Sintra: Another Sunny Place For Shady Deals
“Say Nuttin.” (Sully)
Summary:
· Sintra is located between the same BlackRock and Hard Place as the Polycrisis.
· The IMF is located between the same BlackRock and Hard Place as Sintra and the Polycrisis.
· The insolvent Bundesbank’s legally precedent crash landing provided the financial instability halo for the view from Sintra.
· Rumour has it, that some ECB Governing Council members are trying to trigger an insolvency credit event, at the central bank, by swiftly realizing losses through accelerated balance sheet contraction.
· Hawkish ECB zeal, for tightening, is in direct conflict with the divergent inflation performance within the Eurozone.
· Hawkish ECB zeal, for tightening, looks like an attempt to maintain German economic hegemony at the point that the global geo-political/environmental fundamentals are existentially challenging it.
· With the Bundesbank insolvent, and Germany Inc. rapidly becoming so, the German government prescribes a depressionary fiscal policy, for the whole Eurozone, so that Germany will not have a competitive disadvantage in the future Great Consolidation.
· On the Fed’s behalf, a Dallas Fed staffer finally admits that “the safest US$ asset is the liability of an insolvent US Central Bank”.
· Unfortunately, the same Dallas Fed staffer admits that the safest US$ asset is a taxpayer IOU, the proceeds of which inflate the value of the AUMs of the “Masters of the Asset Class Universe”.
· Rather than redress the egregious inequity, the Fed intends to transfer its dual mandate, along with its balance sheet, and the usurious monopoly lien on the US taxpayer, to the “Masters of the Asset Class Universe”.
· The executive policymaking function is also “collateral” that will be transferred to the “Masters of the Asset Class Universe”, along with the Fed’s balance sheet, without a return of consideration and accountability.
· By default, the “Masters of the Asset Class Universe” will become the keepers of Brimmer’s Law, but they will have no Constitutional obligation to uphold it.
· As implied by Cairo and Sim (2020), the “Masters of the Asset Class Universe” will become the new de facto, and de jure, “Modern Monetary Monopsonists”.
· Germany continues to conduct “Wagner’s Gotterdammerung”, however, there are several other competing librettos.
· “Ex Uno Plures” is the Novum “Nuntius Sui Generis”.
Extracts
· The Tyranny of Teutonic Democracy threatens the survival of the European Project in its current historical iteration.
(Source: the Author)
· The Fed is in “Transientopia” while the ECB is in “Armageddon Time”.
· The Eurozone lacks a unifying fiscal policy, monetary policy, and foreign policy consensus.
· Italy warns the ECB that it’s Eurozone Armageddon Time.
· Germany pretends that EU/Eurozone fiscal settings can return to pre-COVID/pre-GFC levels.
(Source: the Author)
· European financial instability may create the ECB’s desired financial sector consolidation, a pre-requisite for and pre-cursor to European Federalism.
(Source: the Author)
· The safest US$ asset is the liability of an insolvent US Central Bank.
(Source: the Author)
Cairo and Sim had exposed the unpleasant truth that monetary policymaking would become constrained, perhaps even consumed, by financial stability policy considerations, rather than the two Congressional mandates, as a consequence of a 40-year secular trend in the distributional outcomes of monetary and fiscal policy stimulus. The COVID-19 response was one monetary and fiscal stimulus too far.
(Source: the Author)
· “Brimmer’s Law” is the rational explanation of the Fed’s current “absurd combination” of “Quantitative Tightening” and “Qualitative Easing”.
· Applying “Brimmer’s Law” may lead to the soft landing that the blind application of “Volcker’s Law” precludes.
· Contemporary “Brimmer’s Law” includes sectoral/national security parameters in addition to credit ratings.
· The “Guardians”, of “Brimmer’s Law”, feel confident enough, in their observance, to quantitatively tighten global US Dollar liquidity again.
(Source: the Author)
· The ECB’s Sintra version, of Jackson Hole, may testify Brimmer’s Law.
· The ECB’s Sintra version, of Jackson Hole, may also testify to the replacement of central bank balance sheets with “Master of the Asset Class Universe” AUMs as the future agency of global liquidity, inflation, and financial instability.
(Source: the Author)
· The IMF implies that the absurd combination of “Quantitative Tightening” and “Qualitative Easing” is the optimal way to trade off inflation and financial stability risks at this point in the Polycrisis.
(Source: the Author)
· “Wagner’s Gotterdammerung” venue moves from Bayreuth to follow “Prigozha and the Wolf” at the Bolshoi.
(Source: the Author)
· The best of times for the Free World and POTUS is based on G7’s Not Free Managed Trade and Managed FX regimes.
(Source: the Author)
