VECKA 28
Onsdag
08
Juli
BT-annons
2020-06-01
photo


Myriad möjligheter för politiker
Has de facto modern monetary theory arrived? 

GURU CORNER
The Swiss National Bank owns approximately $94 billion of publicly traded US equities such as Facebook, Apple, Amazon, Netflix, and Google?

Its top holding is in Apple, with over $4 billion worth of shares in the company. 

The COVID-19 panic has provided a myriad of opportunities for politicians to exploit the fear and pain of ordinary people for personal profit. 

QE progress report

Reserve bank credit (i.e., the sum total of interest-bearing assets at the Fed) rose to $6.742 trillion, up $78 billion from last week’s reading.  That pushes the three-month annualized growth rate to 563% from 510% last week and 259% in mid-April. 

Has de facto modern monetary theory arrived? 

Since the Fed unleashed its liquidity firehose on March 23, the central bank’s portfolio of Treasurys has increased by $1.42 trillion, equal to 85% of the net increase in total Treasury debt outstanding over that period. 

Last year, by comparison, the Fed’s Treasury holdings rose by $88 billion, representing just over 7% of net debt issuance in 2019.  

Media outlets, both left and right, are mostly narrative driven. Also, journalists have a tendency to lazily reprint whatever "experts" say. This makes media reporting thoroughly unreliable. 

The EU has now become essentially a makeshift, lawless regime designed to prop up bankrupt states. So much so, in fact, that even the German supreme court has become alarmed. 

Prices and purchasing power are determined by how individual consumers value goods and services. The "velocity of money" won't help us understand prices or the money supply. 

Crashes are fast, like that first hill on a coaster. Recoveries are not, for the simple reason that production is more difficult than destruction. 

Rather than spurring real economic gains, the Federal Reserve’s unorthodox QE program has supported and extended the debt grid and generated asset exuberance. But this can only go on as long as there's capacity for more debt. 

The eurozone needs to understand that if it decides to increase taxes to address the rising debt due to the COVID-19 response, its ability to recover will be irreparably damaged. 

 
Göran Högberg

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