———WHERE———

AlhambraTube: https://bit.ly/2Xp3roy

Apple: https://apple.co/3czMcWN

iHeart: https://ihr.fm/31jq7cI

Castro: https://bit.ly/30DMYza

TuneIn: http://tun.in/pjT2Z

Google: https://bit.ly/3e2Z48M

Spotify: https://spoti.fi/3arP8mY

Breaker: https://bit.ly/2CpHAFO

Castbox: https://bit.ly/3fJR5xQ

Podbean: https://bit.ly/2QpaDgh

Stitcher: https://bit.ly/2C1M1GB

Overcast: https://bit.ly/2YyDsLa

PocketCast: https://pca.st/encarkdt

SoundCloud: https://bit.ly/3l0yFfK

PodcastAddict: https://bit.ly/2V39Xjr

———WHO———
 
Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski, confused and conflicted. Artwork by David Parkins. 
 
———WHY———
31.2 A Faux-Central Bank relies on Inflation Expectations
Real central banks manage money supply. Fake central banks manage inflation expectations. Central bankers cannot define, identify, quantify or convey money supply. Thus, they are reduced to observing a monetary output: inflation expectations.

[Emil’s Summary] American economist and New York Times columnist, Paul Krugman entered the economics profession to follow in the footsteps of Hari Seldon, a psychohistorian living on Trantor, approximately 10,000 years into the future. Seldon, psychohistory and Trantor are all from Isaac Assimov’s Foundation series published between 1951 to ’53. Seldon used, “the mathematics of human behaviour to save civilisation,” as Krugman put it. Admittedly, “economics is a pretty poor substitute”, muses Krugman, “[b]ut I tried,” he says. Many would say he’s done so very successfully having been awarded the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography.

Is he the best psychohistorian alive? Your podcaster does not think so – they hand out those Nobels like candy. No, the best is Hungarian-American George Friedman, the geopolitical strategist. As proof this podcaster offers his 2009 book titled: “The Next 100 Years”. Sure, Seldon forecasted the next 1,000 for the galaxy, but still, who on Earth is offering an outlook for the next century?

In Friedman’s book, Japan plays a very prominent role, second only to the United States. In macroeconomics and monetary policy Japan plays a central role too. It is the scout. Recon as the Americans call it; recee to the Commonwealth. The Bank of Japan is about seven years ahead of the main central banking force. And it’s waving back at everyone to, ‘Stay back! Don’t come this way!’ Is the warning lost in translation? Is it ignored?

Spanish essayist George Santayana famously noted, “Those who cannot remember the past are condemned to repeat it.” But your podcaster prefers Friedman’s quip that, “Studying history has little practical utility in averting past outcomes. We are doomed to repeat history whether we know it or not.”

———WHEN———

00:05 Why is it important to the modern central bank to know what inflation expectations are?
01:43 What did 2012-13 tell us about market inflation expectations relative to Fed QE policies?
03:50 What did the repurchase agreement market in 2012-13 tell us about the monetary situation?
06:46 Inflation expectations falling JUST as Fed is blowing out its balance sheet – Wowowowow!
08:39 A Bloomberg article maintains that market-based signals of inflation are… confusing.
11:52 US consumer prices in September do not signal an inflationary breakout, despite the Fed
14:02 US consumer surveys in September signal falling inflation expectations, despite the Fed
15:58 US Treasury inflation break-evens ratchet down after Fed policy proposals and pivots

———WHAT———

Inflation (Expectations) Is Anything But Confusing: https://bit.ly/3j6CYE0
Decoding Gauges of Inflation Expectations Is Fed’s Next Big Task: https://bloom.bg/2T3qmDm
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7