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Taper Discretion Means Not Loving Payrolls Anymore

By |2022-01-07T20:39:51-05:00January 7th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When Alan Greenspan went back to Stanford University in September 1997, his reputation was by then well-established. Even as he had shocked the world only nine months earlier with “irrational exuberance”, the theme of his earlier speech hadn’t actually been about stocks; it was all about money.The “maestro” would revisit that subject repeatedly especially in the late nineties, and it [...]

Is M2 The Money Behind Inflation? If Not, What Is (Or Isn’t)?

By |2021-11-15T18:46:42-05:00November 15th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Milton Friedman was touring India, and while there he shocked his audience by stating, “Inflation is always and everywhere a monetary phenomenon.” This was 1963, and the audacity of that statement is today understated. Back then, Keynes didn’t just rule there was hardly any opposition to such accepted orthodox dogma.Arguing from firmly empirical rather than theoretical grounds, Friedman’s effort was [...]

What *Must* Lie Beyond the M’s

By |2021-03-11T17:19:49-05:00March 10th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the money printing lever. If we’re focused beyond bank reserves and [...]

Z1 Update to Money, Credit, and Thus Economy

By |2017-09-22T13:18:43-04:00September 22nd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve updated the Financial Accounts of the United States (Z1) yesterday, meaning there is quite a lot of new data for the second quarter of 2017. It also means more than just that update, as each quarterly addition is often accompanied by revisions to past estimates. There were some substantial downward revisions to things like Corporate Net Worth, [...]

Policy From Behind

By |2017-07-31T16:39:37-04:00July 31st, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When the Mario Draghi as head of the ECB first introduced negative rates in early June 2014, his reasoning was very clear. As he said in the opening of his statement imposing NIRP on Europe, “Today, we decided on a combination of measures to provide additional monetary policy accommodation and to support lending to the real economy.” The way in [...]

Missing Money Inverts

By |2017-07-24T15:44:12-04:00July 24th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There was a funny sort of Congressional exchange all the way back in November 2005 that in a weird way defines our world today. At the nomination proceedings on whether to confirm Ben Bernanke as Alan Greenspan’s successor, Senator Jim Bunning of Kentucky wanted the prospective Fed Chairman to first answer for M3. It had become something of a conspiracy [...]

Further Unanchoring Is Not Strictly About Inflation

By |2017-03-17T16:22:06-04:00March 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to Alan Greenspan in a speech delivered at Stanford University in September 1997, monetary policy in the United States had been shed of M1 by late 1982. The Fed has never been explicit about exactly when, or even why, monetary policy changed dramatically in the 1980’s to a regime of pure interest rate targeting of the federal funds rate. [...]

The Missing Money In Europe

By |2017-01-09T17:56:56-05:00January 9th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Europe has not been left out of the “reflation” trend, with some seemingly good news having been reported recently. Inflation has ticked up to the highest in three years. The Harmonized Index of Consumer Prices (HICP) for the Euro Area was 1.1% in December 2016, year-over-year, the first measure above 1% since September 2013. It is easy to see oil [...]

Modern Math and ‘Money’

By |2014-03-26T16:40:04-04:00March 26th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Recently there has been a slight increase in interest over the money supply figures, particularly M1; nothing too major but some perceptible chatter. Going back in the weekly data, you find that the growth rate suddenly jumps in early February. For anyone searching for inflation, which includes practically the whole of the orthodoxy, this might seem like a sign of [...]

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