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Re-Inversion + CNY

By |2022-04-21T20:09:51-04:00April 21st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the third month in a row, China’s PBOC refrained from guiding its quasi-credit benchmark lower. This seemed out of line with what Premier Li Keqiang, in particular, had stated last week before authorities did drop the RRR rate on Friday. Saying that China would “step up” support for its faltering economy, however the RRR cut was half of what [...]

The (less) Dollars Behind Xi’s Shanghai of Shanghai

By |2022-04-19T20:29:36-04:00April 19th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What everyone is saying, because it’s convenient, is that China’s zero-COVID policies are going to harm the economy. No. Economic harm of the past is the reason for the zero-COVID policies. As I showed yesterday, the cracking down didn’t just show up around 2020, begun right out in the open years beforehand, born from the scattering ashes of globally synchronized [...]

China More and More Beyond ‘Inflation’

By |2022-04-11T20:13:16-04:00April 11th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If only the rest of the world could have such problems. Chinese consumer prices were flat from February 2022 to March, even though gasoline and energy costs predictably skyrocketed. According to China’s NBS, gas was up 7.2% month-over-month while diesel costs on average gained 7.8%. Balancing those were the prices for main food staples, especially pork, the latter having declined [...]

It Wouldn’t Be TIC Without So Much Other

By |2022-03-21T18:47:50-04:00March 21st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With the Fed (sadly) taking center stage last week, and market rejections of its rate hikes at the forefront, lost in the drama was January 2022 TIC. Understandable, given all its misunderstood numbers are two months behind at their release. There were some interesting developments regardless, and a couple of longer run parts that deserve some attention.Picking up where TIC [...]

China’s Loan Results Back The PBOC Going The Opposite Way From The Fed

By |2022-03-14T19:29:54-04:00March 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This week will almost certainly end up as a clash of competing interest rate policy views. Everyone knows about the Federal Reserve’s upcoming, the beginning of what is intended to be a determined inflation-fighting campaign for a US economy that American policymakers worry has been overheated. The FOMC will vote to raise the federal funds range (and IOER plus RRP) [...]

Transmission of (euro)Dollar Disease Back Through Beijing To The Rest Of The World

By |2022-02-11T19:43:23-05:00February 11th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Everyone was really confused. China was the unstoppable monster, the economic powerhouse that had quite easily, it seemed, survived the Great “Recession” with barely a scratch. Its ascent to the dominant world position had been written long ago in stone, carved macro graffiti left in place especially as the so-called developed world struggled mightily after 2009.The Chinese were widely thought [...]

China’s Total Dollar Equation: CNY minus Trade Flows equals Some Sense of the Euro$ Problem?

By |2022-02-09T19:13:51-05:00February 9th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In the earliest days of the eurodollar, its purpose was primarily as a global reserve medium to intermediate and finance trade. To surmount Triffin’s Paradox, this ledger system arose as demand for the reserve currency outstripped the Bretton Woods arrangement’s ability to supply it (because it was constrained by US gold reserves). Rebuilding first from WWII and then an explosion [...]

China Has No Room Or Any Real Reason To Rescue 2022

By |2022-01-25T19:02:46-05:00January 25th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When growth stops being growth, or the same growth, what do you do? The Keynesian textbooks all say “stimulus”, but what happens if the stimulus doesn’t stimulate? Worse, when it doesn’t stimulate because it can’t due to other pre-existing and intractable impediments.This is Xi Jinping’s dilemma and it only begins with the textbook’s missing chapters on eurodollar money.So, let’s start [...]

The Hawks Circle Here, The Doves Win There

By |2022-01-21T18:44:35-05:00January 21st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We’ve been here before, near exactly here. On this side of the Pacific Ocean, in the US particularly the situation was said to be just grand. The economy was responding nicely to QE’s 3 and 4 (yes, there were four of them by that point), Federal Reserve Chairman Ben Bernanke had said in the middle of 2013 it was becoming [...]

China’s Petroyuan, Uncle Sam’s Checkbook, The Fed’s Bank Reserves: Who Really Sits On King Dollar’s Throne? (trick question)

By |2022-01-11T17:12:24-05:00January 11th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A full part of the inflation hysteria, the first one, was the dollar’s looming crash. The currency was, too many claimed, on the verge of collapse by late 2017, heading downward and besieged on multiple fronts by economics and politics alike. Basically, the Fed had “printed” too much “money” and the Chinese playing some “long game” were purportedly ready at [...]

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