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 [...]
45.1 Why Are US Treasury Bills in Such High Demand?There is a mainstream explanation for why US Treasury Bill rates are falling. There is also a Eurodollar / Shadow Money / Collateral System explanation. Jeff Snider reviews the two perspectives and looks ahead to where trouble may lay. ———WHO——— Twitter: https://twitter.com/JeffSnider_AIPTwitter: https://twitter.com/EmilKalinowskiArt: https://davidparkins.com/ Jeff Snider, Head of Global Investment Research for Alhambra Investments [...]
44.2 China Announces 'No Sharp Turns' for Bad EconomyChina's economy reported positive numbers, yet they are anything but positive. Despite being the only large economy to grow in 2020, and in spite of analysts forecasting further acceleration in 2021, the "No Sharp Turns" policy implies concern of internal fragility. [Emil’s Summary] Ad Astra is Latin for “to the stars”, which is [...]
44.1 Linking the Long and Great Depressions to TodaySocial upheaval, mass unemployment and economic desperation - this isn't the first time. We look at how the modern unemployment rate came about during the crises of The Long Depression. Also, real GDP-per-capita growth comparisons between The Long and Great Depressions to today. [Emil’s Summary] Ad Astra is Latin for "to the stars", [...]
43.2 Asset Bubbles & Money Financed Fiscal ExpansionHow does one define an asset bubble? Might there be fundamental, non-speculative reasons why prices are persistently high? Also, why did money-financed fiscal expansion fail in Japan? What does that experience tell us about the present? [Emil’s Summary] As many listeners have long suspected, your podcast host did, as a child, run away and [...]
When the going got rough, Bernanke…blamed the weather? It was September 24, 2008, amidst financial chaos the likes of which the entire world hadn’t seen since the early thirties. Hauled up before Congress’ Joint Economic Committee to explain what was going on, or attempt some kind of reasonable sounding explanation, Bernanke pointed to a few positives out there despite so [...]
43.1 The Fed doesn't do Money so it offers SuasionCentral banks cannot define, identify, measure or map modern money. And they haven't been able to since the 1970s. So instead they offer "moral suasion". That's a fancy word for threats, posturing and coercion. That's all fine and well until the global economy requires money. [Emil's Summary] As many listeners have [...]
42.2 Real Yields Near Record Lows say Economy's AwfulReal yields recently hit RECORD lows. Yes, inflation is rising but is that due to the real economy expanding? Real yields say, "No!". Real yields say, 'The real economy is AWFUL!' So what is driving inflation expectations higher? Fuel. Oil prices are up - but the economy isn't. [Emil’s Summary] A recent [...]
42.1 WSJ Columnist asks Fed: 'What the...?' Wall Street Journal columnist Andy Kessler recently spoke with Jeff Snider about central banks and monetary policy. He ended a recent column with, "The least the Fed can do is get out of the way. End QE now". [Emil's Summary] A recent Hidden Forces podcast with Demetri Kofinas featured professor Kevin Vallier and [...]
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