Tyler Durden writes:
…….none other than the TBAC warned that the US is suddenly facing a $10+ trillion high quality collateral shortage in the next decade. As we have also explained, this is a major problem for the Fed which at current rates of QEeing, will monetize all Treasury duration exposure in roughly 5 years – at that point there will be virtually no collateral left and the Fed will be finally out of both tools and ammo.
I suspect that fiscal deficits will add sufficient new Treasury bonds to the pile, so that the Fed never has to run out of decent collateral.
Read more at Central Banks’ Central Bank Warns About Rehypothecation Threats | Zero Hedge.