NIR
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Within the first 24 seconds, Jerome Powell,
the Chairman of the Federal Reserve,
explains the difference between the Debt
and Deficit to Congressman John Kennedy
from Louisana, and then moves on to the
most important discussion of money -- M2.
the Chairman of the Federal Reserve,
explains the difference between the Debt
and Deficit to Congressman John Kennedy
from Louisana, and then moves on to the
most important discussion of money -- M2.
up
| February 2021 Senate Banking Committee on the Semiannual Monetary Policy Report |
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| The Money Supply Doesn't Matter Any More! |
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| Money Market Graph Rip It Out! Simple Money Multiplier (1/RR) Rip It Out! |
| Required Reserves Rip It Out! Excess Reserves Rip It Out! Commercial Bank Balance Sheet Rip It Out! |
The Federal Reserve is the lender of last resort through the
Federal Reserve of New York's Discount Window:
The Primary Credit Rate, formerly called the Discount Rate
until 2003, serves as the principal safety valve for ensuring
adequate liquidity in the banking system. It is available to
depository institutions that are in generally sound financial
condition, and there are no restrictions on the use of funds
borrowed under primary credit.
The term "Discount Rate" is no longer used in the Federal
Reserve's press release after its FOMC meetings. Instead,
"Primary Credit Rate" has taken its place.
Federal Reserve of New York's Discount Window:
The Primary Credit Rate, formerly called the Discount Rate
until 2003, serves as the principal safety valve for ensuring
adequate liquidity in the banking system. It is available to
depository institutions that are in generally sound financial
condition, and there are no restrictions on the use of funds
borrowed under primary credit.
The term "Discount Rate" is no longer used in the Federal
Reserve's press release after its FOMC meetings. Instead,
"Primary Credit Rate" has taken its place.
| The FED starts paying interest on required and excess reserves |
| 2008 (October) |
| The "Discount Rate" is DISCONTINUED and replaced by the "Primary Credit Rate" |
| 2003 (January) |
| In this short video clip, every time you hear the words, Poem, Poetry, or J. Evan Pritchard, say to yourself OLD MONETARY POLICY. At the beginning Robin Williams draws a graph, similar to how we draw graphs in economics. |
| The Past (15 minutes) |
| Monetary Policy -- The Past |
| Again, every time you hear the words, Poem, Poetry, or J. Evans Pritchard, say to yourself OLD Monetary Policy. |
A special thank you goes to:
The Council on Economics Education (councilforeconed.org) for accepting my proposal to present at the
62nd Financial Literacy & Economics Education Conference in Fr. Lauderdale, Florida, on September 24, 2023.
The Council on Economics Education (councilforeconed.org) for accepting my proposal to present at the
62nd Financial Literacy & Economics Education Conference in Fr. Lauderdale, Florida, on September 24, 2023.
| Commercial banks no longer keep these reserves on their balance sheet as they are now stored at the FED earning INTEREST ON RESERVE BALANCES. This is now the PRIMARY TOOL of NEW Monetary Policy. Effective March 26, 2020, the Board reduced reserve requirement ratios on all net transaction accounts to zero percent, eliminating reserve requirements for all depository institutions. |
The Foundation for Economics Education (teachers.fee.org), established in 1946, that provided funding for
me to present at this conference. FEE.org provides "FREE" economics curriculum for teachers to use inside
and outside their classrooms.
me to present at this conference. FEE.org provides "FREE" economics curriculum for teachers to use inside
and outside their classrooms.
The Federal Reserve Bank of St. Louis for allowing the public to use their important graphing resources --
(FRED) -- to help economics educators get the most up-to-date information on economic data at our finger
tips.
(FRED) -- to help economics educators get the most up-to-date information on economic data at our finger
tips.
"Intro level textbooks are quite good. I
shouldn't name them because it is a very
competitive field."
"When we do innovations (at the FED), it
takes time for textbooks to catch up . . .
It will take a couple of editions for those to
be well entered into all of the textbooks."
shouldn't name them because it is a very
competitive field."
"When we do innovations (at the FED), it
takes time for textbooks to catch up . . .
It will take a couple of editions for those to
be well entered into all of the textbooks."
| Dead Poets Society with Robin Williams having students rip out pages of their poetry textbook, just like students should rip out information about OLD Monetary Policy and teach only NEW Monetary Policy (Ample Reserves Regime), saving you and students much more time to spend on Financial Literacy which will become far more important in high school students' lives. |
| 3:56 minutes |
| IMPORTANT: At the 1:37 mark, Robin Williams says the word, "excrement." Click the NEXT button. Each time Robin Williams say "Rip It Out," press the yellow numbered buttons one at a time. |
| Jerome Powell talking about how long it takes textbooks to change their curriculum to meet the changing monetary policies of The Federal Reserve. (September 28, 2023) |
| 1:06 minutes |
| During the first 24 seconds, Jerome Powell, the Chairman of the Federal Reserve, explains the difference between the Debt and Deficit to Congressman John Kennedy from Louisiana. |
| At the 24 second mark, click on the NEXT button below to see the narrative about money supply, money aggregates, and M2. |
| This is the end of the 15-minute lesson on OLD Monetary Policy. |
| OLD U.S. Monetary Policy is a sunk cost*. All FOMC Statements and FED Implementation Press Releases describe only NEW U.S. Monetary Policy -- Ample Reserves. *Sunk costs are typically not included in consideration when making future decisions, as they are seen as irrelevant to current and future budgetary concerns. |
| Touch the colored lines on the graph to see when the Discount Rate term ended and the Primary Credit Rate term began. |
| Steven M. Reff Economics Lecturer University of Arizona (2007 - 2016) The 2015 University of Arizona Five-Star Faculty Award |