Hey what’s going on everybody. This is the block chain backer bringing you the latest cryptocurrency news and analysis and this video is going to be a little bit different than what we usually do. Now I know I say that often but we’re always trying new things. And right now the world is in a very big crisis in regards to obviously that the major news with the illness going around but also with the markets falling in complete freefall and we’ve noticed a lot of things going on in regards to debt money printing and it wanted to take a step back and kind of go through what money is what all this repo stuff means and how our banking system has been and what our banking system just turned into overnight. And I don’t think people really realize what actually just happened and it was the biggest event that we’ve we’ve seen in regards to banking in a long time. And it really happened in the midst of a crisis. And I wanted to show that to you. Here’s an article from Reuters New York Fed says it will offer 1 trillion in daily repo operations for the rest of the month. The Federal Reserve Bank of New York said on Friday it will continue to offer 1 trillion a day in overnight repo operations for the rest of the month with half of the support being offered in the morning and half in the afternoon. All right. So what is that means or going to you know 1 trillion in daily repo operations. So what that means is that means that they’re going to lend money to the bank overnight. So in the in the system that we’ve had for a long time we have something called a fractional reserve banking system and that’s where banks can lend out money based on how much money they have on hand. Now we noticed that this lending or this overnight lending started turning into chaos back on September 16th. You could see that right here September 16th repo markets chaos signals fed maybe losing control of rates. And we noticed that the Fed issued out 50 billion dollars starting on September 16th. There was a lot of events that occurred right after this that was very suspicious on September 18th or September 19th just a couple of days later the Federal Chairman Jerome Powell came out and spoke and did a press conference. He was asked about why are you guys you know issuing overnight lending what is going on because why are banks needing money overnight. What is happening here. His response was oh it was no big deal. They had to pay some taxes and it’s it’s nothing that we have to worry about we’re surprised that the market was even really worried about it and brushed it under very shortly there after just a few days later news headlines got dominated about the impeachment inquiry that was presented by the House of Representatives. So they got swept under the rug and all of the headlines became about impeachment just days after it began. And every single night they continued lending money to the repo market or the overnight lending market 50 billion to 100 billion. And it started on September 16th and it never ended. Why were banks needing all this money overnight. And it has to do with them not having enough cash on hand overnight to satisfy the fractional reserve banking requirements in order to have outstanding loans the way money works or the way that the banking system works is that banks don’t have to actually have all the money on hand in order to lend out what they have. For example there’s a video called Money as Debt. If you have never seen it you should and maybe later today I’ll share that on my Twitter page. But the idea of how it all began is that when we all used to barter in trade using gold it became a point where the gold would go sit in vaults and somebody would hold onto it a gold smith would hold onto all the gold and he would write notes for it and people would use these notes to exchange with each other rather than actually using physical gold to exchange with each other. So the gold sat in a vault and the notes were exchanged in commerce rather than the physical gold. Eventually the the goldsmith realized that hey nobody ever comes and does a run on all the gold. Nobody comes in and actually takes all the gold. So why don’t I just issue out additional notes and no one will really ever know. So the gold smith issues out double the amount of notes based on how much he has sitting in the vault and it doesn’t really matter because no one ever comes in and runs on the gold. They just leave it there it’s heavy. They don’t care they know what’s safe in there. And eventually more notes get created more notes get created more notes get created in all of it is completely fine as long as nobody does a run on the goldsmith and takes all the gold that nobody ever knows that it ever happens. So you have way more gold notes floating around than actual gold sitting in the actual vault. That is how our system works currently. However it operates entirely on debt. Right now we have a fractional reserve requirement. Well we used to and the idea was if somebody comes in and asks for a ten thousand dollar loan the ten thousand dollar loan would be given to the customer. The customer would go buy a car and hand that cheque over to someone else someone else would deposit that ten thousand dollar check. And now that bank has fractional reserves from that deposit and can now issue out a nine thousand dollar loan that nine thousand dollar loan gets sent out gets deposited at another bank and then an eight thousand dollar loan or an eight thousand one hundred dollar loan can be written based off that. And it just keeps getting smaller and smaller and smaller. And from the initial debt that was ever created you can make up to one hundred thousand dollars worth of more debt. However just a couple of days ago. On March 15th the Federal Reserve actions to support the flow of credit to households and businesses all the way down here reserve requirements for many years reserve requirements played a central role in the implementation of monetary policy by creating a stable demand for reserves. In January 2019 the FOMC announced his intention to implement monetary policy in an ample reserves regime reserves requirements do not play a significant role in this operating framework. In light of the shift to an ample reserves regime the board has reduced reserve requirement ratios to zero percent effective on March 26 the beginning of the next reserve maintenance period. This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses. So what does that mean. That means that banks no longer have to have any money on the books in order to write new debt or create new money. The overnight lending that we’re seeing is money being given to the banks being borrowed overnight in order for them to meet their reserve requirements for the outstanding loans that they currently have. And right now the banks don’t have any money hence why we are now at a trillion dollars a day when we used to be at fifty billion dollars a day. Back on September 16th and prior to September 16th we were at zero dollars per day. So something has occurred that has made it to where the banks have run out of money. Now one could argue that there’s a a run on cash right now and people are taking all of their money out of the banks so the banks don’t have any money left because customers are doing a run on the bank right now. So they’re having to go to the overnight lending market in order to get cash in order to hold it overnight to meet the reserve requirements and everything is dandy. But isn’t that crazy in itself right. The bank actually doesn’t even need to actually ever have any of the money as long as they tap into the reserves as long as they tap into the RICO repo market borrow the money overnight then repay the money back the next day then they never even had the money in the first place and it was no big deal. So this whole system is crazy but we are now going to where we will have no reserves of whatsoever and banks can print money at any rate that they would like to. And we have also go down gone down to a zero percent federal funds rate. I think I looked at a mortgage a mortgage rate right now is like two and a half percent for a 30 year loan. It’s ridiculously low it will likely go even lower. So let’s read real quick on what is the repo market and why does it matter. The Federal Reserve uses repos in reverse repos to conduct monetary policy when the Fed by securities from a seller who agrees to repurchase them it is injecting reserves into the financial system. Conversely when the Fed sells securities with an agreement to repurchase it is draining reserves from the system since the crisis reverse repos have taken on a new importance as a monetary policy tool. Reserves are the amount of cash of banks hold either currency in their vaults or on deposit at the Fed. The Fed sets a minimum level of reserves anything over the minimum is called excess reserves. Banks can and often do lend excess reserves in the repo market. What happened in the repo market in September of 2019. The repo rate spiked in mid-September 2019 rising as high as 10 percent intraday and then financial institutions with excess cash refused to lend. This spike was unusual because the repo rate typically trades in line with the Federal Reserve’s benchmark federal funds rate at which banks lend reserves to each other overnight. The Fed’s target for the Fed funds rate at the time was between 2 percent and 2.5 percent. Volatility in the repo market pushed the effective federal funds rate above its target range to two point three percent. OK so what we’re saying here is if you kind of caught all of that is that what you will usually happen is that a lot of banks don’t seem to ever actually have the reserve requirements that they need. But there are other banks that are in stronger positions and do have excess funds in those those banks will provide those excess funds as repo loans to other banks so they can meet the reserve requirement and it’s normal these banks all do that with each other they’re all buddies they say Hey man you need to borrow the money overnight to meet that reserve requirement. Here you go borrow this money and then they’ll pay it back and everything is hunky dory. They try not to get the Federal Reserve involved in it because from what I’ve read whenever it becomes apparent that you are having to tap into the Federal Reserve it means that no other banks actually want to help you anymore. There is something very wrong with your bank. If you start borrowing from the Federal Reserve why would no other bank want to loan you money. Something must be very seriously wrong if they don’t want to let you borrow money overnight. So that’s what we saw happen on September 16th. For some reason someone or several people needed to tap into the Federal Reserve. There wasn’t enough money amongst the other banks in excesses to be able to share it overnight in an overnight repo or there were banks that were not credit worthy enough to be able to get the money from the other banks. And the only option they had was to go to the Federal Reserve in order to satisfy the reserve requirements that they needed in order to maintain the loans that they have. So we watch this behavior continue since September 16th. Fifty billion every single night. Then one hundred billion. Then back to 50 billion and 75 billion one hundred billion and 50 billion and we watched this continue since September. For some reason some banks were unable to maintain their reserve requirements for the outstanding loans that they have. This continued all through 2019 and into 2020. And once the stock market started falling we noticed that the repos got bumped up to one hundred and fifty billion dollars per night. And then this past week we went up to one trillion dollars per day. The fractional reserve banking system failed this week. As I mentioned I go into banks all the time and I ask them all. I mean you know it’s part of what I do right I’m here and making these youtube channels I’m going to relay the information that I can get to you guys. And I ask all of them hey how has it how’s it been is I’ve been pretty busy. Yeah it’s been really really busy and like Oh how cool have you guys gotten any cool coins you know like from people like dumping their stuff needing cash or wanting to put money and then into their deposit like anybody dropped off any half dollars lately. Same story every time. No we haven’t gotten anybody dropping off that kind of stuff it’s just people coming in here to get their money out. The banks are at a point where they can not meet their fractional reserve requirements anymore and we have ushered in a new banking system for many years reserve requirements played a central role in the implementation of monetary policy by creating a stable demand for reserves. In light of the shift to an ample reserves regime the board has reduced reserve requirement ratios to 0 percent effective March 26. There is nothing in here saying that it will be like from a certain period to a certain period. It’s no we just went from a fractional reserve banking system to a no reserve banking system which means that banks can print money in unlimited quantities. This is a video that’s been out since 2009 called Money as Debt and it is fantastic at explaining all of these things to you and how money is just created out of complete thin air. And it’s created by making more and more debt and what’s been crazy is that we’ve been able to create all this money out of complete thin air and make tons of it by using the fractional reserve banking system and now we’ve just put it on steroids and took away the fractional reserve requirements and is now a no reserve requirements and I highly recommend that you go watch your money as debt to get a better understanding of how the whole system works. It’s 45 minutes long but it will give you so much knowledge in that 45 minutes your mind will be blown. It really breaks it down very simply and explains to you exactly how money is created in our current times and how it used to be it shows you the transitional time period of how things changed and explains it in a very easy to understand manner. It has illustrations it shows you exactly how they did it and then at the end it shows you there is no option for this. The only option for this at the very end is that there has to be a switch to a new type of banking system or a new type of money. And here we are in 2009 and it’s saying a new type of digital money. Now I didn’t show you this video because of the digital money part that was just something that blew my mind near the end when I saw them say that I’m like oh my gosh. But I’ve known about this video for over a decade. But money is completely created out of thin air. It’s made out of absolutely nothing and there has been restraints on which the rate at which it can be created out of thin air. And that was by using a fractional reserve banking system and we had reached a point now where we even bypass the fractional reserve system the fact that there even is a repo market. The fact that banks can tap into an overnight lending market to hold onto cash overnight to meet the reserve requirements. We were already bypassing the fact that there was a reserve implemented in the first place. And right now we just took away the fractional reserve requirements and money will start getting created out of thin air at an absolute exponential rate. So as we all sit in these digital assets or in precious metals or whatever you’re in to hedge against the dollar you have to say to yourself what actions are being taken right now that lead me to believe that the dollar is going to have significant inflation. 1 we’re going to be bailing out companies and printing money out of complete thin air with the Federal Reserve and 2 we’re allowing banks to be able to print money on demand with no requirements just free printing press at each private bank. If that doesn’t tell you the story that the dollar is going to hyper inflate then you need to go watch this video. Money as Debt so that’s going to wrap it up for this video. Thank you guys so much for watching. Please like this video and give it a thumbs up as always this is not investment advice and I am not a financial advisor but if you ever need a pick me up or a little bit of reassurance just remember that the block chain backers got your back and let me leave you with something else. This is David Rockefeller and Rockefeller was the CEO of Chase Bank. It was controversial. He had a big personality and a famous quote by David Rockefeller for more than a century ideological extremists at either end of the political spectrum have seized upon well publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States characterizing my family and me as internationalists and of conspiring with others around the world to build a more integrated global political and economic structure. One world if you will if that’s the charge I stand guilty and I’m proud of it.