Kathryn Judge gives an excellent explanation of the FHLB and what their intended mission is. The key is to extrapolate the current action within the bank to use as a leading economic indicator. However, I will say that 100b$ from the discount window compared to 1t$ from FHLB taken so far, while being a 10x multiple and a definite fly in the ointment, is NOT QUITE YET enough to tell me we're moments away from full on bonfire.
With discretionary spending, consumer lending and other "pyramid base" economic data essentially drying up to 0 at this stage, coupled with expectation changes to a longer term length of price inflation staying high, as Powell put to Congress just recently, and lastly the continued squeeze on the middle class, who remain wounded and bleeding out but not yet defeated, I'd say this data tells of a long sojourn through the desert still yet to come.
Elsewhere energy prices will remain high, the rush into commodities also continues, yet still no fundamental change in the energy :: commodity price ratio (oil vs gold) has occured, which says there hasn't yet been a fundamental shift in the international market or the currency spreads, even if attitudes are trending toward "de-dollarization" and against the ultimate power still held by centralized financial institutions like Fed and IMF.
I'd say the growth in creation of a framework for CBDCs in the West has been something of a panacea for the largest financial players and the stock market; the VIX remains surprisingly stable through the horrors of real economic data releases thus far during the year.
Thus I think you could easily see a 5x multiple in FHLB lending before it becomes a real dead canary and the harbinger of imminent economic collapse; with a pathway being built with the idea of quickly shuffling the consumer into a new CBDC market (still pegged to a fiat USD most likely) if enough smoke spreads that fire is discovered, however, there's still enough breathing room for the largest banks and the big spenders in the US government to proceed along as though conditions are somewhat normal, even as the small pocket of Americans who are middle class are now beginning to become increasingly desperate to find an oasis and quench their burning throats.
Even with a Republican win in 2024, it will be time consuming to return to a place where Americans can do any significant wealth creation, and thus recover the tax base. Increasing government revenues via renewed energy production and deregulation of various economic sectors should help significantly however, even if government spending does not return to pre-pandemic levels.
Inflation will ease off, liquidity will return, the dollar will recoup much of its strength and American life will relax greatly with a downshift in prices for core CPI goods and gasoline. But the poverty rate and proportion of our legalized citizenry who populate the graph just below and above that line will now have become a far more crowded place indeed. The work that's been done to separate the castes and turn them against each other is going to be a longer lasting scar, even if they never get to set the big fire like they want and blow up mercantilism forever by drowning our economy.
Sorry, it wasn't the point of this really, but I can't help but factor in human costs when discussing the economic situation and what the data is telling us. The markets are now just another hideout from the monsters they've brought to life; safety is becoming increasingly hard to find, which is why it might be better to let some of these bailout recipients finally die off, if the chance comes around again.
In this kind of half life, the elites and the wealthiest are totally insulated and it's impossible to lose, just as it's impossible for the many to lock in any real gains from the system. Sometimes a little risk can get the car started, instead of getting stuck in neutral, where we have been for decades now.
Here's the podcast he referenced in the video you posted:
https://youtu.be/9oZ0yzf-rzM
Kathryn Judge gives an excellent explanation of the FHLB and what their intended mission is. The key is to extrapolate the current action within the bank to use as a leading economic indicator. However, I will say that 100b$ from the discount window compared to 1t$ from FHLB taken so far, while being a 10x multiple and a definite fly in the ointment, is NOT QUITE YET enough to tell me we're moments away from full on bonfire.
With discretionary spending, consumer lending and other "pyramid base" economic data essentially drying up to 0 at this stage, coupled with expectation changes to a longer term length of price inflation staying high, as Powell put to Congress just recently, and lastly the continued squeeze on the middle class, who remain wounded and bleeding out but not yet defeated, I'd say this data tells of a long sojourn through the desert still yet to come. Elsewhere energy prices will remain high, the rush into commodities also continues, yet still no fundamental change in the energy :: commodity price ratio (oil vs gold) has occured, which says there hasn't yet been a fundamental shift in the international market or the currency spreads, even if attitudes are trending toward "de-dollarization" and against the ultimate power still held by centralized financial institutions like Fed and IMF. I'd say the growth in creation of a framework for CBDCs in the West has been something of a panacea for the largest financial players and the stock market; the VIX remains surprisingly stable through the horrors of real economic data releases thus far during the year.
Thus I think you could easily see a 5x multiple in FHLB lending before it becomes a real dead canary and the harbinger of imminent economic collapse; with a pathway being built with the idea of quickly shuffling the consumer into a new CBDC market (still pegged to a fiat USD most likely) if enough smoke spreads that fire is discovered, however, there's still enough breathing room for the largest banks and the big spenders in the US government to proceed along as though conditions are somewhat normal, even as the small pocket of Americans who are middle class are now beginning to become increasingly desperate to find an oasis and quench their burning throats.
Even with a Republican win in 2024, it will be time consuming to return to a place where Americans can do any significant wealth creation, and thus recover the tax base. Increasing government revenues via renewed energy production and deregulation of various economic sectors should help significantly however, even if government spending does not return to pre-pandemic levels.
Inflation will ease off, liquidity will return, the dollar will recoup much of its strength and American life will relax greatly with a downshift in prices for core CPI goods and gasoline. But the poverty rate and proportion of our legalized citizenry who populate the graph just below and above that line will now have become a far more crowded place indeed. The work that's been done to separate the castes and turn them against each other is going to be a longer lasting scar, even if they never get to set the big fire like they want and blow up mercantilism forever by drowning our economy.
Sorry, it wasn't the point of this really, but I can't help but factor in human costs when discussing the economic situation and what the data is telling us. The markets are now just another hideout from the monsters they've brought to life; safety is becoming increasingly hard to find, which is why it might be better to let some of these bailout recipients finally die off, if the chance comes around again.
In this kind of half life, the elites and the wealthiest are totally insulated and it's impossible to lose, just as it's impossible for the many to lock in any real gains from the system. Sometimes a little risk can get the car started, instead of getting stuck in neutral, where we have been for decades now.