Category Archive: monetary policy

Sep
14

QE∞

Ben Bernanke announced a third round of monetary easing on part of the Federal Reserve this week.  While some have called it QE 3 (quantitative easing 3), I call it QE ∞ (quantitative easing infinity).  Bernanke announced that the Fed would purchase $40 billion of mortgage backed securities each month for the foreseeable future.  Unlike …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2012/09/14/qe%e2%88%9e/

Aug
17

Stimulating America’s Decline

How is it that virtually every economic action is labeled a “stimulus” even as the US economy fails to grow at even average rates?  Secretary of Agriculture, Tom Vilsack, this week described food stamps as a stimulus program.  He claimed that for every dollar increase in SNAP spending, the economy grows by $1.84.  I am …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2011/08/17/stimulating-america%e2%80%99s-decline/

May
18

Debt and Monetary Easing: Dad Was Told by Mother, You Can’t Have One Without the Other

The basis of monetary policy is trickery.  Can you make people feel wealthier by printing more money? Expanding the money supply, either by printing money or engaging in open market operations, doesn’t inherently create wealth.  If it did, Zimbabwe would be one of the richest countries in the world instead of one of the poorest. …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2011/05/18/debt-and-monetary-easing-dad-was-told-by-mother-you-can%e2%80%99t-have-one-without-the-other/

Apr
29

Candy Culture

Easter came last weekend and the massive infusion of sugar into my bloodstream (I ration all of my kids’ Easter candy to a piece a day which gives me time to reallocate all their chocolate to me) got me thinking about our candy culture. I’m beginning to think that our motto on the US dollar …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2011/04/29/candy-culture/

Apr
04

The Fed has Friends in Low Places

When the Federal Reserve intervenes in the market for loanable funds, it is inherently picking winners and losers. Who is helped/hurt by extremely loose monetary policy? As a general rule borrowers are helped and savers are hurt. Let’s break those categories down further. Borrowers When the Federal Reserve expands the money supply, short term interest …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2011/04/04/the-fed-has-friends-in-low-places/

Nov
23

Politicization of the Fed: I do not think it means what Tim thinks it means

This week Treasury Secretary Timothy Geithner warned Republicans against politicizing the Fed. My question is this: is a move to depoliticize the Fed through the political process qualify as increasing or decreasing the politicization of the Fed? As near as I can tell, Mr. Geithner’s and my answers differ on that account. Once upon a …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2010/11/23/politicization-of-the-fed-i-do-not-think-it-means-what-tim-thinks-it-means/

Oct
14

Stag (flation) Parties aren’t as Fun as they Sound

Chairman Bernanke wants to party like it’s 1979. Yes, that 1979, when inflation was 13.3%. No later than did Chairman Bernanke indicate his desire to create inflationary expectations, the government reported its second straight month where producer prices rose by .4%. That’s per month, not per year. So why does Mr. Bernanke want inflation? Chairman …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2010/10/14/stag-flation-parties-aren%e2%80%99t-as-fun-as-they-sound/

Feb
03

Chairman Bernanke Gets Reconfirmed: or, The Return of Bubble Boy!

One definition of insanity is doing the same thing over and over again while expecting different results. Well, if that is the case, US monetary policy is certifiably insane. Former Fed Chairman, Alan Greenspan, in order to stoke the US economy took the Federal Funds Rate below 2% on December 11th 2001. The rate stayed …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2010/02/03/chairman-bernanke-gets-reconfirmed-or-the-return-of-bubble-boy/

Jan
27

Money Can Buy Me neither Love nor Schnitzel

I traveled to New Zealand and Australia in December 2008 and again in January 2010. What a difference a year makes! Last year it took me 68 US cents to buy one Australian Dollar. This year it took me 94 US cents. That’s a 38% reduction in the value of the US dollar vs. the …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2010/01/27/money-can-buy-me-neither-love-nor-schnitzel/

Nov
13

Vacant Seats, Vacant Minds

If monetary policy is so important, why do there continue to be two vacancies on the Board of Governors? The 12 member Federal Open Market Committee which determines monetary policy for the US hasn’t actually had 12 members for over a year. The last three political appointments to the Board of Governors (two by President …

Continue reading »

Permanent link to this article: http://wkubbtcenter.com/2009/11/13/vacant-seats-vacant-minds/

Older posts «