Apr

21

 One of the most astute economists I know who often speaks at the Junto, has described the humorous grandmother as an agrarian reformer without the agriculture. Even worse than the crook that was her chief competitor for the job. One wonders if this is bullish for bank stocks and gold?

Orson Terrill writes: 

She just may be the grandmother not wanting to put the son, who has been living in her basement for possibly too long, out on his own two feet. For this person to remain consistent, inflation should be less of a concern than creating a recession to avoid it, and there has been weight in some academic circles that inflation rates need a much higher target (4%). After the attention they've received in the last few years, it's easy to believe they wouldn't want the appearance of interfering with elections. In that light of all that, it would be more or less of a surprise if there was any substantive action, after the tapering is over, until elections were finished. That would give them a year after tapering was completed to have talked about increases in rates, tri-party reverse repos, permanent MBS positions, and maybe how the only bank prop trading allowed, thanks to the new rules, will be in government debt, which carries a 0% risk weighting, therefore, does not reduce capital adequacy…. and how all of this somehow may curtail the effects of reducing their large positions on the most volatile end of yield curve.


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