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Relentless Rally Rolls On and Over Bears 8/11/20

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14 minutes ago, jp6 said:

https://tinyurl.com/y64spwhx

https://www.bankofengland.co.uk/knowledgebank/how-is-money-created

Most of the money in the economy is created, not by printing presses at the central bank, but by banks when they provide loans.

Mystical economism bullshit. 

Sometimes it is and sometimes it isn't.  

Things have changed radically in the past dozen years. 

In the past 6 months, actually since last September, money supply has grown virtually dollar for dollar with Fed balance sheet growth. 

Of course loans create money. I know that. I've written about it over and over. But central banks have become responsible for most of the growth in the past dozen years, and virtually all of it in the last 6 months. 

To say that central banks don't create money is the worst kind of charlatanism. 

 

 

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So I read a few more paragraphs. Lies piled on lies, piled on lies.  I'll stop now. I have enough to be upset about without reading such crap.  Shame on both of you!  

Dad's not been this pissed off since we crashed his car.

Lest there be any doubt, Money supply didn't magically grow by itself this year. The Fed did it.   If you want to stop being confused; if you want to know the difference between fact and mindless

The simplest way to illustrate that loans create money is margin. 

OK. But margin is a two way street. Sometimes it destroys money. When that happens, the Fed and friends crank up the pumps and inject trillions into the banking system. That's what happened from March to June.  

Anybody who claims otherwise is selling some real shit. 

Sometimes people reach the right conclusion for the wrong reason. And in a binary world, if you say the same thing for a long time, and it happens to be consistent with the empirical trend, people think you know something. Bullshitters frequently gain a lot of credibility for being something that they're not.    

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This is why the Fed is hellbent on inflating asset prices. Too much margin. 

Now if they could just get the dealers and their customers to use all that central bank injected money to delever while asset prices are high, that would be the best of all worlds. 

Human nature being what it is, it's a doubtful proposition at best. To get deleveraging and healthier financial ratios, the players need to get the fear of god put in them. A little hellfire and brimstone.  We need a series of minicrashes that don't cause the whole system to self immolate.  

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Your credit card is another example.  

But lately, the Fed (and its cohort central banks) buying Treasuries and MBS has caused all monetary inflation by injecting reserves through their purchases of bonds (POMO), or to a more limited extent through temporary lending programs (repos aka TOMO) or the alphabet soup shit.  

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30 minutes ago, PullMyFinger said:

What does it say about me that whenever I see an angry red candle like that, the first thing I do is check Trump's Twitter postings? 

Funny... I checked to see if Biden’s VP had been announced. 

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