As Chair Janet Yellen prepares to review interest rates at the Federal Open Market Committee meeting scheduled for June 2016, Dr. Tiemann reviews the purpose of Monetary Policy. Through the lens of monetary economics, monetary policy is reviewed in the context of the functioning of our banking system, the history, thinking and goals that animate the Fed’s actions.
US Congressional hardliners have been threatening not to raise the debt limit again. They may not understand how central US Treasury securities are to the US and global monetary and banking system. Dr. Tiemann explains the importance of raising the debt ceiling and the catastrophic consequences that could result from a failure by Congress to act in a timely manner.
In the aftermath of the financial crisis of the past decade, Congress passed the Dodd-Frank financial reform act to moderate the risks that banks might take with their balance sheets. Wall Street, seeing this legislation as constraining their ability to conduct profitable business, has been vigorous in its efforts to slow and dilute rulemaking under the new law. Dr. Tiemann analyzes the argument posed that the law’s restrictions impair the profitability of bond dealing, hence liquidity in the bond market — especially the corporate bond market — and reviews the data evidence of whether of not liquidity in the corporate bond market has declined since the passage of Dodd-Frank.
This note reviews Bitcoin, the new, fully virtual form of currency, and explains in more detail how it works. Issues with recent revelations of missing Bitcoin and the problems with verification and confirmation of the currency are discussed, providing illuminations relating the iron of the currency and why broader acceptance of Bitcoin may not be forthcoming until issues pertaining to certainty are better addressed from the point of view of the broader public.
Reviews the concepts of competition, economics and the operation of markets within the contexts of both perfect markets and those where products are differentiated and businesses compete to defend special market advantages that enable them to earn excess profits. Covers concepts of the invisible hand, the operation of oligarchies and the purpose of regulation for protecting markets from unfettered competition that serve to protect monopoly rents which result in reduced output and higher prices.