eurodollar squeeze

A Perfect Example of the Euro$ Squeeze

By |2019-11-07T16:22:14-05:00November 7th, 2019|Economy, Federal Reserve/Monetary Policy|

Germany’s vast industrial sector continued in the tank in September. According to new estimates from deStatis, that country’s government agency responsible for maintaining economic data, Industrial Production dropped by another 4% year-over-year during the month of September 2019. It was the fifth consecutive monthly decline at around that alarming rate. Four percent doesn’t sound like [...]

The Shock, The Squeeze, and The Downside

By |2019-08-28T11:39:46-04:00August 28th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Yesterday, Eurostat confirmed that German GDP in Q2 2019 had contracted. Also issuing benchmark revisions, the European government agency found that GDP growth had been slightly better than previously thought at the top of Reflation #3. The last two quarters of 2017 saw the biggest upward revisions. But if Europe’s “boom” really was a little [...]

That Can’t Be Good: China Unveils Another ‘Market Reform’

By |2019-08-19T13:16:07-04:00August 19th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Chinese have been reforming their monetary and credit system for decades. Liberalization has been an overriding goal, seen as necessary to accompany the processes which would keep the country’s economic “miracle” on track. Or get it back on track, as the case may be. Authorities had traditionally controlled interest rates through various limits and [...]

The Asian PMI Picture of A Dollar Shortage

By |2019-07-01T11:51:32-04:00July 1st, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s actually one of the few areas that has been studied in mainstream Economics. The links between global financial upset and broader economic consequences are pretty well understood. Trade gets shut down, therefore economies which are highly dependent upon the exchange of goods experience the effects first. When you see these bellwethers under pressure, it’s [...]

From Their Lips To No One’s Ears

By |2019-06-25T15:27:49-04:00June 25th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I thought this one needed a separate notation, though the same subject as the previous article. We’re still talking about the foreign repo pool, or monetary policy’s original reverse repo. It’s basically a way for overseas official governments and central banks to tell the Fed’s New York branch they’re uncomfortable with the dollar condition. How [...]

With Rate Cuts Looming, A Necessary Bit of Perspective Before Going Into Them

By |2019-05-23T17:11:20-04:00May 23rd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is sometimes amazing what happens when you add just a little perspective. In some cases, it doesn’t require much at all to do so. One little addendum can upend the entire message, leading you off into entirely different interpretations. The implications can be enormous. To see what I mean, let’s begin with the basics. [...]

China’s Big Stimulus

By |2019-05-22T11:26:25-04:00May 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Earlier this month, the People’s Bank of China (PBOC) reduced the percentage of liquid reserves some banks are required to hold. Effective May 15, the Chinese central bank estimated that the policy change would release about RMB 280 billion into the system. This RRR discount, however, was only applied to small and medium-sized banks. The [...]

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