Monetary Policy

Tyler Durden's picture

China Cuts Benchmark Interest Rate By 25bps, Cuts RRR By 50bps





  • CHINA PBOC CUTS INTEREST RATES
  • CHINA PBOC CUTS REQUIRED DEPOSIT RESERVE RATIO
  • CHINA PBOC CUTS 1Y DEPOSIT RATE BY 25 BPS
  • CHINA PBOC CUTS 1Y LENDING RATE BY 25 BPS
  • CHINA PBOC CUTS BANKS DEPOSIT RESERVE RATIO BY 50 BPS
 
Gold Standard Institute's picture

Who the Heck Consumes His Capital?!





To make people eat their seed corn, we need to add the essential element: a perverse incentive. There’s only one way to make everyone play a perverse game: force. Let’s look at monetary policy in this light.

 
Tyler Durden's picture

Paul Craig Roberts: Central Banks Have Become A Corrupting Force





As asset bubbles are in the way of the Fed’s policy, a decline in stock prices removes the equity market bubble and enables the Fed to print more money and start the process up again. On the other hand, the stock market decline could indicate that the players in the market have comprehended that the stock market is an artificially inflated bubble that has no real basis. Once the psychology is destroyed, flight sets in.

 
Tyler Durden's picture

In Less Than 10 Years, The Federal Reserve Has Driven Millions Of American Women Into Prostitution





It's a case of economic policy run amuck.  Real estate development can boost the economy, under the right conditions: lots of jobs and economic activity get generated when homes are built or refurbished.  And there is the wealth effect when home prices rise.  But when taken to extremes - as it is today and was in the previous economic cycle consumer spending gets squeezed out in order to pay mortgages and rent.  It becomes an incredibly unproductive use of capital. Simply put, we have a surge in college-age prostitution and it's the Fed's fault. It gives new meaning to the term "perverse monetary policies"

 
Tyler Durden's picture

The Ghost Of 1997 Beckons, Can Asia Escape? Morgan Stanley, BofA Weigh In





The similarities between the current crisis and that which unfolded in 1997/98 were so readily apparent that many analysts began to draw comparisons and that may have added fuel to fire over the past week. Now, there seems to be a concerted effort to calm the market by explaining that while there are similarities, there are also differences. And while some of the world's imperiled EM economies may be in better shape to defend themselves this time around, when attempting to cope with a meltdown it may be more important to look at where things are similar and on that note, here’s some color from Morgan Stanley and BofAML.

 
Tyler Durden's picture

"They're Getting Away With Murder": Trump Blasts "Paper-Pushing Hedge Fund Guys" On Taxes





"The hedge fund guys didn't build this country. These are guys that shift paper around and they get lucky. They are energetic. They are very smart. But a lot of them - they are paper-pushers. They make a fortune. They pay no tax. It's ridiculous, ok?"

 
Phoenix Capital Research's picture

Did the Crisis of Our Lifetimes Begin Last Week?





If the investment world has reached the point at which it no longer has faith in Central Banks’ abilities to prop up the markets, then THE major crisis of our lifetimes is here.

 
 
Tyler Durden's picture

Saudi Arabia Faces Another "Very Scary Moment" As Economy, FX Regime Face Crude Reality





Over the weeks, months, and years ahead we’ll begin to understand more about the fallout from the death of the petrodollar and nowhere is it likely to be more apparent than in Saudi Arabia where widening fiscal and current account deficits have forced the Saudis to tap the bond market to mitigate the FX drawdown that's fueling speculation about the viability of the dollar peg. As Bloomberg reports, the current situation mirrors a "very scary moment" in Saudi Arabia’s history.

 
Tyler Durden's picture

Why It Really All Comes Down To The Death Of The Petrodollar





Last week, in the global currency war’s latest escalation, Kazakhstan instituted a free float for the tenge causing the currency to immediately plunge by some 25%. The rationale behind the move was clear enough. What might not be as clear is how recent events in developing economy FX markets stem from a seismic shift we began discussing late last year - namely, the death of the petrodollar system which has served to underwrite decades of dollar dominance and was, until recently, a fixture of the post-war global economic order.

 
Tyler Durden's picture

Productivity In America Now On Par With Agrarian Slave Economy





Adjusting for the WWII anomaly (which tells us that GDP is not a good measure of a country’s prosperity) US productivity growth peaked in 1972 – incidentally the year after Nixon took the US off gold. The productivity decline witnessed ever since is unprecedented. Despite the short lived boom of the 1990s US productivity growth only average 1.2 per cent from 1975 up to today. If we isolate the last 15 years US productivity growth is on par with what an agrarian slave economy was able to achieve 200 years ago.

 
Tyler Durden's picture

What Does The Fed Do Now? The FOMC Decision Tree





The $64,000,000,000,000 question: what does the Fed now do? One attempt at an explanation taking into account last week's market plunge comes from Nomura, which provides a "2015 Scenario Analysis" in which it "breaks down various monetary policy (rate hike options) and rates market implications ahead."

 
Tyler Durden's picture

The Federal Reserve Is Not Your Friend





Imagine that the Food and Drug Administration (FDA) was a corporation, with its shares owned by the nation's major pharmaceutical companies. How would you feel about the regulation of medications?  Whose interests would this corporation be serving? Or suppose that major oil companies appointed a small committee to periodically announce the price of a barrel of crude in the United States. How would that impact you at the gasoline pump? Such hypotheticals would strike the majority of Americans as completely absurd, but it's exactly how our banking system operates.

 
Tyler Durden's picture

Is The Oil Crash A Result Of Excess Supply Or Plunging Demand: The Unpleasant Answer In One Chart





Courtesy of the following chart by BofA, we have the answer: while for the most part of 2015, the move in the price of oil was a combination of both supply and demand, the most recent plunge has been entirely a function of what now appears to be a global economic recession, one which will get far worse if the Fed indeed hikes rates as it has repeatedly threatened as it begins to undo 7 years of ultra easy monetary policy.

 
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