Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
The Fed scheduled $123 billion per day in Treasury and MBS purchases this week. That’s a month’s worth of old QE per day. What about unintended consequences?
There are three things the markets have going for them right now, and none of them have anything to do with the Federal Reserve. More and more conditions resemble the early thirties in that respect, meaning no respect for monetary powers. This isn’t to say we are repeating the Great Depression, only that the paths […]
On March 3, the Fed converted Not QE into Panic QE. Since then it has pumped $766 billion in cash into Primary Dealer accounts. At the same time the US Treasury issued “only” $147 billion in new debt. So in essence, the Fed issued $619 billion in excess cash.
Other than the hyperinflationary implications, what good has it done? What does it mean for us looking ahead.
Sometimes technicals work so brilliantly it just has to be pointed out. A big rally was going to come. After all we’ve had the most oversold readings ever on some measures and […]
Why didn’t they think about this first? All of a sudden, with markets in the toilet (especially stocks), everyone is itching to get the economy back up and running. The first real peeks at what’s happened to it (as we’ll see in a minute) have definitely contributed to what seems to be an about-face. Many […]
OK, so I’m worried about the potential for hyperinflation. Meanwhile, here’s how today’s charts look. Going up?
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” —Adam Smith, The Wealth of Nations
Hyperinflation is coming.
OPERATION – RESULTS Operation Date: 03/24/2020 Operation Type: Outright Coupon Purchase Release Time: 02:29 PM Close Time: 02:50 PM Settlement Date: 03/25/2020 Maturity/Call Date Range:…