According to Reuters, investors are beginning to pour more money into Treasury Inflation-Protected Securities (TIPS). These are special Treasury bonds that are designed to protect investors against inflation risk. Granted, part of the reason for the increase could be that in the current zero interest rate environment there is a constant search for greater yield,…
This past weekend saw the Federal Reserve’s annual Jackson Hole summit take place, an event sponsored by the Kansas City Fed that draws top Fed officials along with the world’s top central bankers. It has become a central bank retreat of sorts, an opportunity for the central banking elites to meet and talk in relative…
Last week, the St. Louis Fed published a response by its Vice President, David Andolfatto, to the question “Why doesn’t the U.S. return to the gold standard so that the Fed can’t ‘create money out of thin air’?” The advantage of a gold standard is that if government adheres to the gold standard then prices…
A fitting throwback video of Ron Paul asking Ben Bernanke whether gold is money, especially considering that tomorrow is the 43rd anniversary of President Nixon closing the gold window.
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.