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The challenge of monetary tightening




When it was announced on September 13 that the consumer price index – a key measure of inflation – had risen more than expected in the United States in August in August, stock prices plummeted and the US dollar appreciated sharply. Markets knew that this would spur the US Federal Reserve to announce another significant rate hike. And that’s exactly what it is

happened. But the pain of monetary tightening is just beginning.

The Fed isn’t the only one raising interest rates. Soaring inflation – which has reached double digits in the European Union and the UK – has prompted the European Central Bank and Bank of England to do the same, although many economists still accuse all three monetary authorities of being behind the curve.

Indonesia, South Korea and Thailand also raised interest rates by 25 basis points in August and the Philippine central bank by 50 basis points. Inflation for the same month was 7.9 percent in Thailand, 6.3 percent in the Philippines, 5.7 percent in South Korea and 4.7 percent in Indonesia. One Asian economy that is not struggling with skyrocketing prices is China. With inflation at 2.5 percent, the central bank cut interest rates last month. For China, the bigger challenge – and the main reason inflation hasn’t spiked – is the collapse in economic growth, largely due to the government’s zero-Covid policy. The slowdown is putting severe pressure on the heavily indebted real estate market.

Then there is Japan. After years of below-target inflation and even deflation, rising energy and food prices pushed core consumer inflation to 2.8 percent in August – the fastest annual rise in eight years. However, excluding fresh food and energy, the inflation rate was just 1.6 percent in August, still below the 2 percent target. This explains why the Bank of Japan (BOJ) has not yet abandoned negative interest rates or yield curve control (10-year bond cap at 0.25 percent). As the interest rate differential between Japan and the US has widened, the yen-dollar exchange rate has also moved sharply towards yen depreciation. With the yen depreciating nearly 30 percent in the last 12 months, the dollar is now around 144 yen – a level last seen in 1998 during the Asian financial crisis.

Japan cannot relax forever. In fact, it should already be preparing for dressing. And raising interest rates isn’t the only way to achieve that goal. They may also shrink their balance sheets, which have expanded significantly since the 2008 global financial crisis, when monetary authorities began buying huge amounts of long-dated bonds as part of their quantitative easing (QE) programs. One way to do this is to roll maturing bonds off balance sheets rather than reinvest them.

There is a risk here. Before a central bank cleans its balance sheet of enough long-dated bonds, rapidly rising interest rates will reduce the bonds’ mark-to-market values, even if the liability value remains unchanged. This could drive a central bank into “technical insolvency”, with the mark-to-market liability value exceeding the mark-to-market asset value by more than the sum of capital and any buffer (cumulative retained earnings). Japan may be particularly vulnerable on this front, having maintained a near-zero long-term interest rate for a long time. The average maturity of the bonds on the asset side of the BoJ balance sheet is estimated at 6.5 years and their average yield is extremely low. But in reality, a technical insolvency would not be an event. Unrealized losses are not an issue for a central bank, which almost always holds bonds to maturity.

but might face another problem if they raise interest rates. A central bank earns its income from the interest on its assets (mainly government bills and bonds) and pays interest on interest-bearing reserves. Due to its balance sheet expansion, the Fed began paying interest on excess reserves in October 2008; the BOJ followed the next month. This was not a problem at the time, since the interest paid on reserves was essentially the same as the federal funds rate, which was close to zero, while interest rates on Treasury bills and bonds (or Japanese government bonds) were positive, albeit trending downwards. The interest rate difference between the assets and liabilities brought in high profits for the central banks – so-called seigniorage – which are paid to the state. Large and rapid rate hikes eat into those gains as the interest paid on the liability side rises in line with policy rates, but most Treasuries have fixed rates. If policymakers aren’t careful, interest payments can exceed revenue and even eat up any central bank buffers. The result is so-called negative seigniorage, where the government has to provide subsidies to the central bank – which could pose a political problem.

In order for the BOJ to avoid negative seigniorage, it must not rush the roll-off process. In addition, it must allow the long-term interest rate to rise by raising the 10-year bond ceiling before (slowly) raising the federal funds rate. The question is whether economic and financial developments will allow this approach in the coming years. When central banks introduced QE, the risks of technical insolvency and negative seigniorage were widely acknowledged. But the governments stood behind the monetary authorities. The Fed’s balance sheet should be backed by an implicit government guarantee. The British government’s guarantee was clearer. And the Japanese government allowed the BOJ to accumulate retained earnings. However, as monetary tightening progresses, these commitments could be put to the test. Crucially, when negative seigniorage occurs, governments must refrain from making it a political issue.

The author, former deputy finance minister of Japan, is a professor in Columbia University’s School of International and Public Affairs. ©Project Syndicate, 2022


Sam Bankman-Fried on prospect of prison: This isn’t the time and place to think about that




The disgraced founder of crypto exchange FTX, which went bust aCentre County Reporter looting client funds, says he’s not particularly focused on criminal risks he may be facing at the moment. His remarks came during a widely watched interview at a New York Times DealBook conference.

“There will be a time and a place to reflect on myself and my own future. But I don’t think it is. Look, I’ve had a bad month,” Sam Bankman-Fried responded to a question from host Andrew Ross Sorkin about whether he was concerned about criminal liability for his actions.

The comments sparked laughter from audiences and raised eyebrows on social media, where many were surprised Bankman-Fried even agreed to the live interview. Those at the center of potentially criminal scandals usually heed lawyers’ advice to remain calm lest they provide compromising information to prosecutors.

“They’re not at all,” Bankman-Fried replied when asked if attorneys were telling him to speak out. “I have a duty to explain what happened … I don’t see what is achieved by just sitting cooped up in a room and pretending the outside world doesn’t exist.”

Legal observers have suggested that Bankman-Fried’s conduct at FTX could amount to wire fraud, a federal law that can carry a 20-year prison sentence. For the time being, he has not been charged with any criminal charges and is presumed innocent.

Sam Bankman-Fried, dressed in a black t-shirt and appearing practically from the Bahamas, apologized for FTX’s collapse, which has leCentre County Report it owing money to more than a million customers and creditors. But he denied attempting to commit fraud.

“[I] not even knowingly mixed. I was frankly surprised at how big Alameda’s position was, which indicates another failure on my part. I wasn’t trying to mix funds,” he said, referring to his hedge fund, which drew funds from the FTX exchange when it ran into financial difficulties earlier in the year.

On several occasions during the interview, Bankman-Fried apologized to investors for the FTX debacle but didn’t seem to acknowledge that he had done anything morally wrong.

“Ultimately, I had a duty to investors, to the world. I didn’t do that well. I made a lot of mistakes. There are things I would give anything to do again. I wasn’t trying to cheat on anyone … There are things I wish I had done differently,” he said.

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[PIAS] founders explain why they sold 49% of their company to UMG: ‘The battle lines in our industry have been redrawn.’




Independent music giant[[[[PIAS]revealed on Wednesday (November 30) that Universal music group took a minority stake in the company.

The deal UMG sees acquire a 49% stake in which [PIAS] Group for an undisclosed sum, following the formation of a strategic global alliance between the two companies in June 2021.

In a letter to [PIAS]’s Partners on Tuesday (November 29), a day before the deal was announced, the indie company’s founders, Kenny Gates and Michel Lambot, outlined the background and reasons behind their decision to close the deal with UMG.

In the note MBW has now received, Gates and Lambot wrote that they did “established a productive and mutually trusting working relationship with UMG” oin the last 18 months since they formed their global alliance in June last year.

UMG has “shown us clearly that they understand and appreciate the importance of [PIAS] in the marketplace as an autonomous global music company serving independent labels and artists,” added Gates and Lambot.

“With this in mind, we recently approached UMG to make an investment [PIAS] that would allow us to retain majority control of the company.”

The duo said they felt it was “a reasonable option in the context of an increasingly challenging economy and an uncertain geopolitical environment.”

“We recently approached UMG to make an investment [PIAS] this would allow us to retain majority control of the company. We felt this was a viable option in the context of an increasingly challenging economy and an uncertain geopolitical environment.”

Kenny Gates and Michel Lambot, [PIAS]

Keep commenting on the reasons for the deal, [PIAS]”We are also aware that the fronts have been redrawn in our industry,” write the founders of .

They continued, “Today we compete with tech and financial giants who don’t value the cultural significance of the artists and labels we work so hard for, but see music only as an ‘asset class’ to be ruthlessly exploited a speedy return,” they added in their letter.

According to the press release issued on Wednesday (November 30), as per their new agreement, “[PIAS] will remain fully independent and its founders, Kenny Gates and Michel Lambot, will retain majority control of the company.”

The publication confirmed that “UMG will have no seats on the company’s board of directors.”

You can read her letter [PIAS]’s full-length partner below.

dear partner,

Tomorrow morning we will announce that Universal Music Group has invested in a minority stake in [PIAS] Group.

We wanted to make sure that you, as our partner, were informed before the announcement went live. We also wanted to take this opportunity to share some background and arguments for our decision to include UMG as a minority shareholder.

As you were informed last June, we initially agreed a strategic partnership with UMG which gave us access to finance and allowed UMG to use our international distribution network for part of their own repertoire.

Over the past 18 months we have developed a productive and mutually trusting working relationship with UMG which has clearly shown us that they understand and value the importance of [PIAS] on the market as an autonomous global music company serving independent labels and artists.

With that in mind, we recently approached UMG to make an investment [PIAS] this would allow us to retain majority control of the company. We thought this was a reasonable option in the context of an increasingly challenging economy and an uncertain geopolitical environment.

We are also aware that the fronts in our industry have been redrawn. Today we compete with tech and financial giants who don’t value the cultural significance of the artists and labels we work so hard for, but only see music as an “asset class” to be ruthlessly exploited in exchange for a quick return on investment.

We are therefore pleased to confirm that UMG are now our partners and investors and that [PIAS] will remain fully independent, with Kenny and Michel retaining majority control of the company.

In addition, it is important to clarify that the UMG has no seats in the [PIAS] Blackboard.

This investment by UMG means we can continue to expand our offering and offer our partners an even better service in what is still a challenging, aggressive and acquisitive market. As one of the few remaining, globally operating and privately held music companies in this industry, we strive to provide independent labels and artists with the best possible service through our unrivaled international network, led by passionate and experienced music lovers.

We will continue to strive to be a trusted and valued partner to you and all the other great labels, artists and their managers that we are privileged to work with through our two distribution companies [Integral] and the [PIAS] label group.

Nothing changes – business as usual remains the same [PIAS].

If you have any questions about this announcement or our plans for the foreseeable future, please do not hesitate to contact us.

We would like to thank you very much for your trust and look forward to continuing our long-standing partnership.

Kenny, Michel and the [PIAS] Leadership team music business worldwide

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AZIO Launches Cascade 98 Keyboard, the First Low-Profile Mechanical Keyboard With a Full-Size Number Pad — NOW LIVE on KICKSTARTER




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The fully customizable Cascade mechanical keyboard with 98% layout features a full-size number pad for improved typing accuracy and productivity

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LOS ANGELES, Nov. 30, 2022 (GLOBE NEWSWIRE) — AZIO, the company that developed the popular Cascade 75% keyboard line, today announced the launch of Cascade 98% on Kickstarter. Last March, AZIO successfully funded the Cascade 75 keyboard series and reached its funding goal within the first week. As a successor, the Cascade 98 offers a full-size number pad and is available in standard and slim profiles. This gives users the ability to remain unobtrusive, which is trending among keyboard enthusiasts.

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With customization options, users can expect to customize their choice of keyswitches, keycaps, and even the aluminum top plate. The Cascade keyboard is now available in a 98% layout that is a blend of form and function for users who prefer a full-featured keyboard in a compact form.

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The Cascade and Cascade Slim come in two basic keycap themes, Galaxy and Forest, with laser-etched lettering for a backlit effect. Four sets of PBT keycaps can be purchased separately, more designs are in the pipeline.

Most notably, the mechanical keyboard is equipped with a hot-swappable switch mechanism that allows users to choose their preferred mechanical switch. Options on the Kickstarter include four different Gateron G-Pro switches: blue, brown, yellow, or red, and three different low-profile Gateron switches: blue, brown, or red. The Cascade keyboard is compatible with all MX switches compatible, allowing users to swap out and use their own favorite switches.

Other features of the Cascade 98% are:

  • Full-size number pad with a full-size NULL key that improves typing accuracy and productivity
  • Hot-swappable mechanical switches and keycaps
  • Built-in foam dampeners for improved acoustics while reducing vibration and rattling
  • Pre-lubricated switches for smooth key actuation
  • A variety of different backlight settings, including RGB colors and animation patterns
  • Three adjustable foot positions for optimal comfort
  • System and connectivity switcher that allows users to switch between Mac and PC mode or Bluetooth and USB mode
  • Connect/pair up to five devices simultaneously with three Bluetooth profiles and USB + RF modes

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The Cascade 98 is available now kickstarters. Backers can take advantage of the early bird special starting at $99 on any base model.

About AZIO Corporation

Founded in Los Angeles in 2009, AZIO was created as an answer to the stagnant aesthetic of workplace accessories. Our design goal is to develop innovative products that are intuitively easy to use, offer maximum comfort and leave a minimal ecological footprint. Bypassing traditional materials, form and function, we disrupt conventional design to create your dream workspace. Our aim is to spark creativity and improve the way you work through a unique narrative that is efficient yet beautiful. Let us help revolutionize the way you work.

Contact information:

William Ao
[email protected]

(909) 468-1198

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Image 1: AZIO Cascade 98 Mechanical Keyboard

AZIO Cascade 98 Mechanical keyboard with slim bronze body and Forest Light keycaps.

This content was published by the News release distribution service at




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