About a year ago, on july 6, 2020, the number of reverse repurchase agreements with the fed was at zero. Nobody was using this system now fast forward to june 2021, 547 billion. This thing went from zero to 547 billion in the single year. In fact, you don't have to go to last year, just in the beginning of this year, on march and april, we had 3 billion 2 billion 0.7 billion and then the spike started.

Let me show you about a month ago the spike went through the roof. It went all the way to 200 and kept going up, and usually with that kind of spike, you'd basically say well, there's so much money all of a sudden in the market. That was not there earlier. What the hell happened in may and june.

Something crazy happened in may and june, and there's two explanations: one is that we are in an insane state of hyperinflation right now, as we speak, which is highly unlikely. We are in the state of inflation, but not hyperinflation, or you have the second option, which is way more plausible is all of a sudden massive whales put in a lot of cash into their bank accounts. For some external reason - and this is exactly what i want to explain to in this video and how it affects jimmy and amc and how it actually shows that the retail investors are actually winning. My name is tom nash and i quit my corporate job as a senior financial analyst to break down companies for you there's one thing you need to know about me: i don't take from anybody.

Ladies and gentlemen, this is going to be a five minute video, i'm going to explain to you why the reverse repo market is a clear indication that the amc and gme fight is actually being won by the retail investors and the mainstream media. Won't. Let you know about it, but i will and here's the case so first of all, what the hell is, the reverse repo, and why does it even matter for amc and gme? Well, let me be clear about it. If you and me hold cash, that's an asset for you and me either as a business or as an individual.

However, for banks, cash is a liability because they owe interest on that cash to whoever deposit it and, of course, banks are insanely regulated, which means they can't have too much liabilities versus their assets. They have to be at a certain threshold which means that if they have too much cash, they have to dump some of the liabilities, because otherwise they're non-compliant and that's why the government have created this fake system. I don't say fake, because it's illegal, i say fake, because it's literally just to solve this little problem called the reverse reports. The fed overnight gets the cash and gives the banks t-bonds with zero interest.

Next morning, uncle sam comes into the office, gives the banks the cash back and takes the t-bonds. It doesn't do nothing beyond just solving the regulatory problem of the banks having too much liabilities, which i think is a weird solution, but i mean it is what it is now. Here's the thing, the more money you have in the market you'll see a higher activity of reverse reports. That's just the way things work, and that is why this is the main indicator of inflation.

Creeping up because simply put the higher the activity is in reverse repos. It means there's more money in the market, which essentially means banks have too much money to handle, which means inflation is creeping up. If you believe that kind of thing i don't know, but here's the thing while inflation is definitely to blame for the latest increase. It's not to blame for the parabolic spike now check it out.

This is a very important chart. This is the reverse repo actual numbers for the past year. You can take a look at what's going on. You see this now.

Let me max out a five-year chart. You see this, so this is actually the beginning of the pandemic march 2020.. You see the spike now. It went all the way to zero and stayed there and when it really went, parabolic was in may may 17th may 18th may 19th boom past 300 and may 20th.

It was heating up, but nothing parabolic and, as far as i know, we're not in hyperinflation. Yet now, for me, it's clear evidence: the banks are having to deal with so much cash. That's why we're seeing this insanity in the reverse repo market 547 billion - i mean historically, if you go over 300, that's called crazy. 547 billion is insane, there's no two ways about it.

Now. How does this prove that the amc and gma thing is working? Well, isn't this just an inflationary trigger? Well, yes, there's a lot of inflationary issues here, it's an inflationary indicator. However, the fact that it's so well correlated to amc on may 20th is an accident i'll explain why the banks have to deal with more cash once the hedges, the ones who are stuck in bad short positions, basically need to put in more cash in their accounts. To prevent themselves from getting margin called because the worse thing get the higher the risk that they're going to get margin called.

So more cash goes into the system. More cash gets deposited. The banks have to deal with more cash they're, actually making the problem of the reverse repo even worse. Now that is what's sending the system parabolically up now, of course, there's a lot of other contributing factors and of course, inflation is a huge part of it, but the parabolic nature of it and the clear correlation with the amc short squeeze is definitely an indicator that The hedge funds are in trouble, essentially, the hedge funds are trying to pretend that this is some sort of a mexican standoff.

We can stay here all day. No, you can't, because, unlike the apes that have to do with mainstream media pressure, psychological pressure, the fud and all that stuff and a lot of speculators in the market that are trying to make quick buck, the hedge funds are even worse. They have to pay literally for every day they have to pay interest for the short, also they're, in the risk of a margin. Call the worse things, get the higher the price goes up.

The more risk of getting margin called is because, once they get margin called it's gg, it's game over. That is why you're seeing this massive pouring of money into their accounts, that is why you're seeing a great spike in the whole reverse repos. That means that this thing is about to end, because there's a limit to how much you can do this, especially in inflationary times, this system is already overused and there's so much talk about it. There's so much light on it and it's literally already about to actually go max, and that is why the old rules can't apply anymore.

The banks and the hedge funds used to use reverse repos. To basically make this thing clean. You know help each other. Now they can't the system is already oversaturated over used over stream.

This system is basically being taken over by inflation, then pushing so much pressure. On top of it might cause a massive collapse. They got ta stop at some point, there's just a limited amount of air left there before they go under. So this thing is about to collapse.

If you hold amc and jamie, i honestly don't know what's gon na happen, but this is clear proof to me that things aren't right both from an inflationary aspect as well as the clear correlation to amc and gme. We have to come out and see. What's going on next week, i'm fascinated by this. Let me know in the comments what you guys think spread this video.

So people know more of this, because mainstream media isn't going to tell you that part of the story different about inflation and all that stuff, but not about gme and the short squeeze. Thank you so much for the channel members and the patrons we'll see you guys in the next video.