Markets, speculation and risk. This is the Chatwood Trader's podcast hosted by Aaron Feifield.

Traders welcome to the show. This is episode 192. Similar to the last episode with Neshant

Poor Banderweiler, this episode also has a relevant focus on current events. As we've

seen, making headlines recently, reserve banks of numerous countries have been adding the

quitter tea to the market in an effort to stabilize economies. While some listeners will already

understand exactly how reserve banks conduct these operations, a figure there will be many

others, myself included, who don't completely grasp what takes place below the surface.

To get clarity on the subject, I kindly asked Kevin Muir to appear on Chatwood Traders

for a second time and to explain the actions of reserve banks during this market downturn.

Because in my opinion, Kevin has a gift for analysing and explaining complex subjects

and a way which is easy to follow. Kevin was a derivatives trader for a Canadian bank

during the 90s and has been an independent trader from 2000 onwards. He also writes a brilliant

financial newsletter, the macro tourist and co-hosts the Market Huddle podcast. For links

to his newsletter, podcast as well as our first interview, check the show notes at chatwithtraders.com

slash 192.

Kevin, before we get into your thoughts and your perspectives too much on what's happening,

let's just get some clarity about what's actually taking place. One of the things which

has been making headlines, not only in the US but Australia, Europe, etc, is central

banks injecting liquidity into the market. One of the questions I'd like to start things

with is what exactly happens when a reserve bank adds liquidity into the market?

Well, Aaron, they can do it through a variety of different methods. The most common one is they

actually go out and buy securities. If you go look at the Federal Reserve, they announced

...