Was Last Month’s Fedwire A Coincidence?

I’d liken his response to Dunkirk, too, though for awfully different reasons. While that specific exertion was a resounding success, mostly because of individual private British citizens, the reason for its haphazard, ad hoc nature was down to the hapless leadership, utter incompetence of British/French military planning and execution.

To follow the analogy more accurately, Jay wasn’t in the boats last March leading the evacuation from the dangerous French coastline rocked by Treasury market dysfunction, nor was he even in position to organize and gather the rescue vessels, no, Powell was the Allied generalship whose lack of attention and understanding had sown the seeds of what – apart from the rescue – was a truly horrendous military defeat that left France to be gobbled up by the rampaging, unchecked German advance.

As one reader and correspondent emailed to me today:

I totally agree, Jay. Just like Dunkirk, you DIDN’T see it coming, you got your @$$ handed to you, and you are lucky it didn’t turn out worse than it did.

I could not possibly have said it any better, no more fitting description of what really happened last year considering the accidental role of Treasury T-bill issuance in calming collateral.

Why does it matter, you ask? The very reason Powell is today plying his true self on NPR; he wants you to believe otherwise, except this thing ain’t over.

I don’t mean that March 2020 is about to repeat yet again, instead the danger here and going forward is the same one the world has been forced to confront for closing in on fourteen years. We get knocked down by these monetary events, global dollar squeezes, but then can only ever come partway back up from them.

And no one can come up with any answers for this, least of all central bankers who would prefer to totally rewrite their (limited) understanding of inflation (always coming up short) than to connect the easiest dots there is ever to connect – consistent deflation, labor decimation, mis-supply in the monetary system.

If Jay’s 2020 action had indeed flooded the world with digital dollars, as he claimed, where are they? Not only has the PBOC balance sheet stayed perfectly empty, the dollar’s exchange value against everything except the euro and yuan barely moved for that flood; and now it appears in danger of reverse, especially the euro and the yuan.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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