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Inflation chart book: Not as soft as we’d like but gone in 6 months

Inflation Watch: Why inflation is not in the grave but a dead man walking

Peak inflation is in, but monetary policy works with “long and variable lags” as monetarists say. While Goods inflation is sliding, some areas are resilient and services inflation remains an issue. Even though expectations and soft data are perplexing, there are pockets of data indicating a fight-back to the weakening dove sentiment.

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Something for your Espresso: Sentiment is improving, while data is worsening

Something with your Espresso: Do you like the rates roller-coaster? We do…

Another day, another direction for rates. Banks are driving the show and the underlying question remains. Is this a true banking crisis or is it a tempest in a teapot? As true macro investors, we prefer to take a step back from the daily noise and watch the underlying trends. Amidst a renewed hawkish repricing yesterday the M2/M3 money growth measures were released in the Euro area. We have never seen the kind of destruction of money (and hence deposits) in the history of the Euro zone and if we look at similar data in the US, it looks even worse. The underlying quarterly growth numbers of money in Europe and the US are running at historically destructive levels. This is the true underlying reason for the deposit flight/destruction and the monetary policy is simply too tight by now. Chart 1: The quarterly pace of negative money growth in Europe is historic The trend remains very uniform across the West. Money growth is falling of a cliff from a sequential perspective and the banking crisis is likely to accelerate the trend as M2 growth is linked to the risk appetite of credit departments of banks. When various emergency facilities at the Fed (and other central banks) are getting maxed out, it is not a signal that banks are willing to add to the risk profile, rater the contrary. We know this drill and it is not reflationary. There is one spot on earth, and basically one spot only, with a […]

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Money Watch: Trillions of USDs are waiting to be unleashed

Money Watch: Have people forgotten that everything is about money? Also the SVB case..

Most people tend to agree that the amount of money in an economy affects economic conditions. More money makes consumers buy more goods and services, and the excess demand leads to increasing prices.. but what happens when we destroy USDs as we currently do? More SVB cases show up!

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