{"id":25903,"date":"2017-09-21T06:29:57","date_gmt":"2017-09-21T11:29:57","guid":{"rendered":"http:\/\/olduvai.ca\/?p=25903"},"modified":"2017-09-21T06:29:57","modified_gmt":"2017-09-21T11:29:57","slug":"will-the-fed-really-normalize-its-balance-sheet","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=25903","title":{"rendered":"Will The Fed Really \u201cNormalize\u201d Its Balance Sheet?"},"content":{"rendered":"<header class=\"entry-header\">\n<h3 class=\"entry-title\"><a href=\"http:\/\/investmentresearchdynamics.com\/will-the-fed-really-normalize-its-balance-sheet\/\">Will The Fed Really \u201cNormalize\u201d Its Balance Sheet?<\/a><\/h3>\n<div class=\"entry-meta\">To begin with, how exactly does one define \u201cnormalize\u201d in reference to the Fed\u2019s balance sheet? \u00a0The Fed predictably held off raising rates again today. \u00a0However, it said that beginning in October it would no longer re-invest proceeds from its Treasury and mortgage holdings and let the balance sheet \u201crun off.\u201d<\/div>\n<\/header>\n<div class=\"entry-content\">\n<p>Here\u2019s the problem with letting the Treasuries and mortgage just mature: \u00a0 Treasuries never really \u201cmature.\u201d Rather, the maturities are \u201crolled forward\u201d by refinancing the outstanding Treasuries due to mature. \u00a0 The Government also issues even more Treasurys to fund its reckless spending habits. \u00a0Unless the Fed \u201creverse repos\u201d the Treasurys right before they are refinanced by the Government, the money printed by the Fed to buy the Treasurys will remain in the banking system. \u00a0I\u2019m surprised no one has mentioned this minor little detail.<\/p>\n<p>The Fed has also kicked the can down the road on hiking interest rates in conjunction with shoving their phony 1.5% inflation number up our collective ass. \u00a0The Fed Funds rate has been below 1% since October 2008, or nine years. \u00a0\u00a0Quarter point interest rate hikes aren\u2019t really hikes. we\u2019re at 1% from zero in just under two years. That\u2019s not \u201chiking\u201d rates. \u00a0Until they start doing the reverse-repos in $50-$100 billion chunks at least monthly, all this talk about \u201cnormalization\u201d is nothing but the babble of children in the sandbox. \u00a0I think the talk\/threat of it is being used to slow down the decline in the dollar.<\/p>\n<p>To justify its monetary policy, Yellen stated today that she\u2019s, \u201cvery pleased in progress made in the labor market.\u201d \u00a0Again, how does one define progress? \u00a0Here\u2019s one graphic which shows that the labor market has been and continues to be a complete abortion:<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Will The Fed Really \u201cNormalize\u201d Its Balance Sheet? To begin with, how exactly does one define \u201cnormalize\u201d in reference to the Fed\u2019s balance sheet? \u00a0The Fed predictably held off raising rates again today. \u00a0However, it said that beginning in October it would no longer re-invest proceeds from its Treasury and mortgage holdings and let the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[16079,4468,1849,16078,503,534,841],"class_list":["post-25903","post","type-post","status-publish","format-standard","hentry","category-economics","tag-balance-sheet-normalization","tag-fed-funds-rate","tag-financial-markets","tag-fomc-meeting","tag-market-manipulation","tag-monetary-policy","tag-us-economy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25903"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25903\/revisions"}],"predecessor-version":[{"id":25904,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25903\/revisions\/25904"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}