Federal Reserve

A Global House Of Cards

As most Americans, if not the financial media, are aware, Quantitative Easing (a euphemism for printing money) has failed to bring back the US economy.  So why has Japan adopted the policy? 

Since the heavy duty money printing began in 2013, the Japanese yen has fallen 35% against the US dollar, a big cost for a country dependent on energy imports.  Moreover, the Japanese economy has shown no growth in response to the QE stimulus to justify the rising price of imports.

Forget QE, Send in the Helicopters!

After the Great Recession had officially began (but prior to the stock market crash of 2008/09) George W. Bush responded to the early signs of economic trouble with a "helicopter drop" in the form of lump sum tax rebates to wage earners to help stimulate the economy. They were provided for in the Economic Stimulus Act of 2008, with support from both the Democrats and the Republicans. The bill was signed into law on February 13, 2008.

The Late, Great Taper Starts With Low Interest Rates as Far as the Eye Can See

Wall Street was all aghast that their quantitative easing was about to disappear.  The FOMC decided to taper in January and now stocks soar.  Why?  Because the taper is minimal and the FOMC announced the federal funds rate will remain an effective zero for much longer than previously estimated.

Volcker Rule Gets Poor Marks Out of the Box

What is the Volcker rule?  The headlines in the press describe a nebulously defined financial regulation as being the second coming of financial reform  Yet the only thing clear about the Volcker rule is who it is named after, former Federal Reserve chair Paul Volcker.  The Volcker rule was a last minute financial regulation rule in an attempt to stop speculative trading by Wall Street.  It has been politicized, lobbied against, delayed, watered down and modified heavily.

Yo, Yellen Round Up

This moment is historic.  For the first time in history a woman is nominated to chair the Federal Reserve.  Assuming Dr. Janet Yellen does a good job, this alone will help millions of women in finance and economics, which to this day is fraught with gender bias and glass ceilings.  She is already inspiring the phrase, Yellenomics and referred to as Bernanke Redux for most perceive the Fed and their policies will not change much in the transition.

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