Questions tagged [monetary-policy]
29 questions
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Is inflation a good or bad thing? Why do governments want some inflation?
Is inflation a good or bad thing? Why do governments want some inflation?
user454
29
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6 answers
Where do countries / national governments borrow money from?
It seems that every country on Earth is in debt, but nowhere on the news do they ever mention to who. If countries are all in debt to each other then why not just cancel all the countries debt.
If it's one central place why don't all countries just…
Jonathan.
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If a country can just print money, is global debt between countries real?
I was having a conversation with my brother last night and we were trying to figure out how exactly countries go into debt to each other. Say the US borrows money from China. What does this mean? Do they give us US dollars? Where do they get it? Can…
MetaGuru
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The U.S. National Debt: What is it, where did it come from, and how does it work?
I am not from USA. I read few articles about the US National debt but still can't get the sense of it. Could you explain it in simple words? I know that it is huge. I can't understand following things:
What sort of debt is it? Was it given in US…
Andrey
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What exactly is the interest rate that the Fed is going to adjust?
Lately, the financial press talks non-stop about the Fed doing this and that to the interest rate. What exactly is this interest rate that the financial press is talking about?
Why is this Fed interest rate so important given that there are so many…
curious
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How can all these countries owe so much money? Why & where did they borrow it from?
When I look at this long list of countries with debt, I get the feeling we've all been sold a load of manure. How can so many countries owe so much money? Generally speaking, why did they borrow it, and from where?
The way this looks to me is like…
boatcoder
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How does the concept of negative interest rates work? Are there any examples of this?
This term has been proposed in economics, what exactly is it? I thought interest rates never fall below zero. How would this work? Wouldn't it actually be a penalty to depositor/investor or a bonus to the someone with a loan or mortgage?
Zephyr
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What do people mean when they talk about the central bank providing "cheap money"? What are the implications for the stock market?
Newspapers write a lot about the central bank stopping "cheap money" in the US. What is that exactly and what are the implications for the stock market?
duedl0r
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Do banks keep their reserves at the Fed in cash or can they be kept in US Treasuries?
This chart at the St. Louis Fed has a lot of people worried about future inflation, because it represents idle money that, when lent out, could eventually flood the world with 10 - 12 trillion new dollars. But my father says that it has already…
azcoastal
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Why is seigniorage different for paper notes and coins?
Wikipedia defines Seigniorage for paper notes and metal coins. Why is seigniorage for paper money not just face value - production cost? I can understand using just the interest rate in the age of the gold standard, but why today? Is it because the…
highBandWidth
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What are good investments to use as hedges when the Federal Reserve draws down quantitative easing?
Basically I think it is quite obvious that quantitative easing (QE) will be pulled back eventually and countries will start to tighten their monetary policy. When that happens, what kind of assets will be able to hold their value, and hopefully…
AZhu
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Why are bank rates based on the federal interest rate?
From what I have read, the Federal Reserve sets the "key rate", which is the rate at which banks can borrow money from the Reserve. However, I don't understand why both mortgage lending rates and savings interest rates are tied to this key rate.
The…
GendoIkari
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How much control over the Federal Reserve does the U.S. Government have?
Or, in other words: Who does the head of Fed report to? Is the Federal Reserve a private institution?
I'm going to be a bit naive here, have just read about how the Fed has been brought to life and can hardly believe that it did manage to survive…
matcheek
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Swiss-style Monetary Policy
I'm doing some research on investing and financial advisers. Not that I have a lot (no debt, less than 20K in net worth), but I've recently finished paying off all my student loans, and am now considering where I should put the extra 1K/month…
David W
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Are Fed repo operations done through the discount window?
Recently the Fed performed repo operations to keep the effective Fed funds rate down and close to its target. Is this the usual way banks get loans from the discount window, using treasuries as collateral, or is it something new?
I've read that this…
Jonah
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