currency elasticity

Central

By |2017-06-23T18:37:51+00:00June 23rd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Phelan Act of 1920 sounded simple in principle. It authorized the various Federal Reserve Banks, at that time twelve district branches operating independently, to charge progressive interest rates on the rediscounting activities at their respective windows (the discount rate was the interest charged to obtain collateralized funds from the various reserve banks). Private banks [...]

Woe To Seasonality

By |2016-07-11T19:13:48+00:00July 11th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

So much of the basis for monetary policy was put in place in the 1960’s study of the 1930’s. It has become commonplace simply to assume 21st century tactics as being directly lifted from the start of the Great Depression. One of the causes of that calamity was certainly restrictive money supply, but any dereliction [...]

Currency Elasticity Only Applies Where There Is Currency

By |2015-12-23T12:05:11+00:00December 23rd, 2015|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Fed’s control over money markets has always been tenuous, a myth more than anything, it just wasn’t so obvious at one time. That observation extends to its grasp of even basic operations, a spectacular fail revealed by its 2000’s treatment of the Discount Window. On January 9, 2003, the FOMC altered decades of monetary [...]

‘Trickle Out’ Economics Is Really Politics

By |2015-09-21T13:28:33+00:00September 21st, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

With global economic perceptions finally creeping toward financial perceptions (not stocks) despite the enormous and mostly ongoing “stimulus” almost everywhere, it is useful to review once more the assumed general mechanisms. Step 1 is really the most basic and traditional element of central banking, as liquidity, broadly speaking here, is currency elasticity in its more [...]

Why It’s The ‘Money’ Stupid

By |2015-09-11T18:04:52+00:00September 11th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

When grounded in the framework of traditional banking, wholesale dynamics can be quite confusing to the point of being impenetrable. Nowhere is that more the case than the wholesale ideas of currency and what counts for establishing chains of traded liabilities. In the traditional banking/monetary framework, everything is reducible to money; all else are just [...]

Big Changes In Central Bank Theory Pressing Changes in Operations

By |2014-11-10T12:38:29+00:00November 10th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

The important point about doctrinaire ideology is its utmost rigidity. For the longest time that was relevant to the operations of central banks, as they practiced what might have been the most modern version of a new religion. From the end of the gold standard in the 1960’s (1971 was simply the last step in [...]

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