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Tag Archives: Jay Powell

Suasion, Sure, But Is It Really Moral?

One of the concepts educators sort of snuck into the curriculum was something they called “moral suasion.” This term has meanings outside of Economics, but within the discipline it refers to one key element to the monetary policies of central banks. Basically, persuading markets or economic groups to act in the way officials want using rhetoric or threats without having to resort to overt and explicit means. If central bankers have walked softly all these years, the so-called big stick they...

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The Doctor Is In?

Gold’s not buying. Neither is the bond market. Inflation Hysteria #2 has so much less to it than #1 in 2017-18 ever did. But this one isn’t completely empty. There are some asset classes which have been absolutely on fire thus seemingly consistent with the “money printing” excesses of Fed and feds. Investors fearing for currency “debasement” and fiscal breakdown by piling into real and tangible assets in an obvious way.Just not gold. Other commodities, however, particularly copper.They call...

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The Summer Slowdown Collides With The Summers Acceleration Theory

You’d think Larry Summers would know better. Not that he stepped in it, again, but rather why he did this particular time. Making a big deal out of inflationary aggregate demand when he’s been practically the lone mainstream Economist to look at the post-2008 economy in an honest and serious fashion to then somehow failing to incorporate that view into our current place. What got Summers in hot water a few days ago was a rather careless throwaway surrounding his usual partisan politics....

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Evidence Only For Hysteria

The people who believe they are the Federal Reserve’s biggest critics are actually Jay Powell’s most vocal supporters right now. Rather than being bothered by all the “Weimar” memes and printer-go-brrrrr jokes, US central bank officials welcome such free press (pun intended). Anything that contributes to the idea there will be inflation – a little or a ton – helps current monetary policy achieve its objective.And let’s be perfectly clear as to what that objective is: not inflation itself,...

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Messing Gold

They really got carried away, though in the context of that time there seemed any number of legitimate reasons for this. Gold investors were bidding up the precious metal like there was some kind of shortage, the price in dollars making a new record high (LBMA morning fix) on August 7. The way it was reported in the mainstream, this was more confirmation of Jay Powell’s flood of money printing making its way into every last corner of the financial world driving gold bugs nuts in the process...

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Consumers, Too; (Un)Confident To Re-engage

There is a lot of evidence which shows some basis for expectations-based monetary policy. Much of what becomes a recession or worse is due to the psychological impacts upon businesses (who invest and hire) as well as workers being consumers (who earn and then spend). Once the snowball of macro contraction begins rolling downhill, rational prudence dictates some degree of caution on all parts (pro-cyclicality).Bathed in the unearned glow of the Great “Moderation”, central banking’s greatest...

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Act II: The Lie Unwinds

It’s been said that you can’t please everyone all the time. But can you fool enough people some of the time? That’s Jay Powell’s game in a nutshell. He’s got the world believing the Federal Reserve is out here printing gobs of money and sending a tidal wave careening throw the whole economy (stock market first). Nope. Monetary policy is little more than getting people to believe this is what’s happening. For a little while this year, he was on his game. Remember May 17? That particular...

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Weeks of Weak Claims On Growing Claims of Weeks of Weak Demand

At some point, the thing actually has to happen. You can only keep talking about the thing for so long before people start to get wise. And most people, especially those in the public who understandably don’t following the thing closely, or the things related to it, are incredibly patient. Time and time again, they prove willing to give experts, officials, anyone with the “right” pedigree substantial leeway. It’s temporary, dare I write “transitory” though. In 2018, we kept hearing about...

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Where Is It, Chairman Powell?

Where is it, Chairman Powell? After spending months deliberately hyping a “flood” of digital money printing, and then unleashing average inflation targeting making Americans believe the central bank will be wickedly irresponsible when it comes to consumer prices, the evidence portrays a very different set of circumstance. Inflationary pressures were supposed to have been visible by now, seven months and counting, when instead it is disinflation which is most evident – and it is spreading....

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QE Didn’t JOLT (again)

COVID-19 is a 2020 story and not so much one for 2021. Pretty much everyone, however, will be seeking to make it that way. To begin this week a stark reminder of that promise: vaccine-phoria. While that unleashed a curiously narrow risk and reflation frenzy, the fact that it wasn’t more widespread speaks to this disparity.A vaccine doesn’t really change all that much over the intermediate term. An unquestionable good for public health (whatever that means) and a positive development given...

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