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Alberto Savrieno  

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  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    Steve -

    You can get different leverages with TLT put options depending on how far out of the money your strike is. With TBT you can only get 2x leverage and it is reset daily. Overall performance can be greatly affected by volatility. TLT put options leverage is more steady and predictable for each strike regardless of daily volatility.
    Mar 20, 2014. 05:08 PM | Likes Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    Sounds like you've taken way too many macroeconomics courses.
    Mar 9, 2014. 04:20 AM | 1 Like Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    All the Fed does is print money, expand the money supply. That's all. That is the purpose of its existence. I can't say much else in response. Everything else is a tool to that end.
    Mar 9, 2014. 04:18 AM | 1 Like Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    Interesting! Thanks, I didn't know this was available.

    Alberto
    Mar 9, 2014. 04:16 AM | Likes Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    banks are not loaning out the excess reserves because at current interest rates, the potential reward does not outweigh the risk of loan default.
    Mar 9, 2014. 04:14 AM | 3 Likes Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    There's nothing "wrong" with it. It will, however, bankrupt the federal government. Interest on the debt is too high as it is. For every percent on the 10 year, that interest goes up about $100 billion dollars a year.
    Mar 9, 2014. 04:11 AM | 1 Like Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    Hey Larry -

    The Fed doesn't create excess reserves. The Fed creates deposits that it puts in its member banks in exchange for bonds. The deposits come out of nothing. What banks do with these deposits is up to them. They can either loan them out and thus they become part of the money supply, or they can keep them locked up at the Fed in excess reserves, thus they become part of the excess reserves.

    Excess reserves are simply deposits that banks are not required to have as reserve.

    So in short, Fed creates money, buys bonds with it. That money is put in a bank as deposits, which are then put back at the Fed as excess reserves.
    Mar 8, 2014. 03:48 PM | 1 Like Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    Eagle - not every QE dollar has ended up in excess. Some have been loaned out. It's just that the rate of QE has far exceeded the rate at which the excess funds are loaned out, so they keep piling higher. You can see from the graph at the beginning of the article that when the Fed stops printing temporarily, the excess reserves begin to drop. So some QE has entered the system, and this is where stock gains have come from.
    Mar 8, 2014. 03:41 PM | 2 Likes Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    I believe precious metals will rise with the same force that bonds get crushed/interest rates rise. The same exact thing we saw in the late 70's through January 21 1980. Gold and interest rates skyrocketed together. It's going to happen again, but this time even more strongly, with a much, much bigger debt burden.
    Mar 8, 2014. 03:38 PM | 4 Likes Like |Link to Comment
  • Excess Reserves: The Elephant In The Room The Fed Doesn't Want To Talk About [View article]
    The 30 year bull market is over, but the crushing has barely begun. It's going to get really serious when interest payments on the debt become unmanageable.
    Mar 8, 2014. 03:35 PM | 4 Likes Like |Link to Comment
  • China On The Verge Of Deflationary Crash: Primary And Secondary Plays [View article]
    Look at a long term chart of YXI or any leveraged ETF. The long term trend is always down. Wasting asset.
    Feb 19, 2014. 03:47 PM | Likes Like |Link to Comment
  • China On The Verge Of Deflationary Crash: Primary And Secondary Plays [View article]
    All ETF's are wasting assets to a degree because they all carry fees. Short ETF's all the more so, and especially leveraged short ETF's. Just look at the long term chart of any leveraged ETF and you'll see they all have declining long term moving averages with very few exceptions.
    Feb 19, 2014. 03:47 PM | Likes Like |Link to Comment
  • China On The Verge Of Deflationary Crash: Primary And Secondary Plays [View article]
    How currencies perform in relation to other currencies does not impact local price inflation. It is the amount of currency relative to the amount of goods and services in the country that matters. A currency "appreciating by 25%" is a statement that has no absolute meaning. 25% against what? Currencies only trade in pairs.
    Feb 19, 2014. 03:43 PM | Likes Like |Link to Comment
  • China On The Verge Of Deflationary Crash: Primary And Secondary Plays [View article]
    Perhaps, but it is the only crop I can think of that China has almost complete control over the supply at the moment. It is the most tethered to the Chinese economy, and therefore the supply will be highly effected.
    Feb 19, 2014. 03:41 PM | Likes Like |Link to Comment
  • China On The Verge Of Deflationary Crash: Primary And Secondary Plays [View article]
    It's not only true to a certain extent. It's true by definition. Inflation means increasing the supply of money. It always affects prices. Sometimes the nominal effect is muted due to productivity gains, but inflation is inflation is inflation.
    Feb 19, 2014. 03:39 PM | Likes Like |Link to Comment
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