Federal Reserve DISASTER

Worried, remember that the required reserves are around $41.5Billion so in actuallity you should add that to the $90Billion number. I am often wrong and may be wrong about this but that says to me that they are actually around $142 Billion in the hole from where they should be.

While I'm thinking about it I've come across this over the weekend.Bank bail-outs to be kept secret

The Bank of England has imposed a permanent news blackout on its £50bn-plus plan to ease the credit crunch.........taxpayers will never know the names of the banks that have been supported through the special liquidity scheme

If I were in the UK and saw that, I'd assume that all banks were in danger of failing.

I'm keeping a close eye on banks solvency and am keeping more cash available than normal. I feel that despite what I'm hearing from the financial press, this credit-crunch/mortgage crises/commodities price increase is only getting started.

Someone from an economic discussion board I frequent, has started this site
Great American Cashout

Originally posted by For(Home)Country
reply to post by CPYKOmega

 

Sorry to go off topic, but CPYK is right. For being so close to the boarder, I feel almost no effect of the America's receding economy. House prices are climbing, yes, but because of demand, not interest rates. The construction economy is hot, and food is much cheaper here compared to the US, except gas prices are high. Minimum wage is going of to 8.50 CAD starting April, which is like 8.45 American, which indicates a steady inflation. National Deficit is at an all time low, and our water and air is clean. All this, bundled with an extremely open immigration policy is perfect for you guys to come up here. If you find the right work, there is no shortage (service industry and most manufacturing industry).

-Oh, and you don't have to worry about a draft up here. Oh I wish for Canada to have a nuclear weapons program....

Crazy talk - having millions of unemployed US citizens move to Canada makes zero sense. Want to see Canada's economy fail too? Well, THAT'S one way of doing it...

J.

Non-Borrowed Reserves represent the cash assets that Fed depository banks have on hand...either in their individual vaults, or on deposit in their Fed accounts. The negative NBR number represents the amount that banks must borrow from the Fed to remain solvent.

As of April 23, the banking system was short 90912-BB in reserves necessary to cover customer "check-able" deposits. This is the first time that NBR has gone negative since the Fed began keeping reserve records in 1959...hard to spin this as a positive...though some banking pundits are attempting to do just that. Rate cuts couldn't solve the liquidity issue, so the Fed' solution to this crisis was to create the TAF.

The TAF is a lending facility that allows banks to circumvent the "more" transparent Fed Discount Window...so the consensus is that banks are probably borrowing against less than prime collateral...in other words, from the "lender of last resort"...against weak assets for which there is no other market. Bernanke even refused to tell the congressional committee "publicly" what collateral he took on the books to back-stop Bear Stearns (he'd only submit it in writing).

Apparently the Fed is attempting to sterilize these infusions through the sale of treasuries...but at what point do they simply run out of cash and begin printing? The Fed is depleting it's own reserves, and in the process...destroying the integrity of it's balance sheet.