Share this page!

Lyn Alden Profile picture
Twitter logo
23 Jul, 4 tweets, 2 min read
Several people have correctly pointed out that bank loans haven't kept up with bank deposits.
However, if you add bank holdings of Treasuries to their loans, the gap fills by quite a bit. The rest is mainly excess reserves.
This is because, as @LukeGromen has elegantly pointed out a number of times, banks *are* lending, albeit mainly to the federal government.

It's like the 1940s more-so than the 1970s.
Treasuries and agencies, to be specific.

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Lyn Alden

Lyn Alden Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @LynAldenContact

Lyn Alden Profile picture
23 Jul
All the folks who were tweeting out year-over-year M2 growth rate charts several months ago aren't tweeting them anymore, since the charts are less sensational, so I'll do it.

M2 YOY % change is down to about 13%, from a peak of 27%.
I highlighted this effect since last year, where the rate after the crazy March/April 2020 period is a more modest "only 13%" growth rate. My chart from back then:
The rate of ongoing M2 expansion will largely depend on fiscal decisions.

As I've pointed out, this period is more like the 1940s, not the 1970s, and so money supply growth is primarily about fiscal spending, not bank lending.
lynalden.com/may-2021-newsl…
Read 4 tweets
Lyn Alden Profile picture
13 Jul
The global monetary system built around the dollar currently relies on the US running persistent trade deficits with the rest of the world, and benefits the US corporate class over the US worker class, which is part of why it's gradually losing steam.
lynalden.com/fraying-petrod…
The other reason it's losing steam is that the US is becoming a smaller share of global GDP over time, and with sanctions it is starting to incentivize strategically important countries (ie those with oil and nukes) to de-dollarize and diversify their currency usage.
The numbers speak for themselves as to how the current monetary system is not working for 90% of the US anymore:
Read 4 tweets
Lyn Alden Profile picture
28 Jun
My latest public article discusses the global energy market, including an overview of why it's rather difficult to replace fossil fuels in practice.
lynalden.com/oil-and-gas/
When we think about new energy sources, we often envision pervious ones being replaced. Like this chart, that shows the percentage of total energy consumption that each energy type is responsible for:
However, in absolute terms, new energy sources tend to be additive to previous energy sources.

The world as a whole has never previously phased out primary energy sources in absolute terms, or downgraded the energy density of its primary energy sources. So, that's not trivial.
Read 4 tweets
Lyn Alden Profile picture
20 Jun
This results in an interesting question. For folks who act differently online vs offline, which one is their "true self"?

I would say a bit of both.
On one hand, people let out thoughts or aggressions online that they would be less prone to do in person. It helps get a feel for what people "really" think.

On the other hand, people are social animals with instincts and bonds. Online diminishes those, leaving the rough side.
Folks develop "internet enemies" that if they were to meet in person and get to know each other a bit, might be more respectful even if they naturally disagree.

Internet enemies have all the natural disagreements, without the million years of empathy instincts as social animals.
Read 7 tweets
Lyn Alden Profile picture
6 May
Broad money growth generally occurs in one of two ways: either banks lend and create deposits (and thus increase the money multiplier, M2/MB) or when bank lending seizes up, governments run large deficits and go around the bank lending channel.

A thread. Image
Looking at 140 years of data, we see periods where loan growth fueled broad money growth (late 1800s, 1920s, 1950s, etc), periods where fiscal deficits fueled broad money growth (1940s), and periods like the 1970s/1980s where both lending and deficits fueled broad money growth. Image
The 1940s are interesting because they are most analogous to the 2020s. After a large private debt bubble partial deleveraging (1930s and 2010s), a period of economic stagnation and external catalyst eventually resulted in a massive fiscal response (1940s and 2020s). Image
Read 8 tweets
Lyn Alden Profile picture
26 Apr
Broadly since the 1970s, but especially since the 1990s, the US ran structural trade deficits, which displaced part of the industrial sector.

The imbalance isn't only with China, but with Europe and other developed countries as well.
The foreign sector took those dollar surpluses, and reinvested them initially into Treasuries, but then increasingly into US stocks and real estate.

The foreign sector now owns $10+ trillion in US equity, and the US has a deeply negative net international investment position.
Whether this "financialization" was good or not depends on what one does.

If you work in finance, education, healthcare, government, or tech, you get most of the benefits and your assets go up.

If you want to make things or don't have a lot of equities, it's been rough.
Read 5 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

Like this author's thread?

Get emails when @LynAldenContact has new unrolls!

Check out other threads from @LynAldenContact!

Read all threads by @LynAldenContact

:(