Nonprofit publication DCReport points out a recent pattern of massive cash infusions by the NY Federal Reserve into banks.
The concern here is not that the Fed can, and from time to time does, infuse banks with cash to cover shortfalls. It does this through a mechanism called a Repo in which the bank puts up collateral to cover the cash infusion. The rules include a sophisticated shield from federal Bankruptcy Court filings and with super low interest rates.
The issue is that after five years and three months with virtually no such cash infusions there’s suddenly a spate of them, three of them gigantic.
The Fed in New York has removed limits on the amount of cash it will provide the banking industry, although it is limiting individual banks to between $80 billion and $240 billion per day, depending on how you read its announcement.
Add the fact that the Chicago Mercantile Exchange, after reviewing silver and gold market volatility, tightened up on speculation in silver and gold and these are clear early warning signs of trouble.
The last time we saw big cash shortfalls on Wall Street we saw the collapse of the economy in 2008. By some measures the Great Recession was more damaging and more enduring in the harm it caused than the Great Recession that began in 1929.
I'll say here that Johnston is one of the most careful, thorough reporters I've ever seen. But because he writes stories the corporate media would rather ignore, he's been pretty much blackballed by what I call "hot" media -- TV. All these stories we see about Trump's grift and criminal tendencies? Johnston wrote in depth about Trump's affiliation with the mob in Atlantic City, and his big-money grifting. No one wanted to hear about it.
