Forget The Propaganda, Look At This Carnage
Forget The Propaganda, Look At This Carnage from King World News
Many people around the world are trying to figure out what is really happening. Forget the propaganda and look at this carnage.
Look At This Carnage
May 19 (King World News) – Jeff Snider at Alhambra Partners: People quite often want to know what I have against the Fed’s swaps. To begin with, they are sourced by bank reserves. My co-host partner Emil Kalinowski likes to say these latter are the equivalent of laundromat tokens, an analogy I can at least get behind. They are monetary in appearance but of (extremely) limited use.
Maybe a more comprehensive way of thinking about the Fed’s form of reserves is to equate them with gluten. This is a non-nutritious filler whose widespread purpose is to cheapen the food product by being injected in place of it, all the while fooling everyone into believing they are eating more desired content (by volume) than they really are – while causing a number of unintended side effects along the way.
Overseas dollar swaps merely add to the kabuki another layer, an extreme, almost like an accidental practice of performance art.
The Fed does not support markets but pretends to endlessly in this day and age. A market is dynamic place where agents compete to most efficiently, accurately, and brutally serve competing needs. Intermediation means something.
That’s not what any central bank does; it takes weeks to form a list after hiring the usual rent-seekers to “advise” as to its construction and detail, and then moves along in a static and predetermined fashion. Why do QE’s always come in round numbers?
How a monetary unit moves along is at least as important as what constitutes that unit, the old debate between stock and flow. It raises a series of other meaningful questions about if rotten or mutated stock might flow in the same manner desired…