Excess Reserves

Tyler Durden's picture

The Keynesian House Of Denial





The Eccles Building and its Washington/Wall Street acolytes have become a House of Keynesian Denial because the assumption that capitalism is an 80 pound recessionary weakling without the constant ministrations of the state is dead wrong.

 
Tyler Durden's picture

Shuffling The Deckchairs On The USS Perpetual Growth





The Fed Funds rate is functionally pointless now that Interest on Excess Reserves are higher and deposit rates are zero. The bottom line is that the Fed must keep asset prices up because assets are collateral for potentially deflationary systemic debt.

 

 
Tyler Durden's picture

The Path To The Final Crisis





We cannot be sure what shape the next crisis will take, although it seems likely that it will be yet another “deflation scare”, mainly caused by falling asset prices. However, we do know what the last crisis of the current system will look like. It will entail a crumbling of the public’s faith in fiat money and the institutions that issue and administer it.

 
Tyler Durden's picture

Month-End Market Weakness Looms As Monetary Base Trumps Buybacks





Regardless of which source ultimately proves more important, the below suggests that market liquidity tends to become more scarce around the end of the quarter at present. We have already seen this effect play out twice in row and it could well be that there will be another replay this quarter.

 
rcwhalen's picture

Fred Feldkamp: Donald Trump, Jesus Christ & Financial Stability





On Trump V. Clinton: "Bill Greider is correct and a very wise man... "

 
Tyler Durden's picture

Deutsche Bank: Negative Rates Confirm The Failure Of Globalization





"The demise of positive interest rates may be nothing more than the global economy reacting to a chronic oversupply of goods through the impact of globalization including the opening up of formerly closed economies as well as ongoing technological progress." - Deutsche Bank

 
Tyler Durden's picture

"There Is No Clear Way Out" - Richard Koo Says "The Price For QE Has Yet To Be Paid"





Recently, for example, the markets took a tumble when the Fed moved to normalize monetary policy. The US central bank responded by delaying the normalization process, which stabilized the markets, but eventually fears of falling behind the curve on inflation will force it to resume the process. That will lead to renewed market turmoil in a cycle that has the potential to repeat itself endlessly.

 
Tyler Durden's picture

German Banks Told To Start Hoarding Cash





This is officially an all-out revolution of the financial system where banks are now actively rebelling against the central bank. In a stunningly real rebuttal of Europe's negative interest rate policy, German newspaper Der Spiegel reported yesterday that the Bavarian Banking Association has recommended that its member banks start stockpiling PHYSICAL CASH.

 
Tyler Durden's picture

Most "Priced In" Policy Since 2011 - Why Draghi Better Not Disappoint





Mario Draghi better put up or shut up at the next ECB meeting as the market is more-than-pricing-in a very significant deposit rate cut (deeper into NIRP). In fact, at -56bps, 2Y German bond yields are the most "priced in" since 2011 (and bear in mind he disappointed in December).

 
Tyler Durden's picture

With All Eyes Again On Draghi, This Is What Remains In The ECB's Toolbox





Today's deflationary report, the worst since the start of Europe's QE, virtually assures another substantial round of policy easing from the European Central Bank on March 10. The question is what the ECB will reveal. Here are the options.

 
Tyler Durden's picture

The Global Run On Physical Cash Has Begun: Why It Pays To Panic First





If, and when, a run on physical cash begins, there will be roughly $1 dollar in physical to satisfy $10 dollars in savers' claims, a ratio which drops to 20 cents of "deliverable" cash if the $100 bill is taken out of circulation.

 
Tyler Durden's picture

HSBC Looks At "Life Below Zero," Says "Helicopter Money" May Be The Only Savior





"If central banks do not achieve their medium-term inflation targets through NIRP, they may have to adopt other policy measures: looser fiscal policy and even helicopter money are possible in scenarios beyond QE and negative rates.

 
Tyler Durden's picture

Where Negative Interest Rates Will Lead Us





The real pity is that the busts and crackups could all have been avoided if central bankers recognized that falling prices eventually create the conditions for a normal economic revival. Deflation is not a death spiral as the Keynesians believe. Nevertheless, expect more central banks to follow the early leaders — Switzerland, Sweden, Denmark, and even the European Central Bank itself — into negative interest rate territory. The crying shame is that it will not work and will cause great harm to hundreds of millions of people.

 
Tyler Durden's picture

Donald Trump Is Right: Here Are 100 Reasons Why We Need To Audit The Federal Reserve





When a leading nominee for President gets something exactly right, we should applaud them for it.  In this case, Donald Trump’s call to audit the Federal Reserve is dead on correct.  Most Americans don’t realize this, but the Federal Reserve has far more power over the economy than anyone else does – including Barack Obama.  The funny thing is that the Federal Reserve is not even part of the federal government.  It is an independent private central bank that was designed by very powerful Wall Street interests a little over 100 years ago.  It is at the heart of the debt-based financial system which is eating away at America like cancer, and it has no direct accountability to the American people whatsoever.

 
Tyler Durden's picture

How Italy Will Fail And Drag Down The European Project





Italy is big enough to matter (it is the eight largest economy on the planet), but so uneventful that most does not pay any attention to what is going on there. We contend that Italy will, during the next year or two, be on everyone’s radar screen as it has the potential to derail the European project for real.

 
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