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Is Powell Playing Fed Games?

U.S. Federal Reserve chair Jerome Powell speaks during a discussion at the Economic Club in Washington on Jan. 10, 2019. (SAUL LOEB/AFP/Getty Images)
U.S. Federal Reserve chair Jerome Powell speaks during a discussion at the Economic Club in Washington on Jan. 10, 2019. (SAUL LOEB/AFP/Getty Images)

Is Powell Playing Fed Games?

The Federal Reserve will be adding assets to its balance sheet again, but Powell insists it’s not “quantitative easing”

The Federal Reserve will be adding assets to its balance sheet again, but Powell insists it’s not “quantitative easing”James GorrieWRITEROctober 10, 2019 Updated: October 10, 2019Share

Apparently, the “repo market” purchases by the Federal Reserve we discussed earlier this week —which don’t count as quantitative easing (QE)—were just the beginning of the new, non-quantitative easing but money printing period.

Fed “repos,” you may recall, are now necessary to boost weak overnight liquidity reserves of the big banks and don’t permanently expand the Fed’s balance sheet, unless they go on forever, in which case they would be QE. Now they are more of a short-term bail-out.

It’s Time for “Non-Quantitative Easing”

But in his Tuesday speech, Federal Reserve Chairman Jerome Powell explained that for the first time in five years, the “time is now upon us” for the Fed to resume buying U.S Treasury bills and bonds. That means that come November, the American economy will officially enter into another period of quantitative easing, you know, the Fed buying assets to expand its balance sheet.

Or not.

Typically, when the Federal Reserve buys Treasury assets, it’s because of weakness, either in the economy or in the financial system. A weakness that needs to be papered over by money printing, expanding the Fed’s balance sheet and bank reserves. Or the Fed buys other assets that nobody wants to buy at a decent price, like the purchases of mortgage backed securities (MBS) it conducted after the financial crisis.

 …click on the above link to read the rest of the article…

How Digital Banking Makes You More Vulnerable

A man takes part in a hacking contest during the Def Con hacker convention in Las Vegas, Nevada, U.S. on July 29, 2017. (Reuters/Steve Marcus)

A man takes part in a hacking contest during the Def Con hacker convention in Las Vegas, Nevada, U.S. on July 29, 2017. (Reuters/Steve Marcus)

How Digital Banking Makes You More Vulnerable

Banking – and bank robbery – have entered the digital age and all is not well.

Safes and vaults used to be how banks protected your money. Now the money completely accessible through your digital identity. But how safe is your digital identity?

Needless to say, banking has changed. Although managing financial assets, providing services and processing transactions remains retail financial institutions’ primary functions, they’re also charged with protecting the most prized and valuable assets of all: their customers’ digital identities. That would include yours as well as mine. They’re spending vast sums on it as well. Unfortunately, achieving total security is more of a challenge than paying interest on a CD or interest-bearing checking account.

Invasive Banking Laws Make You Vulnerable

One of the biggest changes in banking over the past decade or so is how much individual privacy has been eliminated. With various anti-money laundering laws and protocols put in place since the 9-11 Attacks, banks have been given new powers aimed at identifying sources of funds and recipients of financial transfers. Furthermore, strict limits on how you transfer or receive money – how much, how often, from whom or to and from where – have resulted in banks knowing more about their clients’ lives than ever before.

But that invasiveness has left clients’ identity incredibly vulnerable. In the past, some banks were slower in adopting client data security tools and protocols necessary to protect personal and corporate client identity details due to conflicting interests. And even those that did so couldn’t be certain that their efforts were successful. Even with the most sophisticated systems in place, that ambiguity remains today.

 …click on the above link to read the rest of the article…

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