{"id":8935,"date":"2015-06-09T05:55:18","date_gmt":"2015-06-09T10:55:18","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8935"},"modified":"2015-06-09T05:55:18","modified_gmt":"2015-06-09T10:55:18","slug":"more-central-banking-lunacy","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8935","title":{"rendered":"More Central Banking Lunacy"},"content":{"rendered":"

More Central Banking Lunacy<\/a><\/h3>\n

US Rate Hike: The Back-Pedaling Brigade<\/strong><\/p>\n

Last week\u2019s payrolls report was \u201cstronger than expected\u201d, which should actually be fairly meaningless, given how many times it will be revised and considering that it is a lagging economic indicator. However, in light of the Fed\u2019s absurd employment mandate, it does slightly increase the chances of a token rate hike at some point this year.<\/p>\n

\"Christine-Lagarde-EU-IMF\"IMF chief Lagarde \u2013 a political operator and bureaucrat since 2005, thinks monetary policy should remain as loose as possible. No-one seems to really know why.<\/p>\n

Photo credit: Reuters<\/p>\n

To this it should be noted that whether the Federal Funds rate is or isn\u2019t 25 basis points higher shouldn\u2019t make much difference either, but it would certainly have some symbolic significance if the Fed were to move away from its current zero interest rate policy. In the meantime, the broad US money supply TMS-2 has most recently recorded an approx. 7.8% year-on-year growth rate, which remains a historically very high level. Only in the context of the ever wilder oscillations since the Nasdaq bubble blow-out in 2000 can it be considered a \u201cmiddling\u201d rate of money supply growth:<\/p>\n

\"1-TMS-2\"<\/a>The broad US money supply aggregate TMS-2 (true money supply) is growing at 7.8% y\/y at last count \u2013 click to enlarge.<\/p>\n

Given that the Fed has stopped \u201cQE\u201d and its balance sheet growth has turned slightly negative, current money supply growth is the result of credit creation by commercial banks \u2013 especially industrial and commercial loans are essentially back at typical boom growth rates. Most recently they clocked in at a rate of 12.45% annualized.<\/p>\n

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

More Central Banking Lunacy US Rate Hike: The Back-Pedaling Brigade Last week\u2019s payrolls report was \u201cstronger than expected\u201d, which should actually be fairly meaningless, given how many times it will be revised and considering that it is a lagging economic indicator. However, in light of the Fed\u2019s absurd employment mandate, it does slightly increase the […]<\/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":[124,6177,303,6230,305,418,1154,434,6229],"class_list":["post-8935","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-christine-lagarde","tag-fed","tag-federal-funds-rate","tag-federal-reserve","tag-imf","tag-interest-rate-policy","tag-international-monetary-fund","tag-us-rate-hike"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8935","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=8935"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8935\/revisions"}],"predecessor-version":[{"id":8936,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8935\/revisions\/8936"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}