Money and Banks

A report on my day inside the Fed

Whether its drug prices, crushing debt, or unemployment, government can always come up with someone else to blame. Fortunately though, in spite of the lackluster economy the Fed and the government seem committed to giving us, there's hope for a much better future.

The Pope is touring North America this week, promoting a variety of interventionist “solutions” to global warming, poverty, and more. But a far more powerful religious figure, Janet Yellen, continues to pull the levers of the global financial system.

There’s much debate over how the Fed determines interest rates. Many pundits seem to assume that central banks dictate interest rates to the market. In fact, central banks mostly affect interest rates indirectly through their power to change the money supply.

With the Greek crisis fading in the minds of Europeans, the calls for Europe-wide political unity are fading. But the Euro elites will still strive for a world where both rich and poor member states can be coerced by a central European state.

Thirteen powerpoint slides lead you through Dr. Thornton's presentation. There exist strong correlations between either the announcement or the completion of the world's tallest building and GDP, but it is not held that you can accurately forecast a recession or financial panic by this measurement. Thornton suggests the common cause is artificially low interest rates.

The Greek debt crisis is often framed as a matter of Greek debtors against German creditors. But it’s really a matter of Greek and German taxpayers being exploited by their own governments which are promising to pay debts with other people’s money.

Our method of calculating GDP growth is hopelessly flawed, and is more likely determined largely by the growth of the money supply in the economy. So as the Fed pumps more, the economy appears to grow also.

It was another volatile week for stocks, Canada slipped into recession, and we’re left wondering if central banks will let interest rates rise in the face of a weakened global economy.