🚨 US BANKS IN EMERGENCY: $74.6 BILLION FROM FED REPO FOR URGENT LIQUIDITY 🚨
American banks have drawn a record $74.6 billion from the Federal Reserve's Standing Repo Facility in New York today, December 31, the last trading day of the year, collateralizing $31.5 billion in Treasury bonds and $43.1 billion in mortgage-backed securities.
This figure surpasses the previous peak of $50.35 billion on October 31, in a year-end context that amplifies liquidity needs for seasonal reasons, but raises questions about deeper tensions in the financial system.
This is not routine: despite reassurances from the Fed regarding a temporary phenomenon linked to "window dressing" of balance sheets, the smoke emanating from the system seems related to colossal losses on OTC silver derivatives.
JPMorgan Chase reported an unrealized loss of $4.875 billion on short positions in silver futures and swaps, revealed in an emergency SEC filing on December 27, as silver surged above $76 an ounce, peaking near $84.
Bullion banks, historically short for 200-500 million ounces (about a quarter of global annual production), face a devastating gamma squeeze: industrial demand from solar, EV, and AI creates structural deficits of 820 million ounces over the last 5 years, while COMEX loses 60% of registered stocks in 4 days.
Concentrated short positions (101,000 contracts, valued at $37.8 billion at $75/oz) generate margin calls impossible to cover without Fed liquidity, with European banks now exposed to the US pivot towards long positions.
This "5-alarm silver fire" risks spreading: persistent backwardation (spot > futures) signals physical shortage, skyrocketing lease rates, and the risk of a paper market collapse.
The Fed, which has already injected $25-30 billion in recent operations, is monitoring to avoid a repeat of 2019 with repos at 10%.
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