[Judgmentality]

What's really weird is they're getting interest to park their money overnight now (it's been zero interest for a while until today).

This is really smoke and mirrors though. Moving the cash into the repo market doesn't change anything, other than now it's an "asset" instead of a "liability." Yes, there are obviously legal differences here, but it's still the same amount of cash owned by the same entity, except now they're getting paid just to park it overnight.

I'm not saying the reverse repo market is nonsense. I'm saying the way the government has structured assets and liabilities in this instance is bizarre and seems like musical chairs. I've actually read up on this and am happy for someone to explain it to me further, but it really seems like they're just inventing new ways to kick the can down the road. I don't think they're actually solving anything; they're just making the problem worse and hiding the symptoms.

[jkhdigital]

> they're just inventing new ways to kick the can down the road

Yes, even mainstream voices are starting to say things like this. Hard to imagine that this doesn't end very, very badly.

The fundamental contradiction is that the Fed wants to goose economic activity with money printing, but simultaneously imposes capital adequacy requirements on banks to prevent systemic risks. You can't have your cake and eat it too; or, in the parlance of classical economics, there's no free lunch.

[imtringued]

It's not just the central bank. It's literally every market participant kicking cans down the road. Everyone is saving at the expense of everyone else.