Repo meltdown shows budget deficit has limits

BloombergOpinion/Brian Chapatta

“Ballooning Treasury auctions have placed a heavy burden on the financial system, forcing the Fed’s hand.”

USAGOLD note:  As of a few days ago, the addition to the national debt for fiscal year 2019 went over the $1 trillion mark. “[T]he amount of U.S. Treasury securities outstanding,” says Chapatta, “has roughly tripled since the financial crisis.” That’s a large load to carry and its weight is making itself known in the overnight repo market where banks scramble for liquidity.

Bar chart showing dramatic rise of additions to the national debt since 2008 financial crisis

Repost from 9-27-2019

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