For want of a nail the shoe was lost,for want of a shoe the horse was lost,for want of a horse the knight was lost,for want of a knight the battle was lost,for want of a battle the kingdom was lost.So a kingdom was lost—all for want of a nail.– “For Want of a Nail” China can print money, but it cannot print water.-Charlie Parton, April 2018 “According to Wang Shucheng, China’s former minister of

“Recent Disruptions and Potential Reforms in the US Treasury Market: A Staff Progress Report” (Page 2) “BIDEN SAYS HE IS COMMITTED TO INDEPENDENCE OF FED TO MONITOR INFLATION AND COMBAT IT” (Page 4) “Treasury Secretary Yellen says Fed wouldn’t allow repeat of 1970s inflation” (Page 5) BIS working paper on Central Bank Digital Currencies suggests CBDC’s would likely drive significant global inflation (Page 6) “Yellen backs new effort to issue green bonds, says climate crisis

Key points: New Fed and Treasury report published 11/8/21 appears to effectively end of Fed independence for the foreseeable future: There may be some near-term volatility, but likely no dearth of USD liquidity for some time. In our view, the Fed is doing “Fake QE Taper”, not “real QE Taper.”  The financing of the US government is being shifted from US T-Bond markets to US money markets at increasingly negative real rates, which money market

“October jobs report: US economy added 531,000 jobs, prior months revised higher.” (Page 2) “We think the Fed should taper immediately & begin raising rates as soon as possible.” (Page 4) “Bonds will throw a tantrum if the Fed doesn’t deal with inflation, and stocks will throw one if it does.” (Page 6) “Treasury unveils first cut in long-term debt sales since 2016” (Page 7) US Steel appears to have had a large spate of

Goldman Sachs Group economists now expect inflation will force the Fed to hike interest rates next July, a year earlier than expected…what a change from a few days earlier.-Christophe Barraud, via Twitter, 10/30/21 I gave a presentation to the Federal Reserve Bank of New York last week to share our views on inflation and Fed policy. The bottom line: we think the Fed should taper immediately and begin raising rates as soon as possible.-Investor Bill

“Plunge in US export shipments sparks US 3q21 GDP downgrades” (Page 2) Supply chain disruptions look likely to weigh further on US ISM New Orders (and by extension, GDP) (Page 3) “Secretary Yellen, JPM CEO Dimon say supply chain bottlenecks will soon ease” (Page 4) “China gas stations ration diesel, adding to supply chain squeeze” (Page 5) “China sticks to COVID-zero policies, despite rising pressure to ease restrictions” (Page 6) “We’re not in a global