Money supply

The Fed, short for the federal reserve is the central bank of the United States. The federal reserve plays a huge role in the lives of Americans. The federal reserve is also responsible for overseeing the banking system, controlling the amount of money in the economy, and most importantly controlling the interest rates. The federal system is compromised of four separate branches. The Board of Governor, 12 regional banks, the Federal Open Market Committee or (FOMC), 12 regional banks and member…

monetary police are two of the most powerful tools that impact a nation’s economic activity (Investopedia 1). Fiscal policy is defined as the government spending and taxation that influences the economy. Central banks use monetary policy to change the money supply and either stimulate faster growth of an economy, or slow it down due to risks such as inflation. Both policies have their share of similarities and differences, and are vital in the United States economy. It is still questioned which…

. In your own words, why did the debt problem occur? Debt problem occurs when you do not save money for an emergency situation. The use of all monthly payments means that you will not have reserve funds of an emergency situation occurs. When these situations occur, the more susceptible the more you will likely to have a debt. Also, when you own too many credit cards and unable to manage while using it, and when you set up budgets that you do not follow, etc. All of that eventually you will…

Today, most countries function under a regime of fiat money, in which a national currency has value based on government claims that it does. Operating in a fractional reserve banking system where banks only keep a fraction of all their deposits in reserve, it is the role of central banks to protect and preserve its value and ensure its stability (Plosser, 2014). Central banks play a very important role in the fractional reserve banking system, because their goal is to limit the freedom of banks…

Japanese government bonds” back in February, which was 16% more than January’s total (Person and Warnock). The reason why investors are staying away from the money markets is because there is nothing to back their investments up if something were to happen. Naomi Muguruma, “strategist at Mitsubishi UFJ Morgan Stanley Securities,” says that ‘if the money market dries up’ and ‘an event like the Lehman crisis’ were to happen again, then there would be nothing for the banks to raise its capital on…

This week 7 episode was about “Inflation and Bubbles and Tulips” and how these things affect us in our daily lives. Inflation is when people have a lot of money and bid off for things also known as Demand Pull inflation, another cause of inflation is when producers raising prices and producing less because of an increase in production cost.The global rise in home prices the biggest bubble in history when each person is betting that they can sell at a higher price but you run out of buyers and…

Positive Money’s sovereign money proposal: Could it work? Under the sovereign money proposal proposed by the forward thinking group positive money, the power to create money would be taken away from the banks and given to the central banks. Banks would therefore serve two purposes; a transaction function with which people stored money until they needed to spend and this money would be secure, the other a lending and savings function with the banks acting as a middleman between savers and…

Schlichter’s article is based around the use of fiat money and obvious complications it has made for the economic world we live in today. Through the use of fiat money we have the ability to control much that was uncontrollable in the past and there have been many positive outcomes to date. Although he doesn’t propose switching our system to gold or any other object which might be of better value, he does insist that there is going to be a flaw when we might least expect it. The issue of our…

Salt lending is a new platform that promises to allow consumers to borrow fiat using crypto currency like Bitcoin as collateral. There are no credit checks and no hidden fees. All you have to do is buy your one salt membership and you have access to a ten thousand dollar loan. You can aswell buy thirty memberships and you have access to a one hundred thousand dollar loan how Hoes Salt Work? Let's say you want a ten thousand dollar loan. All you have to do is buy one salt membership that…

your currency for theirs. Economies that have high interest rates that are left unchecked can expect a downward spiral not too long after the interest rate stays peaked. People take out investments that they have, most people do not have as much money to spend freely as the price of goods and services also increase. If the interest rates in a country increase, that means that their economy becomes stronger in the foreign exchange market. This means that if the US economy had an increase in…