Much has changed since the beginning of “quantitative easing” (QE), the large-scale asset purchase programs conducted by all major central banks. The ECB is one of them. Ever since the start of these programs, central bank balance sheets were massively expanded. One of the problems with QE is that bank reserves are no longer scarce. Before the crisis, central banks used to adjust the supply of bank reserves to manipulate (both upward and downward) the interest rate on these reserves (which

Every quarter I write a report for UFM Market Trends of Universidad Francisco Marroquín (Guatemala), backed by the John Templeton Foundation, about the likelihood of a recession in the US. This week, we published our latest report on the US economy which included several surprising statistics (you know, the type of statistics you cannot read about anywhere else). Because, at first glance, everything seems to be going just fine: the economy is growing, the Fed is raising interest rates

A remarkable statement by current Fed Chair Janet Yellen: she publicly stated, and without blinking an eye, that no new financial crisis will erupt in our lifetimes. With special emphasis on our lifetimes; if Yellen would have said my lifetime, things would be different (although even then she would be utterly wrong; a crisis is approaching and approaching fast). With 70 years of experience Yellen can be called a Fed veteran, and rightly so. But a veteran with “only” 16 years ahead of herself, if we rely on a mortality table of any randomly picked life insurer. “Will I say there will never, ever be another financial crisis? No, probably that would be going too far. But I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will,”