FED

Crumbling Fractional Reserve Bank

Is this the End of Fractional Reserve Banking?

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In the following article Douglas French looks at the shaky Fractional Reserve Banking system that has been around since it was created by the Banking Act of 1933 (aka. the Glass-Steagall Act), which also created the Federal Deposit Insurance Corporation (FDIC). Will Fractional Reserve Banking survive to celebrate its Centennial anniversary?  Recent trends in Idaho (of all places) could spell the end of fractional reserve banking (but not the FED).

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Central Bank Digital Currency

Is it Really Paranoid to Worry about a Central Bank Digital Currency?

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Recently there has been talk about the FED creating a Central Bank Digital Currency (CBDC). A CBDC is similar to a cryptocurrency, except that its value is set by the central bank and equivalent to the country’s fiat currency. Some countries like Venezuela have already tried a National Cryptocurrency in an effort to solve their inflation problem, but since the same guys are pulling the levers, it worked out about as well as you would expect.

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FED Raises Interest Rates- ROC’s Retain Buy Signal

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At the Federal Reserve’s recent policy meeting on Wednesday, December 14th the FED raised their federal-funds target interest rate by a quarter percentage point, to range between 0.50% and 0.75%. Fed officials pointed to a strengthening economy and inflation nearing their targeted level of 2%. According to the The Wall Stree Journal “The Fed’s more

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The Fed’s Alice In Wonderland Economy – What’s Next?

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After the president of the United States, the most powerful person on the planet is the chairman of the Federal Reserve. By simply choosing to utter the right words, the chairman of the Fed can create or extinguish trillions of dollars of wealth both in and outside of the U.S. He holds the economic fate of billions of people in his hands. So it’s no shocker that investors carefully parse everything he says.

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Central Bank Smackdown

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The opening riposte came from the Bank for International Settlements, the “bank for central banks.” In their annual report, released this week, they talked about “euphoric” financial markets that have become detached from reality. They clearly – clearly in central banker-speak, that is – fingered the culprit as the ultra-low monetary policies being pursued around the world. These are creating capital markets that are “extraordinarily buoyant.”

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FED Magic

Yellen’s Wand Is Running Low on Magic

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The FED Thinks it has a “Magic Wand” that can boost the economy and solve all of our country’s problems. But as interest rates near zero… Housing is a major portion of GDP and lower interest rates make housing more affordable, thus boosting the economy but there is an actual limit to how low-interest rates can go and a theoretical limit to how long they can stay at zero.

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Edgar Allen Poe vs. The FED

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Ladies and gentlemen, I give you (drumroll please) total outstanding credit versus GDP in the United States from 1929 to 2012: Source: St. Louis Fed
This one chart shows exactly WHY we are where we are, folks. From the moment Richard Nixon toppled the US dollar from its golden foundation and ushered in the era of pure fiat money (oxymoron though that may be) on August 15, 1971, there has been a ubiquitous and dangerous synonym for “growth”: credit. The world embarked upon a multi-decade credit-fueled binge and claimed the results as growth.

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