Tag Archives: Central Banks

Central banks’ massive Quantitative Easing (QE) programs have come under scrutiny many times since the central banks fired up the printing press and began quantitative easing programs en masse after the 2008-09 Great Financial Crisis. However, the increase in central bank assets due to quantitative easing programs during the crisis pale in comparison to the QE programs during the Covid pandemic. As economies recovered after the Great Financial Crisis many worried...

I have long thought about and written about the incredible opportunities that decentralized digital technologies have brought forward, especially when it comes to solving financial and monetary problems. The more these technologies and their applications develop and mature, the more I believe they hold many of the answers to some our most complex challenges. Chief among them is the future of money itself: the idea of a decentralized, robust and independent system of freely competing...

Swiss Franc The Euro has fallen by 0.06% to 1.0761 EUR/CHF and USD/CHF, January 21(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The S&P 500 and NASDAQ gapped higher yesterday to record-levels, and the reflation theme lifted Asia Pacific shares for the third session today. South Korea, Taiwan, and China led the advance. Europe’s Dow Jones Stoxx 600 gapped higher and is consolidating, seemingly waiting for...

After falling in July and August, the US dollar strengthened against most of the major currencies in September.  The dramatic pullback in equities seemed to have undergirded the yen’s resilience, which gained a net 0.25% against the dollar.  However, the dollar’s broadly firmer tone appears corrective and consolidative in nature and coincided with the downturn in equities, especially high flying US tech shares.  Risk assets, in general, succumbed to profit-taking...

Coming and Going Like a Wildfire Second quarter 2020 came and went like a California wildfire. The economic devastation caused by the government lock-downs was swift, the destruction immense, and the damage lasting. But, nonetheless, in Q2, the major U.S. stock market indices rallied at a record pace. The Dow booked its best quarter in 33 years. The S&P 500 posted its best performance since 1998.  And the NASDAQ had its biggest increase since 1999… jumping...

Printing Until the Cows Come Home… It started out with Jay Powell planting a happy little money tree in 2019 to keep the repo market from suffering a terminal seizure. This essentially led to a restoration of the status quo ante “QT” (the mythical beast known as “quantitative tightening” that was briefly glimpsed in 2018/19). Thus the roach motel theory of QE was confirmed: once a central bank resorts to QE, a return to “standard monetary policy” becomes...

Swiss Franc The Euro has risen by 0.10% to 1.0632 EUR/CHF and USD/CHF, March 2(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: Comments beginning with Powell before the weekend, and BOJ and BOE earlier today promising support have saw equity markets briefly stabilize after last week’s dramatic moves. The G7 will hold a teleconference this week, but speculation of a coordinated rate move does not seem...

Addicted to Spending There are many falsehoods being perpetuated these days when it comes to money, financial markets, and the economy. But when you cut the chaff, three related facts remain: Uncle Sam needs your money. He needs a lot of your money. And he needs it bad! The inescapable logic of tax & spend: empty vault… empty pockets… gimme more! PT According to the Congressional Budget Office, the federal budget deficit for the first two months of fiscal year...

The second most frustrating aspect of trying to analyze global shadow money is how the term “shadow” really applies in this case. It’s not really because banks are being sneaky, desperately maintaining their cover for any number of illicit activities they are regularly accused of undertaking. The money stays in the shadows for the simple reason central bankers don’t know their jobs; even after a somehow Global Financial Crisis in 2008, they don’t realize the full...

  True Money Supply Growth Rebounds in September In August 2019 year-on-year growth of the broad true US money supply (TMS-2) fell to a fresh 12-year low of 1.87%. The 12-month moving average of the growth rate hit a new low for the move as well. The main driver of the slowdown in money supply growth over the past year was the Fed’s decision to decrease its holdings of MBS and treasuries purchased in previous “QE” operations. This was partly offset by bank credit...