At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 4.10 per cent. It also increased the interest rate paid on Exchange Settlement balances by 25 basis points to 4.00 per cent. Continue reading Statement by Philip Lowe, Governor: Monetary Policy Decision
The few that control financial and natural resources are as much afraid of uncertainty as you or I. Quelling uncertainty requires a model for managing expectations and in a credit-driven political economy that means determining before-hand where interest rates and yields should end up. Continue reading Interbank Market News Scan: As the money supply falls, asset values fall as well…
The takeaway … Banking on a new philosophy. Is it time to make consumer lending by banks illegal? Yes. Consumers should raise cash from private individuals and households to the extent that the activities of these private individuals and households have no impact on the money supply. The focus of nationally chartered banks should be … Continue reading Interbank Market News Scan: Banks need a new philosophy.
On this first impression I expect both chambers of Congress to make the supposed banking crisis less of an issue especially as we move further into the campaign season. Congress, particularly congressional Democrats, do not want to be perceived as facilitators of a worsening political economy. Continue reading Interbank market news scan: Rates on Treasurys continue to inch up in week prior to Fed Day
The takeaway: A strategy for selling the idea of CBDCs: Paying labor by the end of the day. It is time for non-asset holding members of the labor class to look at ourselves as traders of time versus mere employees. The trader spends his or her day managing their financial and time capital converting one … Continue reading Interbank market news scan: How to sell the idea of CBDCs? By paying labor at the end of the day.
The takeaway: Joe Biden announces his re-election bid. Today, U.S. President Joseph R. Biden announced his candidacy for president in 2024. Since taking office in January 2021, Mr Biden has for the most part steered clear of adding onerous regulation to the banking sector. On the contrary, his infrastructure legislation and the spending that flows … Continue reading Interbank Market Scan: Latest Federal Reserve, Treasury rates of interest … and Joe Biden announces his re-election bid.
Should Mr Biden speak specifically to the inflation report, I expect that he will give some amount of credit to his inflation reduction and infrastructure initiatives that he has been implementing over the past two years. In theory, fiscal spending usually takes 18 months to move through the economy. Inflation, however, is a monetary phenomenon where there is an increase in money supply and not enough production in the economy to absorb the money supply. Continue reading Interbank Market News Scan: Inflation slows. Expect Biden to take a victory lap.
The irony is that the wrong capital allocation decisions could result in the evaporation of the income generating asset. The asset itself may have to be sold to pay off the debt that has been used to sustain the borrower. Failure to acknowledge the event of paying the balloon payment with the sale of the asset makes the “generational wealth” political argument proffered by some low-income and unbanked advocacy groups sound asinine. Continue reading Interbank Market News Scan: The Asset-less Shall Inherit the Earth
Mr Biden may have missed an opportunity to craft a narrative that emphasizes the importance of getting ahead of the inflationary impact of blocks of emerging economies threatening to transition from the US dollar to resource-backed currencies. These threats have yet to materialize into something definitive and until then the inflationary impact of dumping the US dollar or at least complementing it with other currencies is a way off. Continue reading Interbank market news scan: The jobs report wraps up the Holy Week.
Lawyers Write the Bets. Bankers Sell the Bets. 