Via Coindesk comes news of a Bitcoin ATM operator forced to close their business because they were unable to find a bank that would provide them with an account. This is a real danger to the mainstream viability of Bitcoin. Without access to the banking system, Bitcoin is unable to be converted into other currencies, something which will hamper more widespread acceptance of the currency among the general population. In order for Bitcoin to be converted into and out of fiat currency, banks will either have to offer accounts to Bitcoin businesses or Bitcoin businesses themselves will have to become banks and offer banking services. Obviously the former is easier than the latter.
The Atlanta Fed wants to know: “Where’s the Mobile Payment?” Well, as anyone who has ever used Bitcoin can tell you, mobile payment is one of Bitcoin’s strengths. Take, for example, the case of Mission Market, an upscale convenience store in Fullerton, CA, which accepts Bitcoin as payment at point of sale (POS). Ring up your items, tell them that you want to pay with Bitcoin, and the POS tablet displays a QR code. Swipe it with your smartphone and Bitcoin will be debited from your account and credited to Mission Market’s account. Quick, easy, painless. No cash to change hands, no credit card bill to pay at the end of the month.
Former Federal Reserve Chairman Alan Greenspan is coming out with a new book this fall. The title of the book, “The Map and the Territory”, is as descriptive of the book’s subject material as Chairman Greenspan’s Congressional testimony always was of the Federal Reserve’s conduct of monetary policy. We’ll assume that Greenspan in his old age hasn’t taken up geography as a side hobby. In advance of the book’s release, the Chairman gave an interview to Marketwatch late last week. Many of the excerpts published online are typical Greenspan, giving vague answers, answering questions that he wanted to answer rather than what was asked, etc.
Lest one get the idea that everything coming out of the Fed is always bad, we bring to your attention some recent comments made by Dallas Fed President Richard Fisher. Although we don’t always agree with everything Fisher says, he has been one of the more outspoken internal critics of the Fed’s loose monetary policy, and his recent comments are no exception.
Federal Reserve Chairman Janet Yellen recently completed her semiannual round of testimony in front of the Senate Banking Committee and the House Financial Services Committee. As at most Congressional hearings, the testimony itself was largely a rehashing of previously-made statements and the real meaty responses were expected in the question and answer session.
But even at hearings as important as these, the questions themselves were largely uninspiring, many revolving around the same theme of “Madame Chairman, don’t you agree that if the Federal Reserve and/or the federal government don’t do what I or my political party want to do that the country will be ruined?” And because many of the questions didn’t specifically revolve around monetary policy, most of the answers didn’t either. Nevertheless, there were a few interesting observations.
This was a relatively busy week for monetary policy in Washington. On Wednesday, the Federal Reserve published the minutes of its June Federal Open Market Committee (FOMC) meeting, and on Thursday the House Financial Services Committee held a hearing on H.R. 5018, the Federal Reserve Accountability and Transparency Act.
The regional Federal Reserve Banks in the United States perform a number of functions. They assist in the execution of monetary policy, are involved in supervision and regulation of banks, and publish research papers on economic topics. One recent paper published by the Dallas Fed that piqued our attention was entitled “Inflation Is Not Always and Everywhere a Monetary Phenomenon.” (PDF link) Given Dallas Fed President Richard Fisher’s reputation as one of the more hawkish Fed presidents with respect to the Fed’s monetary policy, why would the Dallas Fed publish this paper as their monthly economic newsletter?
Given the long history of governments and central bankers driving their currencies to destruction through relentless inflation, many people both within and without the Austrian School of Economics would view “Central Bankers for Financial Stability” if not as an outright joke, then at least as a prime candidate for the world’s smallest and most exclusive…
Ever find yourself listening to a Federal Reserve Chairman and trying hard to keep your mind from drifting to something more interesting? Me neither. But while most of the media was trying to glean tidbits about upcoming monetary policy decisions from Chairman Yellen’s speech at the IMF, they missed some pretty important statements. Here are a few that I picked out and translated into everyday English to make them more accessible to the layman.
Federal Reserve Chairman Janet Yellen delivered a speech at the International Monetary Fund today, on the topic of “Monetary Policy and Financial Stability.” The speech’s topic is one which is not unusual for Washington nowadays, as financial stability seems to be mentioned during any discussion of the banking system. And given Chairman Yellen’s diminutive stature and colorless delivery, you can just imagine the IMF bureaucrats sitting in the room sneaking glimpses at yesterday’s World Cup highlights on their iPads as they struggled to stay awake for yet another boring speech. Yet behind that dry title lies a major policy shift that has gone largely unnoticed.