Monetization

Monetization
Tyler Durden's picture

Only Yesterday - How The Federal Debt Went From $1 Trillion To $18 Trillion in 33 Years





In the great fiscal scheme of things, October 22, 1981 seems like only yesterday. That’s the day the US public debt crossed the $1 trillion mark for the first time. It had taken the nation 74,984 days to get there (205 years). What prompts this reflection is that just a few days ago the national debt breached the $18 trillion mark; and the last trillion was added in hardly 365 days.

 
Tyler Durden's picture

Markets Slide As Draghi Kicks The Can





But, but, but all the clever talking heads said he had to do it now...

*DRAGHI SAYS ECB TO REASSESS CURRENT STIMULUS NEXT QUARTER, MAY NOT DECIDE ON NEW MEASURES IN JANUARY
*DRAGHI: DECISION TO CHANGE BALANCE SHEET LANGUAGE NOT UNANIMOUS

This is not what the market wanted to hear - Draghi kicking the can with no indication they are any closer to getting Zee Germans on board with direct monetization of European fiscal irresponsibility.

 
Bruno de Landevoisin's picture

StealthFlation!!! Got Gold?





Money is stored labor. Labor is part of human life. To devalue money is to debase life itself.

 
Bruno de Landevoisin's picture

Economic Energy Elation





Money is stored labor.  Labor is part of human life.  To devalue money is to debase life itself.

 
Tyler Durden's picture

For The World's Largest Rig Operator, The "Recovery" Is Now Worse Than The Post-Lehman Crash





The last time the world's largest oil and gas drill operator, Seadrill, halted its dividend payment was in 2009, shortly after Lehman had filed and the world was engulfed in a massive depression. Retrospectively, this made sense: the company was struggling not only with depressionary oil prices, but with a legacy epic debt load as can be seen on the chart below. So the fact that the stock of Seadrill collapsed by 20% today following a shocking overnight announcement that it had once again halted its dividend despite what is a far lower debt load than last time, indicates that when it comes to energy companies, the current global economic "recovery" - if one believes the rigged US stock market - is actually worse than the Lehman collapse.

 
Tyler Durden's picture

Guest Post: Why Monetizing Debt Could End In Revolutions





All that the Fed, BoJ (Bank of Japan), the Bank of England etc. have been concerned with is the preservation of private banks and the continued propping up of stock markets. None of these institutions really care about the real-world economy, real-world inflation or the ability of individuals to maintain their lives in a prolonged period of economic contraction. When you couple high real inflation with stagnation or reduction in wages over the years since the 2008 crash then real-world buying power of most individuals is drastically reduced. This doesn’t just make people depressed, it makes them angry – hardworking people do not expect or deserve to be thrust into poverty.

 
Tyler Durden's picture

Deutsche Bank: "People Are Talking About Helicopter Money And Debt Cancellation Being The End Game"





"I had a few meetings yesterday and one of the biggest surprises I had was that for the first time in a long time people were talking about helicopter money and debt cancellation being the end game. This was a major theme of our 2013 long-term study but one that we've struggled to get much traction with over the last year. Perhaps there's an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock.... Anyway, this is not something for today or tomorrow but the fact that different clients brought it up independently of each other makes me think that's its starting to get into people's thoughts." - Deutsche Bank

 
Tyler Durden's picture

Why Japan’s Money Printing Madness Matters





Keynesian fiscal policies and central banking regimes have buried the public sectors of most of the world’s major economies in unsustainable debt. Now they propose to double down on more of the same because an entire generation of politicians have been house-trained in permanent fiscal profligacy and endless kicking of the fiscal can down the road. To be sure, in perhaps putting off Japan’s day of fiscal reckoning once again, Prime Minister Abe is proving himself to be a certifiable madman. In short order, however, he will have plenty of company all around the planet.

 
Tyler Durden's picture

The Biggest Myth About Investing In Europe





The BTFDippier of the fast money is already rotating into a long-Europe mode: their entire thesis is that sooner or later the whales will have no choice but to follow the momentum chasers right back into Europe, because where else are they going to go: in the "safety" of the S&P's 19x GAAP P/E?  In theory this would be a great strategy, if only in a world in which nobody actually does any fundamental homework and the only thing that matters is frontrunning the next great sucker. In practice, it is fatally wrong. As the following observation from hedge fund Lyxor shows, while CTA and momentum strats have indeed bailed on Europe in recent months, the so-called smart money, the "global macro" funds never left.

 
Tyler Durden's picture

Despite Record Highs, These 5 'People' Are Still Flipping Out





Despite the apparent economic and profit news improvements recently, JPMorgan CIO Michael Cembalest notes there are a few instances where people are still flipping out. It’s worth reviewing them, he suggests, as they're indicative of risks and opportunities in financial markets heading into 2015, and of the continued presence of central banks affecting asset prices.

 
Tyler Durden's picture

ECB Says May Buy Gold, Stocks Next, Admits "Not Sure If Japan's QE Has Worked"





A stunner this morning by ECB board member Yves Mersch who said earlier today that the ECB balance-sheet expansion is "neither an end in itself nor a fetish." As quoted by Bloomberg, the ECB member said that  "the effect on rates that comes along with it is at best a collateral benefit." Nothing new here: we have discussed why unlike Japan and the US, the biggest gating factor for Europe is the presence of freely-available, unencumbered collateral that could, at least in theory, be purchased by the ECB. Which brings us to the Mersch punchline: "Theoretically the ECB could purchase other assets such as gold, shares, ETFs to fulfill its promise of adopting further unconventional measures to counter a longer period of low inflation."

 
Tyler Durden's picture

As QE3 Ends, Fed Reserves Have Biggest Drop Since Start Of QE





While we understand the Fed's desire to pass the monetization baton seamlessly from the end of QE3 in the US, to the expansion of QE in Japan first, and then the launch of public QE by the ECB, things may not be quite as smooth as desired . Because a quick glance at the latest Fed H.4.1 statement reveals something unexpected: in the past 4 weeks, the level of total reserves with Fed banks (i.e., excess reserves created by QE), have seen their biggest plunge since the launch of QE in March of 2009. As of November 5, the total amount of outstanding reserves tumbled to $2.561 trillion, down a whopping $188 billion in the past 4 week, well below the $2.8 trillion recorded in August, and at a level last seen in February 2014.

 
Tyler Durden's picture

Ritual Incantation - The Economic Gibberish Of The Keynesian Apparatchiks





The Keynesian notions of “potential GDP” and “aggregate demand” have no basis in the real world. They are revealed doctrine. They are the religion of the state’s economic policy apparatus. Its bad enough that this destructive economic religion leads to the farcical forecasting games evident in the EC’s chronic updates and slow-walks of the GDP numbers down. The evil, however, is that the Keynesian apparatchiks will not desist in their destructive money printing and borrowing until they have suffocated free market capitalism entirely, and have monetized so much public debt that the financial system simply implodes.

 
Tyler Durden's picture

Only A Few Years Left Until The Nikkei Hits Dylan Grice's Price Target Of 63,000,000





"Japan is no Zimbabwe. Neither was Israel, yet from 1972 to 1987 its inflation averaged nearly 85%. As its CPI rose nearly 10,000 times, its stock market rose by a factor of 6,500 … Regular readers know that I don’t generally make forecasts, but that every now and then I do go out on a limb. This is one of those occasions. Mapping Israel’s experience onto Japan would take the Nikkei from its current 9,600 [as of October 2010] to 63,000,000. This is our 15-year price target." - Dylan Grice

 
Syndicate content
Do NOT follow this link or you will be banned from the site!