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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
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The only question that I have is there such a dearth of short term Treasuries available from the Treasury due to the upcoming debt ceiling. that the banks have to use the RRepo window. That doesn't seem too likely a major causation. That in of itself is a sea change.. The tide has definitely turned against the USD as a safe haven. First the Chinese reducing their US Treasury portfolio by 200B and the net out flow of capital from the US when the CV hit in 2020 .. instead of the past historical inflow during times of stress. My guess is that there is a slow reparation of USD from foreign nationals and or corporations lightening their loads. That this is the beginning of a trend. Imperceptible at first.. 10B to 20B a day.. The USD is trending downwards against other currency's. But other currency's have similar troubles as the USD so the fx equilibrium remains..
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Copyright "Some Observer" Last edited by tabs; 06-11-2021 at 03:00 PM.. |
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06-11-2021, 02:58 PM
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If you give your word: keep it. Last edited by Helix8; 06-11-2021 at 04:57 PM.. |
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06-11-2021, 04:53 PM
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We have already been through outflow when you made the false claim "never have seen it before in the last 40 years".
At that time I showed you that we have had inflows for the 1st 3 months of 2021. I also said we should probably wait for the next data release of April numbers (15th of June) to see if we stay positive or go negative. We have had a net positive inflow from China from Oct-March (damn near neutral over the last 15 months of data). Positive from Europe. Negative from Canada and a big negative number from the Caribbean. (Caribbean?) I will say it one more time...we should probably wait for April data to see if the inflo continues or we go negative. https://www.federalreserve.gov/data/secholdtrans/treasurybondsnotes20210531.htm Last edited by Sooner or later; 06-11-2021 at 06:16 PM.. |
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06-11-2021, 06:05 PM
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Fed doing repos to keep money markets from breaking the buck par value. If they didn’t, short term rates would be negative.
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06-11-2021, 06:29 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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The point of the argument was that in 2020 instead of foreign money coming in to the USD and Treasuries as a SAFE HAVEN it was leaving (per Druckenmiller). This denotes a sea change in the global perception about the USD's solidity. It is the ADVERSE SHIFT I mentioned in 2013. Now you can quibble about my semantics and minutia all you like..but it doesn't change reality, as much as you would like it to. Shoot the messenger so you can ignore the message. As far as pop growth and econ growth..Jeremy Grantham who is the strategist for a 120B + fund also stated the same thoughts in late 2012 and again on CR in 2013. He also has lots of street cred. The main conclusion that I made in 2012 was that the US econ was going to grow between 1.5 to 2.5 percent as a benchmark going forward. It has largely been between those parameters with statistical variances. I would say that what I said was close enough for govt work. Also I said that growth did not meet the 3% growth parameter that the govt set out as a benchmark for sustainability of US fiscal policy, but everybody understood that as a given. that is why everybody has said growth has been anemic.. I also concluded that the only reason we have gotten the stellar growth that we have gotten is FED and Treasury juicing..it has kept the system bouyant at these levels and the corollary that they couldn't take the foot off the gas or else. One might say with diminishing returns as debt levels increases the drag on the econ. So the juicing has to become ever bigger...this has been born out by events. You can look at the veracity of that by what happened in late 2018 after the FED went from Acomadative to Neutral policy in an attempt to NORMALIZE the Balance Sheet and Interest rates. The FED did a quick about face, where Equities then did an about face rising to ever higher levels. . In Sept 2012 wt QE3..wt the SP500 at 1450 I said that the SP500 would go to 2250 as the FED was guaranteeing the over and the under with the caveat that the amount of time it took to reach that number might skew it higher. . It took until Trump's election to breach that level. The point to be taken is that operationally Equities were a NO LOSE prop as long as the FED maintained it's street cred. That remains as true today as it did in 2012. As far as current over Equity valuation..maybe not..the intrinsic value of the USD is not what it once was..so valuations of even abstract assets like Equities would run higher..
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Copyright "Some Observer" Last edited by tabs; 06-12-2021 at 12:38 PM.. |
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06-12-2021, 09:42 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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There is NO VALUE left in the USA...not with it's debt and accts payable obligations. The USD has been run out to support the continuation of these obligations. Americans have borrowed their way into oblivion to support their hedonistic life style. Everybody went along for the ride..
With those levels you are dead men walking..and for the most part don't even know it. The USD is the Bedrock of the Global economy, there isn't an alternative as nothing else has scale ability or credibility. Everything else that you see are the distortions caused by the stress of a system that is unraveling. People have become delusional in trying to bitterly hang on to their perceptions of being a rich nation in the face of a BK reality. They have gone Alice in Wonderland. the fact that the leadership touts MMT shows you the lunacy of it all. They think that they can defy gravity. Nobody says no to it, no body stands in the way. Maybe they have come to realize that their is no other alternative except collapse..so they keep on keeping on? Kick the can on down the road..until they can't. I do believe as I smell a whiff of it in the wind and I am running with it that the worm has turned and that a global adverse shift has occurred with the USD.. It is in the nascent stage..of something bigger to come. It is like hearing the very faint rumbling of thunder in the distance and being able to discern what it is. Back in 09 or 10 I said that we were in the EYE or quiet of a hurricane and that we were going to revisit the other half of the storm down the road. We have solved nothing, the leadership has not even been able to identify and or clarify the causation. Thinking that peripheral fixes would return the world to prosperity which was in fact debt based.. Of which the causation is the US consumer was tapped out by 08, lessor paying job, no job, no savings and credit to the eyeballs (you need a broad based MC to support a Global Econ of Scale and with out it..) Which was the cause of anemic Demand. The Global Econ of Scale is voracious requiring ever greater demand to be sustainable and without it contracts into what amounts to a death spiral..Where debt and currency are the knife and gun of demise. We the people have pulled the trigger with our chase of secular materialism and perception of being prosperous and wealthy. In reality we are not only bk materially but intellectually and spiritually as well.
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Copyright "Some Observer" Last edited by tabs; 06-12-2021 at 10:49 AM.. |
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06-12-2021, 10:31 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Caribbean 2019, -88,625 2020, -266,542 3/2021, -66,664 -3,650 -36,637 -6,426 -21,416 -48,024 -60,386 41,746
https://www.federalreserve.gov/data/secholdtrans/treasurybondsnotes20210531.htm The Caribbean the home of off shore banking...Luxembourg, Ireland, Belgium, Switzerland The UK is a large purchaser...maybe as a proxy for the FED? As stated there is no official alternative to the USD in scale ability and or credibility so they have to stick to the USD. In the shadow world of off shore..those havens are showing a negative flow out of.. Then we have to look at the guyz who stuff their mattresses with USD eg don't use banking to hold USD's. And that btw is a large amount of USD's. What are they doing? I suspect that sentiment is being reflected by the Reverse Repo Window as those USD's are being repatriated (coming out of the mattresses)...as in a ground swell of divestiture. As long as people want to and do hold USD's the FED could print all they wanted as they would be sucked up ..change that sentiment and suddenly you start to see an excess of USD's showing up on banking doorsteps... So what does the FED do with them but store them into the daily limbo of Reverse Repo. The more that come out the bigger the Reverse Repo operation. WOW from apx 240B a day in early May to 547 in mid June...that is an increase of 300B in excess cash in one month...or 10B a day... So can we surmise the mattresses (including foreign banking etc ops) are hemorrhaging 10B a day Globally? That is a groundswell change in sentiment towards the USD. by dribbles and drabs.. So the trajectory indicates that this is the beginning and that the USD divestiture is going to get much bigger down the road. At this point the official policy of sovereign nations and corps is that they must stick with the USD..no other alternative. And they are trying to find one. That is largely my point here. Do I make myself crystal? I give you Boyz credit, that you are capable of filling in the blanks in my initial offerings...but I find myself being mistaken in that remedial help is needed as there is a lack of capability here. You need it spelled out..
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Copyright "Some Observer" Last edited by tabs; 06-12-2021 at 12:29 PM.. |
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06-12-2021, 12:15 PM
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We may go back to outflows when the report hits this week. March, 2021 was the highest inflo in history. We shall see what happens.
At this time the latest data in 2021 shows a slight net inflo |
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06-12-2021, 12:28 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
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A lot of stuff is not reflected in the data? Where did that 300B in excess cash that suddenly showed up on the banks doorsteps come from? It was lurking somewhere and now it is in the open. The FED printed it, and it was being held somewhere..where it wasn't being utilized. The USA has relied on USD's being held in reserve Globally where they would not be utilized..in essence dead money..by holding them, there is a defacto imposed tax in that with inflation those USD's would decline in real value. That is the why of 2% needed inflation.. it makes US debt cheaper. Without that 2% the US is paying sticker price for that debt.
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Copyright "Some Observer" Last edited by tabs; 06-12-2021 at 01:11 PM.. |
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06-12-2021, 01:02 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
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Can you imagine the fear and trepidation at the FED and Treasury that they would pump out roughly 5T in a month? They threw caution to the wind and were throwing money willy nilly into the fire to keep the boiler of the economy lit... they had NO LIMITS..it was all in to stave off nothingness.
To do that they had to realize that it was do or die..their feet were dangling over the abyss. They did not care about consequences or ramification of their actions..cause there would be no consequences if they didn't act as they did. Luckily it stopped at 5T cause they would have gone all the way....at some point they would have realized that no matter what they did it couldn't be stopped. That is what their actions tells you about the circumstances of 2020.
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Copyright "Some Observer" Last edited by tabs; 06-12-2021 at 01:29 PM.. |
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06-12-2021, 01:25 PM
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Net inflows in April. A net inflow since at least Sept, 2020. They haven't updated their page with the April data by country.
https://www.reuters.com/article/usa-treasury-securities/update-1-foreign-holdings-of-us-treasuries-rise-in-april-as-rates-stabilize-data-idUSL2N2NX2KV NEW YORK, June 15 (Reuters) - Foreign holdings of Treasuries rose in April, data from the Treasury Department showed on Tuesday, as investors bought back U.S. government debt after yields started to decline from their highs. Major foreign holders of Treasuries held $7.070 trillion in Treasuries in April, up from $7.028 trillion in March. On a transaction basis, foreigners purchased $49.57 billion in Treasuries in April, after record inflows of $118.87 billion the previous month. Japan, the largest foreign holder of U.S. sovereign paper, led the way, increasing its holdings to $1.276 trillion in April, from $1.24 trillion the previous month. Japanese investors sold Treasuries in February and March as their holdings declined. China’s holdings, meanwhile, slid to $1.096 trillion from $1.1 trillion in March. Its stock of Treasuries has declined for two straight months. Last edited by Sooner or later; 06-16-2021 at 05:30 AM.. |
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06-16-2021, 05:23 AM
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Checked out
Join Date: Jun 2009
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Like 08, immediate collapse is avoided (the can is kicked) but as you say, nothing is fixed, and in fact the “fix” just sets the conditions for the next, bigger crisis. 08 was a drop in the bucket - child’s play - compared to what the govt did the last year (and has continued and continues to do even with an effective vaccine in place) in response to a virus with a 99.x% survival rate. |
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06-16-2021, 06:57 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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I disagree with the culpability of the FED...they act in response to.....to maintain an equilibrium. In other words to mkt conditions..and policies. The ultimate responsibility for Americas current fortune is the American people themselves which includes the policy makers etc as a subset. The FED did not create the inflation of the 70's...the LBJ inspired policy of "GUNS AND BUTTER" sic fighting a war in Vietnam and the GREAT SOCIETY..all at the same time...created an environment of OVER SPENDING....Americans gradually after WW2 thought they could have it all with out consequences because they were so rich. It just took a few years to reap what we had sown. We are now reaping the consequences of living beyond our means for the last 53 years (1968). The American people have been living on BORROWED MONEY since the 1980's. Nothing is going to fix this problem. The resolution is to eat the shyte sandwich, and I hate to say it there is no short term recovery as the scale of the debacle is globally inclusive..It is a global plunge into chaos. I have lived in a state of chaos for a good portion of my life..so I know it when I see it. There is little to no continuity now...we are in a state of chaos now. With the overlaying fiction which fewer and fewer people are believing that thing are continuing on as before... Anybody want to contradict that statement I have a long list of chronological events that would indicate otherwise. So the facade of stability remains somewhat, but behind the scenes holy shyte it is desperation born of complete wreckage of a system.
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Copyright "Some Observer" |
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06-16-2021, 01:21 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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The bottom line on Inflation is that the BROAD BASED American MC that is needed to sustain the Global Economy of Scale NO LONGER EXISTS..As such DEMAND becomes ANEMIC and has to be propped up with FED monetary policy and Treasury Spending. Thus a LONG TERM UNDERLYING DEFLATIONARY ENVIRONMENT. This has not changed and is only growing worse, where consumers are being priced out of markets.
So what skews that scenario. 1. Disruption of fragile Supply Chains which can create shortages which drives inflation. Especially after the CV shutdowns and growing geo political concerns makes supply chains uncertain and or unstable. 2. Reduced demand will cause a decrease in production which will drive unit costs higher which will be reflected by inflation. 3. Debasement of fiat currency by printing strips out the intrinsic value of said currency. Prices remaining constant in that situation is a form of hidden inflation. Now here is the bad news...The FED and Treasury went all in to backstop the CV economic shutdown. Stretching the limits of an already stretched system. Long term FED and Treasury policies and the aftermath of CV has made the system unstable. In response to continuity being lost as the system unravels, the animal spirits have become desperately maniac in seeking to find some sort of safe haven for themselves. Rationality has been lost, this is resulting in a maniac blowoff stage in a last frantic attempt to hold onto what no longer exists. After the animal spirits exhaust themselves reality will set in and the slide will begin..Nothing will stop it..as with water the system will seek it's own level. The question is will the slide be short and quick or slow and prolonged? Will a semblance of the system's structure remain or will it be Darwinian?
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Copyright "Some Observer" |
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06-16-2021, 02:15 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Many people are seeking to get out of large metro areas because of their increased vulnerability to disease, fragility of infrastructure and civil unrest inclusive of lawlessness. In essence they are seeking to leave killing zones.
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Copyright "Some Observer" |
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06-16-2021, 02:24 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Monday R REPO set another record at 584B, Tues 509B W 520B...
Good luck with the FED backing off the accelerator.
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Copyright "Some Observer" Last edited by tabs; 06-16-2021 at 04:39 PM.. |
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06-16-2021, 02:26 PM
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1989 3.2 Carrera coupe; 1988 Westy Vanagon, Zetec; 1986 E28 M30; 1994 W124; 2004 S211 What? Uh . . . “he” and “him”? |
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06-16-2021, 06:31 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
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120b a month is the pedal as well as interest rates. Raise rates and watch debt service explode. And who is going tobuy all those Treasuries every month if it isnt the FED as last resort. Interest rates would jump if the FED stopped. The FED has to be accomodative to keep interest rates low..They have no choice. Add it up. |
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06-17-2021, 01:28 AM
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1989 Porsche 911 Carrera 3.2
