Archive for January 3rd, 2021

Notes From Underground: Where Do We Go From Here?

January 3, 2021

In 2020, the entire world endeavored to smooth out a new wrinkle in the global macro landscape as the covid pandemic spurred fears of a global depression as economies shuttered to stem the virus’s spread. The FED stepped in to ensure that the global system had access to enough dollars as corporations and individuals rushed to sell assets in an effort to meet a potential economic contraction. The U.S. central bank did its best to reduce the fear of deflation by opening dollar swap lines to more foreign central banks, as well as pushing U.S. interest rates back to the lower zero bound. The huge amount of liquidity thrust upon the financial system stopped a global selloff in its tracks.