This week, three G-7 central banks had meetings and all decided to CHECK and leave policy unchanged. This was widely expected as there was little reason to UPSET the incoming Biden administration with any idea of currency manipulation. However, the Bank of Canada, Bank of Japan and European Central Bank all discussed the fear of a further slowdown from an increased spread of covid-19.
Posts Tagged ‘bitcoin’
Notes From Underground: Central Bank Poker
January 21, 2021Notes From Underground: Where Do We Go From Here?
January 3, 2021In 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.
Notes From Underground: Ghosts (Past, Present and Future)
December 21, 2017I want to wish every one who celebrates Christmas a very joyous season, and, most importantly I want to wish all my readers a year of good health and peace. The meaning of Christmas, Hanukkah and the spirit of the season should resonate with us everyday of the year. As I have told my children over the years about their wedding day: It is the least important day for it is the next day that matters most as does every day that follows. May we experience the meaning of the season each and every day of the coming year. I was always amazed that wars would halt for a Christmas truce but begin hostilities 12 days later. If you could stop for 12 days why not 12 months?
Notes From Underground: Hell Has Frozen Over. Greenspan and Harris Agree
December 7, 2017Over the last 30 years I have not had much regard for Alan Greenspan. He has been wrong on many of the issues on which he has opined, not least his speech on home bias and his pleadings for U.S. homeowners to refinance their mortgages and use home equity as a piggy bank. But like Holden, I digress. In his CNBC interview Wednesday he was adamant that fiscal stimulus was ill-advised, but tax reform was necessary. He said Congress should use the reform to close tax loopholes and run budget surpluses while we are at some modicum of full employment. I agree with this and as Greenspan maintained, the beginning of this tax reform OUGHT to be the reconsideration of Bowles/Simpson. Greenspan also stressed “… the folks in Washington do not understand that reducing the size of the system portfolio is a necessary condition for normalizing the price of credit.” I also agree with this viewpoint. And, in regards to BITCOIN, Sir Alan explained you can’t create VALUE out of nothing.
Notes From Underground: Bored to Tears by the Global Macro News
December 1, 2013It’s all good, so say the pundits. The tapering discussions have now moved to the issue of FORWARD GUIDANCE as Chairman Bernanke has maintained that at the zero bound interest rate FG may have more influence on rates than quantitative easing. For the Nth time, the FED is at a fork in the road and doesn’t know which path to take. A continuously steepening YIELD CURVE is an indication that the market is signaling its discomfort with the Fed. The rise in the longer end of the curve is causing the Fed a great deal of concern because their model seems to say that continued pressure on the short end will act to keep long rates low (unless, of course, the market is questioning the Fed’s credibility and rolling out of BONDS and into the equities). A key question for the FED: Are equity markets a better long-term investment (hedge) against the success of Fed policies?