Money comes into existence in two ways: government spending and bank credit. And it is, likewise, destroyed in two ways: taxation and loan repayment. And money moves markets.
In an earlier Seeking Alpha article, we showed that the flow of funds from the banking system (bank credit) was starting to falter. In this piece, we take a look at what is happening with the liquidity provision coming from the Federal Reserve and how the interplay with the US Treasury's spending and "borrowing" actions can affect the stock market.
Since mid-March, the Fed has been