• Modern Monetary Theory is neither modern nor new: #QEinfinity via @AntoniaOprita Link
    Alberto Gallo Mon 03 Aug 2020 12:20

    If after the great financial crisis of 2007-2009 the word “extraordinary” characterised monetary policy, the Covid-19 pandemic calls for a much stronger adjective: “unprecedented”.

    As the world has never before been faced with an instance when virtually all economic activity stopped for a certain period of time, this is an appropriate word. However, in monetary policy really very little can be said to be truly “unprecedented”.

    For example, take modern monetary theory (MMT) — a theory about how to have your (monetary) cake and eat it, which (simplistically) states that if a country can print its own currency, that country will never default on its debt because it can create as much currency as it wants to and use it to pay back the debt.

    Major central banks, to a certain degree, have already begun versions of MMT.

    The Bank of Japan was the first to start massive purchases of assets from the markets, more than two decades ago. Japan’s...

  • RT @jimmellas: #BringThemBackHome a video from the Hellenic American Leadership Council for the return of the Parthenon Sculptures (full vi…
    Alberto Gallo Sat 01 Aug 2020 17:13
  • RT @NickTimiraos: 70% of people who went back to work last month did so despite likely receiving more in benefits than they had in pay from…
    Alberto Gallo Sat 01 Aug 2020 09:18
  • United States Outlook revised to negative - Fitch #QEinfinity #inequality #Inflation Link https://t.co/oktgnFuGZc
    Alberto Gallo Fri 31 Jul 2020 21:02
  • RT @VMRConstancio: Easy short-term prediction, and everybody should agree with it. The dollar will stay dominant as a reserve currency for…
    Alberto Gallo Fri 31 Jul 2020 20:57
  • RT @JoeBiden: You won't have to worry about my tweets when I'm president.
    Alberto Gallo Fri 31 Jul 2020 15:17
  • Government bonds or frogs in a boiling pot? As real rates turn more negative, we look for diversification and new income sources for investors. Our latest podcast: Link
    Alberto Gallo Thu 30 Jul 2020 11:06
    Boiling frogs The COVID-19 crisis has produced risks and opportunities worldwide. Looking at the latest developments in Europe and at the global political scenario, Alberto Gallo, Head of Macro Strategies at Algebris Investments, discusses implications and perspectives for investors. What does it mean that government bond investors are "boiling frogs"? Why is that? The European Union approved a €750bn Recovery Fund while the US will hold elections in November. Where do you see risks ... See More and opportunities around the world? 3 From a strategic perspective, what are the asset classes we see value in today?
  • ETFs are the canary in the bond coal mine: @gilliantett explains how structures with a mismatch between illiquid assets (e.g. Credit) vs liquid liabilities can make markets more fragile - not more robust. Via @FT Link
    Alberto Gallo Thu 30 Jul 2020 06:50
  • Turkey's credit-driven growth model is unsistainable. Large imbalances have accumulated across its banking system, used to boost lending and defend the Lira. The day of reckoning is getting closer. @FT Link
    Alberto Gallo Wed 29 Jul 2020 22:00
  • Could you buy equities?’ Powell: ‘We haven’t looked...’ ‘It has to be focused on a group of entities’ ‘We felt that using these facilities we could buy corporate bonds and municipal bonds too’ *’We haven’t tried to push it to what’s the theoretical limit’* #QEinfinity
    Alberto Gallo Wed 29 Jul 2020 19:25
  • “We’re not even thinking about thinking about thinking about raising rates” - Powell #QEinfinity
    Alberto Gallo Wed 29 Jul 2020 19:15
  • The line between monetary and fiscal policy gets even more blurred at today’s #Fed press conference. Central bank financed spending is likely to result in more Dollar debasement, lower real rates, higher real assets, suppression of volatility and credit risk. #QEinfinity
    Alberto Gallo Wed 29 Jul 2020 19:05
  • Makes cents. Link
    Alberto Gallo Wed 29 Jul 2020 19:05

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  • US real interest rates fall to record lows. Austerity is out of fashion: another stimulus is coming. With fiscal deficits on the rise as central banks keep yields suppressed, how will you find new sources of income? #QEinfinity #FinancialRepression Link https://t.co/Q69V4xifKx
    Alberto Gallo Tue 28 Jul 2020 15:04

    “The lesson of history, then, is that even as institutions and policy makers improve, there will always be a temptation to stretch the limits. Just as an individual can go bankrupt no matter how rich she starts out, a financial system can collapse under the pressure of greed, politics, and profits no matter how well regulated it seems to be.“

    Carmen M. Reinhart, This Time is Different: Eight Centuries of Financial Folly

  • RT @lisaabramowicz1: A record 86% of the $60 trillion global bond market traded with yields no higher than 2%, and more than 60% yielded le…
    Alberto Gallo Tue 28 Jul 2020 06:04
  • RT @VMRConstancio: Economics is indeed struggling with inflation theory. Monetary aggregates and monetarism have been correctly abandoned.…
    Alberto Gallo Sat 25 Jul 2020 10:21
  • History shows inflation is social and political, before an economic and monetary phenomenon. Today, bond yields don't compensate for rising prices, despite record monetary and fiscal stimulus. How do you protect your capital? #QEinfinity #SilverBullet Link https://t.co/B8wkwoxoGs
    Alberto Gallo Fri 24 Jul 2020 09:20

    “The lesson of history, then, is that even as institutions and policy makers improve, there will always be a temptation to stretch the limits. Just as an individual can go bankrupt no matter how rich she starts out, a financial system can collapse under the pressure of greed, politics, and profits no matter how well regulated it seems to be.“

    Carmen M. Reinhart, This Time is Different: Eight Centuries of Financial Folly

  • RT @johnauthers: Inflation has been down for so long, will the Fed know what to do when it returns? It has a history of being behind the cu…
    Alberto Gallo Thu 23 Jul 2020 20:45
  • Fine art and famous sneakers fetch record prices: #QEinfinity keeps making the rich richer, writes @gilliantett @FT Link https://t.co/C7Nd3EPjgb
    Alberto Gallo Thu 23 Jul 2020 20:25
  • Gold $2,000 #QEinfinity
    Alberto Gallo Thu 23 Jul 2020 11:44
  • Italy's 10-year yields drop below 1%. #QEinfinity #EUCO https://t.co/g59F3dx7Op
    Alberto Gallo Thu 23 Jul 2020 10:29
  • Governments around the world are bailing out the economy from #Covid19 - but at what cost? Total government and private debt continues to grow. #QEinfinity #SilverBullet Link https://t.co/OXiM5PdIFw
    Alberto Gallo Wed 22 Jul 2020 13:08

    “The lesson of history, then, is that even as institutions and policy makers improve, there will always be a temptation to stretch the limits. Just as an individual can go bankrupt no matter how rich she starts out, a financial system can collapse under the pressure of greed, politics, and profits no matter how well regulated it seems to be.“

    Carmen M. Reinhart, This Time is Different: Eight Centuries of Financial Folly

  • Out of over $70 Trillions of bonds outstanding, only *four* percent yield > 5%. If the $ depreciates and inflation rises, where will the money go? #QEinfinity #SilverBullet Link https://t.co/oTY9vAdHmW
    Alberto Gallo Wed 22 Jul 2020 08:38

    “The lesson of history, then, is that even as institutions and policy makers improve, there will always be a temptation to stretch the limits. Just as an individual can go bankrupt no matter how rich she starts out, a financial system can collapse under the pressure of greed, politics, and profits no matter how well regulated it seems to be.“

    Carmen M. Reinhart, This Time is Different: Eight Centuries of Financial Folly

  • Are bond investors frogs in a boiling pot? Inflation is social and political, before being a monetary phenomenon. In our last #SilverBullet letter, we discuss risks to markets from US elections, the upside from today's #EUCO deal and navigating H2 2020. Link https://t.co/A3Gl2EzqeQ
    Alberto Gallo Tue 21 Jul 2020 12:52

    “The lesson of history, then, is that even as institutions and policy makers improve, there will always be a temptation to stretch the limits. Just as an individual can go bankrupt no matter how rich she starts out, a financial system can collapse under the pressure of greed, politics, and profits no matter how well regulated it seems to be.“

    Carmen M. Reinhart, This Time is Different: Eight Centuries of Financial Folly

  • #EUCO deal: - €750bn: €360bn loans / €390bn grants - Budget rebates to frugal countries - Conditionality assessed by qualified majority Link https://t.co/gRQtPJHu6p
    Alberto Gallo Tue 21 Jul 2020 05:57
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