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. [...]
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 [...]
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 [...]
Japan’s yen is backward, at least so far as its trading direction may be concerned. This is all the more confusing especially over the past few months when this rising yen has actually been aiding the dollar crash narrative while in reality moving the opposite way from how the dollar system would be behaving if it was really happening. A [...]
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 [...]
It took some doing, and some time, but Mexico has managed to bring its car production back up to more normal levels. For two months, there had been practically zero automaking in one of the biggest auto-producing nations. Getting back near where things left off, however, isn’t exactly a “V” shaped recovery; it’s only halfway.Two months of zero production are [...]
The good news: the World Trade Organization (WTO) has crunched the numbers for 2020’s horrific second quarter and where global trade is concerned it may not have been as bad as first feared. Make no mistake, it was bad but not crashing down as far as the most pessimistic of the dreamed-up scenarios. Given where things stand now with only [...]
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 [...]
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