Category: money

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Interbank market news scan: How to sell the idea of CBDCs? By paying labor at the end of the 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.

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What is the US dollar?

There has been a lot of chatter over the last year about the dollar losing its dominance as a world reserve currency. I believe that the dollar will not lose that dominance overnight. The bulk of its trading partners are in the Euro Zone and North America. I have no doubt that nations like France and Germany will try to maintain close ties with the United States and any China-Russia currency bloc that may ensue from the attempts of emerging markets to develop their own currency. Continue reading What is the US dollar?

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Interbank Market News Scan: Betting markets see the effective federal funds rate dropping and that the Fed will not hike rates.

Over the next twelve months, as rates fall any cheerleading about an economic upturn should be tempered by a narrative that a close eye is being kept on the economy and that disciplined expenditures are being made to keep moderate winds blowing into the economy’s sails. Continue reading Interbank Market News Scan: Betting markets see the effective federal funds rate dropping and that the Fed will not hike rates.

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Interbank Market News Scan: Inflation slows. Expect Biden to take a victory lap.

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.

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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.

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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.

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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: 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.