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Federal Reserve IR Policy – Longer, Lower, and ZIRP Until Something (or Everything) Breaks
Federal Reserve IR Policy – Longer, Lower, and ZIRP Until Something (or Everything) Breaks The current interest rate cycle began in August of 2019 when the Fed cut rates from the previous cycle high of 2.4% to 2.1%. The Fed was then fighting the “repo-crisis” in which the Fed was incapable of setting interest rates…and […]
“Not QE”, Monetization, & “Definitely Asset Inflation”
“Not QE”, Monetization, & “Definitely Asset Inflation” Chart below shows the Federal Reserve holdings of Treasuries, a weekly change (black columns) and total holdings (red line) during QE1, QE2, Operation Twist, QE3, QT, and “Not QE”. Got it?!? This current “Not QE” explosion in QE is like some kind of old time vaudeville act (like […]
Putting Federal Debt In Perspective Against those Responsible In The Future
Putting Federal Debt In Perspective Against those Responsible In The Future Since 2007, US federal debt has risen 150% while annual US births (legal and otherwise) have fallen almost 14%. Said otherwise, over the dozen years since 2007, federal debt has increased by $13.8 trillion while 5.2 million fewer births have occurred over the same […]
For Second Week In A Row, Fed Buys Treasuries (AKA, QE4!?!)
For Second Week In A Row, Fed Buys Treasuries (AKA, QE4!?!) Summary: After 250 weeks without a purchase of Treasuries (since Oct. 2014), for the second week in a row, the Federal Reserve bought Treasuries.The $14 billion in purchasing is in stark contrast to zero purchases since Quantitative Easing ended and selling during Quantitative Tightening.When […]
Slowing Growth the Problem, Asset Appreciation the Solution?
Slowing Growth the Problem, Asset Appreciation the Solution? The Problem:The Fed and major central banks believe they are fighting a deflationary spiral battling ongoing misses to their inflation targets. But in truth their misguided policies are contributing to a depopulation spiral. They are forcing low interest rates that only exacerbate overcapacity for a consumer base among whom growth is fast decelerating. The cheap money is […]
Slowing Growth the Problem, Asset Appreciation the Solution?
Slowing Growth the Problem, Asset Appreciation the Solution? The Problem:The Fed and major central banks believe they are fighting a deflationary spiral battling ongoing misses to their inflation targets. But in truth their misguided policies are contributing to a depopulation spiral. They are forcing low interest rates that only exacerbate overcapacity for a consumer base among whom growth is fast decelerating. The cheap money is […]
Weekly Commentary: No One Knows How Monetary Policy Works
Weekly Commentary: No One Knows How Monetary Policy Works My interest was piqued by a Friday Bloomberg article (Ben Holland), “The Era of Cheap Money Shows No One Knows How Monetary Policy Works.” “Monetary policy is supposed to work like this: cut interest rates, and you’ll encourage businesses and households to borrow, invest and spend. […]
Economic Doom Loop Well Underway
Economic Doom Loop Well Underway From 2007 through 2018, births in the US have declined by 470 thousand on an annual basis, or an 11% decline. The US fertility rate has likewise cracked lower, from 2.12 births to 1.72, an 18% decline (2.1 births over a females childbearing years is considered zero growth). This has resulted in 4.5 million fewer net births in the […]
Census Bureau, Treasury, EIA Detail American Insolvency
Census Bureau, Treasury, EIA Detail American Insolvency Since 2007, US births and net immigration have consistently and unexpectedly fallen sharply. Over the same span, US federal debt and unfunded liabilities have soared while federal tax receipts, as a percentage of the federal debt and unfunded liabilities, continue declining. Total US energy consumption also peaked in ’07 and continues […]
Economic Breakdown Starts In East Asia due to Collapsed Births & Childbearing Populations
Economic Breakdown Starts In East Asia due to Collapsed Births & Childbearing Populations The floor under the East Asia neighborhood (consisting of China, Japan, South / North Korea, Taiwan, & Mongolia) is about to fall away. These nations (combined) equal slightly more than 20% of the global population and consume 27% of total global energy. From […]
Monday Musings on Monetization and Markets (or Fundamentals Don’t Matter, Liquidity Does)
Monday Musings on Monetization and Markets (or Fundamentals Don’t Matter, Liquidity Does) Being I’m not an economist nor associated with any financial or investment institutions nor do I have anything for you (dear reader) to buy or sell, I have total freedom to say what I please and freedom to share what I see. In that spirit, I […]
2019 Considered…Macro Population Cycle & Business Cycle Turning Down Together?
2019 Considered…Macro Population Cycle & Business Cycle Turning Down Together? Well, 2019 is here and it’s time to consider what sort of growth is possible. Speaking from a macro’est viewpoint, it’s helpful to acknowledge that 90% of the wealth/ income/ savings and nearly 90% of global energy is consumed by the high and upper middle income nations of […]
Why the Fed, Nor Any Central Bank, Can Ever Truly “Normalize”
Why the Fed, Nor Any Central Bank, Can Ever Truly “Normalize” Last week, I highlighted that since ’00, when the Federal Reserve has ceased adding to its balance sheet or begun “normalizing” (via rolling off assets), equity markets have swooned (detailed HERE). A simple idea today…that the end of population growth (where it matters) has long been upon […]
A Debt Based System Can’t Succeed Without Population Growth
A Debt Based System Can’t Succeed Without Population Growth A simple idea today…that the end of population growth (where it matters) is upon us. Absent population growth among the nations that do nearly all the consuming, a debt based economic and financial system can’t ultimately succeed. That is, without growth, assets generally don’t appreciate and debt is generally […]
Most Bearish of Economic Charts Are Reason To Be Most Bullish on Financial Assets
Most Bearish of Economic Charts Are Reason To Be Most Bullish on Financial Assets In the land of the blind (economics), the one eyed man is king. So, forget everything you know (or don’t know) about economics and follow some very simple math that economists (and financiers, Fed chiefs, and administration after administration) are unwilling to […]
