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What If CNY’s Backdoor Still Isn’t A Big Enough Exit?

By |2021-03-02T18:22:26-05:00March 2nd, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

China’s currency had been on fire for seven months straight. Rising nearly in a straight line, from May 27 last year until very early January this year, CNY had gone from a certain plunge into the devastating monetary abyss (unintentional devaluation) to a significant basis for Xi Jinping’s global boasting. This was no ordinary turnaround.The timing of it speaks initially [...]

Xi To Davos: If You’re Waiting For Us, We’re Waiting For You

By |2021-01-25T17:59:44-05:00January 25th, 2021|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Chinese erstwhile dictator Xi Jinping asked the Davos gathering of the superrich, can’t we all just get along? More than a weird juxtaposition, appearing virtually before other virtual attendees, the Communist strongman wanted to make plain his view, therefore China’s, he harbors no desire for a renewal of the Cold War. Though we come from very different places and [...]

Not Manipulation, Montagu’s Monkey

By |2020-12-18T19:06:08-05:00December 18th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Chinese have never subscribed to the modern wave of “transparency” which has swept over Western central banks. The People’s Bank of China, Big Mama, very much operates instead on the doctrine which preceded it. Basically, Montagu Norman’s way of doing things. Never explain, never excuse.This mantra has been applied to what it does outside of China as much as [...]

Redistributing A Shrinking Pie Is Nothing Like A Flood; Because There Was No Flood

By |2020-11-18T18:11:07-05:00November 18th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the past couple months, the foreign official sector has been able to go back to buying (net) US Treasuries again. Not a lot, but it’s a change from the prior period when overseas central banks and governments would dependably dump tens of billions each month. Contrary to convention, this kind of buying corresponds to rising rates, the reflationary stuff. [...]

Six Point Nine Times Two Equals What It Had In Twenty Fourteen

By |2020-11-16T18:47:36-05:00November 16th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was a shock, total disbelief given how everyone, and I mean everyone, had penciled China in as the world’s go-to growth engine. If the global economy was ever going to get off the ground again following GFC1 more than a half a decade before, the Chinese had to get back to their precrisis “normal.” In 2014, the clock was [...]

Three From Xi (bonus 4th for CNY)

By |2020-10-28T16:35:01-04:00October 28th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Physical cash vs. bank reserves. Quality growth vs. quantity. Xi Jinping vs. everyone not onboard with Xi Jinping. All three contests are actually very simple and straightforward – once you let go of the strong economy, money printing Federal Reserve nonsense. As to the last of the trio, Emperor Xi has been awfully keen this year to redo government flags.Communists [...]

CNY + TIC = October 2020, or 2017?

By |2020-10-20T18:10:21-04:00October 20th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The dominating feature during the last months and days of globally synchronized growth (Reflation #3, to you and me) wasn’t inflation nor growth. It was instead CNY. Taken at face value, the marvelous resurrection of China’s currency after 2014-16’s debacle (Euro$ #3, to you and me) did seem consistent with a global dollar system (eurodollar, to you and me) rebound.And [...]

Are These Magic Beans?

By |2020-10-09T18:56:27-04:00October 9th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

China’s Caixin Composite PMI came down a little bit in the month of September 2020. According to the latest update, the country’s manufacturing sector index declined by a small amount while services accelerated only modestly. Combined, the manufacturing side worked out to contribute more to the composite than services, so the score for last month dropped to 54.5 from 55.1 [...]

Small But Real Progress Carrying The Yen Carry Trade Into the Light

By |2020-09-25T17:21:44-04:00September 25th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Bill Dudley was a key guy at the Fed for a very long time. It is very important to point this out. Not only did he hold two of the central bank’s most crucial positions, he held them during the institution’s most critical moments. Dudley was Manager of the system’s Open Market Account in August 2007. On the seventh of [...]

Brief Summary Of Where Things Stand Getting Closer to Q4

By |2020-09-24T20:25:50-04:00September 24th, 2020|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Flash PMI’s for September 2020 around the world add more evidence to the possibility of a global slowdown during the economy’s all-important rebound quarter. Q2 was the big downturn, and so it always going to be Q3 where the bounce back would be sharpest. While that has definitely been the case, concerns are mounting for what might follow in Q4. [...]

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