Category: interbank market

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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.

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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.

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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

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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.

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Interbank Market News Scan: Hours away from Powell’s testimony, the Fed should do a one and done with the fed funds rate.

While I believe that the FOMC will vote to raise rates, how much the rates increase by will be a decision driven by politics as it is by economics. The United States is entering the silly season of campaigning that runs up to the 2024 presidential election. As the expenditures stemming from President Biden’s infrastructure spending and financial support for Ukraine seep through the economy, the last thing the Administration wants to contend with is increased financial stress on American households. Mr Biden would prefer to see the Federal Reserve bring a pause to the inflation fight by the end of this spring, putting the pain into the past as soon as possible while crafting a narrative that places the full blame for inflation on the central bank. Continue reading Interbank Market News Scan: Hours away from Powell’s testimony, the Fed should do a one and done with the fed funds rate.

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The Interbank Market News Scan: An arbitrage moment for U.S. banks

Morning thoughts … When I listen to the YouTube posse opine about the Federal Reserve’s use of its monetary policy tools, I sense the gurus lack of awareness that they are playing in a sandbox and trying to navigate in the afterburn of an airplane engine. The noise can be deafening. The clutter thicker than … Continue reading The Interbank Market News Scan: An arbitrage moment for U.S. banks