONLY $26B LEFT
POWELL IS PULLING LIQUIDITY TO TRIGGER A CRISIS JUST LIKE 2020,ALSO COINCIDENTALLY THE $36T DEBT CEILING WILL HIT TOMORROW
WE ARE ABOUT TO EXPERIENCE A 1929 LIKE CRASH…$SPY pic.twitter.com/2lV6ZoEbkD
In response to the 2023 United States banking crisis in March 2023 involving multiple failures of American banks, in 2023 the United States government took extraordinary measures to mitigate fallout across the banking sector.
On March 12, the Federal Reserve created the Bank Term Funding Program (BTFP), an emergency lending program providing loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions that pledge U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.
The "Bank Term Funding Program" was designed to provide liquidity to financial institutions, following the collapse of Silicon Valley Bank and other bank failures. It was also created to reduce the risks associated with unrealized losses in the U.S. banking system, which totaled over $600 billion at the time of the program's launch.
Funded through the Deposit Insurance Fund, the program offers loans of up to one year to eligible borrowers who pledge as collateral certain types of securities including U.S. Treasuries, agency debt, and mortgage-backed securities.
Financial Gurus are saying that the federal reserve bank, "pulled" over half of the available credit in the Bank Term Funding Program and this, they say, will have the effect of putting massive stress on banks.Â
According to these financial people, SOME banks won't be able to cover cash withdrawals.  This is NOT because the banks don't have the funds, but because the bank's funds are locked-up in things like Treasury Notes. Little solace to a depositor who needs cash, now, or companies that need cash for things like payroll or inventory.
Some of these financial gurus are pointing out the very strange TIMING of the federal reserve's move: The days AFTER the November Election.  "It's almost as if they timed this, so that if the "wrong" candidate won the election, they could pull the rug out from the entire economy" said one financial guy.
It's important to see how the Federal Reserve pulls liquidity from the banking system to trigger a crisis.
— Financelot (@FinanceLancelot) October 5, 2024
Jan 2020 the Fed reduced emergency REPO by $110B (-44%) over 8 wks.
BTFP has been reduced by $29B (-29%) over 2 wks, targeting $0 on 6 Nov 2024... 1 day after the election. https://t.co/tupfUxBjAh pic.twitter.com/lL5Hm1hCMy
Other financial observers say that Federal Reserve Chairman, Jerome Powell, "handed Trump a ticking time bomb":
J Powell has handed Trump a ticking time bomb
— Porter Stansberry (@porterstansb) November 14, 2024
By prematurely cutting rates by 50 bps ahead of the election, even with inflation still running hot, the Fed has set the stage for an inflationary resurgence
The latest October inflation data released this morning confirms the… pic.twitter.com/SsYtXHgcAk
If bank's money is tied-up in Treasury Notes for a fixed term, and the federal reserve has now pulled credit from the Bank Term Funding Program, then how will banks meet their cash needs if the federal reserve won't give them the credit to get the cash from them?  Answer: They won't.
One rather blunt observer said "This whole thing is coming down. Soon. The fall guy is in place and setting up the scene. He is lining up the patsies and puffing up the patriot crowd. You ain't getting no Vaseline when this one goes in."
