Friday, March 5, 2010

Central Banks and Global Crises

The worldwide credit crisis that began with the collapse of the housing market in the United States in 2008 was just one of many crises that central banks and other financial authorities have had to deal with during the first part of the 21st century.
But the enormity of the 2008 financial collapse required government and central bank intervention never before seen in the global economy. After Lehman Brothers, one of America's biggest investment banks, was allowed to go bankrupt, the Federal Reserve was required to bail out AIG, the world's largest insurance company. The $85 billion bailout was, until then, the biggest bailout in American economic history.
Stock market declines of more than 50% in some countries presaged a global economic meltdown. The concerted action of the world's central banks, including the U.S. Federal Reserve, the Bank of England, the European Central Bank, and the Bank of Japan, helped calm things down for a while. Just as the speed of an engine is regulated by its fuel supply, a country's economy is controlled by regulating its money supply- and each country's monetary policy is the responsibility of its central bank. In Britain, it's the Bank of England; in Switzerland, it's The Swiss National Bank; in the United States, it's the Federal Reserve; in the euro zone countries, it's the European Central Bank; and in Japan, it's the Bank of Japan. Despite the tendency of the media to concentrate on the latest economic statistic, there is no one single indicator that tells us how fast an economy is growing- or if that growth will lead to inflation down the road. And, unfortunately, there is no way to know how quickly an economy will respond to changes in monetary policy. If a country's central bank allows the economy to expand too rapidly- by keeping too much money in circulation, for example- it may cause "bubbles" and inflation. If it slows down the economy too much, an economic recession can result, bringing financial turmoil and rampant unemployment.
Central bankers, therefore, need to be prescient- and extremely careful- keeping one eye on inflation, which is the product of an overheating economy, and one eye on unemployment, which is the product of a slowing economy. In the 21st century economy, however, regulating money supply has become a much more difficult task. Inflation and unemployment have become the yin and the yang of the 21st- century economy. It used to be that reports of a surging economy brought euphoria to the markets. Reduced unemployment means that companies are forced to pay higher wages for scarce workers, and prices of goods and services need to be raised to pay for the increased cost.
In a booming economy, inflation can grow quickly as consumers and businesses begin to compete for increasingly scarce goods and services- and scarcity leads to higher prices. The result is usually a vicious circle of wage and price increases that end up hurting almost everyone- especially those on fixed incomes, who see their buying power decline when prices rise.
The international markets watch each country's inflation rate carefully- always on the lookout for signs that an economy is stalling or overheating. International investors, including gigantic pension funds, hedge funds, and international banks, move billions and sometime trillions of dollars, pounds, euros, and yen around the world on any given day, looking for the best return on their investment. When a country's economy looks like it is growing too strongly, and inflation is about to rear its ugly head, international investors can move their money out of an economy at a moment's notice, preferring to invest their funds in countries with more stable economic growth and low inflation.
Just as a prudent driver keeps an eye on the road ahead, a country's central bank tries to keep the economy on a steady course. Central bankers need to look at all the economic data, such as factory orders, housing starts, consumer credit, retail sales, manufacturing, construction and employment figures-some of which are leading and some of which are lagging indicators-in an ongoing effort to keep the economy from overheating or sliding into recession.


The Central Bank

The central bank has two very important functions within the economic system of a country. The first is to preserve the value of the currency and maintain price stability, its primary tool for this purpose is the management of interest rates. When using the gold standard, the value of banknotes issued by central banks was expressed in terms of gold content, or possibly someone else, the bank tried to maintain certain levels over time.
The second is to maintain financial system stability, since the central bank is the bank of banks, their clients are not ordinary people or specific companies, but the State and existing banks within the territory of the nation to which it belongs. The central bank takes deposits from its customers and keeps them in accounts which they have in him. With these transactions for clients' accounts with other banks through the payment and clearing systems (SNCF, TARGET2), as an individual in a commercial bank account used for transactions with another individual. In turn, the central bank also provides loans to banks with liquidity problems, or to other states.
Normally, in circumstances of war, governments in a country solve their financial needs with its own central bank.
Central banks are in
* Custodians and administrators of the gold and currency reserves;
* Providers of legal tender;
* Perpetrators of exchange rate policies;
* Responsible for monetary and price stability;
* Service treasury services and financial agents of the Public Debt of national governments;
* Lender of last resort (banks banks);
* Promoters of the proper functioning of financial system stability and payments systems;


Thursday, March 4, 2010

Mathematics in Computer Programming

Mathematics is applicable in various traditional fields of engineering: mechanical and electrical engineering are among them. Mathematics is used in computer engineering too.
As Venn diagrams are helpful in understanding the concepts of logic, they are also helpful in the programming. For instance, De Morgan's laws are used in writing statements involving decisions and Venn diagrams are helpful in understanding these laws.

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Calculations are also important in the science of computers. The text you read on the computer screen is presented in a particular format. Geometry is used in the development of graphics. Actually a graphics screen resembles the co-ordinate plane. Just as we have points in the co-ordinate plane, we have pixels on the graphics screen. Though there are endlessly many points in any bounded part of the plane, while the number of pixels on the graphics screen is limited, yet the techniques of coordinate geometry can be used in drawing various figures on the graphics screen.
Various transformations play a part in the development of software. As the graphs are useful in understanding different kinds of transformations, these help understand, in particular the Pop and Push transformations too.
The classical computer programming language namely 'the C language' makes a lot of use of mathematics. Different graphics commands of this language are based on the mathematical logic.


MIT Computer Science Degree Has the Highest Recognition

Located in Cambridge, Massachusetts, the Massachusetts Institute of Technology (MIT) is one of the best-known universities across the world. The Massachusetts Institute of Technology (MIT) is one of two private land-grant universities. Essentially a private university, MIT comprises of five schools and one college. The institution lays strong emphasis on scientific and technological research and is known for its expertise in the same. Earning your degree from MIT means a lot as it holds high repute across borders. This is why there are numerous aspirants that seek a MIT degree in various subjects. These could be a degree in mathematics, arts, zoology, music, healthcare or even a MIT computer science degree.

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The famed MIT computer science degree is known not just for the repute it holds worldwide but also for the enriching learning experience that it offers to the students. The MIT degree offers high quality education to the students, which is why the degree is acknowledged even the biggest of corporate honchos. The quality of the education served at MIT is evident from the fact that institution has a number of noble prizes to its credit. 'Excellence in engineering' seems to be the motto of the institute as suggests their alumni that have held their name in their respective fields. Some of the notable alumni of the institution include names like Col. Buzz Aldrin, NASA Astronaut; IM Pei, world-renowned designer and architect; Robert Metcalfe, inventor of Ethernet.
If you are enrolling yourself at MIT, you can undertake several programs in computer science. These could be an undergrad program, a bachelor's degree, or even a master's in computer science. All these programs serve you with the quality education and prepare you for an astounding career in IT. Though there are several subjects that you are taught as a part of a MIT computer science degree, artificial intelligence and aerospace engineering continue to be some key specialties of the institution. The program focuses on the accomplishment of specific tasks that are complex and need an accurate definition.
The MIT computer science degree helps you make a bright and prospering career in almost every area. Computer algorithms, games and graphics, computer architecture, software engineering, computer security?there are so many fields that you could choose from. Sounds interesting. Head to MIT now and get set for a rocking career.


The Magic of Mathematics

I remember when I took mathematics back in high school. It was a drag! Many problems with few given solutions at the back of my mathematics book and many times my teachers just didn't take the time to work the homework problems, so I got quite frustrated. They were busy meeting the demands of the principle and delivering the curricula that was set for them.
So, they were poor slaves in the educational system. However, despite this frustration, I also found great "grace" in mathematics. In fact, I complete five mathematics courses in four years during high school (algebra, geometry, algebra two, precalculus and calculus), and even considered a career as an actuarial mathematician.

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However, over the years after college, I feel in love with computers and computer science, programming, software, documentation, but have taken steps recently to recapture my love for mathematics. I finished my MS Mathematics Education Degree at Nova Southeastern University and have thus recaptured my math skills. Math is magical because it helps you to "reason" your way through a problem in small steps until a final solution is determined.
Math, in many ways, is philosophical and helps the student learn to reason from within the parameters of certain math principles and laws. In the world of business, we are presented with parameters at a job or on a project, so must work toward a solution, but at the same time respect the very parameters that define the project. Mathematics is a great skill and should be applied in business - in accounting and finance alike. Professionals from both professions have much to gain by opening their old math books and working some problems. They are getting back in touch with the essence of their decision making abilities. This can translate back to them in many ways - and soon they will find themselves succeeding at work and in all number-crunching endeavors.


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