Discover and read the best of Twitter Threads about #quantitativeeasing

Most recents (7)

The #DebtCeiling debate is genuinely absurd: Congress authorized the spending of new dollars, so the Treasury has to create them. For Congress to turn around and force the Treasury NOT to create the dollars it ordered the Treasury to create is an obvious political gimmick.

1/ "A $1 trillion coin; it is especially thick and is stam
If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2021/10/19/moi…

2/
Hence the #TrillionDollarCoin - a proposal to use a 2000 amendment to 31USC§5112k ("Denominations, specifications, and design of coins") that permits the Treasury Secretary to "mint and issue platinum bullion coins and proof platinum coin [at] the Secretary’s discretion."

3/
Read 31 tweets
Please tell me if I get the big picture on #Eurozone #QuantitativeEasing right.

1. The EU is a historical political project
2. The #ECB is a child of that project and understandably protects it until its last breath
3. Protecting it means
a) ensuring no member to go bust
b) sovereign spreads to remain at a managable levels

4. These in turn requires heavy purchases of sovereign bonds, on a scale that can only be done with newly created money #M0 i.e. #QE.
5. That money inevitably blows a bubble on nearly all markets of investable assets
6. ...which side effect the ECB does not like but sees no alternative to keep the Eurozone together
7. ECB also needs to keep printing money as #FED is printing money too, and the #EUR would otherwise appreciate, creating huge competitiveness problems for the entire Eurozone.
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.cf…
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
#BeyondHeadlines: There are not-so-obvious global reasons why the #OilMarketCrash is NOT good for #India.

Heavy #QE/ currency pressure + Intense #geopolitical tension

= #India, importer & friend to all oil producers, in the crosshairs.

Thread on these impacts of #OilPrice 👇 Image
US #oilprice crashed negative for the 1st time in history. West Texas Intermediate (a US crude) traded as low as -$40.32 a barrel. So far the bulk of the losses are in US crude, -200 to -1000%! Global (Brent) crude has not gone down as much because global storage still exists.
#COVID19 #lockdown has sharply cut all travel & thus demand for oil. Excess supply of oil resulted in a shortage of #storage space, esp in North America. As they & slowly the rest of the world run out of storage, the demand for future oil contracts (futures) goes down sharply
Read 11 tweets
Will interest rate cut be enough? mp.weixin.qq.com/s/VnrMVeAnm6PW…
At noon of March 3rd, Beijing time, the Reserve Bank of Australia reduced interest rates by 25 basis points, kicking off another round of #ratecut through the Occident this year, followed by Malaysia, an emerging economy, which also announced interest rate reduction.
Later on, shortly after the open of U.S. #stockmarket, the #Fed released its rate decision -- a 50-basis-point rate cut, while its rate and magnitude were beyond expectations. However, the US stocks fell sharply after a brief rebound.
Read 5 tweets
Lets talk about how important it is to frequently #Review #CentralBank #MonetaryPolicy #Frameworks...
I will set things off by pointing out that the various facets of #BusinessCycles (early, mid, late / boom & busts) consistently keep reminding us that what goes up, must come down. We might find ourselves in a prolonged #expansion, but eventually it decelerates into a #recession
As part of #Macroeconomic management (counter cyclical), a #CentralBank's objective (through its #MonetaryPolicy) is to maintain #PriceStability & #FinancialStability & in other cases, to promote #FullEmployment. It does this hand in hand with #FiscalPolicy...
Read 15 tweets
Lets talk #New #Tools for #MonetaryPolicy...
The #Global #Financial #Crisis of 2007/08 taught the policy making world that something special beyond #Conventional #MonetaryPolicy was necessary to lift economies out of the economic malaise...tinkering with the key rates was not enough anymore...
To this end, #centralbanks in the developed world (The US, UK, Japan, The EuroArea) adopted what they termed #UnconventionalMonetaryPolicy #UMP which is characterised by #ForwardGuidance #NegativeInterestRatePolicy & #QuantitativeEasing...but, have they helped?
Read 10 tweets

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