Comments by "k98killer" (@k98killer) on "" video.

  1. At this point, even though broad money is created by banks without regard to their reserve balances held at the Fed, one could make the argument that reserve balances contribute to inflation/debasement more than broad money because of the extreme financialization we have experienced in America. However, I still regard this with some suspicion. Reserve balances are not spent on eggs or gasoline; they could be used to clear/settle commodity transactions, but GSIBs can clear a lot of those transactions without resorting to shifting around reserve balances. Personally, I struggle to envision how the sort of transaction chains that would cause prices to rise would be prevented by IORB -- I think it is more a stealth bail-out for banks to buoy their balance sheets through accumulated NIM to offset the unrealized losses in their bond assets.
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  2. Philosophically, I have to dosagree with the notion that SOFR is a "free market rate" simply because the use/threat of coercion prevents markets from being free. In this case, the threat is of state coercion to enforce debts. The second philosophical issue is in calling the interest rate the "value" or even the "price" of the dollar, since we know that interest rates rise during inflation (increase in supply of money) despite the real value of the currency demonstrably falling, which is precisely the opposite of normative supply-and-demand price action.
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