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Home / Alhambra Investment Partners / Eurodollar University’s Making Sense; Episode 63; Part 1: Bernanke Was Not Making Sense, Bonds, Bubbles & Money

Eurodollar University’s Making Sense; Episode 63; Part 1: Bernanke Was Not Making Sense, Bonds, Bubbles & Money

Summary:
63.1 Bernanke’s Idea Doesn’t Make Any Sense———Part 3 Summary———In the early 2000s, bond markets ignored the Fed. Alan Greenspan called it a “conundrum”. Ben Bernanke blamed a “Global Savings Glut”. But recent Federal Reserve research notes events since 2008 upend the Bernanke glut and instead suggest economic weakness and financial fear as causal. ———SEE IT———– Twitter: https://twitter.com/JeffSnider_AIPTwitter: https://twitter.com/EmilKalinowskiAlhambra YouTube: https://bit.ly/2Xp3royEmil YouTube: https://bit.ly/310yisLArt: https://davidparkins.com/ ———Hear It———

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63.1 Bernanke’s Idea Doesn’t Make Any Sense

———Part 3 Summary———
In the early 2000s, bond markets ignored the Fed. Alan Greenspan called it a “conundrum”. Ben Bernanke blamed a “Global Savings Glut”. But recent Federal Reserve research notes events since 2008 upend the Bernanke glut and instead suggest economic weakness and financial fear as causal.

———SEE IT———–

Twitter: https://twitter.com/JeffSnider_AIP
Twitter: https://twitter.com/EmilKalinowski
Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL
Art: https://davidparkins.com/

———Hear It———

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———Ep 63.1 Topics———

00:43 What is Milton Friedman’s interest rate fallacy? Do low interest rates represent stimulus?
03:20 What is the “Greenspan Conundrum” from 2005? Why did US Treasury behavior perplex the Fed?
06:42 Greenspan’s Fed understood the bond market to be dependent on Greenspan Fed decisions.
09:15 The Fed appears to have an efficient market hypothesis view of asset bubbles.
13:33 Bernanke’s “Global Savings Glut” implies interest rates aren’t dependent on Fed decisions.
15:11 The Fed believes interest rates cause booms and busts, not money supply.
17:38 Two Fed researchers conclude the Global Savings Glut hypothesis stopps working after 2008.
19:29 A visual representation of current account surpluses / deficits by geoeconomic region.
22:39 “Secular Stagnation” (i.e. a lousy economy) seems to better account for interest rates.
24:04 Unhinged Eurodollar money creation boomeranging back to advanced economies – not a GSG.
26:03 Unhinged Eurodollar money creation began to spook markets, pushing them to safe assets.
28:02 Research is starting to note several inconsistencies of orthodox central banking.

———Ep 63.2 References———

Slight, But Only Slight, Movement In the Understanding of Rates: https://bit.ly/3t9B37Q
The Global Saving Glut and the Fall in U.S. Real Interest Rates: https://bit.ly/39WgTq0
Global Imbalances Tracker: https://on.cfr.org/3mIWx7W
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7

———WHO———

Jeff Snider, Head of Global Investment Research for Alhambra Investments and Emil Kalinowski. Art by David Parkins.

 


Jeffrey P. Snider
As Head of Global Investment Research for Alhambra Investment Partners, Jeff spearheads the investment research efforts while providing close contact to Alhambra’s client base. His company is a global investment adviser, hence potential Swiss clients should not hesitate to contact AIP

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