(Zero Hedge)—Bank reserves at The Fed rose considerably last week expanding The Fed’s balance sheet by the most since the SVB crisis last March – as usage of The Fed’s BTFP bank-bailout facility pushed to a new record high (amid increasing arbitrage flows).
But, after four straight weeks of inflows, seasonally-adjusted bank deposits saw $23.3BN outflows in the first week of 2024…
And, on a non-seasonally-adjusted basis, deposits also saw an outflow (-$33.7BN) after five weeks in a row of inflows (NSA)…
Which means that while money-market funds hit a new record high, bank deposits did pull back a little (despite the drain in RRP filling the liquidity gap)…
Excluding foreign bank flows, domestic banks saw deposit outflows of just over $40BN (SA and NSA) – the first in 5 weeks…
Large banks dominated that deposit outflow (Large -$39.9BN, Small -$347MN)…
On the other side of the ledger, Large bank loan volumes tumbled (-$16.6BN) for the 5th week in row (small bank loan volume rose $4.3BN)…
The Fed’s reverse repo facility is draining fast (faster each week), getting closer and closer to zero…
…at which point reserves get yanked, which mean huge deposit flight.
And the embarrassing surge in usage of The Fed’s BTFP for free-money-arbitrage…
…will make it hard for The Fed to defend leaving the facility open after March when its “temporary” nature is supposed to expire.
“In justifying the generous terms of the original program, the Fed cited the ‘unusual and exigent’ market conditions facing the banking industry following last spring’s deposit runs,” Wrightson ICAP economist Lou Crandall wrote in a note to clients.
“It would be difficult to defend a renewal in today’s more normal environment.”
Which means, as we pointed out earlier in the week, “March will be lit”…
March will be lit:
1. Reverse repo ends
2. BTFP expires
3. Fed cuts (allegedly)
4. QT ends (allegedly)— zerohedge (@zerohedge) January 8, 2024
Because without the help of The Fed’s BTFP, the regional banking crisis is back bigly (red line), and large bank cash needs a home – green line – like picking up a small bank from the FDIC…
And now you know why The Fed will cut rates in March – no matter what jobs or inflation is doing.
At Last, a Company With Integrity in the Gold IRA Industry
For several years, I’ve been vetting out precious metals companies in search of the best. I believe in gold and silver but it’s hard to find integrity in the Gold IRA industry. The vast majority operate with shady tactics and gigantic spreads that take advantage of Americans who simply want to protect their life’s savings.
I’ve found a handful that I like and I’ve worked with some of them. By no means would I “unrecommend” them because, again, I vetted them out and found them to be above the fold. Unfortunately, it isn’t hard to be better than the rest when the rest are so darn awful.
After years of searching, I finally found a company that truly operates with integrity. Augusta Precious Metals has three important attributes that set them far above the competition:
- Non-Commissioned Sales Team: I cannot stress how important and unique this is. With just about every other company in the Gold IRA industry, the sales teams make commission from every account they open. This means they steer their clients toward the gold and silver products with the highest commission. With Augusta Precious Metals, the team is solely focused on putting the best gold and silver for their clients into their IRA. They get paid to serve the best interests of the Gold IRA client, NOT their own commission pay.
- Incredibly Low Fees: Most Americans would be shocked if they knew the spread other Gold IRA companies charge. Augusta charges just 5% versus up to 45% elsewhere.
- No Pressure, No Gimmicks: There’s an understanding among most in the Gold IRA industry that fear and pressure is the way to go. Augusta Precious Metals takes a sober approach when working with clients because they hold integrity in the highest possible regard. This is why they don’t offer gimmicks like “free” or “bonus” silver. It’s also why they do not apply pressure tactics to get quick sales. Their educational and transparent approach to doing business is exceedingly rare in the Gold IRA industry.
Reach out to Augusta Precious Metals to learn more about protecting your wealth and retirement with physical precious metals.
