An Introduction to Banking and Money Creation

By |May 1st, 2018|Money and Banking|

INTRODUCTION Commercial banks and other deposit-taking institutions have a central role in the U.S. economy. Banks allow us to safely store our savings and facilitate transactions without the need for cash.  Banks also act as financial intermediaries, lending money and channeling funds from savers to borrowers.  The more interesting role for banks, however, is that [...]

Monetary Policy and The Federal Reserve System

By |April 13th, 2018|Money and Banking|

INTRODUCTION The 2007 – 2009 financial crisis brought increased attention and scrutiny to the Federal Reserve System.  However, despite the Federal Reserve’s increased recognition, few in the public understand much about the institution.   The Federal Reserve System (the Federal Reserve or “the Fed”) is the central bank responsible for implementing monetary policy - the [...]

Money Defined

By |October 17th, 2017|Money and Banking|

WHAT IS MONEY Generally, anything which is accepted as a medium of exchange can be considered money.  Money has followed a natural evolution, culminating in the fiat money used in modern economies.  Fiat money is considered legal tender, but it is not legally convertible, or “backed”, by a commodity such as gold or silver.  Fiat [...]

The Importance of Monetary Policy

By |July 11th, 2017|Money and Banking|

INTRODUCTION In the fall of 2010, I attended a presentation held at a local trust bank.  The presentation was given by a New York-based securities analyst who was there primarily to present some stock picks.  This analyst, however, took a “top-down” approach to security selection, so a discussion of the macro economy was very [...]

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