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Our guest today is Danielle DiMartino Booth, CEO and chief strategist for Quill intelligence. One of the major themes of our podcast series so far has been the reactions of central banks to the global pandemic, and it\u2019s likely effects on inflation and asset prices. As a former Fed insider, with nine years of experience as an advisor to the president of the Dallas Fed, Danielle is uniquely positioned to give us her take on the action taken by central banks so far, and what their next move is likely to be. However, our conversation was not just about the Fed, as it covered many other interesting topics including the curious timing of the US-China trade talks and when we first learned about COVID in the autumn of 2019 (one for conspiracy theorists!).\n\t\n\tTopics Discussed in this Episode\n\nCOVID-19\nQE and the transmission mechanism\nChina\n\n\u201cThe number of people moving from Chinese Suburbs, urbanization if you will, a massive, massive secular trend, was coming to an end\u2026 You pile the trade war into this preexisting dynamic, in 2019, and you end up with the global economy headed for recession. At the same time, you had leverage, of course, in a very, very bad place.\u201d\n\nUS bond market\nMonetary policy rules and the choice of inflation measure\nDemocracy: Revolution or direct democracy?\n\n\u201cJanet Yellen and Ben Bernanke were fighting, and fighting, and fighting for this two percent target for years but it wasn\u2019t until Alan Greenspan left the Fed that they were able to actually implement it.\u201d\n\nChina-US trade\nInequality\n\n\u201cThe Fed is doing a lot for the top 1%. The Fed is helping private equity not get buried in some very bad investments that they have made. They\u2019re helping the wealthy stay wealthier.\u201d\n\nNegative interest rates\n\n\u201cThe one thing that I will give J. Powell credit for is holding the line on negative interest rates. It\u2019s clear from listening to everybody on the committee and every district president that there is unity and a cohesive solid front against negative interest rates\u201d\n\nBitcoin and \u2018Fedcoin\u2019\n\n\tLinks\nCatch up with Danielle and learn more about her work:\nQuill Intelligence\n\nFollow Niels, Moritz, & Rob on Twitter:\nNiels Kaastrup-Larsen\nMoritz Seibert\nRob Carver\n\tSubscribe on:\n\n\tFull Transcript\nThe following is a full detailed transcript of this conversion. Subscribe to the podcast to get access to all of our transcripts as eBook downloads!\n\tNiels\nDo they really believe that they\u2019re doing the right thing or is it just\u2026?\nDanielle\nThey really. No, no, they really do. There are occasional voices of reason. J. Powell was one of them. He read my markets briefings that got under the skin of Bill Dudley and Timothy Geithner. They hated the work that I did for Fischer all those years ago but Powell didn\u2019t, he appreciated it. In October 2012 he\u2019d only been on the Federal Reserve Board for two or three months, at that point. It was one of his first FOMC meetings and he said that the Federal Reserve\u2019s policy of quantitative easing was inflating a duration bubble across the entire credit spectrum, and that quantitative easing could become habit-forming, and that if and when the time came to try and extricate themselves and normalize interest rates he was in the driver\u2019s seat trying to do that and to shrink the size of the Fed\u2019s balance sheet, that it could be problematic.\nWell, he discovered what problematic was when the U.S. high yield bond market shut down for a record forty-one days between November the 14th on, which caused all the world regulators, the VIS, everybody collateral backing, all of these ETFs were trading \u2018by appointment only\u2019 spreads gapped out, redemptions went through the roof and then we had the Powell Pivot. So, he understood what the Fed was creating \u2013 the monste...