$9,000,000,000,000: Former Fed Strategist Now Expects Fed's Balance Sheet To Double This Year
The bailout of 2009 was a doubling of debt, the charts would expect a repeat.
But that is death knell for retail banking, a huge market share loss by the Fed, and they know it. That balance sheet implies a huge gap with the IOER low, and that gap is a tax being passed to retail banking, some 200 billion, an additional 1.5% fee from what the monopsony fee might be today.
The Fed cannot give up the retail sector, that is its anchor, that is the source of government taxes. If that banking sector is gone, government pricing is out the window, chaos, chaos, chaos.
Under my plan, the tax dollar comes with a government fee, averages 2%, it is mandated, and direct inflation will vary about that by half a point, typically. But this is a 15 year contract of independence from Congress, and the Fed can easily double its market share. The fee is paid by all users of the tax dollars, especially government agencies, and they pay the fee. The New Fed being profitless remains powerless, it simply runs the matching S/L pit. The other sources of 'inflation' are mainly distortions, like inflation adjustments and market restrictions from government.
So inflation evolves to one anchor, the regular cost of government blunders, which we predict to be a third of a generations debt. But after the Nixon Shock, we saw 15% inflation of a short period, and inflation was not totally tamed until the mid 1990s.
The key to anchoring inflation is to quit lying about government, it blunders, bet on it, literally. Then we avoid the massive congestion as caused by the Nixon overnighters.
Under my plan, the tax dollar comes with a government fee, averages 2%, it is mandated, and direct inflation will vary about that by half a point, typically. But this is a 15 year contract of independence from Congress, and the Fed can easily double its market share. The fee is paid by all users of the tax dollars, especially government agencies, and they pay the fee. The New Fed being profitless remains powerless, it simply runs the matching S/L pit. The other sources of 'inflation' are mainly distortions, like inflation adjustments and market restrictions from government.
So inflation evolves to one anchor, the regular cost of government blunders, which we predict to be a third of a generations debt. But after the Nixon Shock, we saw 15% inflation of a short period, and inflation was not totally tamed until the mid 1990s.
The key to anchoring inflation is to quit lying about government, it blunders, bet on it, literally. Then we avoid the massive congestion as caused by the Nixon overnighters.
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