Category: Money Mechanics

  • How Interest Rates are Created

    Have you ever scrolled through a financial news site, glanced at the rows of bond prices and yields, and wondered how on earth they’re determined in the first place? Have you ever been curious about why a bond’s price goes down when interest rates go up—or vice versa? Well, if so, you are in the…

  • How Interest Rates are Created

    A little while ago we went over the time value of money. If you haven’t read that article, I suggest you definitely read that article before reading this article. Now, you may be wondering, why does it seem like interest rates are so closely related to the time value of money? Well, that is because…

  • Why the Federal Reserve Exists

    The era prior to the establishment of the federal reserve was marked by prominent panics and economic breakdowns. One example is the Panic of 1907, when the New York Stock Exchange fell nearly 50% and an economic collapse was nearly incited. Banks operated independently, and when general confidence in the banks fell, people rushed to…

  • Why a Dollar Today is Worth More Than a Dollar Tomorrow

    Today, we will be talking about the time value of money. The time value of money makes the argument that any amount of money today is worth more than that same amount tomorrow. The key component here is time. The time value of money is essential in considering the future value of investments, loans and…

  • How Are Stock Prices Determined? A Beginner’s Guide

    Have you ever looked at the small numbers in red and green displayed at the bottom of a daily news segment and wondered how those prices are set in the first place? Have you ever wondered why it seems as if these prices change within the blink of an eye? Well, if so, you are…

Is this your new site? Log in to activate admin features and dismiss this message
Log In