Markets are tied to the concept of freedom, particularly the freedom to enter into negotiations and agree on the price of exchange. But I see markets as more than just a mechanism for moving goods and services. Markets, for political economy purposes, serve as nodes the State uses to extract energy in the form of taxes for the government. Continue reading Just a thought: The State’s ability to expand depends on markets.
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: 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.
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
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.
Lawyers Write the Bets. Bankers Sell the Bets. 