Gyroscopic Investing

Would like to hear the PPers thoughts on the fact that $50b/mo of liquidity is being taken out of the money supply (fed rolling sheet) combined with the rate hikes. Do you think we are in for a period of tight money?

"A period during which the growth of the supply of money in circulation slows down. This leaves people with less cash than they expected to have, and usually leads to a recession - a period of poor economic conditions."

More:
https://www.bloomberg.com/news/videos/2 ... view-video

Cash is the only asset in the PP that does well during tight money. Is anyone loading up on cash in their VP?

Well...I’d say it may or may not matter. The actual equation is money * velocity (fancy word for turnover). During QE money supply went up tremendously...velocity went down the whole time...net nothing and leaning hard toward deflation. If velocity picks up we could have another net nothing. I suspect velocity will pick up as the banks won’t be able to sit on it like they’ve been doing...assuming they want to make lending profits.

Banks get 2.4% IOER simply for existing, and a 6% dividend from the Fed

Whats the CPI + assets, tuition, healthcare?

boglerdude wrote: ↑Fri Dec 21, 2018 12:08 am Banks get 2.4% IOER simply for existing, and a 6% dividend from the Fed

Anyone interested in pulling together and starting a bank?????

Good gig if you can get it. :-)