CHART OF THE DAY: When Banks Start Lending... Watch Out!

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Amazingly, massive printing by governments around the world hasn’t resulted in massive inflation — at least in terms of crazy price movements. But don’t get complacent.

From Kyle Bass’s latest investor letter comes this chart of the US monetary base, and obviously the big, gold-shaped “excess reserves” spike stands out. This is basically cash that banks are hoarding.

As he notes, if this V-shaped recovery materialises as the market expects, the banks start lending, inflation lies in wait, and will roar back to life.

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