Sign up to save your podcasts
Or
Share #130 Dr. Charles Calomiris On Fiscal Dominance And The Return of Zero-Interest Bank Reserve Requirements
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
#130 Dr. Charles Calomiris On Fiscal Dominance And The Return of Zero-Interest Bank Reserve Requirements
Dr. Charles Calomiris, Henry Kaufman Professor of Financial Institutions Emeritus at Columbia Business School, joins The Julia La Roche Show to discuss his recent paper, Fiscal Dominance and the Return of Zero-Interest Bank Reserve Requirements.
In this episode, Dr. Calomiris examines the state of the economy in the near-term and longer-term, as well as the fiscal challenges facing the U.S. According to Dr. Calomiris, there's a significant probability of a fiscal dominance problem arriving in the next decade. Fiscal dominance is the need for the government to fund its deficits on the margin with non-interest-bearing debts, also known as "inflation taxation."
He points out the need for political leadership and accountability in addressing the unsustainable promises of entitlement spending. Dr. Calomiris explains what could trigger panic in the bond market and the potential solutions, including taxing the banking system. He also discusses the implications of such policies on the banking system and the broader economy. Overall, he emphasizes the importance of addressing the long-term fiscal challenges to avoid a crisis in the future.
Timestamps:
00:00 Introduction and background
01:01 Short-run and long-run perspective of the economy
03:23 The dysfunctional state of the economy, the blame is ours
06:37 Generational government accounting and political responsibility
10:06 We are not a grown-up society right now
11:20 Debt situation in the U.S.
13:53 The point of no return?
17:50 Less than a decade to make the political decision
19:50 Deficits, recessionary environment, and the consequences
23:00 Signs to look out for in the bond market
24:40 Fiscal Dominance and its definition
27:30 Will the government tax the banking system into almost oblivion?
28:50 Taxing the banking system and the inflation tax
34:00 If nothing changes, how implied annual inflation could be 35-40%
37:00 Fed could raise reserve requirements and pay zero interest to expand the inflation tax base, lower implied inflation rate
40:00 Impact on the banking system
46:17 The power of the Federal Reserve
51:00 Bitcoin
54:19 Parting Thoughts and Advice
Links:
Fiscal Dominance and the Return of Zero-Interest Bank Reserve Requirements
Fragile By Design The Political Origins of Banking Crisis and Scarce Credit
View all episodes
By Julia La Roche
4.5
5656 ratings
Dr. Charles Calomiris, Henry Kaufman Professor of Financial Institutions Emeritus at Columbia Business School, joins The Julia La Roche Show to discuss his recent paper, Fiscal Dominance and the Return of Zero-Interest Bank Reserve Requirements.
In this episode, Dr. Calomiris examines the state of the economy in the near-term and longer-term, as well as the fiscal challenges facing the U.S. According to Dr. Calomiris, there's a significant probability of a fiscal dominance problem arriving in the next decade. Fiscal dominance is the need for the government to fund its deficits on the margin with non-interest-bearing debts, also known as "inflation taxation."
He points out the need for political leadership and accountability in addressing the unsustainable promises of entitlement spending. Dr. Calomiris explains what could trigger panic in the bond market and the potential solutions, including taxing the banking system. He also discusses the implications of such policies on the banking system and the broader economy. Overall, he emphasizes the importance of addressing the long-term fiscal challenges to avoid a crisis in the future.
Timestamps:
00:00 Introduction and background
01:01 Short-run and long-run perspective of the economy
03:23 The dysfunctional state of the economy, the blame is ours
06:37 Generational government accounting and political responsibility
10:06 We are not a grown-up society right now
11:20 Debt situation in the U.S.
13:53 The point of no return?
17:50 Less than a decade to make the political decision
19:50 Deficits, recessionary environment, and the consequences
23:00 Signs to look out for in the bond market
24:40 Fiscal Dominance and its definition
27:30 Will the government tax the banking system into almost oblivion?
28:50 Taxing the banking system and the inflation tax
34:00 If nothing changes, how implied annual inflation could be 35-40%
37:00 Fed could raise reserve requirements and pay zero interest to expand the inflation tax base, lower implied inflation rate
40:00 Impact on the banking system
46:17 The power of the Federal Reserve
51:00 Bitcoin
54:19 Parting Thoughts and Advice
Links:
Fiscal Dominance and the Return of Zero-Interest Bank Reserve Requirements
Fragile By Design The Political Origins of Banking Crisis and Scarce Credit
More shows like The Julia La Roche Show
View all
Macro Voices
3,069 Listeners
Hedgeye Podcasts
200 Listeners
The Market Huddle
361 Listeners
Palisades Gold Radio
263 Listeners
Excess Returns
88 Listeners
Eurodollar University
463 Listeners
The Grant Williams Podcast
1,341 Listeners
ITM Trading Podcast
75 Listeners
Wealthion - Be Financially Resilient
372 Listeners
The Jay Martin Show
70 Listeners
On The Tape with Danny Moses
163 Listeners
Forward Guidance
270 Listeners
Thoughtful Money with Adam Taggart
414 Listeners
The David Lin Report
47 Listeners
Monetary Matters with Jack Farley
159 Listeners