82.3 The Federal Reserve is NOT a Central Bank Pt. 3
———Ep 82.3 Summary———
Central banks inject liquidity into money markets to PREVENT a crisis. Let us review the last 14 years: Global Financial Crisis I (2008), European Sovereign Debt Crisis (2011), Chinese Reserve Crisis (2015), Global Financial Crisis II (2020). Not too good. Do they know what they’re doing?
Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL
———Ep 82.3 Topics———
00:00 What is a central bank supposed to be? It is the institution that is supposed to step in.
01:23 But should or do central banks step in front of an asset bubble?
02:27 The mainstream narrative of March 2020 starts with foreign banks selling US Treasuries.
06:49 Why were foreign banks selling US Treasuries at all? What caused the selling?
08:21 There were six quantitative easing episodes by the Federal Reserve between 2008-2020.
09:33 A wave of Treasury selling did not clog the repo market – it was already impaired.
14:39 Are the European Central Bank and People’s Bank of China janitors too?
17:00 The Fed’s behavior as janitor negatively impacts the real economy and employment.
18:34 The Fed’s behavior as janitor negatively impacts the private banking system and credit.
———Ep 82.3 References———
When You Aren’t Actually A Central Bank, Part 2: The Stubborn Deflation: https://bit.ly/3x5fMxt
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7
Jeff Snider, Head of Global Investment Research for Alhambra Investments and Emil Kalinowski.
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