Category: Uncategorized

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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: 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.

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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.

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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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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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There is no such thing as “moral hazard” surrounding this bank bailout.

What the “moral hazard” critics overlook is the economic impact on those of us who rely primarily on wages to get by. Hiccups in the current monetary and financial system in the immediate term that change the wage earners standard of living have a greater detrimental impact versus those individuals buttressed by the ownership of claims on income. While it behooves the wage earner to reduce his or her exposure to the current monetary and financial system, the short-term bandage on this injury should be applied. The wage earner should bear in mind that this fix is short-term and that it is up to us to seek out a longer-term solution. Continue reading There is no such thing as “moral hazard” surrounding this bank bailout.

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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

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What should your currency be backed by? Deposits of gold, silver, land, food, and knowledge.

Currency derives its value from the underlying money we spoke of earlier. Currency is a promise that per one unit of this derivative we receive some portion of the underlying money. Currency not only is a derivative, it’s a bond, a promise to pay real money, but in this case, a promise that is not backed by real money. Continue reading What should your currency be backed by? Deposits of gold, silver, land, food, and knowledge.

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Using the Constitution to determine what your relationship with government is

The main body of the Constitution is where the political factions and their representatives play; where they determine the structure of and constraints on the government. There is little to nothing that you can do about the structure and constraints of the government. There is nary a mention in the seven articles of the Constitution of the citizen or the rights the citizen may have.

Your attention should remain on making sure that the promises contained in the amendments are kept. Continue reading Using the Constitution to determine what your relationship with government is