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1 vote

Why is there increased speculation that America might go into a recession ? If they do will the rest of the world also face downturn?

This question is really a set of questions. 1 ) Will raising rates lead to a recession? 2 ) Will the US go into a recession (whatever the cause)? 3 ) Would a US recession have spillover effects to ...
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2 votes

Savings = Investment. High interest rates stifle investment. High interest rate encourage savings. Isn't this a contradiction?

tl;dr There is absolutely no contradiction. $I=S$ is purely definitional like saying all triangles have three angles. It holds always because we defined the word saving in such way to always be equal ...
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4 votes

With what money does a central bank buy gold?

When central banks buy gold, they use their reserves (their assets). A central bank's assets are predominantly government bonds, but gold is also part of the reserves (and so is US currency). So, ...
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1 vote

How do banks trust each other especially in cross-border situations?

When Bank A transfers money to Bank B, it usually does through in Bank C. The exception would be when Bank A is a client of Bank B. Then it would just move money out of its own account and into Bank ...
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