Introduction If you believe that all dollars “are” money, I have a whole bag of dollars (about $165) that I will exchange for one $5 bill. Bag of Money I have used the image of shredded dollars to demonstrate that use determines what people do or do not use as “money.” The definitions of many … Continue reading Distinguish Between Money & Reserves
Month: March 2026
Why The Fed Cannot Change Interest Rates
Introduction Last week, I published on The Free Market Center Journal an article entitled “Price Determination and Interest Rates”. In addition, on May 6, 2024, I published “How to Calculate Interest Rates.” These two articles provide support and an introduction to this week’s article about “Why The Fed Cannot Change Interest Rates.” This article has … Continue reading Why The Fed Cannot Change Interest Rates
Price Determination and Interest Rates
Introduction I have encountered numerous, and very certain statements about the Federal Reserve "changing rates." I cannot, however, figure out how, in a logical and mathematically sound manner, any entity, even The Fed, can unilaterally "change rates." Instead of starting with an explanation of how one calculates interest rates, I thought I would begin with … Continue reading Price Determination and Interest Rates
People do not deposit “Money”
Introduction I’ll dial the phone. I’ll hang-up the phone. Let’s watch the sun rise. Let’s watch the moon set. I’m going to deposit my money [cash, check, or debit card transaction] into the bank. Most people know that a person does not dial or hang up a modern phone (which is actually a radio). Watching … Continue reading People do not deposit “Money”