The Free Market Center Journal
The voice of Free Markets
Banking, the systems that holds money accounts, manages money transactions and facilitate the effective transfer of money between market actors. Banking also plays the primary role in the creation of artificial money.
Banks also buy notes from customers (still referred to as lending, but banks have nothing to lend.)
As an experiment I have posted (below) a video version of the diagram I used to develop the Money Tree Post. If this experiment works, I might use videos such as this (only a little slicker) to enhance the explanation of additional points related to free markets. https://videopress.com/v/9l7qqCXZ?preloadContent=metadata Let me know what you think of … Continue reading Developing the Money Tree
We have seen a lot of craziness in the financial markets recently. A small group of investors, known as the Reddit investors, bid up several low-priced stock prices, squeezing short-sellers. Many people have applauded this activity depicting it as the small guy outsmarting the big guy — in this case, hedge funds. But, there is … Continue reading The Money Tree
In an earlier post, I described a contradiction between popular economic theory and statistical data. In this post, I will describe true premises upon which we can develop more accurate theories. Popular Assumptions Reserves held at the Federal Reserve somehow act as money — so goes popular assumption. When the Fed adds dollars to bank … Continue reading Who Actually Makes Money?
Introduction The fact that we perpetuate false or inaccurate theories causes at least one problem for understanding money and its role. For years economic classes have taught that the Federal Reserve controls the supply of money. When they buy government bonds from banks, they pump reserves into the banks’ reserve accounts, and that addition to … Continue reading Money Supply and Bank Reserves
A dollar cannot represent the value for an item of less value than a dollar
Can the Fed actually control interest rates? And, does the fed funds rate actually have a significant influence on broader market interest rates?
The Fed funds rate is zero because banks don't have a need for reserves. Fed action has not changed that.