Notes From Underground: A European Discussion With Professor Polleit

Yes, Wednesday is FED day and the markets are expecting a 50 basis point increase in the FED FUNDS RATE to a range of 0.75% to 1%. The most important issue will be the size of the balance sheet unwind and whether Chair Jerome Powell is good to his heightened concerns about headline inflation means a full throttle on balance sheet shrinkage, reaching the full $95 billion a month at a quick pace. So Jerome, let’s have at it and let the markets decide the impact on myriad asset classes. In 2018, this double shotgun of QT and interest rate hikes proved too much for the highly leveraged global markets. Now that the Fed’s balance sheet is twice as large let’s see how it will affect the leverage in the global system.

The most interesting aspect of the FOMC meeting and Powell press conference is whether there’s any concern about the 12% rise in the U.S. dollar since the beginning of the year. Every other central bank discusses interest rates and the value of its currency but the most important central bank never discusses the value of the DOLLAR. Will we get a sea change?

On Tuesday I recorded another Financial Repression Authority podcast with Richard Bonugli and Thorsten Polleit, a highly regarded finance professor from Frankfurt, Germany. This is a euro-centric discussion and well worth a listen in effort to truly understand the significance of the European Union and ECB going forward. Enjoy some fine whiskey and give it a listen before the FOMC decision Wednesday afternoon.
Click here to listen to the podcast.

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10 Responses to “Notes From Underground: A European Discussion With Professor Polleit”

  1. ShockedToFindGambling Says:

    Yra, what are you expecting today on the shrinkage?

    • Yra Says:

      shocked –as i wrote a much quicker pace to get to the 95 billion in QT then Powell delivered which is why it was deemed dovish by the market

  2. ARTHUR Says:

    D-mark currency still in circulation

    BRIDGEWATER “An Update from Our CIOs: What Was Coming Is Now Upon Us”

  3. ARTHUR Says:

    Marc Faber monthly commentary

  4. ShockedToFindGambling Says:

    Amazing how Powell went from being a genius on Wednesday to having a credibility problem om Friday.

    Confidence is what you have before you understand the problem.

  5. Pierre Says:

    I would like to see Jerome Powell come out smoking a cigar at the next Fed Interest rate decision…..that would instill some confidence.

  6. Pierre Says:

    What if Russia collapses? I found this video interesting, thought I would share it here.

    • Yra Says:

      Pierre—thanks for the link to a good synopsis of the geo political reality of the eur asian land mass —Russia is a keystone of that part of the world and maintains 13 time zones to complicate the situation—-never as easy as the popular narrative wishes to believe

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