AAAU - Gold Reverse Repos And Why Rate Hikes Will Exacerbate Inflation

• The week of June 14 was gold's worst week since the March 2020 crash. It happened because the Fed hiked rates and sucked $235B out of the banking system overnight.
• Specifically, it hiked the reverse repo rate from 0 to 0.05%, sucking money out of the banks and back to the Fed because banks have nowhere else to store it.
• Reverse repos are now in record $800B range, money that could come out in a torrent if the Fed is forced to fight price inflation with aggressive rate hikes.
• Higher rates would give the reverse repo money other places to go in the banking system, and so rate hikes could push money supply much higher, making price inflation even worse.
• Conclusion: Whether the Fed fights or doesn't fight price inflation, gold and silver are headed much higher and the dollar's purchasing power much lower.

For further details see: