Long end UST yields on the rise with reflation-y factors taking more of a hold, last year’s postponed YCC flirtation is almost certain to be rekindled over the weeks ahead. We’ve been told how it’s really simple, meaning low interest rates are stimulus and this must be maintained without fail. But what’s really been responsible for all the failing?When I [...]
Working with my colleague Joe Calhoun (mostly him), we’ve come up with what we think is a list of questions that quite naturally arise from this week’s discussions of bank reserves, some specific and technical, the monetary system, some theoretical, some practical, and the (much) wider economic consequences which follow from those. 1. When the bank buys a Treasury note/bond/bill [...]
It’s another day ending in “y”, therefore there must be some new liquidity scheme being announced by the Federal Reserve. For a crisis that many seem confident has been put in the past, the optimists still are going to have to factor that even US central bankers feel they have to keep pulling repo rabbits out of their…somewhere. Today it [...]
One year ago today, something huge broke inside the global monetary system. Exactly what, we may never know. I believe it was something to do with collateral and securities lending, the kinds of things that brought AIG to its knees in what doesn’t seem like all that long ago. In a rush, over several days, everyone around the world piled [...]
In September 2009, leaders of the G20 nations got together in Pittsburgh. It was the third such summit in close succession following the devastating events of the monetary crisis, ostensibly so that each head of state could share strategies with the others as to how to avoid blame. Solutions weren’t in good supply, obviously. Populism was a bit different in [...]
The US Treasury Department’s update of its Treasury International Capital (TIC) report for October contained no surprises. In many ways, it was ironically uninteresting given the constant excitement that had happened during that particular month. It was, in a word, a mess for global markets. Liquidations struck throughout the world and more than a month later we are still struggling [...]
As much as officials in Beijing may outwardly fight it, they are still in the “dollar” business. It’s not raw conjecture, either. Though we don’t know the specifics of their policy positions, in this context we don’t need to know them; it’s all right there on the central bank balance sheet. The most prominent thing about China right now is [...]
Bundesrepublik Deutscheland Finanzagentur GmbH (German Finance Agency) was created on September 19, 2000, in order to manage the German government’s short run liquidity needs. GFA took over the task after three separate agencies (Federal Ministry of Finance, Federal Securities Administration, and Deutsche Bundesbank) had previously shared responsibility for it. On September 17, 2014, almost exactly fourteen years later, GFA managed [...]
It doesn’t work as the math is surprisingly simple. That is why “sweeping” changes and reform have to be considered at each point of escalation. Taking account of what has occurred only damages further the credibility and faith that is supposed to be the keystone for everything that happens. Instead, the only way to solve the historical deficit is to [...]
Given all that has transpired in China this past year, year and a half it is likely that confusion will continue if only due to bias and preconceptions about “omniscience” in central banking. For my part, the PBOC has been unusually open and candid about “what” it is doing, particularly in the framework of the high degree of secrecy under [...]
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