I like your reference to livestock. Herded is the appropriate word for that despotic thinking coming from Ken Rogoff. But it didn't start with him. Larry Summers took this from another Harvard prof, Peter Sands, who once was employed by Standard Charter. Summers made the argument for stopping crime without making the argument that he wanted NIRP, at all! He kept silent as the article appeared in your local TV spot. The masses all learned, incorrectly, that Summers wanted to stop crime when in truth he wants to implement NIRP! These people are despotic. So far they are just windbags. But, America may one day have to throw them out if they cause too much mischief! www.talkmarkets.com/.../larry-summers-100-dollar-bill-ban-and-westfalia-lost

I believe the Fed sets the table for low yields, but even after QE, yields continued to go down. Yields went down as there was prosperity in the 1990's. In good and bad times bond yields go down over time. I think demand for bonds is growing, which the Fed certainly engineered, as no one wants another AIG. The demand for bonds as collateral continues to grow. But it is supply and demand.

I agree Moon. This is a much more accurate picture than one that attempts to show inflation is exploding. Rents are exploding and they will lead to a massive drag on the economy.

It seems like the core PCE is right because it doesn't even count food, which is showing no increase in price. And gasoline, after a march upward in the first half of 2016, is leveling off. Wage increases are good, but car sales are leveling off, so wage increases are likely limited to more expensive cities. It is a mixed bag for sure. It looks like rent exceeds wages, and that is a massive tax. I don't think the average working man can tolerate it. Look for more multigenerational households and more roommate situations because of this.

I agree, Gary. I think money, in the form of real helicopter money, should be tried. That would put money into the real economy. So far, trickle down from the Fed to financial institutions is not putting money into the real economy. HM should only be used to bump us off zero rates like we have. The Fed really only stimulates the financial system, and that is not having a desired affect on the real economy.

Steven, people keep wanting to shut down the government over this or that, so why wouldn't the treasury want to keep extra cash in order to pay bills when the idiots are on the loose? Nice charts, btw. This money not being in circulation was not in circulation as excess reserves. So I agree it is not a tightening. However, lending in the real economy seems to be slowing and that is a tightening on main street. Just because the financial system is awash with money does not mean it flows to main street.

We will see how much poverty will impact Denmark when the housing bubble crashes. Apparently that is what the central bank of Denmark wants. The housing market crashed just 8 years ago, and the central bank wants price declines again, already! I am not sure if Scandinavian nations are immune from mispriced risk and subsequent liquidation from the central bank. Unlike in the US, where some markets were bubbled and some were not, but the Fed unfairly crashed it all, in Denmark, you have a small nation with a pricey market. The Danes are, according to this article, not immune from economic shock. www.bloomberg.com/.../banks-told-be-ready-for-customer-pain-when-denmark-s-rates-rise

There is little money on mainstreet. But does the Fed really care about that when it has created a global savings glut? Not really. It thinks the world is wealthy because of the savings glut.

i think some banks could get hurt with low rate loans they made. But apparently Jamie Dimon said that his bank would make more money if rates rose a bit. That is course, is connected to neo-Fisherism, that raising rates causes more economic activity.

This bond buying is an unintended consequence of reverse interest on reserves.