Is Reflation #3 Over?

Jeffrey Snider at Alhambra: Is Reflation #3 Over? Some Important Data Is Pointing Toward That Possibility
To sum up, we know what the deficiency is and has been for a very long time – banks. That’s a big problem for the idea of QT since it very clearly shows there was no QE; or, more specifically, QE didn’t end up doing any E. The level of bank reserves has been entirely irrelevant for reasons I’ve briefly sketched out before. That would leave the T-bill angle in isolation, which only makes it all the more ridiculous than it already was.

Instead, the more serious implications are for the increasingly developed outlines of restarted “dollar” reverse. What is being proposed by the TIC figures is an end to Reflation #3 in any meaningful monetary fashion however it may have kept on in the last bond market selloff later last year (still the curve collapsed, which is the more consistent element to the trading during that time).

We have all the indications of tightening, but not as the mainstream would have it because this would be renewed tightening of a variety we’ve seen before.
If he's right, China's economic troubles are only starting.

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