Reverse Repos Plummet, And Pondering The Mysterious Yen Carry Trade

Before crap happens, gold trading volumes rise. So probably, a bunch of crap is about to happen. If only my ancestor had invented the toilet instead of Tom Crapper, Farb would be about to happen.

• Reverse repos have decreased by $128B in the last two days, potentially reaching zero by the end of May. Banking crisis by June?

• Expect high volatility in all assets leading up to the Fed being forced to print for what may be the last time.

• The correlation between higher interest rates and weaker currency is becoming tighter.

• Craig Hemke reveals how Comex gold futures were set up to sap demand for physical bullion citing a Wikileaks cable from 1974, 21 days before gold trading on Comex began.

• The Yen carry trade may be difficult or impossible to unwind until earning profits in currency terms becomes meaningless, but I may be missing something.

Reverse Repos in The Home Stretch

Reverse repos have fallen $128B in the last two days due to Tax Day (probably). We are down to $327B. My guess is we'll drop to somewhere in the mid $200B range by the end of April, and we could zero out by the end of May.