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If ‘It Sounds, Looks And Smells Like Debt Monetization’, It’s A Duck.

"... and most likely permanently."

"... and most likely permanently."
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4 comments on “If ‘It Sounds, Looks And Smells Like Debt Monetization’, It’s A Duck.

  1. My head is spinning. If governments keep overspending, and central banks keep printing money to monetize the debts, why do we not see inflation and rising long bond rates?

    • w2j2, Remember in the calculation that they assume the consumer will make perfect substitutions. For example, if steak prices jump then you would trade down to pork chops and that is what gets added in.
      The SA

  2. I think we aren’t seeing inflation because of the way it is calculated and also because the cost of capital is so low many marginal companies are left to produce. Finally, the structural shift to technology (low or zero marginal cost and the inherent productivity enhancing nature (theoretically) and from older higher cost workers to younger lower cost workers.

    But consumer inflation is understated (seeing my monthly bills) and asset price inflation is very high (stocks, bonds, housing, art, vintage cars, etc).

    We are all getting screwed and it only will get worse sadly.

  3. All those Subpar “Bonds” we bought in June of 2015, with 3x leverage against the Future;s’ market are performing quite well, I believe the payout is now 250,000,000 per bond.

    This is called “Old Math” Ladie;s’ and Gentlemen.

    Read “Euler”

    Read “Leonhard Euler”


    stay in touch


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