Well, this is current yield grants interest rate observer of the air.

I'm Jim Grant, and with me as always is Evan Lorenz, the great deputy editor of grants.

We are going to talk today with Eric Sinamon, and I am persuaded that we will be recording because Henry

is at the controls, as usual, and all things are set to go. So, Evan, I want to begin by observing

to you that the Wall Street Journal appears to have bugged offices of Grant's Interest Rate

Observer. And I say this because this morning, the Wall

Street Journal published something that you yourself wrote last evening. If flattery is the

sincere form of imitation, or if imitations, the sincerest form of flattery, they gave us a great

compliment. Yeah. Well, tell our, tell our listeners what they copied and, and what legal

steps we are taking to have this happened and going.

Well, I think we're in line to Sue Burt-Mardek after some other prominent figures in

America. The story is essentially the Fed is actually controlling interest rates through a facility

that actually exacerbates bank runs. So prior to the housing bust in 2007 through 2009, the Fed would actually nudge

interest rates by buying or selling short-term treasuries in order to impact the rate that

banks would lend their excess reserves to one another, either up or down. This worked well in

the decade ending 2007 when excess reserves averaged $1.7 billion with a B. However, this system broke down over the course of easy monetary policy, and by 2013,

when the Fed was in the midst of its third round of quantitative easing, excess reserves,

you know, topped $2 trillion.

So the Fed introduced the RRP or the reverse repurchase facility.

In the RRP, the Fed actually borrows against

its gargantuan securities portfolio in order to set a floor under rates. The idea being, if you're

a money market fund and you can actually lend to the Fed, which has a printing press and therefore

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