Macro Tourist

The Macro Tourist On Endogenous Money

"...when someone tells you inflation will run out of control because of the Fed's balance sheet expansion, think through the logic of their argument".

"...when someone tells you inflation will run out of control because of the Fed's balance sheet expansion, think through the logic of their argument".
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9 comments on “The Macro Tourist On Endogenous Money

  1. Anyone interested can pick up a Minsky book from the ‘80s to read effectively hundreds of pages on the mechanics of endogenous money. It’s essential to his (correct) endogenous financial instability hypothesis.

  2. Respectfully this is a load of b s. Have you ever studied German history? Printing money without limits? You will be buying a loaf of bread with a wheel barrel full of cash soon if you support this nonsense. The interest on our national debt is now approaching $400 billion a year. And a massive corporate tax cut at the same time? How do you proposey we pay for this debt? Print more money and scare everyone out of the sovereign debt of the USA and watch the dollar tank and rampant inflation come ashore here?

    • Care to explain why Japan isn’t suffering from hyperinflation if what you say is true?

      I hate to tell you this, but there is every reason to believe that money can, in fact, be printed without limits. Your sentiments are shared by a lot of people, but reality doesn’t back you up. References to Weimar don’t change the fact that despite a decade of printing money to finance the purchase of trillions in assets (as the Fed, the ECB and the BoJ have done) there is no inflation. In fact, the world has the opposite problem.

      Further, one of Kevin’s biggest conviction trades is long inflation. So you’re kinda preaching to choir here without realizing it.

      Finally, you should go back and read the letter that dozens of big name hedge fund managers and other various luminaries wrote to Bernanke in 2010 warning him that the Fed’s post-crisis policies were going to cause hyperinflation.

      Bernanke basically called them morons.

      Guess who was right?

      Hint: It wasn’t the hedge fund managers and luminaries.

  3. It all depends if you belief the entrenched Western Free Market Capitalist system will remain in control of the Financial future of the planet or will there be a challenge where inevitably Geopolitics Rules….????

  4. Huge difference between Japan and the USA. The savings rate is super high in Japan. The average Japanese citizen is not leveraged to the hilt and, MOST importantly the massive bulk of Japanese debt is held in the hands of very sticky investors; Japanese citizens through the postal savings system etc. No comparéis on between Japan where holding national debt is a matter of civic pride and the the PomI scheme that is the USA. Yes u am preaching to the choir a bit but I worked in finance for the last 26 years. I ran a $10 billion international trading desk. I lived through the Asian contagion the devaluation of the Mexican peso the .com bubble burst, 2008-2009. I’ve seen this move many times before. I know how it ends. I’m with Peter Schiff in how this ends despite not agreeing with his politics. I won’t ever drink the CNBC/WSJ plutocrat kool ade. It will end in pain. Inevitable.

    • Sorry for typos. I do agree that timing is a big component and I’ve been wrong about timing in the last year just as the economists who wrote to Bernanke were off on their timing. I was a bull until about a year ago. But now I only see they the equities market covenant light debt fueled Ponzi scheme plutocrat buyback sham will end in eventual disaster. Not sure what will trigger it. Perhaps a multitude of events rather than one big thing but I’m super comfortable being 100% short MOMO. Especially the QQQ. Imho.

      • So, you worked in finance for a quarter century and you’re now quoting Peter Schiff? Sorry, but Peter is a joke. Nobody takes him seriously. He’s a cartoon. There will be no hyperinflation in the US. It’s never going to happen. And people like Peter will be writing the same “articles” (scare quotes there for a reason) every, single day forever. Hopefully, it’s occurred to you that people like Peter don’t write this stuff because they believe it. They write it to entertain people. That’s all that kind of stuff is — entertainment.

        Sure, there are crashes. But it’s not people like Peter who make money from them, and it damn sure ain’t the God-only-knows-how-many poor retail investors who poison their minds with that crap. It’s people like Michael Burry, etc., who see something specific, identify a catalyst and then have the financial firepower to call up a desk that’s willing to write them some protection against it.

        The idea that average Joe retail is going to make steady money by buying some puts and loading up on GLD is patently absurd.

        • I never said I agree with Schiff on gold. I don’t and he is a bit of a blowhard but he was 100% right about 2008-2009 and he is right about the ridiculously unsustainable levels of consumed corporate and sovereign debt of the USA. I wish it were not true. I love my country. My son is currently serving in the military. But I know the equity markets will blow up soon from unsustainable corporate covenant mignt debt, leverage loans, massively overleveraged consumers etc etc. Multiple triggers out there soon to pull us lower. And of course the retail investor can make a killing shorting the market. I doubled my account in 2018 being short Qqq and ultra long VIX and it will happen again. I love perma bulls. Gotta have someone on the other side of my trades. Takes all kinds to make a market. I’m staying short til it blows up and then I’ll buy it all back after the 40% Qqq selloff. 🙂

  5. Oops. Covenant light debt. It’s the Corp debt bubble that will ultimately reverse the buyback machine and lead many companies to issue more shares through secondaries. It’s all coming. Soon.

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