It’s worth taking a look at a couple of extremes, and the putting each into wider context of inflation/deflation. As you no doubt surmise, only one is receiving much mainstream attention. The other continues to be overshadowed by…anything else. To begin with, the US Bureau of Labor Statistics reported today that US import prices were up on annual basis for [...]
46.3 On the Economic Road to NothingGoodVilleRecent, low consumer price inflation readings combined with falling US Treasury Bill yields are cautionary sign posts that say this reflationary path may not be the road to recovery but a deflationary cul-de-sac. [Emil’s Summary] Having studied monetary policy for several years it was only natural that your podcaster spent considerable time contemplating the essential [...]
The Aussies weren’t the first to drive into the YCC channel. That “honor” belonged instead where it always does: Japan. The Japanese had also pioneered yield curve control just like they had for practically every single element behind post-crisis monetary policy everywhere else around the world. It’s always a safe bet that if some central bank somewhere starts doing something [...]
46.2 Nevada Solution to Covid Economy: CEO as RulerNevada's tourism economy has been wrecked by the Corona. Governor Sisolak, to encourage investment, is proposing to offer corporations to set up their own local government structures. [Emil’s Summary] Having studied monetary policy for several years it was only natural that your podcaster spent considerable time contemplating the essential elements of fiction. Some [...]
Long end UST yields on the rise with reflation-y factors taking more of a hold, last year’s postponed YCC flirtation is almost certain to be rekindled over the weeks ahead. We’ve been told how it’s really simple, meaning low interest rates are stimulus and this must be maintained without fail. But what’s really been responsible for all the failing?When I [...]
46.1 Interbank Netting: The Pressure to Get to ZeroPrivate banks fund global economic activity. But how do they move money among themselves? We consider the November 20, 1985 software glitch that shocked the interbank market. Then, a brief history of Fedwire, Telex, SWIFT and CHIPS. Finally, September 2019's repo market freeze. [Emil's Summary] Having studied monetary policy for several years [...]
This is a holiday-shortened week in the US but there is some important data on tap. Retail sales are expected to show a month-to-month rise for the first time since September. Year-over-year numbers remain pretty subdued and likely will until life returns to something resembling normal. Producer prices will likely rise but inflation continues its benign ways. It is likely [...]
Sometimes, the government will tell you a lot when it really doesn’t want to tell you anything. It’s not what they say, but what they don’t. In the case of the Treasury Department, there was a small, seemingly nondescript morsel buried down underneath the rest of its more immediately consequential next-quarter projections. While focused, quite rightly, on the scaling back [...]
Japan is just the name of a group of large islands on the far side of the Pacific from the United States. For most people, there’s not much else more to say beyond the charm of weird, ofttimes masochistic tendencies embedded within the inscrutably fascinating Japanese gameshows. Maybe something about suicidal demographics. The financial media has done such a poor [...]
There is another part to the upcoming July debt ceiling constraint. On the one hand, as noted last week, the Department of Treasury will have to draw down its checking account balance it holds at the Federal Reserve (TGA). There are, as there have always been, consequences for doing so insofar as bank reserves are concerned. These are extrapolated into [...]
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