Working with my colleague Joe Calhoun (mostly him), we’ve come up with what we think is a list of questions that quite naturally arise from this week’s discussions of bank reserves, some specific and technical, the monetary system, some theoretical, some practical, and the (much) wider economic consequences which follow from those. 1. When the bank buys a Treasury note/bond/bill [...]
Why are there still outstanding dollar swap balances? It is the middle of September, for cryin’ out loud, and the Federal Reserve reports $52.3 billion remains on its books as of yesterday. Six months after Jay Powell conducted what he called a “flood”, with every financial media outlet reporting as fact this stream of digital dollars into every corner of [...]
One day short of one year ago, on September 16, 2019, China’s National Bureau of Statistics (NBS) reported its updated monthly estimates for the Big 3 accounts. Industrial Production (IP) is a closely-watched indicator as it is relatively decent proxy for the entire goods economy around the world. Retail Sales in the post-Euro$ #2 context give us a sense of [...]
Emperor Xi of China is still at. Showing no signs of letting up, still looking like the early stages of a purge, Communist Party Leader Xi Jinping continues to reorder the country’s vast security apparatus. His current target is the internal police and security force, which used to answer to the State Council.Now it answers to the Party, not the [...]
The Brazil strategy isn’t, of course, truly Brazilian. Like the Spanish flu which became famous for where it was first noticed and reported rather than where it originated, this monetary policy was thought up elsewhere and Banco do Brasil is merely the central bank which decided it was worth sharing.What is this Brazil (my term, by the way) policy? “Contingent [...]
There’s one key piece of the “petroyuan” story which has gotten lost in the frenzied hype. While many get fixated, and make others fixate, on how RMB-for-oil was going to, or maybe even still will, destroy the dollar there’s been important, legitimate functions for Shanghai’s International Exchange which don’t involve, and never really did, replacing the reserve currency. It’s all [...]
Does anyone remember the petroyuan? It doesn’t appear so, though not because the thing disappeared rather due to the fact that it didn’t. It was a really big deal for a time, pretty much all of 2018. What it was supposed to have represented was the dollar’s death knell. Guaranteed, one hundred, no, one thousand percent dead. This was widely [...]
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; [...]
According to the latest figures, Japan has tallied 56,074 total coronavirus cases since the outbreak began, leading to the death of an estimated 1,103 Japanese citizens. Out of a total population north of 125 million, it’s hugely incongruous. For now, however, it does present an obvious reason why the government there didn’t go to such deliberate lockdown extremes as so [...]
Forget scripted television. If you want Game of Thrones-style palace intrigue, you can do no better than Beijing in 2020. There are all sorts of rumors floating around, few of which can ever get confirmed. It’s not that there are rumors but rather how many of them, and how they don’t seem to be stamped out with the usual regularity [...]
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