reserves

I spoke at a Euromoney conference on inflation-linked products last year. My thesis at the time that deflation is the real problem and that inflation isn't going to be a concern - which has largely proved right - was out of step with most…

Barclays Capital had a sobering update on India today. Apparently June saw the largest outflows on record from India bonds and equities portfolios. As a result, declines in India's foreign reserves are becoming material.

Floating emerging markets currencies have been under tremendous pressure over the past month, as active investors move out. Slowing growth, political instability, and weaker demand for natural resources have all contributed to the sharp…

ECB President Draghi suggested last week that the central bank was taking a fresh look at the deposit rate. There does not appear to be any economist that thinks it is a good idea. The reasons vary, but the two main reasons are that it…

In the short term, though, a continuation of the currently lax monetary policy is likely to lead to higher assets prices. The investor mindset is very much in risk-on mode at the moment, as documented by the surprisingly calm reaction to…

By Michael Pettis In the past two weeks we have been treated with a mostly positive but nonetheless mixed bag of economic data from China. There has been good news, bad news, good news with worrying underlying trends, and bad news with…

The last post I wrote on endogenous money and fully reserved banking set out a case for viewing the demand for credit to attain real or financial assets as a fundamental aspect of any monetary system. The point of that post was to make…

After the Great Depression broke out, American economist Irving Fischer championed a view of the financial system now called "endogenous money", which sees each person in the economy as a creator of credit. Viewing the economy through this…

I spoke on the panel of a conference that backed into a keynote address by Dennis Gartman. I thought he had a lot of interesting things to say, a lot of which I agreed with. The basic theme of his talk - and this was an investing in…

A friend tipped me off to this BIS paper from 2009. It looks into unconventional monetary policy and the inflationary consequences of adding a huge amount of reserves to the system. The abstract reads as follows:  Abstract The recent…