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Stop(ped) The (Printing) Press

By |2018-10-22T12:33:30+00:00October 22nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Banks in China have to hoard liquidity ahead of their weeklong holidays, twice each year. The bigger of the two, related to the Chinese New Year, occurs in either January or February. The second, associated with China’s National Day, takes place at the beginning of every October and is still a formidable challenge to the [...]

Not A Good Start For China’s Third R

By |2018-10-17T16:39:56+00:00October 17th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

File it under “what were they thinking?” In March 2015, confronted by a severe external monetary squeeze, the PBOC made a truly radical choice. Maybe it was that for a few months anyway things looked a little better. The eurodollar system had practically melted down globally first on October 15, 2014 (collateral) and then in [...]

The Aid of TIC In Sorting Shorts and Shortages

By |2018-10-17T11:58:06+00:00October 17th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Asians are selling their Treasuries again, which can only mean one thing. The mainstream media will offer all sorts of explanations as to why that might be and not a single one will be correct. China and Japan are offloading US$ assets primarily federal government debt for vastly different reasons. Their decisions spring from [...]

China Reopens With Another Dollar Warning

By |2018-10-08T19:11:16+00:00October 8th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s one of those useless explanations that while technically true tells us nothing of value about the situation. The Chinese are never boring when coming back from a Golden Week holiday. This weekend was no exception, China’s reopening bringing with it the news of yet another cut in that country’s bank reserve requirement ratio (RRR). [...]

Your Semi-Annual Golden Week Reminder

By |2018-09-25T11:56:06+00:00September 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s that time of year. September, the leaves start to turn and the air grows crisp. Autumn smells arrive; the Chinese prepare for their nationalist Golden Week. Ever since 2014 and the dollar’s rise, that is, eurodollar tightening especially in Asia, these holiday bottlenecks are never boring. To be shut down for an entire week [...]

When Central Banks DON’T Print

By |2018-08-17T11:41:30+00:00August 17th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We all know, or we think we do, what happens when central banks print money. There are any number of historical images from which we can refresh our collective memory. Weimar Germany usually comes to mind, as does Venezuela or Zimbabwe in recent times. But what about the opposite? It sounds absurd. No government officials [...]

The Smoke Thickens In China

By |2018-08-13T11:54:23+00:00August 13th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A major part of any yield curve is inflation expectations. Nominal growth particularly toward the longer end of curves sets the agenda for trading. But further out there are several confluences that may cause distortions. For Economists, these are conundrums. There are times, however, when curve dynamics remain pretty simple. These are not usually the [...]

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