{"id":28682,"date":"2017-12-09T09:06:06","date_gmt":"2017-12-09T14:06:06","guid":{"rendered":"http:\/\/olduvai.ca\/?p=28682"},"modified":"2017-12-09T09:06:06","modified_gmt":"2017-12-09T14:06:06","slug":"stranger-things","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=28682","title":{"rendered":"Stranger Things"},"content":{"rendered":"
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Stranger Things<\/a><\/h3>\n<\/div>\n<\/div>\n
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\u00a0\u00a0\u00a0\u00a0 <\/strong>The hidden agenda in the so-called tax reform bill is to act as stop-gap quantitative easing<\/em> to plug the \u201cliquidity\u201d hole that is opening up as the Federal Reserve (America\u2019s central bank) makes a few gestures to winding down its balance sheet and \u201cnormalizing\u201d interest rates. Thus, the aim of the tax bill is to prop up capital markets, and the apprehension of this lately is what keeps stocks making daily record highs. Okay, sorry, a lot to unpack there.<\/p>\n

Primer: quantitative easing (QE) is a the Federal Reserve\u2019s weasel phrase for its practice of just creating \u201cmoney\u201d out of thin air, which it uses to buy US Treasury bonds (and other stuff). The Fed buys this stuff through intermediary Too Big To Fail banks which allows them to cream off a cut and, theoretically, pump the \u201cmoney\u201d into the economy. This \u201cmoney\u201d is the \u201cliquidity.\u201d As it happens, most of that money ends up in the capital markets. Stocks go up and up and bond yields stay ultra low with bond prices ultra high. What remains on the balance sheets are a shit-load of IOUs.<\/p>\n

The third round of QE was officially halted in 2014 in the USA. However, the world\u2019s other main central banks acted in rotation \u2014 passing the baton of QE, like in a relay race \u2014 so that when the US slacked off, Japan, Britain, the European Central Bank, and the Bank of China, took over money-printing duties. And because money flies easily around the world via digital banking, a lot of that foreign money ended up in \u201csure-thing\u201d US capital markets (as well as their own ). Mega-tons of \u201cmoney\u201d were created out of thin air around the world since the near-collapse of the system in 2008.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Stranger Things \u00a0\u00a0\u00a0\u00a0 The hidden agenda in the so-called tax reform bill is to act as stop-gap quantitative easing to plug the \u201cliquidity\u201d hole that is opening up as the Federal Reserve (America\u2019s central bank) makes a few gestures to winding down its balance sheet and \u201cnormalizing\u201d interest rates. Thus, the aim of the tax […]<\/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":[57,122,282,303,449,487,536,538,2615,661,662,17414,3650,17413],"class_list":["post-28682","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-central-bank","tag-european-central-bank","tag-fed","tag-james-howard-kunstler","tag-liquidity","tag-money","tag-money-printing","tag-peoples-bank-of-china","tag-qe","tag-quantitative-easing","tag-to-big-to-fail","tag-us-federal-reserve","tag-us-tax-reform-bill"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28682","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=28682"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28682\/revisions"}],"predecessor-version":[{"id":28683,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28682\/revisions\/28683"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28682"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28682"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28682"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}