This isn’t going to be like the tale of Goldilocks, at least not how it’s usually told. There are three central banks, sure, call them bears if you wish, each pursuing a different set of fuzzy policies. One is clearly hot, the other quite cold, the final almost certainly won’t be “just right.” Rather, this one in the middle simply [...]
They zig when they were supposed to zag. China’s PBOC was widely expected to drop its MLF rate, triggering the same for bank LPR (loan prime rate) which will be published this upcoming Monday morning (Beijing time). It would have been the third rate cut since December, though it should be noted Chinese authorities had already refrained from action in [...]
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) [...]
Most Americans understandably have tunnel vision when it comes to the American CPI and what it might portend for their personal circumstances. Gasoline prices and those for anyone trying to buy a car or now rent some kind of shelter, the threat is immediate. From this palpable sense, the word “transitory” today might just seem offensive.Yet, it may prove itself [...]
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 [...]
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 [...]
Chinese authorities responded to their faltering economy in 2018 by diverging from their Western counterparts. Their PBOC would lean into rate cuts (RRR) at the very same time America's Federal Reserve would accelerate more in the direction of rate hikes. The ECB, for Europe’s part, intended to follow the Fed’s path, reaching December 2018 and terminating its own QE with [...]
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 [...]
Chinese run media, the Global Times, blatantly tweeted an homage to China's late leader Mao Zedong commemorating his 128th birthday. Fully understanding the storm of controversy this would create, with the Communist government’s full approval, such a provocation has been taken in the West as if just one more chess piece played in its geopolitical game against the United States [...]
If there is a better, more fitting way to head into the Christmas holiday in the United States than by digging into the finances and monetary flows of the People’s Bank of China, then I just don’t want to know what it is. Contrary to maybe anyone's rational first impression that this is somehow insane, there’s much we can tell [...]
Stay In Touch