What the hell is a bank reserve? Is it money? Since its very creation is a byproduct of concerted central bank action, the thing sure sounds like it has to be. As we know only too well since 2008, the financial media will uniformly call these things and the creation of more of them “money printing.” If everyone says…Not only [...]
On June 24, Europe’s central bank, the ECB, settled what it called T-LTRO III. Technically, this was an open market operation (OMO) and therefore a specific kind of LTRO. The “T” part of the program doesn’t really matter unless you happen to be running the short desk at a major European bank. For the public, the Roman numeral “III” added [...]
You can (and should) read the entire text of Richard Clarida’s speech delivered today (via webcast) for the Peterson Institute for International Economics. The Federal Reserve Vice Chairman’s remarks are a perfect example of the unnecessary gobbledygook that Economists like him reach for when clarity is warranted. You’d think after being unable to meet their definitions for their statutory mandate on [...]
If you have to work overtime just to catch up to where you were supposed to be, you haven’t done a good job. It’s really that simple. And in the context of inflation, therefore legitimate economic growth as distinguished from fake booms, that’s really all bond yields are.The lower rates go, and the longer they stay lower, the more they [...]
Before getting into the why of the dollar’s stubbornly high exchange value in the face of so much “money printing”, we need to first go back and undertake a decent enough review of the guts maybe even the central focus of the global (euro)dollar system. I’ve written before that the repo market is the lender of last resort, not central [...]
While the world is taking the smallest of baby steps in the right direction, mostly it’s been related to the part of the eurodollar system that everyone can see. Not bank reserves and the Fed’s “money printing”, though you can see them and we’re told to obsess about them those things don’t matter. I mean instead the dollar’s exchange value; [...]
The Bank of Japan has been paying Japanese banks a supplement on loans they collateralize with the central bank. This program is not new, announced first during the depths of COVID earlier this year, but its growing popularity has demanded attention. In addition to this market “support”, in April BoJ added a bonus of 10 bps to each pledged loan.The [...]
There’s one part of the dollar story I’ve not yet touched on recently. We’ve already heard, too much, about how the Fed’s killing the dollar, or at least is aiming to with all its immense money printing fire power. While it’s the euro which has demanded so much from DXY that it almost seems plausible (to a few) this time, [...]
If that wasn’t the most anticlimactic worst economic quarter in history. The numbers were just as bad as people were expecting – which is the point. It’s not like this economic collapse snuck up on anyone, nor did its scale and depth. We’ve all known from the very beginning what the deal was going to be. Headline real GDP fell [...]
When people accuse the Federal Reserve of anything when it comes to inflation, they say the central bank is cooking the books to hide it. Back in 2000, for example, monetary observers were aflutter as policymakers shifted away from the CPI and to the PCE Deflator as their ultimate standard for broad consumer price behavior. The bastards, the latter widely [...]
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