FAST FIVE: "QE-For-The-People Is The Endgame…And Gold Will See It Coming First"
The Fed thought it could control the fed funds rate by manipulating IOER instead: Since Fed deposits are by definition risk-free in nominal terms, the fed funds rate should never go below IOER because if it did, banks would withdraw their loans to other banks and deposit the funds at the Fed instead.
Repo lenders are entities such as banks and money market funds, who provide investors and depositors a return on their cash.
From midSeptember through October 2, the Fed's repo lending balance has gone from nothing to $181 billion, thereby expanding its overall balance sheet by the same amount.
All markets consist of a bid and an ask-therefore, one should inquire: a cash shortage compared to what demand.
Under the original QEs, the banking system received $2.8 trillion in new reserves and, over the ensuing decade, levered these reserves to provide $20 trillion more in credit.