Tag: money supply

More Than Tiny Bubbles: Policy-Driven Market Distortions

More Than Tiny Bubbles: Policy-Driven Market Distortions

We highlight some of the bubbles (some call it the "Everything Bubble"), caused by the ultra-loose fiscal and monetary policies that have distorted markets since April 2020. The longer Powell & Company wait to taper and eventually raise interest rates, the more difficult it will be to reel in the price inflation caused by the … Continue reading More Than Tiny Bubbles: Policy-Driven Market Distortions

Leveraging Alternative Assets To Increase Yield

Leveraging Alternative Assets To Increase Yield

Insurance company CIOs continue to use Alternative Assets to increase yield in this ultra-low interest rate environment. KKR Asset Management's Insurance CIO survey found similar results (chart below) to our recent TEK2day Spotlight report on the insurance industry which may be accessed HERE. We expect that the heavy use of Alternative Assets in the pursuit … Continue reading Leveraging Alternative Assets To Increase Yield

Powell Acknowledges Inflation Could Persist Longer Than Anticipated

Powell Acknowledges Inflation Could Persist Longer Than Anticipated

Fed Chair Powell's statement to be made Tuesday at 10:00am ET to the Committee on Banking, Housing, and Urban Affairs acknowledges that inflation may not be as "transitory" as the Fed initially thought. Powell's statement to the committee is below. Powell knew this would be the case months ago but the Fed will never admit … Continue reading Powell Acknowledges Inflation Could Persist Longer Than Anticipated

A Fed Critique By Time Stamp

A Fed Critique By Time Stamp

We critique Fed Chairman Powell's recent FOMC YouTube clip comments (video below) by time stamp. 0:07 - The Fed continues to purchase Treasuries ($80 billion per month) and MBS ($40 billion per month), thereby artificially suppressing interest rates while inflating the money supply. The Fed's actions - increasing the money supply - are solely responsible … Continue reading A Fed Critique By Time Stamp

Leveraging The Fed’s Digital Dollar

Leveraging The Fed’s Digital Dollar

The Fed's digital U.S. Dollar will happen. The question is which FinTech firms and traditional Financial Institutions will best leverage it. The Fed will quickly become a FinTech firm and Consumer Depository Institution of primary importance once it goes live with its digital U.S. Dollar. A whole new slate of FinTech firms will rise, building … Continue reading Leveraging The Fed’s Digital Dollar

Price Increases Are Here To Stay

Price Increases Are Here To Stay

There is no surprise to today's 5.4% reported CPI increase. Price increases of goods and services are here to stay. The Federal Reserve has inflated the money supply significantly since April 2020 without a commensurate increase in productivity. We have another $1 trillion in spending (and money printing), coming associated with the Biden Administration's infrastructure … Continue reading Price Increases Are Here To Stay

How Technology Companies Can Fight Inflation

How Technology Companies Can Fight Inflation

The most liquid measure of the money supply - M1 - is up 4.8x since February 2020. Given the exorbitant inflation of the money supply, we are only in the early stages of price inflation. Cash-rich Technology companies can take several steps to combat inflation. Now is not the time for cash-rich Technology companies to … Continue reading How Technology Companies Can Fight Inflation

What Is The Real Rate of Price Inflation?

What Is The Real Rate of Price Inflation?

For a more accurate read on price inflation than the tall tale spun by the CPI, look no further than growth of the money supply. It is the forever growing money supply that enables the Federal Reserve to spend $120 Billion per Month on purchases of Treasuries and Government Agency Securities to maintain artificially low … Continue reading What Is The Real Rate of Price Inflation?

Fewer People Are Productive Today As Compared To The 2008 Financial Crisis

Fewer People Are Productive Today As Compared To The 2008 Financial Crisis

The fact is that the U.S. economy was more productive from a Labor Force Participation Rate perspective during the Financial Crisis as compared to where it stands today. The Labor Force Participation Rate stood at 66.0% in October 2008 and steadily declined until January 2020 when the Labor Force Participation Rate stood at 63.4%. The … Continue reading Fewer People Are Productive Today As Compared To The 2008 Financial Crisis

Rewarding Non-Productive Activities with New Money Leads to Price Inflation

Rewarding Non-Productive Activities with New Money Leads to Price Inflation

The punchline is that a significant percentage of new money creation over the past year was allocated to non-productive use cases. "Helicopter" money to individuals and non-performing firms are two examples. When capital is deployed for non-productive use (acquiring cryptocurrencies for example), that capital invariably bids up prices causing asset price inflation. Conversely, recipients that … Continue reading Rewarding Non-Productive Activities with New Money Leads to Price Inflation