Finally the Real Cause of Repo Madness - John Rubino

Remember just a few months ago when repo rates went from 1 percent to 10 percent overnight. The Fed assured us that it was because of quarterly tax payments, or who knows may it was a YouTube video that caused the meltdown. Well, we speculated from the get go that it was one or more major banks going bust. We were close to the truth, at least according to the BIS (Bank for International Settlements) it was hedge funds hocking their treasuries to stay liquid. But the main funding big banks pulled the plug. Seems they were rattled by the sudden surge in demand and were trying to reign in their risk. But we're convinced this is only part of the story and the net result is still the same, QE3.5 or better is with us forever.

John Rubino is the founder and manager of the popular financial website DollarCollapse.com. Mr. Rubino is the co-author, with GoldMoney's James Turk, of The Money Bubble and The Collapse of the Dollar and How to Profit from It. He spent the 1980's on Wall Street as a Eurodollar trader, equity analyst and junk bond analyst. During the 1990's he was a featured columnist with TheStreet.com and a frequent contributor to Individual Investor, Online Investor, and Consumers Digest, among many other publications. He currently writes for CFA Magazine.