Discover and read the best of Twitter Threads about #centralbanks

Most recents (24)

Negative Interest Rates #NIRP do more harm to #Centralbanks than they do good

Times are changing with hard cash to online digital payments
The world has been forced to adapt to new methods of online payment like #Debitcards , #creditcard and #mobilewallet payments
Few use cash and the global elites are using negative interest rates to do the same thing as inflation make money disappear
The U.S. discontinued the use of large-denomination bills in the late 1960s. Until 1969, $500, $1,000, $5,000 and even $10,000 bills were issued and today
the largest bill is a $100 bill, but it has lost 80% of its purchasing power since 1968

Europe has ended the 500 euro note and today the largest note in euros is 200 euros. Existing 500 euro notes will still be legal tender, but new ones will not be produced.
Read 12 tweets
Rise of the #CBDC: we just published a major analysis of drivers, #technologies and policy approaches. bis.org/publ/work880.pโ€ฆ [some details/thread]
We start by measuring the stance towards issuance in #centralbank #communication. We investigates the cross-country drivers, the technologies central banks pursue, and their policy approaches. #money #innovation #DLT
We examine how #centralbanks are involving the private sector in CBDC design, whether they employ a #DLT-based infrastructure, whether they opt for account-based access or #privacy-preserving #tokens, and whether their focus is on domestic or international #payments.
Read 6 tweets
The #Fed Playbook
Aug. 20, 2020

What's up with the Federal Reserve this week? Time fo a thread. ๐Ÿ‘‡

1/ The balance sheet is back above $7 trillion. We are probably not going to go very much below that this year. ImageImageImage
2/ Since the start of the #Fed intervention this year that's $2.8 trillions added.

Sure that's a lot of money... but in percentage that's only a 65% expansion.

There is a lot more room for growth if we compare to what happened after the 2008 crisis. ๐Ÿง ImageImage
3/ But the #FOMC doesn't really have a choice... #stonks need to go up... Image
Read 5 tweets
One noteworthy aspect of the #COVID19 market has been the success with which the #Fed & other #centralbanks have been able to stem the โ€œCovid Crashโ€ and then help control the recovery. The current backdrop reminds me a bit of the 1942-1946 #QE cycle. Letโ€™s take a look. (THREAD)
1/ After the Great Depression, the government went into high gear during WWII and, in the process, ran up huge government debt. Federal debt as a percent of #GDP jumped to 116% from 39% during the 1st half of the 1940s.
2/ Not only did the Fed monetize the debt by increasing its balance sheet 10-fold, it repressed the entire #yieldcurve by capping short rates at 3/8% & long rates at about 2.5%. #Inflation ran up but, with the #Fed repressing rates at low levels, real rates went negative.
Read 24 tweets
The #Fed Playbook
Aug. 06, 2020

What's going on with Brrrr? Time for a thread. ๐Ÿ‘‡

1/ Not much has changed for the Fed. Minus $4 billion on the balance sheet this week.

When your assets total $7 trillion that's barely visible. ImageImageImage
2/ In net value the size of the 2020 #FOMC intervention dwarfs what happened in 2008.

But in percentage term that is barely the beginning. ๐Ÿ‘‡ ImageImage
3/ So far the US Federal Reserve is getting what they wanted. They have prevented a total meltdown of the stock market.

But investors aren't blind to the side effects of money printing: #gold and #Bitcoin are on the rise. Image
Read 5 tweets
The #Fed Playbook
Jul. 24, 2020

1/ Only $6 Billion added to the balance sheet this week.

This is so small compared to what happened recently that you can barely see it on the chart.

For now the balance sheet is sitting just below $7 Trillion. ImageImageImage
2/ Same as in 2008, after the initial emergency measures we have moved to the plateau phase of the balance sheet expansion.

The next step for the #Fed is to come up with a more permanent #QE program.

I wouldn't be surprised if we hit $10 Trillion this year. ImageImage
3/ At the same time the money supply continues to expand at an unprecedented rate.

M2 is up more than 20% this year. This is:
- 4 times higher than the average year
- 2 times higher than the largest M2 growth on record

If you haven't already it is time to consider #Bitcoin. Image
Read 4 tweets
The #Fed Playbook
Jul. 16, 2020

1/ After a few weeks of decline the Federal Reserve is adding a small $38 billion to its balance sheet.

The emergency measures are almost gone so we are now getting a good old regular asset purchase program. ImageImageImage
2/ We are entering the plateau phase of the #Fed playbook.

In 2008 during this period the balance sheet stayed around the same level until the #FOMC put in place a more permanent #QE program. Image
3/ Don't expect the #Fed balance sheet to go back down to "normal" levels, the #Stonks market cannot afford that... #Brrrr Image
Read 4 tweets
The #Fed Playbook
Jul. 10, 2020

1/ The Fed continues purchasing treasury securities but swap lines and repo lending are down. That means another week of contraction of the balance sheet.

Down US$ 88 billion... but you can barely see it on the chart... ๐Ÿ‘‡ ImageImageImage
2/ This balance sheet contraction is not a surprise though. It simply follows the end of the emergency measures. The same thing happened in 2008.

After that expect the #Fed to do more #QE and more balance sheet expansion. ๐Ÿ‘‡ Image
3/ And this is leading to nothing else but currency debasement.

From 1980 to 2019 the M2 money supply averaged a 5.85% growth every year with occasional spikes at 10%.

It is only July but already in 2020 the M2 money supply is up 20%!

#Brrr Thank you Chairman Powell... Image
Read 4 tweets
1/Thanks very much to my old friend @steve_sedgwick @SquawkBoxEurope for the chat this morning
2/We looked at #Growth v #Value, the #US v ROW, we touched on #bonds and borrowing, #money supply, #inflation, #lockdown, #commodities & #gold - all in under 10 mins!
3/If that was all a bit rushed, here follow the notes I sent to accompany our chat:-

#macro, #markets
Read 12 tweets
The #Fed Playbook
Jul. 02, 2020

1/ Currency swaps are on the decline. That translates in the Fed balance sheet moving lower for now.

Keep in mind that it still sits at US$7 Trillion! ImageImageImage
2/ But the same thing happened in 2008. The emergency measures make the #Fed balance sheet explode. Then after they fade away the next step is a long term #QE program that will last for years.

At the same point in 2008 we weren't even half way through the expansion... #Brrrr ImageImage
3/ What's the conclusion? Keep calm and #StackSats.

Problems: #FOMC #QE #CentralBanks
Solution: #Bitcoin
Read 3 tweets
The #Fed Playbook
Jun. 25, 2020

1/ Very small decline in the Fed balance sheet this week.

This is mostly the result of foreign central banks not rolling over currency swaps with the Fed.

The rest of the world is less hungry for US$ for now. ImageImageImage
2/ The #Fed balance sheet has expanded a little bit less than US$ 3 Trillion in 2020.

But that's only a 67% growth compared to the 150% expansion at the same time in 2008.

The US economy is still in trouble though. So there is probably more support from the Fed coming soon. ImageImage
3/ Moral of the story: be prepared, #StackSats!

Problems: #FOMC #QE #CentralBanks
Solution #Bitcoin
Read 3 tweets
We are #pleased to #conclude our marathon of 4 consecutive #IMF #TechnicalAssistance #missions with productive outcomes for #IslamicFinance, despite the very challenging constraints and limitations.
The first six months of the year under #COVID19, a #NewNormal", have been fantastic intellectually and fulfilling.
The support of colleagues from the #IMF and Central Bank of #Djibouti; Central Bank of #Yemen; Central Bank of #Iraq, and Central Bank of #Libya have been excellent for #Islamicfinance IMF missions through #Cisco #webmex.

Now it is time to have a little break!!
Read 5 tweets
The #Fed Playbook
June. 18, 2020

1/ The Fed is taking a break this week. The balance sheet is smaller by US$ 74 Billion. But that's also what happened after 2008. ImageImageImage
2/ As in the 2008 #QE cycle the #Fed is now unwinding some of the emergency currency swaps and credit facilities.

After this technical correction we'll be left with the more permanent programs. Image
3/ So far the 2020 crisis is seeing an expansion of the #Fed balance sheet by 69%.

This is much lower than what happened in 2008 when talking percentages. Image
Read 4 tweets
The #Fed Playbook
June 12, 2020

1/ This week the Fed added only $ 4 Billion to its balance sheet. This is basically a pause. It happens in the 2008 #QE cycle too. ImageImageImage
2/ But in 2008 after the expansion took a pause it still grew 3x... Image
3/ And remember, this time in percentage term the balance sheet is up 69%. In 2008 it expanded by 150% in a few months. Image
Read 4 tweets
The #Fed Playbook
June 04, 2020

1/ The Fed is in cruise control, now adding an average of $70 Billion per week to the balance sheet... ImageImageImage
2/ At this rate QE-Infinity โ„ข๏ธ will have added to the system in only a few months as much money as the total of all previous #QE programs! Image
3/ Yet in percentage this is amounts to only a 69% expansion of the balance sheet... Image
Read 4 tweets
The #Fed Playbook
May 28, 2020

1/ After reaching $7 Trillion last week, the US Federal Reserve only added $60 Billion to its balance sheet this week. Only a drop in the ocean at this point... ImageImageImage
2/ But still, in 2008 it took 5 years of #QE to add that much money in the system. In 2020 we did it in 2 months... Image
3/ And yet in percentage term this is only a 67% expansion of the balance sheet. There is plenty of room to do more... Image
Read 4 tweets
A THREAD on my new paper with @arebucci1 on the impact of #COVID-19-related central bank long-term asset purchases of sovereign debt (#QuantitativeEasing) on government bond yields in both Developed and #EmergingMarkets (1/n) papers.ssrn.com/sol3/papers.cfโ€ฆ
We analyze 20 #COVID-19 QE announcements made by 17 central banks (9 DM central banks, 11 EM central banks) using the classic event study framework of FFJR(1969), extending work of Vissing-Jorgensen and Krishnamurthy (2011) and Swanson (2011) who analyze Great Recession QE (2/n)
Starting with the Fed which led the pack with new QE: the 1-day impact of the Fed's $700 bn MBS+Treasury #QE 3/16 announcement on the US 10-year yield was -0.21% and "unlimited" QE announcement on 3/23 was -0.16%, only slightly smaller than past #GreatRecession era QE (3/n)
Read 9 tweets
The #Fed Playbook
May 21, 2020

1/ That's it! the US Federal Reserve balance sheet is above U$ 7 Trillion! ImageImageImage
2/ As Jay Powell said: "So the things we are doing now are substantially larger." Image
3/ Yet in terms of growth the Fed balance sheet "only" expanded 66% this year. Image
Read 5 tweets
The #Fed Playbook
May 15, 2020

1/ The Fed is again adding US$200 Billion to its balance sheet this week.

We are now at a total of US$ 6.9 Trillion! ImageImageImage
2/ In the last #QE cycle started in 2008 it took 250 weeks to add US$ 2.7 Trillion to the #Fed balance sheet.

This time it took only 9 weeks... Image
3/ But that's only a 60% increase of the balance sheet since the start of this 2020 Fed intervention.

After 2008 it grew 400%... trillions will keep on coming... Image
Read 4 tweets
Many seem to be unwilling or unable to grasp the dire economic consequences of the #COVID19 pandemic.

In this thread I try, based on the evolution of our thinking, to explain, why we are heading to a deep and prolonged depression.

First, an intro and a reminder. ๐Ÿ‘‡1/17
The situation in the world #economy would not be so alarming without this. ๐Ÿ‘‡

We have lived in unprecedented economic expansion with stagnated productivity growth!

I cannot stress enough, how strange and troubling this is. 2/
We analyzed its implications thoroughly in the March 2019 issue of our Q-Review.

"Because zombie companies can fail at any time, ..., they create a huge risk for both private investors and the global asset markets." 3/
gnseconomics.com/2019/03/05/q-rโ€ฆ
Read 17 tweets
This is something I've planned to do for a long time. There are wide-spread misconceptions on #centralbanks that need to be set straight.

So, a (long) thread on why Central bankers are not "superheroes".

Let's start with a cheerful poll. ๐Ÿ˜Š 1/26
#Fed #ECB #economics
It seems that majority of my followers are both insightful and wise ๐Ÿ‘.

The results also lead to the conclusion, which I now try to elaborate a bit more. 2/
@Amdalleq @CNBCJulianna @KellyCNBC @DiMartinoBooth @KatriKulmuni @bondstrategist @BradHuston
First, few words on QE.

The purchases of assets in QE-programs are done through commercial banks.

Banks buy the securities from other banks, investors and households and the central bank credits the reserve balances to the accounts of banks to balance their balance sheet. 3/
Read 27 tweets

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