Category: interbank market

Posted on

Interbank Market News Scan: No political rhetoric today that impacts the overnight markets in the U.S.

I would think that given the U.S. economy runs on a fractional reserve platform that the Administration and the Congress would politely opine more on monetary policy. The Administration and the Congress appear to prefer the “kick the can across Pennsylvania Avenue and down Constitution Avenue” approach to monetary policy, mentioning it only when it is time to deflect criticisms on his handling of the economy. Continue reading Interbank Market News Scan: No political rhetoric today that impacts the overnight markets in the U.S.

Posted on

Interbank Market News Scan: The Asset-less Shall Inherit the Earth

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

Posted on

Interbank market news scan: Incentivizing the market for a CBDC.

Why not amend the Federal Reserve Act so that depositors can create and enter their own overnight market where they authorize the exchange of funds at some rate agreed to by depositors? Rather than risk less than optimal participation in the digital currency system including the risk that black markets for US currency are created, the government and the Federal Reserve could consider such an incentive system. Continue reading Interbank market news scan: Incentivizing the market for a CBDC.

Posted on

Interbank market news scan: The jobs report wraps up the Holy Week.

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.

Posted on

Interbank market news scan: NFA issues rule to protect against manipulating bitcoin and ether prices.

The Federal Reserve would like to see a looser employment market, including reduced wage pressure and an uptick in unemployment. If these measures do not work to control inflation into 2024, more intrusive measures targeting consumer spending are anticipated. Continue reading Interbank market news scan: NFA issues rule to protect against manipulating bitcoin and ether prices.

Posted on

Georgia Power still looks like a proxy for bonds.

Ratepayer advocates in particular should keep in mind that ratemaking occurs in an environment outside of a public utility hearing room; that the rates used by a utility to attract investors and determine the rate of return on the assets used to generate energy are impacted by what happens in the banking environment. How you structure your strategy on rates should take this environment into consideration. Continue reading Georgia Power still looks like a proxy for bonds.

Posted on

Interbank Market News Scan: Central bank digital currencies are likely more about efficiently changing the money supply.

The Federal Reserve’s intent around central bank digital currency is to create a direct and efficient way to manipulate money supply. A programmable digital currency that regulates spending via some algorithm or all out reduces dollar amounts in accounts again by some algorithm would save the Federal Open Market Committee two days of hair pulling decisions. CBDCs would amount to their unique version of ChatGPT, an artificial monetary policy environment that reduces the FOMC’s role to monitoring and advising versus direct policy action. Continue reading Interbank Market News Scan: Central bank digital currencies are likely more about efficiently changing the money supply.

Posted on

Money: Staying mindful of how the State regulates society

The State regulates society via the following: Via money … Gold, silver, currency, bank notes, etc., are not money. Sounds like heresy, but in actuality, these items are derivatives, representations, of real money. Real money is the energy released and used in the creation of value. The time spent and the sweat created when harvesting … Continue reading Money: Staying mindful of how the State regulates society

Posted on

Interbank Market News Scan: Inflation at 6% and the dollar index takes a hit.

Bankers came to the King and said, “We can help spread your influence and power by distributing your currency; by helping to coin the energy extracted from your subjects while validating these actions by funding your political economy. All we ask in return is to earn a spread on the loans, currency, and currency-denominated products … Continue reading Interbank Market News Scan: Inflation at 6% and the dollar index takes a hit.