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A TIC Trio of More Serious Deflation Potential: Asset Rebound, Banks Can’t Borrow T-bills From Foreigners, And The China Cringe Which Goes Along

By |2021-08-18T20:41:43-04:00August 18th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Treasury Department’s TIC update for the month of June 2021 was, well, interesting. Not in a good way, either (post-2014, is it ever actually good?) There are just too many nuggets to digest in one sitting, so here I’ll merely go over three major developments: an update to the May 2021 big dollar warning; a big, nasty wince given [...]

Go Early, Go Fast? Go Deflation

By |2021-08-03T18:16:01-04:00August 3rd, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Go early and go fast. This was the message FOMC Governor Christopher Waller wanted to send to the CNBC audience watching his interview yesterday on that channel. He was referring to the possible taper of QE6. In Waller’s view, if the US economy lives up to its current hype in the form of two more blowout jobs numbers, those would [...]

Maybe Interesting, Perhaps Somewhat Useful Other TIC Nuggets

By |2021-07-23T19:21:49-04:00July 23rd, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I’m just going to post some brief comments on other parts of the TIC data. The major takeaway from the May 2021 update is what I wrote earlier, how what these figures show is both entirely consistent with what will be to most people a surprisingly long history as well as completely misconstrued in mainstream conversations (what few may take [...]

A Glut of February’s

By |2021-04-19T20:06:07-04:00April 19th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Ben Bernanke saw it even before he took over from Alan Greenspan. Like his “maestro”, however, Bernanke didn’t really know what to make of it. So, while early in 2005 Greenspan told of his version as an interest rate “conundrum”, his successor a month later tried to add more dimensions and details to the same puzzle via recognizing its clear, [...]

TIC October: More Foreign Bills & More Private Corporates

By |2020-12-18T19:42:42-05:00December 18th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Since we highlighted the action in T-bills yesterday and the day before, it’s worth at least mentioning what TIC had to say about the instruments. Foreigners had been reducing their holdings of them not out of growing distaste but rather the opposite. There’s not nearly as many of them, not enough for what’s demanded, the Treasury Department quite purposefully (and [...]

Not Manipulation, Montagu’s Monkey

By |2020-12-18T19:06:08-05:00December 18th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Chinese have never subscribed to the modern wave of “transparency” which has swept over Western central banks. The People’s Bank of China, Big Mama, very much operates instead on the doctrine which preceded it. Basically, Montagu Norman’s way of doing things. Never explain, never excuse.This mantra has been applied to what it does outside of China as much as [...]

Just Who Is, And Who Is Not, Selling T-Bills

By |2020-11-25T14:56:18-05:00November 25th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Are foreigners selling Treasury bills? If they are, this would seem to merit consideration for the reflation argument. After all, the paramount monetary deficiency exposed by March’s GFC2 (and the Fed’s blatant role in making it worse) was the dangerous degree of shortage over the best collateral. Best collateral means OTR, and for standard practice this had always meant Treasury [...]

Redistributing A Shrinking Pie Is Nothing Like A Flood; Because There Was No Flood

By |2020-11-18T18:11:07-05:00November 18th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the past couple months, the foreign official sector has been able to go back to buying (net) US Treasuries again. Not a lot, but it’s a change from the prior period when overseas central banks and governments would dependably dump tens of billions each month. Contrary to convention, this kind of buying corresponds to rising rates, the reflationary stuff. [...]

Quarrel With Quarles Over Too Little, Not Too Many

By |2020-10-27T17:14:09-04:00October 27th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It wasn’t the first time the ground had already been eroding underneath his feet. Randall Quarles took at turn at the Treasury Department during the Bush Administration, rising to Undersecretary for Domestic Finance during the most maniacal part of the eurodollar-fueled housing bubble. Not surprisingly, among the last things he did there was tell the public how great everything was [...]

CNY + TIC = October 2020, or 2017?

By |2020-10-20T18:10:21-04:00October 20th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The dominating feature during the last months and days of globally synchronized growth (Reflation #3, to you and me) wasn’t inflation nor growth. It was instead CNY. Taken at face value, the marvelous resurrection of China’s currency after 2014-16’s debacle (Euro$ #3, to you and me) did seem consistent with a global dollar system (eurodollar, to you and me) rebound.And [...]

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