central banks debt Markets

‘The Ultimate Conundrum’ At The Limits Of Stimulus

"...we are starting to get to the limits to central bank stimulus."

"...we are starting to get to the limits to central bank stimulus."
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7 comments on “‘The Ultimate Conundrum’ At The Limits Of Stimulus

  1. Anonymous

    14 pp OR 14 bp? This, in some ways is the main question especially since battle lines re. MMT are being drawn.

    • Lance Manly

      Hey Bloomberg is even quoting Muir on MMT:

      “This equilibrium likely can’t last, and particularly not if MMT becomes the nation’s economic policy, says Kevin Muir, a market strategist at East West Investment Management Co., who happens to have the rare MMT trading thesis. “Putting your head in the sand regarding MMT would definitely be a mistake,” he wrote on his blog, The Macro Tourist. Importantly, “spending time arguing about its relative merits/detriments will not help your trading or investing one iota.”

      To bad getting advice from drunk Albanians is the in thing so Walter could get his name in lights.

  2. Anonymous

    Just a simplistic thought as to why the QE money hasn’t fueled inflation in the real economy. Could it be that it never reached the real economy and the inflation has actually been in the market itself?

    • Harvey Cotton

      If that is simplistic, then I will join you in being simple. There are several kinds of inflation: consumer, producer, wage, asset. Asset inflation, from stocks to houses, is through the roof. The reason inflation hasn’t hit the consumer, in part, is because a lot of the money created by governments were lent to recapitalizing banks at near zero interest rates, and banks hoovered up Treasuries, bonds, gilts, bunds, etc. to make a profit on the yields. The money didn’t really circulate enough to create inflation.

    • That is correct…the money was never allowed out of the Fed coffers..Example IOER which is a simple tool to accomplish just that. Let’s face it what Bank really wants 30 year Mortgages at 3-4 %..Too much potential downside on that type exposure.

      Another reason for no inflation showing up is the fact that most consumer products get downsized regularly , and have been for years . This all masquerades as a productivity increases and does not register in the CPI.

  3. Curt Tyner

    Yea lets be simplistic: CB’s right now are a debt creating monsters. The more debt the more my life get inflated because my dollar is buying less, paying for less every f-ing day.

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