Tag: money supply

Money Is Tight. Perhaps Too Tight.

Money Is Tight. Perhaps Too Tight.

Money is tight when we observe the monetary base (currency in circulation plus reserves). It is dangerous to shrink the monetary base at the pace in which we have done so as interest rates rise. Doing so could be the difference between an economic recession and a depression. One can see based on the first … Continue reading Money Is Tight. Perhaps Too Tight.

The Fed’s Quest To Regain Credibility

The Fed’s Quest To Regain Credibility

The Fed's tightening is as much about its quest to regain credibility as it is about curbing inflation. The fact that prices for goods and services started to climb in 2020 and have persisted higher for two years is no surprise. The Treasury (subsidized by the Federal Reserve) mailed trillions of freshly-printed U.S. Dollars (helicopter … Continue reading The Fed’s Quest To Regain Credibility

FOMC Minutes: More Fed Propaganda

FOMC Minutes: More Fed Propaganda

The two paragraphs below are excerpts from the Fed's "Staff Economic Outlook" section of the FOMC meeting minutes published today. The Fed is disingenuous in that it does not acknowledge the fact that it inflated the money supply, thus resulting in higher prices. In fact, years ago the Fed used to define inflation as "inflation … Continue reading FOMC Minutes: More Fed Propaganda

The Strong U.S. Dollar. Or Is It?

The Strong U.S. Dollar. Or Is It?

Sure, the U.S. Dollar may be strong as of late versus other currencies, but when measured versus the price of gold, the USD has experienced significant value destruction over the years as a result of the Federal Reserve's persistent money printing. The USD has lost 98% of its value versus gold since August 1971 when … Continue reading The Strong U.S. Dollar. Or Is It?

The Fed Should Focus On QT

The Fed Should Focus On QT

The Fed would be far more effective in controlling inflation if it were to pare its Balance Sheet versus focusing on the Fed Funds Rate. Inflation is created by excess money in the economy ("excess" money in that it is not generated from Production output but rather money printing by the Fed). The Fed could … Continue reading The Fed Should Focus On QT

Tomorrow’s Fed Decision

Tomorrow’s Fed Decision

We expect a 50 basis point increase in the Fed Funds rate tomorrow. More importantly over the next number of months will be the Fed's actions with respect to its balance sheet. Our focus will be on the Fed's balance sheet over the next number of months (see chart below), which has ticked down recently … Continue reading Tomorrow’s Fed Decision

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