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money supply

What *Must* Lie Beyond the M’s

By |2021-03-11T17:19:49-05:00March 10th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the money printing lever. If we’re focused beyond bank reserves and [...]

Before Hume, Before Carnegie

By |2020-09-28T20:01:19-04:00September 28th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For as long as there have been people, there have been great people who have spent their time thinking about money. For as long as money has existed, the reasons to commit so much to studying its beautiful and horrific effects have been obvious. It’s really only been the last half century when ignorance had become the preferred position.So much [...]

A Good Time For Some Q & A: Bank Reserves, Treasury Auctions, MMT, and the Monetary Resolve

By |2020-09-23T18:24:58-04:00September 23rd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Working with my colleague Joe Calhoun (mostly him), we’ve come up with what we think is a list of questions that quite naturally arise from this week’s discussions of bank reserves, some specific and technical, the monetary system, some theoretical, some practical, and the (much) wider economic consequences which follow from those. 1. When the bank buys a Treasury note/bond/bill [...]

Taking You, The Fed’s Bank Reserves, And Banks’ Checkable Deposits For A Quick Stroll In The Monetary Zoo

By |2020-09-22T18:40:29-04:00September 22nd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Milton Friedman wasn’t trying to be cagey. Quite the contrary, he was recognizing the complexity of the world we actually inhabit and then stating this in perfectly clear language. Things aren’t so simple as positive versus negative, especially when it comes to moving progress forward – or stopping in its tracks. What if progress merely slows; worse, what if it [...]

OK, Bank Reserves; Let’s Do This One More Time

By |2020-09-21T19:48:02-04:00September 21st, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What the hell is a bank reserve? Is it money? Since its very creation is a byproduct of concerted central bank action, the thing sure sounds like it has to be. As we know only too well since 2008, the financial media will uniformly call these things and the creation of more of them “money printing.” If everyone says…Not only [...]

Swap Me Still

By |2020-06-12T16:55:09-04:00June 12th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In its earliest years, the Discount Window wasn’t something to be avoided at all costs, it was nearly the whole point. In order to supply largely seasonal liquidity, the word “discount” meant banks could show up at one of the local 12 Fed branches and post collateral for an increase in their reserve balance. No one would be stuck holding [...]

Why Go After Hong Kong?

By |2019-08-14T15:12:37-04:00August 14th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There may yet be bitter irony in the fact that China’s nascent embrace of capitalism in the late eighties allowed it to survive the wave of failed socialist states which fell all throughout the world at the time. While the Berlin Wall came down, the Eastern bloc nearly disappeared, and even the Soviet Union dissolved, the Chinese would stand almost [...]

China’s Big Stimulus

By |2019-05-22T11:30:53-04:00May 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Earlier this month, the People’s Bank of China (PBOC) reduced the percentage of liquid reserves some banks are required to hold. Effective May 15, the Chinese central bank estimated that the policy change would release about RMB 280 billion into the system. This RRR discount, however, was only applied to small and medium-sized banks. The reserve rate for large banks [...]

What Is Missed Inflation

By |2019-03-12T12:34:44-04:00March 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As an alternate member of the FOMC, Lorretta Mester has been sounding off on inflation. When the payroll report for the month of August 2018 was released early in September, Mester as President of the Cleveland Fed was widely quoted for her “hawkish” stance. Referencing the highest wage growth in a decade, speaking in Boston she said, “Today’s [jobs] report [...]

Where It All (Should Have) Started

By |2019-02-15T16:58:45-05:00February 15th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was late on a Friday night in early September 1997. Because his speech was given at Stanford University out in the Pacific Time Zone just as the weekend was about to commence, market watchers were bated with an almost frenzied anticipation. Alan Greenspan had come to be seen as more than just a monetary policy bureaucrat. He had conquered [...]

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