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Monetary Theory and Investments

Taxation- is for Fiscal/ Monetary and Social Policy. Not Revenue.

During the peak of the Financial Crisis in 2008 the Federal Reserve embarked on a program called Quantitative Easing. At the time it was called the “nuclear option.” Under this plan the Federal reserve purchases assets that are falling in price or have few if any bidders. This gives the sellers (generally banks) cash in exchange for an…

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Why the Fed’s Monetary Expansion hasn’t caused excessive inflation

Expanding the monetary base can and has caused significant inflation historically.The truth is that credit long ago became a larger factor in inflation than did actual money in circulation. While the  monetary base has expanded, credit has contracted. So much so that the fed’s massive QE programs have effectively offset the loss of credit banks…

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The Potential Impact of Rising Interest Rates on the Equity Risk Premium

This is a brief article on the impact of Monetary policy on treasury interest rates, which impact equity market valuations through the Equity risk premium.. The New York Federal Reserve released an article by Fernando Duarte and Carlo Rosa May 22, 2013 titled “Are Stocks Cheap a Review of the Evidence” supporting the notion that the low-interest rate environment, caused by the…

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