Addicted To Gov! $350 Billion In Brand New Central Bank Behind Market Rally (On Top Of US Fiscal Inferno!)

Confounded Interest ^ | 12/05/2023 | Anthony B. Sanders

[Kaiser8408a]

You might as well face it, markets are “addicted to gov.” Government monetary interference, that is. Government money printing and massive Federal spending.

According to Goldman calculations, $350BN of liquidity (in USD terms) was added in November from the G4 central banks + the PBOC was nothing short of a fire hose.

In fact, this was the third largest monthly increase this year after January and March 2023.

The US addition of $60bn for a third consecutive week plus weaker dollar are the main drivers.

While the BoJ keeps adding liquidity via bond purchases, increases in the TGA balances in the past 20 days have net drained Yen liquidity.

Looking forward over the year end and at the start of 2024, Goldman thinks that the US can keep adding liquidity via high bill issuance and RRP withdrawal over the next couple of months (something we discussed last month in “How Treasury Averted A Bond Market “Earthquake” In The Last Second: What Everyone Missed In The TBAC’s Remarkable Refunding Presentation“), while the dollar contribution to benign liquidity conditions could face some headwinds due to the risk of pricing out of some of the March Fed cuts as a result of the strong positive FCI impulse in November.

Goldman’s one-factor model for risky assets based on the liquidity cycle suggests that US IG and EM hard currency debt are cheap and the bank’s STS FX carry and Brent Vol Carry indices have under-performed the benign liquidity environment and may catch up the next two months.

The US and Eurozone money supply and lending growth indicators remain weak, implying extended downside bias in domestic demand and inflation in H1-2024 (i.e., higher likelihood for easing absent a reflationary shock out of China or a supply-driven commodity price surge).

[Obadiah]

This is all about propping up and juicing the stock and bond market ahead of the 2024 election. They can keep this up until the economic volcano blows - and it will.

[PeterPrinciple]

“There exists no law which binds the State. The State can do what it regards as necessary, because it has the authority.”

“The next stage of National-Socialist economic
policy consists of replacing capitalist laws by policy.” This Nazi doctrine has nothing to do with Communism or Socialism. lt is offered as a new justification
for the State’s use of private capital and it is a means
of placing drastic limitations upon private property
rights in the “national interest.”

“National interests” are not determined by laws,
courts, or any legislative body. The decision is made
mainly by the Nazi party, or, rather, by its leaders, that
is, by the State bureaucracy.

https://cdn.mises.org/the_vampire_economy_20201022.pdf

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Folks, take the time to read this book about the economy under fascism. It is an easy read, for the common man. Just pick one chapter to read.

You are living the late 30’s in Germany.

[Jan_Sobieski]

Thank you! Will read!

[Obadiah]

Thanks for the link.

[grey_whiskers]

Thanks, saving for later

[Honest Nigerian]

The post describes FASCISM perfectly.
Fascism is government control of the means of production.

[Faith65]

Saving link.
Thank you.