Consulting by RPM || Free Advice Blog

Scott Sumner Slips

Long-time readers know that I am not a fan of Scott Sumner’s signature idea, namely that the Great Recession was caused by Ben Bernanke’s tight monetary policy. However, if you’re really an expert on my writings, you’ll know that I’ve said Sumner would be a very formidable debating opponent–much more than Krugman. Indeed, when I […]

Am I Just a Permabear?

In the comments of this post, Gene Callahan doesn’t shirk his duty of constantly assuming I started reading financial economics last Tuesday: But Bob, weren’t you predicting market disaster when the Dow was at 6000? (I was buying at that point, fwiw.) Weren’t you predicting it through the whole rise of the last seven years? […]

Treasury Yield Curve Over the Last Year

This might be useful to some of you: It’s obvious in the above that the Fed action has raised very short term rates while bringing down longer rates. (To explain some of the movements earlier, remember that markets thought the Fed was first going to raise the fed funds target in September, and then it […]

The Fed’s Magic Trick Won’t Work

Hit and Run on Sumner

We have a super duper awesome conference this weekend here at the Free Market Institute, so I have to be brief. Let me first motivate this post by issuing the following statement, to which I want you to react: *** Ten-year bond yields have plummeted to 1.83%, from about 2.2% when the Fed “raised” interest […]

*Free Advice* Readers Know Why Monetary Base Is Down

Dennis Gartman is warning people that the monetary base is sharply down. That seems odd, since the Fed hasn’t been selling assets, right? It’s the same thing that we figured out (due to helpful comments from two of our readers) regarding reserves: Bank reserves count as part of the monetary base. So when the Fed’s […]

The Connection Between the Stock Market and the Fed

I notice that Roger Farmer has been following this. The below is the chart I put into my article in the September 2015 issue of the Lara-Murphy Report. I was pointing out how the S&P500 had big drops whenever a round of QE ended, and then again in August when (at that point) people were […]

Mystery Explained

Thanks to Captain Parker and E. Harding, they were telling me the answer to my previous query, but I was not receptive until yesterday for some reason. Here’s a chart showing the drop in official “total reserve balances” and how it is largely explained by a rise in Treasury deposits (with the Fed) and reverse […]