Thank you for this new chapter of your newsletter!
Chart 18 is very interesting but I am not sure the explanation is exactly like that. If consumers save less because more spending due to inflation issue, whoever got the payment from consumer will eventually deposit that money into the banking system. My alternative explanation is that higher interest rates discourage borrowing, and less borrowing means less total deposit in the fractional banking system. Wanna know if we can find evidence from hiking cycle in history to confirm this point : ).
Love the graphs, and your titles crack me up! 🤣
Thanks Conor! #29 Flight to Gold is particularly interesting.
Hey Conor,
Thank you for this new chapter of your newsletter!
Chart 18 is very interesting but I am not sure the explanation is exactly like that. If consumers save less because more spending due to inflation issue, whoever got the payment from consumer will eventually deposit that money into the banking system. My alternative explanation is that higher interest rates discourage borrowing, and less borrowing means less total deposit in the fractional banking system. Wanna know if we can find evidence from hiking cycle in history to confirm this point : ).