Central Banks

Then-Fed Chairman Bernanke in 2009 succinctly and honestly, if shockingly, referred to the Fed’s money creation process via commercial bank intermediation by saying, “we simply use the computer to mark up the size of the account they have with the Fed.” The money so a) “created”, and then b) multiplied – because only fractional bank reserves are required – and then c) lent out by banks. Stone Ridge 2020 Investors Letter, inside.

Excerpted from Stone Ridge 2020 investor letter, download here. “The Most Significant Monetary Achievement in the History of the World”  President Nixon thundered these words on December 18, 1971, in a surprise weekend national address announcing the Smithsonian Agreement. The Agreement, following another surprise weekend address earlier that year – the “Nixon shock” of August

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Wolf Richter of Wolf Street: “Instead of allowing corporate debt to be shed via bankruptcies and debt restructurings, at the expense of those investors, traders, and speculators, the Fed is creating an environment of free money that exhorts companies to borrow even more. And then the even greater debt hangover bogs down the economy during the Good Time while everyone is waiting for the next blowup so that the Fed would rescue them again, turning the whole thing into a Fed-managed paper exchange.”

What is this “news” foreshadowing? WASHINGTON (Reuters) – Hackers believed to be working for Russia have been monitoring internal email traffic at the U.S. Treasury and Commerce departments, according to people familiar with the matter, adding they feared the hacks uncovered so far may be the tip of the iceberg.

According to Reuters, unnamed sources at the US Treasury and Commerce departments fear the hacks uncovered so far may be the tip of the iceberg.…

“We’re not going back to the same economy,” Jerome Powell said. “We’re recovering, but to a different economy and it will be one that is more leveraged to technology, and I worry that it’s going to make it even more difficult than it was for many workers.”

I think in the context of this quote from Jerome Powell during a European Central Bank panel discussion on Thursday, “different” is a euphemism for “nightmare.”…