There is a tremendous difference between the world de-dollarizing and those living in it being de-dollared. The former is a choice, the latter a fact of existence since August of 2007 (to varying degrees). Yet, most people, especially the “experts”, talk of only the first one as if that was all there is to it.Especially when it comes to China.We [...]
It’s another one of those crisis-era programs, GFC1, the Fed probably hopes you never think too much about. Almost nobody noticed while the thing was operational. It was called the Supplementary Financing Program (SFP) which was thought up and initiated during the middle of September 2008 just two days after Lehman Brothers and AIG. Its purpose was, unbelievably, to drain [...]
Despite what we’ve all been taught, and what gets reinforced in the media, it’s not really that difficult to get people to see the interest rate fallacy at least where it all starts. Central bankers say that low rates are stimulus when this runs contrary to every bit of historical experience as well as evidence. Yes, they are lying to [...]
Back in the middle of 2018, this kind of thing was at least straight forward and intuitive. If there was any confusion, it wasn’t related to the mechanics, rather most people just couldn’t handle the possibility this was real. Jay Powell said inflation, rate hikes, and accelerating growth. Absolutely hawkish across-the-board.And yet, all the way back in the middle of [...]
I guess in some ways it’s a race against the clock. What the optimists are really saying is the equivalent of the old eighties neo-Keynesian notion of filling in the troughs. That’s what government spending and monetary “stimulus” intend to accomplish, to limit the downside in a bid to buy time. Time for what? The economy to heal on its [...]
It’s another one of those myths that gets repeated over and over because it has never been realistically challenged. Not in any public way. The Fed says its dollar swap lines, central bank liquidity swaps as they call them today, worked beautifully. They may not use that particular word to describe the results, but you are distinctly left with that [...]
Just a quick update to add a little more data and color to my last Friday’s swap line criticism so hopefully you can better see how there is intentional activity behind them. Since a few people have asked, I’ll break them out with a little more detail. While the volume of swaps outstanding at the Fed has, in total, remained [...]
Another 2.1 million Americans have filed this week with their state governments in order to determine their eligibility for unemployment insurance. That brings the 10-week disaster total for these initial jobless claims to an enormous 40.8 million. How did it get to be so many, and why, as states are opening back up, is it continuing in the millions all [...]
Count me among the bond vigilantes. On the issue of supply I yield (pun intended) to no one. The US government is the brokest entity humanity has ever conceived – and that was before March 2020. There will be a time, if nothing is done, where this will matter a great deal.That time isn’t today nor is it tomorrow or [...]
As I’ve said, it is a threefold failure of statistical models. The first being those which showed the economy was in good to great shape at the start of this thing. Widely used and even more widely cited, thanks to Jay Powell and his 2019 rate cuts plus “repo” operations the calculations suggested the system was robust.Because of this set [...]
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