Federal Reserve Could Spike Inflation Further With Risky Strategy to Limit QE Losses.

NFTs actually have a use?

Here is what we will be getting into today:

1. The Federal Reserve's Seigniorage Strategy to Limit QE Losses: Potential Economic Implications.

2. How NFTs Are Empowering Artists to Monetize Their Work and Protect Their Copyright.

3. Dramatic Drop in Office Space Leasing in China.

Let’s Dive In!

Newsletter: Exorbitant Privilege

Title: Huge heap of dimes and bills.
Link: https://exorbitantprivilege.substack.com/p/huge-heap-of-dimes-and-bills

Here are the key highlights:

• The Federal Reserve has recently released two papers which outline their assessment of the losses from Quantitative Easing (QE). The papers state that, due to the continued size of the balance sheet, there will be an expected loss of between $160 to $240 billion from 2023 to 2026.

• In order to limit this loss, the Fed is planning to buy back securities funded by issuing a large amount of dollar bills. This strategy is known as seigniorage and could lead to a huge increase in cash circulation at a time when the Fed is trying to contain inflation.

• Seigniorage occurs when money is created through money printing and used to purchase assets such as government bonds or stocks, thus increasing liquidity and reducing borrowing costs for governments and businesses alike. The Federal Reserve's decision to use seigniorage as a way of limiting losses from QE should not be taken lightly. While it may help reduce the losses from QE in the short term, it could also lead to an increase in inflation if not done carefully.

• The Fed must take into account factors such as interest rates, economic activity, and consumer confidence before implementing this strategy in order for it to be effective in limiting losses while also avoiding an increase in prices that would hurt consumers and businesses alike.

  
  

Newsletter: Analyst's Digest

Title: Non-fungible Tokens.
Link: https://analystsdigest.substack.com/p/non-fungible-tokens

Here are the key highlights:

• The emergence of Non-Fungible Tokens (NFTs) has revolutionized the art industry and provided opportunities for artists to monetize their work. In Nigeria, NFTs are quickly becoming a popular way for creatives to earn income and access unique digital art from around the world. This new technology also helps protect copyright and provides authenticity and originality, which is a great advantage in the Nigerian space.

• NFTs have also made it possible for people to access unique digital art from all over the world. This is an exciting development, as it allows local participation in the global NFT market, creating an avenue to earn income.

• Another major advantage of NFTs is its ability to curb issues of copyright and provide authenticity and originality. This helps protect the artist or artiste by giving them a sense of ownership over their work. This has been a great advantage in the Nigerian space, where artists have long struggled to get their work recognized and monetized.

Website: ZeroHedge

Title: "Tsunami Of New Supply": China Slumping Office Rental Market Faces Historic Crisis
Link: https://www.zerohedge.com/commodities/tsunami-new-supply-china-slumping-office-rental-market-faces-historic-crisis

Here are the key highlights:

• The Chinese commercial real estate market has seen a dramatic decline in the last year due to disruptions from Covid-19 lockdowns, a government crackdown on the tech industry, and an unprecedented debt and liquidity crisis.

• The office space market in particular has been hit hard, with net leased premium office space in Beijing dropping from 1 million square meters to 81,300 square meters in 2021. Major cities such as Shanghai, Guangzhou, and Shenzhen have all experienced losses in net leased office space. The vacancy rate for Grade A office space nationwide has risen 1.5 percentage points to 16%.

• Tech companies have played a large role in the downturn, with many canceling leases and cutting back on office space due to regulatory crackdowns and decreased profits. The effects of this slump could be far-reaching, as real estate contributes an estimated 25% of China's GDP through direct and indirect channels.

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