I have to say, every time I see this chart, it is like the Picasso of charting. Complete madness at first glance to the novice, then looking at it for several minutes, one discovers absolute beauty...........
U.S. HOUSE OF REPRESENTATIVES DEMOCRATS FILE LEGISLATION TO FUND THE U.S. GOVERNMENT THROUGH DECEMBER 11 AND AVOID POSSIBLE SHUTDOWN AT END OF SEPTEMBER
Could the $1.6 Trillion in cash the Treasury is holding have been for the so-called government shutdown in October?
Many are expecting a similar event (yield curve control of the 1940's) over the next few years where the Fed is forced to cap yields, in order to avoid massive defaults when rates rise. This is the inflationary theme that institutions and big money managers are focusing on. I think it is one reason why both Powell and Lagarde were hired to run the Fed and ECB. They are both lawyers and skilled at the technical details if operations need to be adjusted or rules need to be amended.
I am getting that sense more and more. placating to certain asset categories that are hot buttons or emotionally charged subjects in order to get more followers and subscriptions. Whether or not they actually make money for clients is secondary.
This DEFI subject matter is next level $hit.
Honestly this Defi is more confusing than a kindergartener watching and understanding The Big Short.
This argument that QE are loans and not inflationary is now sweeping youtube and twitter. The premise is that the member banks buy Treasuries with reserves. However as Lee pointed out, the initial transaction is with the primary dealers not member banks. The primary dealers get paid in cash as a counterparty when they sell those Treasuries. The misinformation is that the argument is assuming the member banks initially buy treasuries with reserves. Then the Fed buys the Treasuries from the member banks with more reserves. How in the hell do these member banks continue to buy trillions in Trea
I just want to say, your market knowledge and insight has helped me. I have recommended many clients and associates over the years to your websites. Twitter has become for some a marketing tool to simply get 15 minutes of fame or stir up enough controversy to become noticed, regardless of their actual performance of managing money. I look at twitter as a tool for thought provoking ideas. Do not see any value with (I loved your term) "mental masturbation".
Ok. Maybe someone can comment on the following. Lee and I reached out to Brent Johnson and George Gammon on twitter. There was a big discussion whether QE is money printing and whether it is inflationary. I believe QE is money printing and it is one of the main drivers of this entire market going back to the Greenspan days.
Steven Van Metre was asked to comment. He says the following:
"No part of QE is inflationary. It pulls liquidity out of the system and removes the ability of the banks to sell bonds to drive interest rates higher. By design, QE leads to lower interest rates and l