tag:blogger.com,1999:blog-5908830827135060852.post8934254744577480413..comments2024-03-29T02:54:56.523-04:00Comments on Bond Economics: Bank Of Canada: Repo Printer Go Brrr!Brian Romanchukhttp://www.blogger.com/profile/02699198289421951151noreply@blogger.comBlogger22125tag:blogger.com,1999:blog-5908830827135060852.post-35911564156815036572022-02-02T06:59:08.116-05:002022-02-02T06:59:08.116-05:00This comment has been removed by a blog administrator.berryhenryhttps://www.blogger.com/profile/13428270027091002060noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-10529467176576993822021-10-09T03:32:40.492-04:002021-10-09T03:32:40.492-04:00This comment has been removed by a blog administrator.asadhttps://www.blogger.com/profile/10412906618067684488noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-45888874554222428132021-07-13T11:02:23.747-04:002021-07-13T11:02:23.747-04:00This comment has been removed by a blog administrator.Alex Johnhttps://www.blogger.com/profile/08494511491880269822noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-73799591599716810122020-07-15T12:39:03.408-04:002020-07-15T12:39:03.408-04:00No effect. The C$ lost 10% in 2 days after QEing w...No effect. The C$ lost 10% in 2 days after QEing was announced. Traded down to .69.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-23270503421346112242020-07-14T19:28:15.921-04:002020-07-14T19:28:15.921-04:00Duh! The banks then keep the spread with the bonds...Duh! The banks then keep the spread with the bonds they buy! What don't you understand? The $$$ is sterilized but the banks net the spread, free $$ to recapitalize the underwatr banks. This the recapitalization, on taxpayer $$$, that occurred in america thanks to fed and blackrock and that ripoff model has landed in canada. No oversight at BoC so free taxpayer $$$ for banks, blackrock, new political connected hires, consultants and unbid contracts all funded by the coupon payment from the billions in QEing flowing from taxpayers into BoC interest payments. SCAM! RIPPOFF! in the billions!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-89487557589328584822020-07-13T05:56:44.657-04:002020-07-13T05:56:44.657-04:00Meat inflating by 30% and other staples in doulbe ...Meat inflating by 30% and other staples in doulbe digits in a only a few months. Rents and housing have been increasing at double digit rates. Soon there will be tax inflation with 10 tp 30% increases across the board. Middle class will be further gutted and savers, pensioners and those on fixed incomes will be destroyed and printing 100s of billions in fake fiat currency will only make things worse. Canadian standard of living on the downward slope.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-78434175273565487522020-07-13T05:48:25.147-04:002020-07-13T05:48:25.147-04:00The Fed Reserve, unlike the ecb, sterilized trilli...The Fed Reserve, unlike the ecb, sterilized trillions by paying good interest on excess reserves, keeping the $$$ at the fed. 100s of billions were paid to banks for excess reserves. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-57015396224357101222020-07-08T16:17:02.480-04:002020-07-08T16:17:02.480-04:001) They never announce counter-parties. 2) If they...1) They never announce counter-parties. 2) If they are forced to keep the money with the BoC, what exactly would the transaction represent? “Here’s a loan, but you can’t touch the money?” <br /><br />This will have no inflationary effect, so that’s not a worry.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-33502698006016755002020-07-08T10:33:55.884-04:002020-07-08T10:33:55.884-04:00Gold steadily lost value in nominal terms througho...Gold steadily lost value in nominal terms throughout the 1980s and 1990s. Did prices stop going up? Nope. <br /><br />As for food inflation, there's obviously some shortages still. However, prices are not really moving around here, other than maybe some meats. So, not exactly a whole lot of support for your assertions.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-89815885196078853542020-07-08T09:14:35.580-04:002020-07-08T09:14:35.580-04:00Gold to C$ just hit a record high. Central Banks a...Gold to C$ just hit a record high. Central Banks are determined to keep the air in the bubble of 265 trillion $$ of unpayable debt by governments and corporations and propping up defacto banko pension funds by printing trillions in fake fiat currency.<br />Food inflation and housing rents have soared. As in Japan once the QEing starts it will never end until the whole systems implodes or explodes and societies rebel as their standard of living collapses. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-49424207105043937142020-07-08T08:23:05.652-04:002020-07-08T08:23:05.652-04:00Anyway of knowing how much and who is getting repo...Anyway of knowing how much and who is getting repo $$ for ABS, ABCP and CLO? Probably not as it would signal problem banks with their loan book. Thxs.<br />Is the repos for gvt debt instruments required to be left in BoC account to sterilize that $$, so not to cause even more inflation than the $$$ printing has already caused? Thxs.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-70481706702933217412020-07-08T06:48:41.705-04:002020-07-08T06:48:41.705-04:00I read Blackrock, biggest ETF bond holder on the p...I read Blackrock, biggest ETF bond holder on the planet, is now inserted into the BoC as a consultant on what corporate bonds are bought. No moral hazard here. How much is this costing taxpayers? Once the fox is in the hen-house you'll never get rid of it and stocks and many ETFs will be next when the bubble starts leaking again.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-60127555894850391322020-07-08T06:20:50.999-04:002020-07-08T06:20:50.999-04:00So the banks repos are around 200billion. They bor...So the banks repos are around 200billion. They borrow at .025% from BoC and buy all sorts of fed and provincial debt instruments which pay a coupon higher than the .025% borrowed to finance their purchase. They then park their repo 200billion on the BoC balance sheet and receive .025%. Dose anyone know how many billions of taxpayer $$$ in coupon payments the banks will net from this guaranteed setup? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-77378469469042173592020-05-23T14:41:53.087-04:002020-05-23T14:41:53.087-04:00Given all the dramatic ex nihilo money creation by...Given all the dramatic ex nihilo money creation by the BoC, we must remember that shortly after the GFC, constitutional lawyer Rocco Galati was retained by the Committee on Monetary and Economic Reform to implore the BoC to adhere to its mandate to provide virtually interest-free loans to federal/provincial and municipal govts for creation and maintenance of public infrastructure. The case was tossed by the SCC, which declared the matter needed to be settled by via political means. IOW, it's a legal hot potato. See Amanda Lang interview Galati here: <br /><br />https://www.cbc.ca/news/business/rocco-galati-challenges-bank-of-canada-to-offer-interest-free-loans-1.3065650Bill Shieldshttps://www.blogger.com/profile/06474844657098869994noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-20710157824804602692020-05-23T14:31:22.213-04:002020-05-23T14:31:22.213-04:00Well said, Mr. Sparks.
The pity about MMT is tha...Well said, Mr. Sparks. <br /><br />The pity about MMT is that it is a perfectly functional pair of reading glasses that dare not utter its name.Bill Shieldshttps://www.blogger.com/profile/06474844657098869994noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-37828419635491979842020-05-18T08:16:08.871-04:002020-05-18T08:16:08.871-04:00The banks don’t *have* to buy GCAN bonds, rather i...The banks don’t *have* to buy GCAN bonds, rather it is likely (and probably not 100% of tye extra debt). However, government debt has to be higher (otherwise the cash pile could have been used to pay down debt.)Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-2726158658311110672020-05-17T21:17:20.075-04:002020-05-17T21:17:20.075-04:00Thanks for the reply. The sarcasm was indeed clear...Thanks for the reply. The sarcasm was indeed clear. It's the stuff leading up to the sarcasm I don't get... What I got out of all this was, the government lends to banks who then buy government bonds with it... still scratching my head.Joehttps://www.blogger.com/profile/15197727918414570446noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-66651970945765852802020-05-17T18:28:22.923-04:002020-05-17T18:28:22.923-04:00None of this should have any effect on the Canadia...None of this should have any effect on the Canadian dollar, if currency traders were sensible. Since they aren’t, anything could happen. Since the US is also undertaking QE in size, not sure what the net effect is.<br /><br />These operations are just preventing a financial system meltdown that takes out the housing market. Mortgages are largely guaranteed by the Federal Government (via CMHC), so spreads should not be too wild. I have no idea what’s happening in housing, but I think the real economy is more important than interest rates right now.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-84078434158404029902020-05-17T18:23:24.978-04:002020-05-17T18:23:24.978-04:00The Department of Finance (equivalent of Treasury)...The Department of Finance (equivalent of Treasury) is now keeping a big balance at the BoC. I’m away from my computer, and don’t have the number handy, but I think it was $30 billion. This implies the need to borrow an extra $30 billion in the market. Since the balance is the property of the Department of Finance, they are the ones who lend it out. In case my sarcasm was not clear enough, I don’t think this arrangement makes any sense in the first place, so there’s no point in asking whether it could be done differently (yes it could).Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-90367991191689610092020-05-17T17:17:32.001-04:002020-05-17T17:17:32.001-04:00Could someone more fully explain footnote #1?
Wha...Could someone more fully explain footnote #1? <br />What does "counter-part of that balance at the Bank of Canada" mean, and why does the govt need to lend to banks at all, can't the CB do it directly without treasury involvement?Joehttps://www.blogger.com/profile/15197727918414570446noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-16737496315322689572020-05-17T12:14:24.644-04:002020-05-17T12:14:24.644-04:00During the cv-19 disruption, we can divide the eco...During the cv-19 disruption, we can divide the economy into two sectors: essential and non-essential.<br /><br />The essential sector receives income pretty much unchanged from normal times. However, being unable to spend into the non-essential sector, surplus (forced) savings is building in the hands of essential sector members.<br /><br />This surplus is parked in banks for storage.<br /><br />Now consider the income and spending of the non-essential sector. The spending of this sector has essentially stopped, as has income. Without private 'non-essential' spending, many taxes fail to collect. This leaves government continuing to pay social benefits bereft of normally flowing tax dollars to counterbalance. A hole in the normal financial flow has been created.<br /><br />The result: The essential sector has a monetary surplus parked in banks. Government, the creator of fiat money, has a monetary hole needing financial refill. The central bank is the source of refilling.<br /><br />This course of events is following standard MMT banking theory... so it seems to me.Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-16882825913716370702020-05-17T11:49:49.938-04:002020-05-17T11:49:49.938-04:00How much the CAD$ will be devalued to USD as a res...How much the CAD$ will be devalued to USD as a result and imbalances ?<br />What is the impact on housing sector ?neeleshhttps://www.blogger.com/profile/02421578650332106507noreply@blogger.com