4 ms·
1. 2008 recession was offset by both US Fed, PRC, et al. buying lots of UST and stimulating global economy. 2. 2020 was offset by US Fed buying tons of UST and
by pphysch 5y ago
1. 2008 recession was offset by both US Fed, PRC, et al. buying lots of UST and stimulating global economy.
2. 2020 was offset by US Fed buying tons of UST and USG printing USD. However, global economy cannot magically expand by 40% or whatever is required to balance that expansion of USD. Hence a persistent supply chain crisis.
In current geopolitical climate, no foreign state will buy lots of UST. US Fed is still buying lots of UST, causing a liquidity glut causing inflation. Global economy physically cannot expand at the necessary rate to absorb this inflation, so stagflation or financial collapse is the only way forward for America.
- landemva 5y agoFor item 2, you may want to consider how the Fed stepped in to hush up the reverse repo inter-bank lending in Fall 2019. That rolled into 2020 bailouts.
- vlovich123 5y agoAny articles you can point me to? I can’t find anything about this.
- ViVr 5y agoThis september 2019 article from Financial Times might be a start. Why is the Federal Reserve pouring money into the financial system? Answer lies in short-term issues and structural market changes https://www.ft.com/content/345da16e-d967-11e9-8f9b-77216ebe1f17 https://www.ft.com/content/345da16e-d967-11e9-8f9b-77216ebe1....