BankNotes Archive – October 2019

by Frank Shostak Some commentators consider fractional reserve banking as a major vehicle for the expansion in the money supply growth rate. What is the nature of this vehicle? Fractional reserve banking arises because banks legally are permitted to use money placed with them in demand deposits. Banks treat this … Read more

by Robert P. Murphy The Fed met market expectations by cutting its target [1] for the fed funds rate by 25 basis points, down to the range of 1.75 – 2.00 percent. In this post I want to demonstrate just how boxed in the Fed has now become, with the … Read more

by Jeff Deist Do central bankers really think negative interest rates are rational? “Calculation Error,” which Bloomberg terminals sometimes display1, is an apt metaphor for the current state of central bank policy. Both Europe and Asia are now awash in $13 trillion worth of negative-yielding sovereign and corporate bonds, and … Read more

by Allen Gindler The socialist idea has many forms and flavors; however, one can observe three main paths toward socialism. They are the socialization of the means of production, wealth redistribution, and collectivization of consciousness. Different socialist movements use these three approaches to varying degrees. Orthodox Marxists and Marxist-Leninists consider … Read more

Content: Page 16, Becoming Your Own Banker Fifth Edition Now we are going to face the complications at your grocery store. Let’s assume that you are a male, married, with children – where is your spouse going to shop – your store or somewhere else? Your store, of course! She … Read more

Both capitalists and anti-capitalists frequently accuse capitalism of being a system driven by selfishness and greed. Capitalism’s defenders sometimes say: “By nature, man is selfish, which is why socialism will never work. Capitalism better reflects the fundamental characteristics of human nature.” Anti-capitalists claim that capitalism promotes the worst characteristics in … Read more