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Tag Archives: money

Global Inflation In Japan Does Not Speak German

Being able to compare European inflation rates with their American counterparts helps expose what’s driving the latter and it’s not inflationary currency. Comparing both of those inflation regimes with the Japanese simply exposes the Bank of Japan and QE. This was perfectly obvious before the Base 2020 CPI estimates came about.Central banks, we’re always told, possess the printing press of legend and lore. The stories surrounding this currency-cranking machine are always of the cautionary...

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The Two Big Anniversaries of August: The Lost Decade (plus) Of The ‘Fiat’ Half Century

As my esteemed podcast co-host Emil Kalinowski has already mentioned (recurrently), we have, this year, two major anniversaries during these dog days of summer circled on our calendar. Today is, obviously, August 9 and for anyone the slightest familiar with the eurodollar story, that date is seared into their consciousness for as long as it will take to rebuild from the ashes created by the monetary fire lit that day. It has been, sadly, fourteen long years and only incremental signs of...

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Go Early, Go Fast? Go Deflation

Go early and go fast. This was the message FOMC Governor Christopher Waller wanted to send to the CNBC audience watching his interview yesterday on that channel. He was referring to the possible taper of QE6. In Waller’s view, if the US economy lives up to its current hype in the form of two more blowout jobs numbers, those would confirm the Governor’s view inflationary potential is perhaps much higher than indicated by the Fed’s overall “transitory” stance.He doesn’t mean to say the...

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How Do You Spell Escalating? C-H-I-N-A-R-R-R

There are three letters you never want to see hit the Chinese news. Actually, it’s the same letter just repeated three times. If the People’s Bank of China (PBOC), the country’s central bank and top bank regulator, ever decides to reduce or cut their RRR you know things are getting serious. And not in a good way.This, of course, won’t stop the mainstream media from printing countless stories extolling the virtuous accommodation a lower RRR brings with it – in theory. Actually, it’s the same...

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A Clear Balance of Global Inflation Factors

Back at the end of May, Germany’s statistical accounting agency (deStatis) added another one to the inflationary inferno raging across the mainstream media. According to its flash calculations, German consumer prices last month had increased by the fastest rate in 13 years. Even using the European “harmonized” methodology (Harmonized Index of Consumer Prices, or HICP), inflation had reached 2.4% year-over-year which was the highest since 2012.These numbers, of course, pale in comparison to...

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Jamie Dimon (Still) Hates Bonds Because Inflation; Other Banks Apparently Love Bonds Because There’s No Credit To Inflation

JP Morgan’s Jamie Dimon hasn’t produced an enviable track record opining on inflationary potential. He’s forever deeply entrenched in the inflation camp, and because he sits atop the corporate structure of one of the world’s biggest and most well-known banks, it does seem reasonable at first how his opinion on monetary matters is taken very seriously – despite repeatedly missing the mark by a wide margin.That’s the thing; no one ever inquires of Dimon or the mainstream multitudes of others...

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Finance, Money and Cow Clicking

Finance and its derivatives like financialization, are like many political economy categories: they’re a widely used term but lack an agreed-upon definition. One often encounters formulations like “financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions.” That isn’t very helpful! Let me offer a simple definition of finance, which I think corresponds to its sense both for Marx and in everyday business settings....

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What *Must* Lie Beyond the M’s

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the money printing lever. If we’re focused beyond bank reserves and upon broad deposit-based money, there does seem to be reason for alarm. The increase is simply unprecedented; even on a log scale, it...

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The Unit Root of the Missing Monetary Monomial

Milton Friedman first proposed his “plucking model” of the economy back in 1964. In doing so, he said that any economy is sort of mean reverting, in that any setback it might experience, a recession or some such, is merely a temporary deviation from the prior established trend. In his own words (NBER, 44th Annual Report): Consider an elastic string stretched taut between two points on the underside of a rigid horizontal board and glued lightly to the board. Let the string be plucked at a...

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OK, Bank Reserves; Let’s Do This One More Time

What the hell is a bank reserve? Is it money? Since its very creation is a byproduct of concerted central bank action, the thing sure sounds like it has to be. As we know only too well since 2008, the financial media will uniformly call these things and the creation of more of them “money printing.” If everyone says…Not only that, the accounting. One day, there’s little to no bank reserves on the Federal Reserve’s balance sheet, then, seemingly the next, there’s tons of them. Trillions. How...

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