Jeff snider is informed on this stuff
View: https://www.youtube.com/watch?v=xjBYhcX5A_I
he talks about deflationary forces, and how the fed has much less impact on the economy than people think.
(they don't actually print spendable money for example)
the eurodollar curve is very inverted (which is where the giant mega money signals for deflation / hedges)
my understanding is debt is different since 2007. extremes of risk-on mindset back then gave rise to perception that mortgage backed securities were reliable instruments to back debt.
when they went south the collateral went to ***t and everyone had to scurry to back their debt or defaulted on it.
now debt is collateralized with only short term treasuries. much more reliable and liquid. but doesnt stop debt contractions still
jeff says that was just the end straw that broke the camel, the real structural issue being a systemic global shortage of dollars
the difference in downturns today is since covid unprecedented stimulus direct to consumers/businesses was established.
that exists as a short term panic button to interrupt the down cycles when the pressure is on government to step in. so likely a lot more inflation-deflation volatility than past cycles from here on
View: https://www.youtube.com/watch?v=xjBYhcX5A_I
he talks about deflationary forces, and how the fed has much less impact on the economy than people think.
(they don't actually print spendable money for example)
the eurodollar curve is very inverted (which is where the giant mega money signals for deflation / hedges)
my understanding is debt is different since 2007. extremes of risk-on mindset back then gave rise to perception that mortgage backed securities were reliable instruments to back debt.
when they went south the collateral went to ***t and everyone had to scurry to back their debt or defaulted on it.
now debt is collateralized with only short term treasuries. much more reliable and liquid. but doesnt stop debt contractions still
jeff says that was just the end straw that broke the camel, the real structural issue being a systemic global shortage of dollars
the difference in downturns today is since covid unprecedented stimulus direct to consumers/businesses was established.
that exists as a short term panic button to interrupt the down cycles when the pressure is on government to step in. so likely a lot more inflation-deflation volatility than past cycles from here on
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