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rocket31
Toledo Fan
Member since Jan 2008
40799 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

The Fed is terrified we slip into deflation.


they literally just said they are potentially raising rates to increase deflationary pressure

if that happens prices would fall and then the cash-rich can pick up discounted assets

if rising prices (especially for food) continue etc cause a breaking point, the majority will welcome deflation


RedStickBR
LSU Fan
Member since Sep 2009
14577 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

they literally just said they are potentially raising rates to increase deflationary pressure


Are you referring to Yellen’s comments?


wutangfinancial
LSU Fan
Treasure Valley
Member since Sep 2015
8001 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

I’ll just keep providing data and you stick with your personal anecdotes. More banks are tightening lending standards today than pre-COVID.



I work in mortgage as part of a diversified bank. This is 100% true and undeniable. On top of that, the borrowers are throwing down equity and have much better credit than decades past.


wutangfinancial
LSU Fan
Treasure Valley
Member since Sep 2015
8001 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

So the fed is simply betting velocity wont increase? Seems like a risky bet, considering how much cash has been added in the last year.



All $856 billion of cash injections? Really?


rocket31
Toledo Fan
Member since Jan 2008
40799 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
yes, i admittedly didnt follow through with her comments much deeper than surface level

did she take it back?


VictoryHill
Army Fan
Kenner, LA
Member since Nov 2013
1097 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

global currency.

It's called crypto. Buy in now.


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RebelExpress38
Ole Miss Fan
In your base, killin your dudes
Member since Apr 2012
11844 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

All $856 billion of cash injections? Really?


Link


RedStickBR
LSU Fan
Member since Sep 2009
14577 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
Yes. She walked the comments back. Plus, she never would have used the D word. Her comments related to hiking rates in the event prices rise too fast, not to intentionally “increase deflationary pressure.”


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RedStickBR
LSU Fan
Member since Sep 2009
14577 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

I work in mortgage as part of a diversified bank. This is 100% true and undeniable. On top of that, the borrowers are throwing down equity and have much better credit than decades past.


Thanks. I was speaking from personal experience in addition to what the data show, but good to have the additional confirmation from someone in the industry.


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10
wutangfinancial
LSU Fan
Treasure Valley
Member since Sep 2015
8001 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
Naw you can look it up yourself. It's the total for direct payments from the Treasury. I haven't looked at the TGA in a while I'm sure that could be a good source as well.


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10
JayDeerTay84
LSU Fan
Texas
Member since May 2013
8389 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

I’ll just keep providing data and you stick with your personal anecdotes. More banks are tightening lending standards today than pre-COVID.


You realize the data you are posting looks exactly like 2008 right?

Does "tightening standards" simply mean we are fricked?
This post was edited on 5/5 at 1:48 pm


wutangfinancial
LSU Fan
Treasure Valley
Member since Sep 2015
8001 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
If you're worried about the MBS market it's already in full Fed price control mode and has been for 12 years at this point.


JayDeerTay84
LSU Fan
Texas
Member since May 2013
8389 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

If you're worried about the MBS market it's already in full Fed price control mode and has been for 12 years at this point.


I'm not worried. I understand the manipulation. I was just laughing at the comment that "banks are tightening standards"... Like its some kind of foresight on the banks being diligent...


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12
RedStickBR
LSU Fan
Member since Sep 2009
14577 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

You realize the data you are posting looks exactly like 2008 right?

Does "tightening standards" simply mean we are fricked?


I'm not saying we're facing another GFC.

I was simply explaining that money supply increases have been offset by velocity decreases.

Someone else chimed in asking if we could see inflation if velocity increases.

I said we could, but that tightening lending standards and deleveraging in the consumer sector could cause velocity to remain depressed.

You responded, "LOL."

I showed you a chart indicating a continued contraction in loan and lease production since May 2020.

You said, "Yeah, but, what does that have to do with lending standards? And, um, how do you explain the increase in leverage over the last decade?"

I responded with a chart showing more banks tightening lending standards than was the case immediately prior to COVID, which supports the chart indicating an overall decline in loan and lease production. Also, I ignored the second part of your quip as what has happened over the last DECADE is irrelevant to the tightening happening TODAY.

What point exactly are you trying to make? And, to the extent you have one, can you dial down the sarcasm and perhaps point to a data point or two?


Strannix
USA Fan
Banana Republic
Member since Dec 2012
38101 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
I'll bump this when you all look like retards, Yellen and everyone at the fed are stupid idiots


RedStickBR
LSU Fan
Member since Sep 2009
14577 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
I don’t disagree the Fed has been reckless. They have been - no doubt about it.

That said, I think a lot of people will be surprised to see that any uptick in inflation was only temporary. Despite all the money printing, the deflationary forces facing our economy will outweigh any inflationary impacts of QE.

Now, if we go full blown helicopter money mode, and blur the lines between the Fed and the Treasury, then we sure as hell could see inflation, particularly if velocity increases at the same time.


wutangfinancial
LSU Fan
Treasure Valley
Member since Sep 2015
8001 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

Now, if we go full blown helicopter money mode, and blur the lines between the Fed and the Treasury, then we sure as hell could see inflation, particularly if velocity increases at the same time.


The inflationistas on the MB don't understand this is now a political battle and it is one that I think will be lost next year. People are not up for that kind of system yet. It'll take another crisis driven response which I'd expect they have already prepared for just like they were prepared for Covid.


Strannix
USA Fan
Banana Republic
Member since Dec 2012
38101 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

Now, if we go full blown helicopter money mode,


If 10 trillion isn't what figure would you say is? 50 trillion? 100 trillion?


RedStickBR
LSU Fan
Member since Sep 2009
14577 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

The inflationistas on the MB don't understand this is now a political battle and it is one that I think will be lost next year. People are not up for that kind of system yet. It'll take another crisis driven response which I'd expect they have already prepared for just like they were prepared for Covid.


I agree with you. I think we’ve reached the point of grossly diminished marginal returns on fiscal spending and the Fed/Treasury realize that. Even Larry Summers is critical at this point. And given how much of the federal debt has had to be monetized by the Fed, any reduction in QE will also mean a less accommodative fiscal stance (unless foreign Treasury buyers show back up en masse). What has been a twin bazooka of fiscal and monetary coordination could become very problematic for the economy and risk assets if and when they simultaneously run out of ammo. At some point, they are just going to have to take their foot off the gas and let the pieces fall where they may.


Strannix
USA Fan
Banana Republic
Member since Dec 2012
38101 posts

re: Fed hides weekly M1 supply, says "money doesn't matter"
quote:

At some point, they are just going to have to take their foot off the gas and let the pieces fall where they may.


Which should have been done in 2008, they're basically degenerate gamblers.


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