Because there is no actual money in monetary policy, central banks have forced themselves (by having abandoned the monetary system decades ago) into an economic role that looks something like a hypnotist’s. Inflation is a monetary phenomenon, the man said, but in lieu of any practical experience in money what is a central bank to do?Manipulate emotion. Give it a [...]
For the FOMC, there was no alternative. The CPI’s keep going higher while the unemployment rate continues lower. Those who are Economists and practice Economics’ brand of econometrics, these would be scary times ahead. Inflationary times unless someone puts a stop to them first. Not because of consumer prices today, but because officials are worried consumers are becoming normalized to [...]
The TIC data is great, it’s fantastic and wonderful if by comparison to the utterly slim pickings available elsewhere – which is practically nil. Compared to what I’d really like to know, the series leaves a ton out there. This is understandable if still unforgivable; on the one hand, the Treasury International Capital report itself predates the eurodollar system by [...]
Milton Friedman was touring India, and while there he shocked his audience by stating, “Inflation is always and everywhere a monetary phenomenon.” This was 1963, and the audacity of that statement is today understated. Back then, Keynes didn’t just rule there was hardly any opposition to such accepted orthodox dogma.Arguing from firmly empirical rather than theoretical grounds, Friedman’s effort was [...]
Supply shock versus inflation. There’s a huge difference, both in terms of what causes each and how they play out. As discussed in great detail here, it is the bond market not central bankers which repeatedly has proved it can sort out this enormously consequential distinction. Bonds know if there is an overflow of money, they need to pay attention [...]
For several years now, we’ve been harping constantly and consistently about what’s on the PBOC’s balance sheet; or, really, what conspicuously isn’t in very specific line-item numbers. Briefly, simply, if dollars are being extended into China, as has been claimed over the years, particularly the last few, they’re going to show up on the Chinese central bank’s balance sheet. Specifically, [...]
The Chinese yuan had traded in a curiously narrow range ever since mid-June. Stuck, it seemed, between 6.50 at the bottom and around 6.45 ceiling, the lack of movement in either direction raised suspicions of concerted official effort. China’s officials, obviously, certainly not those from the Federal Reserve who spend all their time scouring drug reports and benefits cliffs so [...]
It was one of those signals which mattered more than the seemingly trivial details surrounding the affair. The name MF Global doesn’t mean very much these days, but for a time in late 2011 it came to represent outright fear. Some were even declaring it the next “Lehman.” While the “bank” did eventually fail, and the implications of it came [...]
The first half of 2021 was inundated with government helicopters, more QE’s, and then CPI’s put up with guarantees the “inflation” was going to continue for a long time. Jamie Dimon, JP Morgan’s often hapless CEO, proudly declared US Treasuries beyond the touch of any 10-foot pole. With the economy on fire, he “reasoned”, who would ever want safe and [...]
Because it’s what you don’t see that ultimately matters, the public is left entirely in the dark unable to join what really should be easy dots to connect. Something is wrong, and pretty much everyone acknowledges this if in their own way. We can see the social and political disintegration before our very eyes, the anger, the “revolution”, even the [...]
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