Q&A #171
If governments never have a problem selling debt, why all the budgetary problems in the UK and France? Is there really no constraint on debt creation other than the ballot box? If South Korea makes a large investment in the US economy (Following Trumps direction), doesn't that tank the Won? How effective are currency swops at mitigating the weakness in the Won? After LIBOR, what's the closest thing we have to get a sense of unsecured lending rate along institutions? You usually say that there is no inflation, but the money still lose value over time. Dont you consider that inflation even if the purchasing power of the currency declines? Would you say that QE actually hurts more as it removes the precious collateral from the system? Should Fed be doing reverse (I understand that not having Fed is even better) but we have them? what, if anything, do you make from Reverse Repo being at/near $0? Is this indicative of less extra cash in bank accounts or something else? What is the beverage curve? How do we on a daily, weekly, monthly etc. basis look at the “signal or signals from swap spreads. Does this signal appear as a data point, lightning bolt, what does the signal look like? Jeff, in a recent substack you wrote about the 10 year, as a home buyer I care about this quite a bit, what should we expect to happen in the next 6 - 12 months? Why do you think initial & continious jobless claims are still low? with treasury yields constantly up and down, is it worth it to even be in the bond market anymore? Total Fx reserves from 2000 to 2014 went from <2 T to 14 T. Now they are at 12.5 T, much smaller change from 2014 to 2025. Is this silent depression or dedollarization? Are prudential constraints the only constraints on bank balance sheets now? Does the US shutdown distort the curve in any appreciable way? Or is it just short-lived and quickly forgotten after the show is over?
