In the late 1800s, a surge in silver production made a shift toward a monetary standard based on gold and silver rather than gold alone increasingly attractive to debtors seeking relief from rising real debt burdens through higher prices. The U.S. government made a tentative step in this direction with the Sherman Silver Purchase Act, an 1890 law requiring the Treasury to significantly increase its purchases of silver. Concern about the United States abandoning the gold standard, however, drove up the demand for gold, which drained the Treasury’s holdings and created strains on the financial system’s liquidity. News in April 1893 that the government was running low on gold was followed by the Panic in May and a severe depression involving widespread commercial and bank failures.
Look for our next post on March 23.
Household Consumption Mobility over the Life‑Cycle
Commonly used metrics of inequality and mobility attempt to capture how household (or individual) income compares to the rest of the population and how persistent that income is over the life cycle.
The Turnaround in Private and Public Financial Outflows from China
China lends to the rest of the world because it saves much more than it needs to fund its high level of physical investment spending.
Historical Echoes: Echoes, Schmechoes, This Post Only Has a Drop of History in It
You might hear: “Economy eschmonomy.” Another possibility is: “Economy schmeconomy.” This phenomenon of repeating a word with the prefix shm- (or sometimes “schm-“), is called shm-reduplication. It challenges the relevance and sometimes the value of the repeated word, and examples can be found in articles like this Newsday clip “The High End: Economy, shmeconomy — the rich still travel.”
Borrowing, Lending, and Swapping Collateral in GCF Repo®
By Marco Cipriani and Adam Copeland In the third post in this series, we examined GCF Repo® traders’ end-of-day strategies. In this final post, we further our understanding of dealers’ behavior by looking at their trading pattern within the day.
Why Dealers Trade in GCF Repo®
Analysis using confidential market data shows that the majority of individual dealers follow consistent strategies in GCF Repo, where dealers are net borrowers or lenders on almost every day that they are active.
Understanding the Interbank GCF Repo® Market
In this post, we provide a different perspective on the General Collateral Finance (GCF) Repo® market.
What’s Up with GCF Repo®?
In a recent Important Notice, the Fixed Income Clearing Corporation (FICC) announced that it would no longer support interbank trading for its General Collateral Finance Repo Service.
Lower Oil Prices and U.S. Economic Activity
After a period of stability, oil prices started to decline in mid-2015, and this downward trend continued into early 2016.
What’s behind the March Spike in Treasury Fails?
Michael J. Fleming and Frank M. Keane U.S. Treasury security settlement fails—whereby market participants are unable to make delivery of securities to complete transactions—spiked in March 2016 to their highest level since the financial crisis. As noted in this post, fails delay the settlement of transactions and can therefore lead to illiquidity, create operational risk, […]
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