Bondi on 10 Points for SEC Reform

The new leadership of the Securities and Exchange Commission (“SEC”) should seize the opportunity to review and improve the agency’s enforcement program.

CFS senior fellow Bradley J. Bondi offers a ten-point blueprint for the program.  Brad’s recommended measures would allocate resources more efficiently, strike a better balance between regulation and enforcement, and promote a closer adherence to the SEC’s mission.

The full report is available at
http://www.centerforfinancialstability.org/research/Bondi_8_17_17.pdf

As always, CFS welcomes opinion.

CFS Special Counselor Steve H. Hanke Honored by the University of Liechtenstein…

CFS congratulates Steve H. Hanke, CFS Special Counselor and Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore, on receiving a Doctorate Honoris Causa from the University of Liechtenstein.

At the University of Leichtenstein, located in Vaduz, Hanke was conferred the Doctorate by Rector Jürgen Brücker during a University Day ceremony. The ceremony concluded with a dinner hosted by H.S.H. Prince Phillip von und zu Leichtenstein and H.S.H. Prince Michael von und zu Leichtenstein.

Professor Hanke’s honor was in recognition of his standing as “one of the world’s leading authorities on currencies and alternative currency regimes” and as “the world’s authority on measuring and stopping hyperinflations.” This is Professor Hanke’s sixth Doctorate Honoris Causa.

For further detail: https://www.uni.li/en/news/a-festive-atmosphere-at-the-open-day

Fiscal Times: The National Debt is a Bigger Problem Than You Think…

Today, The Fiscal Times published my opinion piece on U.S. Treasury debt.  Key ideas include:

– The debt situation is worse than commonly realized – when evaluated back to 1946.
– Fortunately, a few debt management policy tweaks can yield great benefit with limited costs.
– It’s our debt.  It’s our problem.  Let’s fix it.

To view the full article:
http://www.thefiscaltimes.com/Columns/2017/06/07/National-Debt-Bigger-Problem-You-Think

CFS Monetary Measures for April 2017

Today we release CFS monetary and financial measures for April 2017. CFS Divisia M4, which is the broadest and most important measure of money, grew by 4.4% in April 2017 on a year-over-year basis versus 3.9% in March.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Apr17.pdf

For more information about the CFS Divisia indices and the data in Excel:
http://www.centerforfinancialstability.org/amfm_data.php

Bloomberg terminal users can access our monetary and financial statistics by any of the four options:

1) {ALLX DIVM }
2) {ECST T DIVMM4IY}
3) {ECST} –> ‘Monetary Sector’ –> ‘Money Supply’ –> Change Source in top right to ‘Center for Financial Stability’
4) {ECST S US MONEY SUPPLY} –> From source list on left, select ‘Center for Financial Stability’

Allan Meltzer

It is with sadness that Center for Financial Stability (CFS) mourns the passing of internationally renowned economist and Carnegie Mellon Professor Allan Meltzer.  Author of more than 10 books and 400 papers, he was one of the leading experts on the Federal Reserve.

Allan was a brilliant economist with contributions of historic importance.  He moved through life with the highest level of integrity and tenacity.  Allan was an economic intellectual with a remarkable ability to get along with economists having diverse views.  He and Karl Brunner were the founders of the Shadow Open Market Committee, which often disagreed with Federal Reserve policy.  Nevertheless, Allan was greatly liked at the Fed and was regularly invited to serve on the semiannual Panel of Academic Advisers, who met in the Board Room with the Governors.  The Federal Reserve’s initial decision to start providing monetary aggregates to the public long ago was based upon advocacy by Allan at the St. Louis Federal Reserve Bank.

Over decades, he influenced many CFS experts, colleagues, and friends.  Since the launch of CFS, Allan often took the time to voluntarily provide feedback or be involved in issues stretching from the Bretton Woods institutions, bank capital, Fed policy, to CFS Divisia monetary measures.  Allan was very familiar with the CFS Divisia monetary aggregates.  Soon after CFS Director William A. Barnett originated the Divisia money aggregates and presented his research in Tokyo, Allan served as a consultant to the Bank of Japan to produce and maintain Divisia monetary measures for Japan.

CFS thanks Allan for his meaningful and longstanding contributions.

CFS Monetary Measures for March 2017

Today we release CFS monetary and financial measures for March 2017. CFS Divisia M4, which is the broadest and most important measure of money, grew by 4.0% in March 2017 on a year-over-year basis versus 4.1% in February.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Mar17.pdf

For more information about the CFS Divisia indices and the data in Excel:
http://www.centerforfinancialstability.org/amfm_data.php

Bloomberg terminal users can access our monetary and financial statistics by any of the four options:

1) {ALLX DIVM }
2) {ECST T DIVMM4IY}
3) {ECST} –> ‘Monetary Sector’ –> ‘Money Supply’ –> Change Source in top right to ‘Center for Financial Stability’
4) {ECST S US MONEY SUPPLY} –> From source list on left, select ‘Center for Financial Stability’

Response to WSJ Comments…”What’s Money?”

Thank you for your interest in my letter highlighting how determinants of inflation can be better understood.  To clarify, two types of money exist ‘state money’ produced by the Fed and ‘bank money’ created by the private sector.  Bank money drives growth. Today, bank money includes the service value of traditional commercial bank products such as deposits as well as shadow banking services such as commercial paper, money market funds, and repurchase agreements. In fact, what constitutes money may change over time as new financial products are introduced.

So, it is essential that the Fed, economists, and market participants measure and monitor both state and bank money.  CFS Divisia accomplishes this feat by identifying assets that serve as money.  Importantly, not all of these monetary assets provide equal amounts of service as money to the economy.

Bill Barnett uses the example of measuring the service value of transportation.  Would a pair of roller skates and a locomotive provide equal value to the economy?  No.  So, CFS Divisia derives weights that vary over time.

For the theory, history and math behind CFS Divisia, please see Bill’s book Getting It Wronghttp://www.centerforfinancialstability.org/getting_wrong.php

For a practical application of CFS Divisia see http://centerforfinancialstability.org/research/why_cfs_divisia_071316.pdf

WSJ: What’s Money?

The Wall Street Journal weekend edition printed my letter highlighting how determinants of inflation can be better understood.

CFS Divisia money growth warned about rising inflation and clearly explained why it was low coincident with QE.

To be clear, CFS Divisia money monitors the output of the financial system and its role in the monetary transmission mechanism.  It is an essential barometer of the economy, whether one is a market practitioner, Keynesian, or monetarist.

Read the full letter – It May Make the World Go Round, but What’s Money

CFS Monetary Measures for February 2017

Today we release CFS monetary and financial measures for February 2017. CFS Divisia M4, which is the broadest and most important measure of money, grew by 4.1% in February 2017 on a year-over-year basis versus 4.8% in January.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Feb17.pdf

For more information about the CFS Divisia indices and the data in Excel:
http://www.centerforfinancialstability.org/amfm_data.php

Bloomberg terminal users can access our monetary and financial statistics by any of the four options:

1) {ALLX DIVM }
2) {ECST T DIVMM4IY}
3) {ECST} –> ‘Monetary Sector’ –> ‘Money Supply’ –> Change Source in top right to ‘Center for Financial Stability’
4) {ECST S US MONEY SUPPLY} –> From source list on left, select ‘Center for Financial Stability’