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Educational awareness and key investment considerations rarely discussed or contemplated within financial planning models.
Collection of Articles
Federal Stimulus
History of Quantitative Easing
HISTORY OF QUANTITATIVE EASING IN THE U.S.
The Federal Reserve seeks to maintain stability in the United States economy through monetary policy. While monetary policy is often synonymous with interest rates, the Fed has multiple tools to impact the economy.
QUANTITATIVE EASING (QE): MAJOR INSTANCES IN HISTORY
The policy of Quantitative Easing (QE) is relatively nascent to the world economics. Despite is recent birth this policy has seen widespread usage in different countries of the world.
HISTORICAL APPROACHES TO MONETARY POLICY
Historically, in efforts to ensure that central banks managed financial conditions in a way consistent with achieving low and stable inflation over time, various nominal anchors have been adopted or proposed in the United States and other countries.
POLICY BASICS: FISCAL STIMULUS
During a recession, a well-designed fiscal stimulus — a government spending increase, tax cut, or both — can shore up demand for goods and services and thereby help to reduce the recession’s depth and length and make the recovery more robust.
A SHORT HISTORY OF THE GREAT RECESSION
The U.S. government was forced to step in to issue aggressive bailouts to prevent a domino effect of closures throughout the U.S. economy. In September 2008, federally backed home mortgage companies Fannie Mae and Freddie Mac were essentially nationalized via the Economic Recovery Act of 2008, which insured $300 billion in mortgages.
HISTORY OF STIMULUS PACKAGES
The American economy has experienced economic recessions and downturns throughout history, and in some instances, the U.S. government has been forced to respond at varying levels. Some legislative responses have helped circulate money, while others have prioritized job creation.
Fiscal Policy Explained
Federal Stimulus and Market Manipulation
HOW EFFECTIVE WERE THOSE STIMULUS CHECKS?
When the U.S. began to shut down the wake of the onset of Covid-19, it meant millions of families were suddenly without the income they needed.
HOW DOES GOVERNMENT STIMULUS AFFECT THE STOCK MARKET?
The U.S. stock market has continued to recover from the adverse effects of Covid-19 since bottoming in March. The recovery also coincided with the announcement of a $2 trillion stimulus package that was introduced to cushion personal income.
WHERE $5 TRILLION IN PANDEMIC STIMULUS MONEY WENT
Roughly $5 trillion went to households, mom-and-pop shops, restaurants, airlines, hospitals, local governments, schools and other institutions around the country grappling with the blow inflicted by Covid-19.
FEDERAL RELIEF CHECKS DRIVE A STOCK BUYING SPREE
For a decade before the pandemic, small investors accounted for roughly a tenth of trading activity in the stock market. But in the last year, they have become responsible for close to a quarter, according to Goldman Sachs analysts.
Future of Monetary Policy
HOW WILL THE PANDEMIC AND WAR SHAPE FUTURE MONETARY POLICY?
After more than three decades of Great Moderation which saw inflation trending down in both advanced economies (AEs) and emerging markets (EMs), inflation has surged over the last year almost everywhere.
RETHINKING MONETARY POLICY IN A CHANGING WORLD
Monetary theory in economics has consisted of various schools of thought rather than a single unified model. Each of these schools emphasizes different forces that drive inflation and recommends a distinct policy response. Different times have raised different challenges...
POLICY MIX OF THE FUTURE: THE ROLE OF MONETARY, FISCAL AND MACROPRUDENTIAL POLICIES
Academic research points to the need for monetary and fiscal policy to work together in times of crisis. This runs contrary to previous wisdom suggesting fiscal policy should mainly support economic outcomes by playing the role of an “automatic stabilizer.”
THE FEDERAL RESERVE SIGNALS MORE TO COME EVEN AS IT SLOWS RATE INCREASES.
After months of moving rapidly to make money more expensive in an attempt to rein in an overheating economy, central bankers are entering a phase in which they expect to adjust policy more cautiously.
A MONETARY POLICY FOR THE FUTURE
The implication of this experience is clear: monetary policy should re-normalize in the sense of transitioning to a predictable rule-like strategy for the instruments of policy. Of course, it is possible technically for the Fed to move to and stick to such a policy...
“Monetary policy has less room to maneuver when interest rates are close to zero, while expansionary fiscal policy is likely both more effective and less costly in terms of increased debt burden when interest rates are pinned at low levels.”
Ben Bernanke - Former Chair of the Federal Reserve
Collection of Articles
Federal Deficit
History of the Federal Deficit
US DEFICIT EXPLAINED
The US federal deficit has been a hot topic in the news lately. There have been headlines about the deficit hitting $3.2 trillion in 2020 in the wake of the COVID-19 pandemic and political pundits talking about the deficit equaling the economy for the first time since World War II.
HISTORY OF THE US FEDERAL BUDGET DEFICIT
The budget deficit is the difference between the money the federal government takes in, called receipts, and what it spends, called outlays each year. The U.S. government has run a multibillion-dollar deficit almost every year in modern history, spending much more than it takes in.
HOW THE U.S. GOVERNMENT AMASSED $31 TRILLION IN DEBT
Two decades of tax cuts, recession responses and bipartisan spending fueled more borrowing — contributing $25 trillion to the total and setting the stage for another federal showdown.
HOW LONG HAS THE U.S. RUN FISCAL DEFICITS?
Since 1970, the federal government has run deficits during every fiscal year for all but four years, from 1998 to 2001. The effect of these cumulative budget shortfalls is debated by political analysts and economists, but their origins are much less controversial.
Gravitas Plus: How America amassed $31 Trillion in debt
Expectations of the Federal Deficit
HOW WORRIED SHOULD YOU BE ABOUT THE FEDERAL DEFICIT AND DEBT?
Even before the pandemic, the federal deficit was large by historical standards and projected to rise. The sharp recession and the spending increases that Congress and the president approved in response has made the deficit even bigger.
WHY U.S. DEBT MUST CONTINUE TO RISE
Many Americans are worried about the seemingly inexorable rise in U.S. debt, whether government debt, household debt, or business debt. They are right to be concerned.
UNDERSTANDING THE EFFECTS OF FISCAL DEFICITS ON AN ECONOMY
Fiscal deficits are negative balances that arise whenever a government spends more money than it brings in during the fiscal year. This imbalance—sometimes called the current accounts deficit or the budget deficit—is common among contemporary governments all over the world.
TOP 10 REASONS WHY THE NATIONAL DEBT MATTERS
At $31 trillion and rising, the national debt threatens America’s economic future. Here are the top ten reasons why the national debt matters. Trillion dollar deficits are now the norm.
Understanding the Debt Ceiling
DEBT LIMIT RISKS ESCALATE AS 2023 DEADLINE NEARS
With no resolution on the U.S. debt limit, the cost of insuring Treasuries against default continues to edge up steadily. The U.S. hit its debt ceiling in January, and the Treasury is currently using extraordinary measures to pay the bills...
CAN CONGRESS MAKE AN END-RUN AROUND A DEBT LIMIT IMPASSE? IT’S TRICKY.
Some Democrats are urging their colleagues to lay the groundwork for using an arcane procedural process to bypass Republicans and stave off economic peril.
WASHINGTON — Call it an escape valve, an off-ramp or a break-glass-in-case-of-emergency option.
WASHINGTON — Call it an escape valve, an off-ramp or a break-glass-in-case-of-emergency option.
CONGRESS MUST RAISE THE DEBT CEILING
Congress must act soon to increase the debt limit so that the United States can continue borrowing the funds needed to run the government and fulfill the budgetary obligations incurred by prior Congresses and presidential administrations.
HOW WORRIED SHOULD WE BE IF THE DEBT CEILING ISN’T LIFTED?
Once again, the debt ceiling is in the news and is a cause for concern. If the debt ceiling binds, and the U.S. Treasury does not have the ability to pay its obligations, the negative economic effects would quickly mount and risk triggering a deep recession.
WHAT YOU NEED TO KNOW ABOUT THE DEBT CEILING AS THE DEADLINE LOOMS
The federal government is perilously close to being unable to make payments on the country's debt. It is up to Congress to vote to increase the nation's borrowing cap, known as the debt limit.
“Both sides of the aisle - Republican and Democrat - have been unwilling and afraid to address the deficit, and someone's got to.”
Rand Paul - Financial Writer
Collection of Articles
Inflationary trends
Post-Pandemic Inflation
WHAT’S THE US’ PROJECTED INFLATION RATE IN 2023?
US inflation rates rose to their highest levels since the 1980s last year, thanks to a string of geopolitical tensions and pandemic-related economic decisions. Now, we’re watching a delicate dance between the Fed, unemployment and interest rates unfold, aiming to tame the beast.
INFLATION GAUGE INCREASED 0.4% IN FEBRUARY, AS EXPECTED AND UP 6% FROM A YEAR AGO
The consumer price index increased 0.4% for the month, putting the annual inflation rate at 6%, the Labor Department reported Tuesday. Both readings were exactly in line with Dow Jones estimates.
IN THE U.S. AND AROUND THE WORLD, INFLATION IS HIGH AND GETTING HIGHER
According to the latest report from the Bureau of Labor Statistics, the annual inflation rate in May was 8.6%, its highest level since 1981, as measured by the consumer price index.
‘ROARING 20S’ AFTER THE PANDEMIC? BIG BANKS WARN BE CAREFUL WHAT YOU WISH FOR
There are a host of parallels between current global conditions and those prior to the Roaring 20s: the end of a pandemic, the proliferation of new technologies, a transport revolution, political polarization, emerging international rivalries and a soaring stock market.
HOW HAS THE PANDEMIC IMPACTED INFLATION?
The ongoing pandemic has played a leading role in the jump in inflation as lingering COVID-induced supply chain disruptions have made it difficult to find some items while driving up consumer prices.
2022 Inflation Explained
Expected Inflation Trends
HISTORICAL PARALLELS TO TODAY’S INFLATIONARY EPISODE
Supply chain disruptions are having a substantial impact on current economic conditions. Economy-wide and retail-sector inventory-to-sales ratios have hit record lows; homebuilders are reporting shortages of key materials; and automakers do not have enough semiconductors.
3 LESSONS FROM HYPERINFLATIONARY PERIODS
As inflation soars to its highest rates in 40 years, it’s critical that businesses have a strategy to respond to fluctuating costs and prices. Pricing during today’s inflation is particularly challenging because people are exhausted and emotionally fatigued from dealing with extreme uncertainty...
INFLATION: PRICES ON THE RISE
Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated—for certain goods, such as food...
HYPERINFLATION
What causes hyperinflations? No single shock, no matter how severe, can explain sustained, continuously rapid growth in prices.
WHAT ARE INFLATION EXPECTATIONS? WHY DO THEY MATTER NOW?
When it comes to inflation, the Federal Reserve is focused on more than just the latest monthly numbers. It’s also striving to understand Americans’ inflation expectations.
Inflation Within a Recession
DOES INFLATION CAUSE A RECESSION?
Inflation and recession have become the two watchwords for economics in 2022. Over the past year, major economies have experienced some of the highest rates of inflation in decades. Inflation in the U.S. economy alone is the highest it’s been since the early 1980s.
INFLATION VS. RECESSION
From rising inflation to recession fears, there is a lot of talk about negative economic conditions. Inflation and recession are important economic concepts, but what do they really mean?
A RECESSION WOULD BE WORSE THAN TODAY’S INFLATION
The Federal Reserve has been under intense pressure in recent months to sharply raise interest rates in the name of taming inflation. The voices calling for these rate increases often explicitly say that they are worth doing even if they greatly increase the risk of recession.
WHAT IS HYPERINFLATION AND WHY SHOULD YOU CARE?
Changing economic conditions can trigger various side effects, including an uptick in inflation, as began to happen in 2021. When inflation leads to rising prices and a decline in the purchasing power of money, your dollars and cents don’t stretch as far.
“Inflation is the crabgrass in your savings.”
Robert Orben - Comedian and Magician
Collection of Articles
financial regulation
Governing Alternate Currencies
CYPTOCURRENCY REGULATIONS AROUND THE WORLD
The U.S. announced a new framework in 2022 that opened the door to further regulation. The new directive has handed power to existing market regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
REGULATING CRYPTO
Applying existing regulatory frameworks to crypto assets, or developing new ones, is challenging for several reasons. For a start, the crypto world is evolving rapidly.
THE 5 MOST IMPORTANT REGULATORY DEVELOPMENTS FOR CRYPTO IN 2022
2022 will surely be remembered as a year of crypto discontent — one when the price of Bitcoin crashed three times, many large companies went bankrupt and the industry experienced a series of significant lay-offs. However, it was a crucial year for crypto regulation worldwide.
BINANCE, COINBASE AND THE FUTURE OF CRYPTO REGULATION
In June of 2023, the U.S. Securities and Exchange Commission filed enforcement actions against the world's largest crypto exchange, Binance. The following day, the agency went after Coinbase, the dominant exchange in the U.S.
CRYPTO SECTOR GETS ITS FIRST SET OF GLOBAL RULES FROM WATCHDOG
International securities watchdog IOSCO unveiled on Tuesday the first global approach to regulating cryptoasset and digital markets, drawing on lessons from last year's collapse of the FTX exchange that fueledconcerns over consumer protection.
The road to regulating cryptocurrency
The SEC and the Post-pandemic
SECURITIES AND EXCHANGE COMMISSION (SEC)
The Securities and Exchange Commission (SEC) is the U.S. government agency in charge of the nation's securities industry. It monitors transactions, as well as the activities of financial professionals. Its mission is to promote fairness, integrity and transparency
SECURITIES AND EXCHANGE COMMISSION (SEC) DEFINED, HOW IT WORKS
The U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation. It was created by Congress in 1934...
SEC NEW RULES AND REGULATIONS
Welcome to new board oversight duties…It is one of the great things about board work…it is ever changing and evolving. The SEC has new proposed regulations for 2023.
GLOBAL: FINDING BALANCE: THE POST-COVID LANDSCAPE FOR FINANCIAL INSTITUTIONS
In recent months many lawyers, consultants, academics and commentators have spoken and advised on the immediate impact of lockdown and business interruption, and a great deal of time has been spent by several organizations telling businesses what they already know about current circumstances.
DOES THE SEC "BEST INTEREST" REGULATION GO FAR ENOUGH?
The US Securities and Exchange Commission (SEC) has adopted a new standard called Regulation Best Interest (Reg BI) that shifts the focus on protecting customers first and foremost. Although the regulation possibly puts certain customers first, it leaves some important areas vulnerable.
Considerations of the Federal Reserve
THE ROLES AND RESPONSIBILITIES OF THE FEDERAL RESERVE
Today, the Fed is an integral part of the U.S. economic system. Because of its importance, students pursuing an online MBA need to understand the role of the Federal Reserve and how it affects business loans, interest rates, and the economy in general.
THE FEDERAL RESERVE EXPLAINED
This is the second time in history that the Federal Reserve took extraordinary steps to stabilize the financial markets and stave off economic disaster. The first time was during the Great Recession. The Fed now owns $6 trillion more in assets than it did during the peak of its response to the 2008
WHAT IS THE U.S. FEDERAL RESERVE?
Over the past decade, the Fed kept interest rates low while it deployed trillions of dollars in stimulus and expanded its regulatory oversight. Now, the central bank is back in the spotlight for its battle against inflation.
THE FEDERAL RESERVE: WHO ARE THEY AND WHAT DO THEY DO?
People think of the Fed as synonymous with interest rates, but it does so much more than that—it also regulates banks and sets policies designed to maintain a healthy economy specifically through stable prices and high employment.
FEDERAL RESERVE SYSTEM: WHAT IT IS AND HOW IT WORKS
The Federal Reserve System (FRS) is the central bank of the United States. Often simply called the Fed, it is arguably the most powerful financial institution in the world. It was founded to provide the country with a safe, flexible, and stable monetary and financial system.
“Whoever controls the volume of money in our country is absolute master of all industry and commerce...when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”
James A. Garfield - 20th US President
educational awareness - Article Summaries
Educational awareness to make the best financial decision for your needs.
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