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bank reserves

The Simple Equation

By |2021-03-29T18:11:54-04:00March 29th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

My entire premise was to make this mockingly simple. Econometrics demands mathematical precision yet always comes up empty because its calculations, no matter how elegantly complex, proceed from the falsest of subjective assumptions. It won’t matter how awesome the computing power if the thing you’re trying to compute doesn’t work or act the way you believe (because everyone says so [...]

Inflation, Deflation, The Historical Record of Bank Reserves

By |2021-03-08T18:55:32-05:00March 8th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Putting some charts and data behind Friday’s extensive essay about bank reserves and inflation intended to further highlight some key parallels…The precursor event to yield caps being imposed in the United States actually took place during the Great Depression. Then – as now – officials at the central bank expected their “money printing” efforts to pay off in the reverse [...]

Reserves Are Definitely Abundant; Money’s Becoming Another Story

By |2021-03-02T19:38:58-05:00March 2nd, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the Federal Reserve’s latest balance sheet update (to last Wednesday, Feb 24), its remainder balance of bank reserves declined a touch from the week before. That week, Feb 17, had seen aggregate reserves rise to a record high of $3.38 trillion. These reserves are utterly abundant, no arguing that, but what does this mean?The other part of this [...]

Treasury Market Volatility: Not Uncommon At All, Why and How

By |2021-02-26T19:35:39-05:00February 26th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

All the signs were there, starting with the fact that the Fed and ECB together had supposedly the flooded the world with digital money yet a palpable “something” was really off. Ben Bernanke’s central bank had unleashed both ZIRP and QE, the latter of which had finished up a couple months before. In Europe, Jean Claude-Trichet’s outfit was “highly accommodative” [...]

Too Much TGA

By |2021-02-05T20:09:27-05:00February 5th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If you remember back to September 2019’s repo rumble, in its immediate aftermath - as well as for some time thereafter - a common explanation put forward for the disruption had been related to a sudden increase in tax liabilities. It was said that an unusually high level of especially corporate receipts had left the Treasury flush with extra cash. [...]

Even The People ‘Printing’ The ‘Money’ Aren’t Seeing It

By |2021-02-04T19:37:46-05:00February 4th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Everyone in Europe has long forgotten about what was going on there before COVID. First, an economy that had been stuck two years within a deflationary downturn central bankers like Italy’s new recycled top guy Mario Draghi clumsily mistook for an inflationary takeoff. Both the inflation puzzle and ultimately a pre-pandemic recession have taken a back seat to everything corona.Whereas [...]

Hey Bill, *What* Is It?

By |2021-02-01T18:00:33-05:00February 1st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There are those people who will remain convinced forever forward that the Federal Reserve is run by capable technocrats absolutely skilled at maintaining for the free peoples of the United States their financial freedom. At a general level, they are thought to do so by signaling to market and economic participants just how these should respond to monetary policy inputs. [...]

Let’s Talk Bills (again)

By |2021-01-29T18:04:12-05:00January 29th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There are those people who will remain convinced forever forward that the Federal Reserve is run by evil geniuses absolutely intent upon robbing the free peoples of the United States of their financial freedom. As evidence, they point to one unsuccessful, controversial monetary policy after another, none of them effective at accomplishing their main task of putting the economic and [...]

Xi To Davos: If You’re Waiting For Us, We’re Waiting For You

By |2021-01-25T17:59:44-05:00January 25th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Chinese erstwhile dictator Xi Jinping asked the Davos gathering of the superrich, can’t we all just get along? More than a weird juxtaposition, appearing virtually before other virtual attendees, the Communist strongman wanted to make plain his view, therefore China’s, he harbors no desire for a renewal of the Cold War. Though we come from very different places and [...]

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