Does QE raise commodity prices~? Will inflation be transitory~? China raises rates, Vietnam same, China’s system, Strong Yen, Greece and Ireland, Hugh Hendry, Gas prices. http://overthepeak.com/wordpress/wp-content/uploads/2011/04/Thu7April_001.mp3 Links 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Evening ( again ) Nick…
I read a little about Open market operations after your pointer recently, and it reminded me of this when you mentioned whether QE would stop…
Unless I was mistaken, OMS and POMS are essentially the buying and selling of treasuries on the markets, but are used primarily to control the interest rates….
Assuming I am right about this, I also assume that QE would continue for the foreseeable future ( maybe not under the title QE ), as without it, the demand for treasuries will drop, and that ( in my humble opinion ) would lead to higher interest rates…. So if I am following this correctly, the bond buys lost via QE, will have to be made up under a different title, just to keep the interest paid on the debt lower….
If I’m wrong, slap me down….!!!
Oh deary me, just heard on the news that Portugal is negotiating an 80bn Euro emergency bailout…..
Sorry Nick, if this steals your thunder for tomorrows WEN….!!!
“And then there were three” was the quote…………….
I would say bank bailouts are responsible for high commodity prices. The banks were bailed out and then went straight back to hyper leveraging commodities. I guess most dont realise that the majority of price in commodities is borrowed money( longs to shorts is 12 to 1). You only have to look at 2008 to see what happened to commodity prices when banks were forced to close their leveraged positions in a mad scramble for cash. The same will happen again but only on a larger scale this time. I’m confident we will see oil in the $10 to $15 a barrel range sometime soon.
Option 1; Increased government spending, debt issued and rising interest rates Option 2: Increasing government spending (some asterity), debt issued at low near zero interest rates. Option 3: Increased government spending, no debt issued (MMT), no interest paid.
I guess Option 2 is as good as it gets under the current central bank system.
As I said in the video…..it is impossible for the human brain to understand everything.
Not trying to understand everything..just trying to see the most significant information and do some risk management! Risk management is all about not being able to understand everything.
You are part of my risk management strategy. Thanks!
That’s what she said
Big thank you for producing the info you do.
As you say: most washes over, some is sticky & stays stuck for a while. On the odd occasion the mind goes ” clunk” and is shifted. If I have learned nothing more than the realization of the staggering complexity of it all… well then I guess that is fine.
I am sure if we could step back far enough we would realize that we are trying to model chaos….it must keep the mind entertained….~.