Discover and read the best of Twitter Threads about #centralbanks

Most recents (24)

What really causes inflation? 🧵

[a thread for normies - like me]
2/ The problem with #inflation is that it's a very personal experience.

As I always say, the wallet is the most sensitive organ in the body, so my inflation might not be your inflation.

In fact, my inflation could be seen as #disinflation by you... (more on that later)
3/ Price inflation and monetary inflation have different definitions:

* For many.- #inflation is the increased prices paid for goods & services.

** To others.- it's a decline in the purchasing power of your #money.

*** In layman's terms.- Too much money chasing too few goods.
Read 25 tweets
Did someone warn you of the current #inflation, #recession, and #bearmarket in equities? Did you get out or reallocate in time? Breaking even? Maybe even profit?
Did you pay a subscription for those warnings late last year?
I started warning friends about it in 2016.

Read on🧵
When I said that I was warning my friends about it in 2016, I did so because it was clear that #Trump would not be a good president for the US & world #economy long-term, and would increase the odds of #inflation and rising #interestrates.

Late 2016 DMs in Norwegian to a friend: Image
But why am I not linking Twitter screenshots? Well, I haven't been on here for even two years yet, so my oldest conversations are in private FB chats with friends and family, as those were the only people I tried to warn.

2018 chats about #Euribor annual hedging puts re #ECB: Image
Read 19 tweets
On Monday $ fell to its lowest level in a basket of currencies bucking its recent trend as investors have grown nervous ahead of US inflation data with other Central Banks like ECB/ BOE etc adopting a more hawkish stand. This will determine the extent of the next Fed rate hike.
So far the US economy exhibiting resilience with multiple data points pointing towards a probable softer landing than a recession has helped the dollar index strengthen.
India has been bucking the trend with the Rupee depreciating against the dollar on account of global sentiments but strengthening against other currencies. The rupee’s ability to stem the fall with RBI looking at holding the figure of 80 seems to be paying off along with other
Read 20 tweets
The global economy has changed dramatically this year, and financial markets have turned volatile. The question on everyone’s mind now is…


#globaleconomy #financialmarkets #nifty
Will recession hit India? How will it be different from past recessions that our country has faced?

Let’s look at some data points.


#recession #india #economy
Based on the RBI’s assessment, the Real GDP projection is retained at 7.2% for FY23. This comes on the back of strong investment activity, improving bank credit and rising capacity expansion.


#rbi #gdp #centralbanks
Read 8 tweets
#BullWhip effect as per @michaeljburry:

All know that rising #inflation is negative for #Equity markets as #CentralBanks (CB) tend to raise rates to control #demand - which in turn can lead to #Recession. During this phase #demand outpaces #supply.

Demand contracts for some time and supply also contracts with a lag. Post that demand starts to rise (post COVID), prompting manufacturers to increase supply disproportionately - creating a supply glut. This puts downward pressure on prices,inflation comes down. CBs turn dovish
This creates disinflationary phenomena. Though looks good on paper for equity markets, prices of all products come down substantially.

This is called #BullWhip effect.

Supply outpaces demand. Prices collapse, inventories pile up, margins shrink.

This slows earnings growth
Read 5 tweets
🚨FOMC preview ...🧵

Target rate probabilities for July 27 (Wed) between 225 and 275 with 3x as much probability on 225-250 (75 bps).

#rates #bonds #federalreserve #us #UnitedStates #fed #macroeconomics #EconTwitter #tightening #riskoff #stocks #riskassets #CentralBanks
Fed will be data driven.

Currently, the market is factoring in target rate probabilities (Dec 2022 FOMC meeting) at 325-375 bps.

#rates #bonds #federalreserve #us #UnitedStates #fed #macroeconomics #EconTwitter #FOMC #tightening #riskoff #stocks #riskassets #CentralBanks
📉Desired demand reduction is visible.

Consumer confidence and subsequently, Retail is taking a massive beating.

JP Morgan global aggregates. 👇

#rates #bonds #federalreserve #us #UnitedStates #fed #macroeconomics #EconTwitter #FOMC #tightening #riskoff #stocks #riskassets
Read 4 tweets
FT opinion article: “Central bankers should think twice before pressing the brake even harder - The war against Ukraine has brought a new negative supply shock on top of the old one”. Harder? Thread #bonds #equities #centralbanks #monetarypolicy…
1/According to the author the invasion of Ukraine has silenced the debate about “transitory” inflation. But where central banks stood impacts how they react. Initially the idea was that inflation was the result of supply issues that could be ignored. This view lost out.
2/Central banks made hawkish turns and have painted themselves into a corner, as the Ukraine crisis has brought a new supply shock. Central banks committed to tightening when the second shock made things worse.
Read 11 tweets
Last Thursday (s. ; or for the full live stream, s. ), @SevimDagdelen from #DieLinke has discussed with @RaniaKhalek & @EugenePuryear esp. the recently decided & billion-dollar rearmament of the German #Bundeswehr... a result of the #RussianFederation's military invasion of #Ukraine, as officially justified by the #GermanFederalGovernment. A recommendable interview! Besides her opposition to such rearmament & the associated fundamental departure...
...from the so-called „#Entspannungspolitik“ established by #WillyBrand & #EgonBahr for #Germany's relationship with the #USSR (& also its territorially largest & politically strongest successor state in the form of the #RussianFederation),...
Read 59 tweets
Don't blame #Putin or #Covid for your sky-high grocery bill. Blame the elites who collude with the biggest scam in history, involving #CentralBanks and their friends in finance, under the cover of the pandemic
A thread on #QuantitativeSleazing ...… Image
Since the start of the pandemic in March 2020, #CentralBanks in the West began pouring trillions into the coffers of large corporations, making their #stockmarket friends rich while making us poorer through high #inflation
#QuantitativeSleazing… Image
#CentralBanks should not favour one business over another by giving them easy loans. Helping large & dirty corporations outcompete smaller firms is anti-business, anti-markets, anti-democratic & anti-sustainability. Such #QuantitativeSleazing makes mockery of green promises Image
Read 18 tweets
Thanks to @GeoffCutmore, @cnbcKaren & the #SquawkBox team for having me on this morning's show.

We discussed #bonds & #centralbanks, touched on #supplychains & talked of #Growth's vulnerability, #commodities' appeal.

Slide deck follows:-

Is your box still backed up in port? How much does the onward haulage cost? What happens to #freight rates after #LNY/#Beijing2022?
The bet is that #energy cannot *possibly* rise as far and fast this year as last, but what about all the other inputs? To what extent are these and other costs yet to be passed on?


Read 15 tweets
In last 5 years, Central bankers across developed countries wanted higher inflation to raise rates so that they can cushion when next time crisis hit. But, now when inflation is so higher, most of developed countries central bankers claiming as transitory!

#centralbank #bonds
Do central banks having any fiduciary responsibility towards citizen of that countries in some other citizens as well or is it towards the people or govt who hired them in first place!
Most of the central banks fail to anticipate any events ahead of the market. At least some market participants are savvy enough to get the clear picture ahead of the events.
Read 8 tweets
Daily Bookmarks to GAVNet 09/02/2021…
CEO Ridiculed for Raising Minimum Wage to $70K Has the Last Laugh…

#IncomeDisparity #MinimumWage #FinancialPerformance
Cross-reactive CD4+ T cells enhance SARS-CoV-2 immune responses upon infection and vaccination…

#SARSCoV2 #ImmuneResponses #infections #vaccinations #antibodies
Read 8 tweets
1/Thanks to @steve_sedgwick and @cnbcKaren for having me on @CNBC #SquawkBox this morning.

We talked about - what else? - #inflation and #centralbanks and whether the #Fed & peers are 'making an historic mistake', in Steve's words.

A few charts & comments for background:-
2/It's trite to say the jump in price indices is *all* attributable to a 'basis effect' when they've accelerated so much THIS year.
3/ #JeromePowell and his merry band may wish to believe that the rise is a mere blip, but all too many businessmen & women (i.e., the people who *really* matter) seem to believe the converse is the case.
Read 10 tweets
Our #inflation forecasts from March on plus the ultimate scare: the possibility of a hyperinflation.

The "shock" was plainly visible in prices of online products and, e.g., shipping 👇. When economies opened, it materialized. 1/4
@GnSEconomics #economy…
By June, it was clearly visible that the source of #inflation had moved from "want to have products" to, e.g., food, rents and fertilizers, that is, to "need to have products", which would be reflected on wages

Alas, inflation was here to stay. 2/…
But, what truly worries us, is the possibility of a very rapid #inflation , or hyperinflation. It's pre-requisites are:

1) Vast issuance of central bank credit, like QE, and
2) Diminution of production possibilities. 3/

Both are here now. 🥶…
Read 4 tweets
We first warned on the possibility of a 'perfect storm' in December 2017.👇

We envisaged that the "storm" would engulf the global #economy in two years, but noted that everything depends on the actions of #Centralbanks and #China .
As we now know, central banks have been very innovative in postponing the crisis.

The bailout operations effectively started in 2016, when China unleashed a massive 'credit bonanza' to halt the collapse in its housing markets, and a global #recession . 2/…
They continued in December 2018/early January 2019, when the near collapse of the Chinese banking sector and credit markets in the US forced the PBoC to inject hundreds billions worth of liquidity into the banking system and the Fed to 'pivot'. 3/…
Read 14 tweets
Currently, the most important thing, when one wants to understand the behavior and the future of financial markets, is to understand the programs of quantitative easing, or QE.

A short thread. 1/6
@GnSEconomics #inflation #centralbanks #Fed #StockMarket…
They are asset purchase programs of the central banks and they have been running since late 2008 (with the Bank of Japan experimenting such programs from March 2001 till March 2006).

In them the central bank buys (mostly) government bonds, but also corporate debt... 2/
...and sometimes even stocks. They have altered the financial system in a profound and a very dangerous way.

This is a pressing issue now when #inflation has risen markedly, as tapering of QE -programs, where central banks end purchases of new assets, is likely... 3/
Read 6 tweets
Thanks to @steve_sedgwick & @cnbcKaren for having me on #CNBC #SquawkBox this AM.

What did we discuss? Well, #inflation of course!

I prepared some slides for the show which I'm happy to present in this thread.
#macro #Fed #Yellen #JeromePowell #bankofengland #QE
Are people in denial or is the #centralbank money flood just drowning all the signals?
#Commodities, #freight, #carbon - and a whole lot besides - sure do cost a lot more, these days.
Read 14 tweets
Is there an incoming policy error by the Federal Reserve? $DXY #FederalReserve #Dollar #Policy #Fed

Thread 1/
Over the past several weeks, we have seen significant Central Bank actions globally. This reflects a market flush with cash and a desire by the Federal Reserve to hold short-term rates positive. 2/
Mid-June 2021 FOMC Summary:
1. Unchanged rate and QE policy
2. Reverse Repo rate increase to 5bps
3. IOER increase to 15 bps
4. Dot plot showing rate hikes sooner than expected
Read 17 tweets
A long thread on the dominance of #centralbanks over our economies.

It should be reminded that central banks were never planned to have such a massive role in the #economy .

The idea of the central bank was born in the Middle-Ages, when failures of the... 1/23
...largest merchant banks of that era, founded by the Bardi and Peruzzi families, shocked the Italian City-State of Florence in 1343 and 1346.

These financial crises gave birth to the idea that the commercial banking sector would need a ‘liquidity backstop’, i.e.,... 2/ entity that could lend to private financial institutions in trouble. This was the original aim of central banks: to act as ‘piggy banks’ for commercial banks.

The first central bank that resembled the modern ones emerged in 1609, when the Dutch empire... 3/
Read 23 tweets
In preparation for my slot on #SquawkBox yesterday, I sent the guys a few slides as a synopsis of my last, detailed subscriber report for the discussion.

I called it #Pyromania. Feel free to take a look


#macro #bonds #commodities #dollar #inflation #centralbanks #fiscal
Is it possible to overkill an act of overkill? #JeromePowell & #JanetYellen seem set to let us find out.

Not that they're alone in their folly, of course. The #ECB is outodoing them handsomely, while the #bankofengland is breaking records stretching back to its founding, 327 years ago.
Read 10 tweets
Citibank 1/5: #AUD: Where does #RBA go in 2021 and beyond? - the RBA Governor concedes that it will take years before it achieves its inflation and employment goals. Despite the meaningful upgrade to the activity outlook, underlying inflation—at 1.25% in 2021 and 1.5% in 2022—
Citibank 2/5: is expected to remain below the Bank’s 2%-3% tget through the forecast horizon. Moreover, there’s still excess spare capacity in labor market; the unemployment rate forecast of 5.25% by the end of next year is still above Bank’s NAIRU (natural rate of unemployment)
Citibank 3/5: estimate of 4.5%. RBA’s balance sheet is set to expand further...the total size of the RBA’s balance sheet is set to increase from its current level of $AU330bn to around AU$600bn by November, or close to 30% of nominal GDP
Read 5 tweets
Now, even as the #CoronavirusVaccine dominates the headlines, we should take heed on the three detrimental 'undercurrents' that are converging to a 'Perfect Storm':

1) Financial instability.
2) Economic fragility.
3) Political uncertainty.

Thread. 1/24
In June 2013, we warned on the detrimental effects of the prolonged low int. rate envir.

"The long-term effects of the zero-bound on the financial markets are not known. What is known, is that extended periods of monetary easing may lead to bubbles." 2/…
We were not particularly worried about the situation in 2013, but in June 2016 we were:

"...fraudulent behavior, indebtedness, persistent macroeconomic imbalances, and major mispricing of risks are usually present before major financial disruptions." 3/…
Read 24 tweets
1/ Let us share some fundamentals on #gold price, given latest price action has been testing nerves of bulls after 50% increase post 2018.

Thread @Mintgecko @TheLastDegree @GMoneyResearch @AdamMancini4 Image
2/ View gold as a currency Image
3/ Like other currencies, #gold prices are volatile despite safe heaven backdrop... Image
Read 20 tweets

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