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The Mechanics of QE and Banking Solvency with former Fed Employee Joseph Wang

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Content provided by Brad Mills. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Brad Mills or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://player.fm/legal.

This episode was recorded on June 3, 2022

In this episode, Brad Mills interviews author and former Federal Reserve market specialist, Joseph Wang. Known for his work "Central Banking 101," Joseph offers a treasure trove of insights from his tenure at the Fed, drawing on his experiences navigating the financial landscape post the 2008 crisis.

Brad and Joseph have an in-depth discussion on the world of the repo market, its challenges in 2019 when rates unexpectedly eclipsed the Federal Reserve's interest on reserves, and the implications for liquidity and bank stability. The episode delves into critical issues like the Liquidity Coverage Ratio (LCR) and the balance between capital and liquidity in safeguarding against bank insolvencies.

Brad probes the possibility of the Federal Reserve's repo market interventions being akin to unapproved bailouts — a notion Joseph addresses by shedding light on the quality of collateral involved in these short-term lending agreements. The dialogue also ventures into the accounting aspects of bond maturities, the purchasing power of the US Treasury's looming debt, and the Federal Reserve's potential role in debt acquisition.

Their exchange extends to Bitcoin's immunity to governmental control, contrasting its decentralized nature with other cryptocurrencies and what that means in an increasingly regulated environment. The episode advances through the murky waters of quantitative easing, the causality of inflation, and the contentious values underpinning the current financial system.

Tune into this episode for a blend of expertise and provocative analyses, revealing the inner workings of the systems that move money globally.

Timestamps

[00:09:44] Keynesian vs. Austrian perspectives on sound money.

[00:14:21] Doubts about banking system, learning and understanding.

[00:19:48] Gold certificates allow expansion of money supply.

[00:23:03] Banks took on too much risk in 2019.

[00:27:26] System adapts, past battles influence future strategies.

[00:35:58] Bank stocks used as collateral for lending.

[00:41:52] Federal Reserve intervened in repo market, changed paradigm.

[00:47:45] Federal Reserve stepped in to stabilize repo market.

[00:53:39] Arbitrage involves trading based on price differences.

[00:57:46] Fed tries to save system, government devalues currency.

[01:04:15] Explanation of monetary transactions and balance sheets.

[01:05:07] Fed moves money around, swapping one form.

[01:15:05] QE raises stock and home prices by lowering interest rates.

[01:17:09] Fed's $5 trillion in bonds affects rates.

[01:24:34] Challenges ahead in financing US debt. Possible Fed intervention.

[01:28:30] Extended conversation about Bitcoin and cryptocurrency concerns.

[01:32:06] Bitcoin decentralized, resistant to government enforcement ban.

Find Joseph Wang

Joseph Wang on Twitter

Find Brad Mills

Brad Mills Twitter

MIM Twitter

Brad Mills Facebook

  continue reading

77 episodes

Artwork
iconShare
 

Fetch error

Hmmm there seems to be a problem fetching this series right now. Last successful fetch was on March 08, 2024 17:17 (4M ago)

What now? This series will be checked again in the next day. If you believe it should be working, please verify the publisher's feed link below is valid and includes actual episode links. You can contact support to request the feed be immediately fetched.

Manage episode 391460383 series 2497796
Content provided by Brad Mills. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Brad Mills or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://player.fm/legal.

This episode was recorded on June 3, 2022

In this episode, Brad Mills interviews author and former Federal Reserve market specialist, Joseph Wang. Known for his work "Central Banking 101," Joseph offers a treasure trove of insights from his tenure at the Fed, drawing on his experiences navigating the financial landscape post the 2008 crisis.

Brad and Joseph have an in-depth discussion on the world of the repo market, its challenges in 2019 when rates unexpectedly eclipsed the Federal Reserve's interest on reserves, and the implications for liquidity and bank stability. The episode delves into critical issues like the Liquidity Coverage Ratio (LCR) and the balance between capital and liquidity in safeguarding against bank insolvencies.

Brad probes the possibility of the Federal Reserve's repo market interventions being akin to unapproved bailouts — a notion Joseph addresses by shedding light on the quality of collateral involved in these short-term lending agreements. The dialogue also ventures into the accounting aspects of bond maturities, the purchasing power of the US Treasury's looming debt, and the Federal Reserve's potential role in debt acquisition.

Their exchange extends to Bitcoin's immunity to governmental control, contrasting its decentralized nature with other cryptocurrencies and what that means in an increasingly regulated environment. The episode advances through the murky waters of quantitative easing, the causality of inflation, and the contentious values underpinning the current financial system.

Tune into this episode for a blend of expertise and provocative analyses, revealing the inner workings of the systems that move money globally.

Timestamps

[00:09:44] Keynesian vs. Austrian perspectives on sound money.

[00:14:21] Doubts about banking system, learning and understanding.

[00:19:48] Gold certificates allow expansion of money supply.

[00:23:03] Banks took on too much risk in 2019.

[00:27:26] System adapts, past battles influence future strategies.

[00:35:58] Bank stocks used as collateral for lending.

[00:41:52] Federal Reserve intervened in repo market, changed paradigm.

[00:47:45] Federal Reserve stepped in to stabilize repo market.

[00:53:39] Arbitrage involves trading based on price differences.

[00:57:46] Fed tries to save system, government devalues currency.

[01:04:15] Explanation of monetary transactions and balance sheets.

[01:05:07] Fed moves money around, swapping one form.

[01:15:05] QE raises stock and home prices by lowering interest rates.

[01:17:09] Fed's $5 trillion in bonds affects rates.

[01:24:34] Challenges ahead in financing US debt. Possible Fed intervention.

[01:28:30] Extended conversation about Bitcoin and cryptocurrency concerns.

[01:32:06] Bitcoin decentralized, resistant to government enforcement ban.

Find Joseph Wang

Joseph Wang on Twitter

Find Brad Mills

Brad Mills Twitter

MIM Twitter

Brad Mills Facebook

  continue reading

77 episodes

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