201807.10
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China’s Seven Years Disinflation

In early 2011, Chinese consumer prices were soaring. Despite an official government mandate for 3% CPI growth, the country’s main price measure started out the year close to 5% and by June was moving toward 7%. It seemed fitting for the time, no matter how uncomfortable it made PBOC officials. China was going to be…

201802.20
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What The Petroyuan Is Not

In mainstream monetary convention, bank reserves are at the center of the monetary pyramid. They are the byproduct of any central bank policy which requires direct action. In the US system, they had been absent, however, until around 2008. The reason was the Federal Reserve’s belief that it didn’t require any change in the corresponding…

201708.18
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Still Written in Chinese

The world of eurodollars is always going to be hidden. What goes on, really goes on, often sees no light of day. The most basic financing transactions are typically bilateral, meaning that the only people who really know the terms and the reasons are the two counterparties engaged. That is also true if one of…

201708.08
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Textbook

China’s export growth disappointed in July, only we don’t really know by how much. According to that country’s Customs Bureau, exports last month were 7.2% above (in US$ terms) exports in July 2016. That’s down from 11.3% growth in June, which as usual had been taken in the mainstream as evidence of “strong” or “robust”…

201707.25
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What Manufacturing Productivity Suggests About ‘Dollars’ And Stagnation

In a report released last week, the Bureau of Labor Statistics (BLS) found that Multi-Factor Productivity rose in only 21 of the 86 categories of the manufacturing industry in 2015. Unlike labor productivity which is more easily calculated, Multi-Factor Productivity measures attempt to take account of all business inputs (including labor). Capitalism is by its…

201705.17
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Unfortunately An ‘Official’ End To The Rising Dollar Isn’t More

TIC data confirms that “reflation” captured more than just pricing sentiment. It appears to have occurred in bank balance sheet activity, and related official sector UST transactions. As to the latter, official holdings of US$ assets did decline on net in March 2017, the latest figures, including more selling of UST’s. The scale of the…

201608.23
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Liquidity Risk Is Very Real And Really Not That Hard To Spot And Define

Going back to Japan for a third time today (it is more than deserved), at least in the setup, the Financial Times on August 1 astutely picked up what the rest of the mainstream media missed about the last BoJ policy moves. They correctly judged the “dollar” intentions, but also that it wasn’t nearly enough, as…

201608.23
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Clues to the Origins And Stubbornness of the ‘Rising Dollar’

On March 9, 2016, front month trading for Japanese government bond (JGB) futures was halted at 12:32 pm Tokyo time. Selling had become intense, tripping the Osaka Exchange’s dynamic circuit breaker. The total length of the halt was just 30 seconds, but fingers were already being pointed in the direction of the BoJ. More than…

201607.19 0

The Helicopter Has Already Been Tested And, Surprising Nobody But Economists, It Failed Spectacularly

Most of what passes for modern monetary policy is nothing more than one assumption piled upon another (and then another, and so on). Taken for granted for so long, rarely are these unproven precepts ever challenged to justify themselves to the minimal standard of internal consistency, let alone prove discrete validity by parts. The latest…