Tag Archive: QE

The Endangered Inflationary Species: Gazelles

Nevada is, by all accounts and accountants, in rough shape. Very rough shape. An economy overly dependent upon a single industry, tourism, in this case, is a disaster waiting to happen should anything happen to that industry. Pandemic restrictions, for instance.

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Even The People ‘Printing’ The ‘Money’ Aren’t Seeing It

Everyone in Europe has long forgotten about what was going on there before COVID. First, an economy that had been stuck two years within a deflationary downturn central bankers like Italy’s new recycled top guy Mario Draghi clumsily mistook for an inflationary takeoff. Both the inflation puzzle and ultimately a pre-pandemic recession have taken a back seat to everything corona.Whereas Draghi spent those years howling for inflationary conditions...

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If the Fed’s Not In Consumer Prices, Then How About Producer Prices?

It’s not just that there isn’t much inflation evident in consumer prices. Rather, it’s a pretty big deal given the deluge of so much “money printing” this year, begun three-quarters of a year before, that consumer prices are increasing at some of the slowest rates in the data.

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They’ve Gone Too Far (or have they?)

Between November 1998 and February 1999, Japan’s government bond (JGB) market was utterly decimated. You want to find an historical example of a real bond rout (no caps nor exclamations necessary), take a look at what happened during those three exhilarating (if you were a government official) months.

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Consumers, Too; (Un)Confident To Re-engage

There is a lot of evidence which shows some basis for expectations-based monetary policy. Much of what becomes a recession or worse is due to the psychological impacts upon businesses (who invest and hire) as well as workers being consumers (who earn and then spend).

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Deflation Returns To Japan, Part 2

Japan Finance Minister Taro Aso, who is also Deputy Prime Minister, caused a global stir of sorts back in early June when he appeared to express something like Japanese racial superiority at least with respect to how that country was handling the COVID pandemic.

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

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.”

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Where Is It, Chairman Powell?

Where is it, Chairman Powell? After spending months deliberately hyping a “flood” of digital money printing, and then unleashing average inflation targeting making Americans believe the central bank will be wickedly irresponsible when it comes to consumer prices, the evidence portrays a very different set of circumstance.

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Good Payrolls Still Say Slowdown

The payroll report for the month of October 2020 was a very good one. This shouldn’t be surprising, perfect BLS publications appear with regularity even during the most challenging of circumstances. Headlines and underneath, everything looked fine last month.

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What’s Going On, And Why Late August?

This isn’t about COVID. It’s been building since the end of August, a shift in mood, perception, and reality that began turning things several months before even then. With markets fickle yet again, a lot today, what’s going on here?

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Consumer Confidence Indicator: Anesthesia

Europeans are growing more downbeat again. While ostensibly many are more worried about a new set of restrictions due to (even more overreactions about) COVID, that’s only part of the problem. The bigger factor, economically speaking, is that Europe’s economy has barely moved, or at most not moved near enough, off the bottom.

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Why Aren’t Bond Yields Flyin’ Upward? Bidin’ Bond Time Trumps Jay

It’s always something. There’s forever some mystery factor standing in the way. On the topic of inflation, for years it was one “transitory” issue after another. The media, on behalf of the central bankers it holds up as a technocratic ideal, would report these at face value. The more obvious explanation, the argument with all the evidence, just couldn’t be true otherwise it’d collapse the technocracy right down to the ground.And so it was also in...

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Re-recession Not Required

If we are going to see negative nominal Treasury rates, what would guide yields toward such a plunge? It seems like a recession is the ticket, the only way would have to be a major economic downturn. Since we’ve already experienced one in 2020, a big one no less, and are already on our way back up to recovery (some say), then have we seen the lows in rates?Not for nothing, every couple years when we do those (record low yields) that’s what “they”...

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This Has To Be A Joke, Because If It’s Not…

After thinking about it all day, I’m still not quite sure this isn’t a joke; a high-brow commitment of utterly brilliant performance art, the kind of Four-D masterpiece of hilarious deception that Andy Kaufman would’ve gone nuts over. I mean, it has to be, right?I’m talking, of course, about Jackson Hole and Jay Powell’s reportedly genius masterstroke.

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Not This Again: Too Many Treasuries?

Tomorrow, the Treasury Department is going to announce the results of its latest bond auction. A truly massive one, $47 billion are being offered of CAH4’s notes dated August 31, 2020, maturing out in August 31, 2027. In other words, the belly of the belly, the 7s.We’ve already seen them drop for two note auctions this week, both equally sizable.

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Fama 2: No Inflation For Old Central Banks

The Bureau of Labor Statistics reported that the core CPI in July 2020 jumped by the most (+0.62%) in almost thirty years. After having dropped month-over-month for three months in a row for the first time in its history, it has posted back to back gains the latest of which pushing the index back above its February level.

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Eugene Fama’s Efficient View of Stimulus Porn

The key word in the whole thing is “bias.” For a very long time, people working in and around the finance industry have sought to gain tremendous advantages. No explanation for the motive is required. Charts, waves, technical (sounding) analysis and so on.

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Science of Sentiment: Zooming Expectations Wonder

It had been an unusually heated gathering, one marked by temper tantrums and often publicly expressed rancor. Slamming tables, undiplomatic rudeness. Europe’s leaders had been brought together by the uncomfortable even dangerous fact that the economic dislocation they’ve put their countries through is going to sustain enormously negative pressures all throughout them. What would a “united” European system do to try and fill in this massive hole?The...

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Accusing the Accused of Excusing the Mountain of Evidence

Why not let the accused also sit in the jury box? The answer seems rather obvious. While maybe the truly honest man accused of a crime he did commit would vote for his own conviction, the world seems a bit short on supply of those while long and deep offering up practitioners of pure sophistry in their stead.

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Wait A Minute, The Dollar And The Fed’s Bank Reserves Are Directly Not Inversely Related

One small silver lining to the current situation, while Jay Powell is busily trying to sell you his inflation fantasy, he’s actually undermining it at the very same time. No mere challenge to his own “money printing” fiction, either, the Fed’s Chairman is actively disproving the entire enterprise. While he says what he says, pay close attention instead to what he’s done.

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