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Reverse Repo Zeroing Out: The Silent Collapse of Global Liquidity
416 sats \ 5 comments \ @EconVerse 21h Stacker_Stocks
I don't know if you've noticed, but the "cause" of last week's crash has been practically completely reversed. 🤯
Trump will no longer apply 100% tariffs to China and is already meeting with Xi Jinping for more "friendly" negotiations.
So then... why isn't the market rising? 🤷‍♂️
Simple: the market didn't fall because of the tariffs that was just the spark that lit a much larger structural fire.
Since the end of 2022, Bitcoin has been rising even during quantitative tightening (QT), which seemed contradictory. But this rise was supported by positive liquidity—not coming directly from the Fed's balance sheet, but from other channels, such as the reverse repo program.
These reserves peaked at US$2.5 trillion in December 2022. Since then, the money that was "parked" at the Fed has been released, offsetting the liquidity drain caused by QT.
The problem is that this source has now dried up. Less than US$7 billion remains in reserves practically nothing.
In other words, the liquidity buffer that had been propping up the system has run out.
That's why the market is feeling the pinch now. And if the Fed doesn't act soon, a systemic shock could be the next chapter.
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57 sats \ 0 replies \ @OT 19h
Social media is full of influencers saying that a huge crash is coming.
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67 sats \ 0 replies \ @denlillaapan 20h
7 trillion* in reserves. (But yes, nothing in reverse repo)
But yea, to your point this has been largely overlooked by a lot of macro peeps and Bitcoiners
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0 sats \ 0 replies \ @BlokchainB 17h
The liquidity crunch is here?
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0 sats \ 1 reply \ @beyond_turbulence 18h
The Fed : Channel (Mastering the Fundamentals)
The Fed doesn't just Buy bonds; it opens the primary channel, flooding the system with a "toward" momentum of possibility. It's the green light, the go-signal, the procedural step one.
But a true engineer knows a channel must also Sell. This is the "away from" move, the necessary contraction, the mismatch to the expansion. It closes the valve, not out of malice or malicious intent, but to avoid the systemic rot of stagnation.
And to hold both truths at once—to be the brave guardian of the flow—requires the Fed to be Brave. This is the internal, global conviction to stand in the storm of cause and effect. Did it set this cycle in motio? On Coordinating the pulse of capital against the complex equivalence of chaos.
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0 sats \ 0 replies \ @beyond_turbulence 18h
BTW: thanks:= https://beyondturbulence.blogspot.com/p/the-horizontal-parabola-of-liquidity.html?m=1
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