# News & Current Events > Economy & Markets >  myths about the federal reserve

## dujac

i'd like to address the myths, one at a time


*myth number one*

*the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders*

anyone that disagrees with this being a myth is welcome to disclose evidence against the assertion

----------


## Travlyr

> i'd like to address the myths, one at a time
> 
> 
> *myth number one*
> 
> *the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders*
> 
> anyone that disagrees with this being a myth is welcome to disclose evidence against the assertion


That is unknown since its books are closed to audits. Do you have access to inside information?

----------


## dujac

> That is unknown since its books are closed to audits. Do you have access to inside information?


that's a different myth, it's just the monetary policy that isn't audited

Each member of the Federal Reserve is audited by independent private accounting firms, by the GAO and by internal means; on a yearly basis.

here's a link to see the audits and reports:

http://www.federalreserve.gov/boardd...ss/default.htm

----------


## Cowlesy

We are well aware that the Federal Reserve's GAAP accounting profits, post member bank dividends, are returned to the U.S. Treasury.

Member banks most certainly profit from the easy-money climate that the Federal Reserve creates, not to mention reaping MASSIVE profits by being able to unload garbage paper on the Fed at or with a slight haircut to face value that may ultimately prove worthless.

----------


## Travlyr

The monetary policy not being audited is problematic in itself. 

Do you have access to the governing documents which established the Federal Reserve System in 1913 showing who are the stockholders?

----------


## Chester Copperpot

Oh no... not a new pro-fed person trying to rally the cause of the federal reserve..

you must be out of your mind oP

----------


## hazek

Whoever still has questions about the FED should just spend those measly 2hours and watch The Creature From Jekyll Island (by G. Edward Griffin):

----------


## dujac

> The monetary policy not being audited is problematic in itself. 
> 
> Do you have access to the governing documents which established the Federal Reserve System in 1913 showing who are the stockholders?


yes and anybody can read the federal reserve act

there are no individual owners of federal reserve bank stock, it's owned by member banks

here's a link to the federal reserve act

http://www.federalreserve.gov/aboutthefed/fract.htm

----------


## Mini-Me

> We are well aware that the Federal Reserve's GAAP accounting profits, post member bank dividends, are returned to the U.S. Treasury.
> 
> Member banks most certainly profit from the easy-money climate that the Federal Reserve creates, not to mention reaping MASSIVE profits by being able to unload garbage paper on the Fed at or with a slight haircut to face value that may ultimately prove worthless.


Plus, "member bank dividends" are hardly insignificant.  When you consider that the Fed and banking industry is coercively placed at the heart of the economy, the amount of money flying through there is so high that the member banks and their fat cats are making a killing on the 6% (I think) they get to keep of the profits.  All that said, it's still not the main reason to oppose the Fed (even if it's one of the main reasons for its existence)...just kind of an outrageous/obscene side show.

----------


## dujac

> Whoever still has questions about the FED should just spend those measly 2hours and watch The Creature From Jekyll Island (by G. Edward Griffin)


here's another one of g edward griffin's videos

in this one he says that noah's ark is over on mount judi

----------


## dujac

> Plus, "member bank dividends" are hardly insignificant.  When you consider that the Fed and banking industry is coercively placed at the heart of the economy, the amount of money flying through there is so high that the member banks and their fat cats are making a killing on the 6% (I think) they get to keep of the profits.  All that said, it's still not the main reason to oppose the Fed (even if it's one of the main reasons for its existence)...just kind of an outrageous/obscene side show.


member banks get 6% of their investment in the stock, not 6% of loan profits

----------


## Cowlesy

> member banks get 6% of their investment in the stock, not 6% of loan profits


Can I invest in the Fed and get a guaranteed 6% yearly dividend?  I'll take it!

----------


## dujac

> Can I invest in the Fed and get a guaranteed 6% yearly dividend?  I'll take it!


no, it doesn't work like that

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

http://www.federalreserve.gov/genera...q/faqfrs.htm#5

----------


## Cowlesy

> i'd like to address the myths, one at a time
> 
> 
> *myth number one*
> 
> *the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders*
> 
> anyone that disagrees with this being a myth is welcome to disclose evidence against the assertion


So you sign-up on this messageboard and want to address the Federal Reserve.  Are you an employee or consultant of the Federal Reserve or an affiliated entity trying to combat 'misconceptions' about the Federal Reserve System?

----------


## Cowlesy

> no, it doesn't work like that
> 
> The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
> 
> http://www.federalreserve.gov/genera...q/faqfrs.htm#5


Yes, we get that.  A 6% return on member bank capital is still great if you can get it.

----------


## hazek

> here's another one of g edward griffin's videos
> 
> in this one he says that noah's ark is over on mount judi


You know what's funny though. He agrees with you. He also says that: "myth number one

the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders" is merely a myth.


Btw I've never seen that video you posted before so I watched a few seconds of it and as soon as I got to the mark 2:15 where he says: "but the purpose of this presentation is to examine the historical and archeological records, nothing more" which I really don't understand how anything after that could hurt his credibility.

And btw I'm a very vocal atheist. Others on this forum will confirm!

----------


## Cowlesy

> no, it doesn't work like that
> 
> The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
> 
> http://www.federalreserve.gov/genera...q/faqfrs.htm#5


Why don't you address my pointing out that the Federal Reserve by purchasing garbage assets from their member banks at par or with a slight haircut during the banking crisis saved those banks from massive losses (given the fact there were no bids for those toxic assets so they were bailed out by the Fed), thereby saving those banks from insolvency caused by massive losses.

----------


## dannno

> there are no individual owners of federal reserve bank stock, it's owned by member banks


Oh, I wasn't aware that individuals don't own banks, thanks for letting me know

----------


## Mini-Me

> member banks get 6% of their investment in the stock, not 6% of loan profits


Perhaps there's a bit of a semantic difference, but it's not that substantive of one.  (Where does the stock gets its value, and where does the money come from to pay dividends?)  It's still called "making a killing," not that that's the primary reason to oppose the Fed.*  I'm guessing you're probably here to troll, but if you educate a few Money Masters viewers about Fed myths, I can't really complain.  It's too easy to get confused about the Fed and hate them for the wrong reason.

*The primary reason is the destructiveness of manipulated interest rates and an inflationary currency, especially an inflationary currency declared "legal tender" and shielded from competition (no, foreign currencies don't count).

----------


## dujac

> So you sign-up on this messageboard and want to address the Federal Reserve.  Are you an employee or consultant of the Federal Reserve or an affiliated entity trying to combat 'misconceptions' about the Federal Reserve System?


no, i'm a private business owner with no connection to any government institution

----------


## Cowlesy

> no, i'm a private business owner with no connection to any government institution


I didn't ask if you had a connection to a government institution now did I?

----------


## hazek

Anyway, dujac or anyone else for that matter. You should spend those two hours and watch that video of his.

----------


## hazek

Hey guys he's right. Edward Griffin confirms it, it's a myth, so leave him alone.

----------


## dannno

> here's another one of g edward griffin's videos
> 
> in this one he says that noah's ark is over on mount judi


Ad hominem attack..

Also, do you have proof that what they found is in fact NOT Noah's Ark?

----------


## dujac

> Perhaps there's a bit of a semantic difference, but it's not that substantive of one.  (Where does the stock gets its value, and where does the money come from to pay dividends? )


the federal reserve act set the value of the stock to $100 per share

the fed made $78 billion in profit last year, it's paid from that

i doubt any of the member banks get exited about $6 a year, i don't think there are many shares in existence

----------


## Mogambo Guru

... we want sound money...  not a central bank.  What part of this do you not understand..  

Myth's or not, it is a central bank.  Our whole monetary system is credit based.

----------


## dannno

> no, i'm a private business owner with no connection to any government institution


If you own a business then your primary interest is maintaining the viability of your for profit business. How are you supposed to maintain your business' viability if the Fed is artificially lowering interest rates causing a boom cycle, which causes your business to increase demand anticipation and causes you to over-buy inventory that you will have to significantly mark-down during the 'bust' cycle? This causes many businesses to go under. Why not let the free market take care of investments and loans so that there is a market stabilised rate for loans that doesn't cause market forecasting distortions?

----------


## dujac

> Anyway, dujac or anyone else for that matter. You should spend those two hours and watch that video of his.


i've watched the video and i read 'the creature from jekyll island', years ago

----------


## Cowlesy

> the federal reserve act set the value of the stock to $100 per share
> 
> the fed made $78 billion in profit last year, it's paid from that
> 
> i doubt any of the member banks get exited about $6 a year, i don't think there are many shares in existence


Statutory dividends in 2009 were $1.4 BILLION.  I'd take it.

----------


## Joey Fuller

is dujac a code word for 'shill' or an alias of ben bernanke or cass sunstein?

----------


## Mini-Me

> the federal reserve act set the value of the stock to $100 per share
> 
> the fed made $78 billion in profit last year, it's paid from that
> 
> i doubt any of the member banks get exited about $6 a year, i don't think there are many shares in existence


Interesting.  I've never heard this take on it, but I'll hold out for gonegolfin's verdict before taking it at face value (I still haven't read all the literature I have on the Fed, e.g. "Modern Money Mechanics" and "The Federal Reserve System - Purposes & Functions.)  Plus, Cowlesy's $1.4 billion figure sounds a bit more...honest?

----------


## sratiug

> i'd like to address the myths, one at a time
> 
> 
> *myth number one*
> 
> *the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders*
> 
> anyone that disagrees with this being a myth is welcome to disclose evidence against the assertion





> div·i·dend Noun   /ˈdiviˌdend/ listen
> Synonyms:
> 
>     * noun: divvy
> 
>     *
>       dividends plural
> 
>     *
>       A sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves)


Why does the FED pay a 6% dividend to its shareholders?

----------


## dujac

> If you own a business then your primary interest is maintaining the viability of your for profit business. How are you supposed to maintain your business' viability if the Fed is artificially lowering interest rates causing a boom cycle, which causes your business to increase demand anticipation and causes you to over-buy inventory that you will have to significantly mark-down during the 'bust' cycle? Why not let the free market take care of investments and loans so that there is a market stabilised rate for loans that doesn't cause market forecasting distortions?


i think it's better to have stability rather than wild fluctuations, like in the 18th & 19th century

----------


## Mogambo Guru

LOL, stability...  Right.  A stable decline in the value of the dollar maybe.  Why do you hate capital savings?  Why dont you want people to be able to save for retirement?

Or what about the huge expansion and enrichment of the middle class from the industrial revolution?  Hours worked dropping, comfort of living rising?  What do you have against these things?

No problem today with unsustainable debt either, right?  We all know that happens "naturally" in the free market with sound money...

----------


## dujac

> ... we want sound money...  not a central bank.  What part of this do you not understand..  
> 
> Myth's or not, it is a central bank.  Our whole monetary system is credit based.


gold & silver are volatile commodities, they're not all that sound when it comes to using them as currency

 its inelasticity of supply is the primary problem

besides, if you want gold or silver, you're free to buy as much as you want

----------


## Mini-Me

> i think it's better to have stability rather than wild fluctuations, like in the 18th & 19th century


By stability, do you mean a steady 96% decline in the value of the dollar from its value in 1913, when its buying power in 1900 was nearly the same as that in 1800?   I'd much rather have comparatively small fluctuations than the steady erosion of savings, disincentive to save (and corresponding economic imbalances), increasing prices (note that wage increases always play catch-up), incentive for endless government spending and borrowing (and wars), and artificial elevation of banking and credit to the center of the economy, that the Fed creates.  That, of course, is completely ignoring all of the other devastating effects that it may have if the Austrian business cycle theory is true (which I believe it is).

No, I'll take my economy burger plain without Fed, thank you.




> gold & silver are volatile commodities, they're not all that sound when it comes to using them as currency
> 
>  its inelasticity of supply is the primary problem
> 
> besides, if you want gold or silver, you're free to buy as much as you want


Take away the taxes on them, and I'll agree with you (mostly, at least).

----------


## Cowlesy

> gold & silver are volatile commodities, they're not all that sound when it comes to using them as currency
> 
>  its inelasticity of supply is the primary problem
> 
> besides, if you want gold or silver, you're free to buy as much as you want


By having a mandate for inflation, you've steadily robbed those who've expected to receive a rate of return on their federal reserve notes held as deposits at the member banks.

The real rate of return on savings right now is negative.  The Fed's policies loot savers in preference to debtors.

----------


## dujac

> LOL, stability...  Right.  A stable decline in the value of the dollar maybe.  Why do you hate capital savings?  Why dont you want people to be able to save for retirement?


i don't hate capital savings, but i think deflation is more problematic than inflation

here's a short article explaining why the gold standard is obsolete:

http://investorcentric.blogs.nuwirei...-obsolete.html

----------


## Mogambo Guru

.. a government controlled gold standard??  Whereby paper claims to gold are created while the dollar amount for gold remains the same?  (not free to adjust to accomodate the paper claims created)

.. and who said anything about a gold standard? (even though I personally believe it to be best, not all RPF members agree)

Please explain how deflation is problematic?  This is how the free market works.. competition of goods for money.

If you dont hate capital savings, why do you insist on punishing savings?  I dont punish my wife for loving me.

----------


## demolama

This guy has got some balls signing up just to praise the Fed Res lol

----------


## dujac

> By having a mandate for inflation, you've steadily robbed those who've expected to receive a rate of return on their federal reserve notes held as deposits at the member banks.
> 
> The real rate of return on savings right now is negative.  The Fed's policies loot savers in preference to debtors.


no system is perfect, but a small annual inflation rate can be beneficial to many people

banks don't generally want much inflation, they make money by lending it and collecting it back later, with interest, if loans are paid back in money worth less than the original loan, then banks lose out

----------


## dujac

> This guy has got some balls signing up just to praise the Fed Res lol


i'm not praising the fed, i dispelling myths

----------


## Mini-Me

> i don't hate capital savings, but i think deflation is more problematic than inflation


Slow, gradual deflation over time is NOT problematic at all.  It simply results from increased production and abundance leading to greater buying power of money.  Borrowers don't get screwed paying back in more valuable money, because all the other money they're making still has greater purchasing power than before.  The ONLY kind of deflation that is problematic is a swift and precipitous destruction of the money supply...which is only realistically possible with central banking.  Of course, other coordinated actions with no counterbalance (e.g. government actions, like the Civil War ) can inflict this kind of thing too, to a lesser degree, but government is still the common denominator.





> here's a short article explaining why the gold standard is obsolete:
> 
> http://investorcentric.blogs.nuwirei...-obsolete.html


The "gold standard" mentioned in the article IS obsolete, because the author is referring to pegging the dollar to gold rather than actually using gold as currency.  They're two OPPOSITE things.  Pegging the dollar to gold is in fact just setting a price control on gold, which would be disastrous.  In contrast, introducing a new currency gradually (and allowing private companies to do the same), which is denominated in actual weights of gold, would allow people to gradually adopt that currency as a pricing standard.  Increased use would gradually make the value of the currency go up until it accurately reflected the buying power of a gold currency with respect to all the other goods and services on the market.

The same applies to any number of freely competing currencies, e.g. silver.  After all, gold would become too valuable under a free market gold standard to actually be carried into groceries in physical form; hell, it's too valuable today.  Paper certificates of ownership, checks, and electronic debit/credit would still exist though, and banks would just make sure to frequently adjust physical possession of gold (in their own self-interest) to reflect transfers between accounts at different financial institutions.  Anyway, another metal, e.g. silver or something else, would still probably end up filling any remaining "supermarket cash" void left by gold alone.

----------


## Mogambo Guru

> By having a mandate for inflation, you've steadily robbed those who've expected to receive a rate of return on their federal reserve notes held as deposits at the member banks.
> 
> The real rate of return on savings right now is negative.  The Fed's policies loot savers in preference to debtors.


Exactly, people used to come out AHEAD on savings.. because it was borrowed by banks for exanding the economy.  Then interest used to offset inflation for a time, so you could break even, and now savings is punished with net negative returns.

----------


## Mogambo Guru

what about small annual deflation!  

Deflation is what enables people to enter the workforce when productivity gains are realized...  Inflation forces people out.

----------


## dujac

> By stability, do you mean a steady 96% decline in the value of the dollar from its value in 1913, when its buying power in 1900 was nearly the same as that in 1800?


the average american worker today is some 36 times richer than his or her counterpart was back in 1895

a zero inflation monetary policy is likely to lead to unpredictability and instability, a 2% inflation rate policy that maintains a constant rate of inflation, allow firms to make reasonable prediction in the future about price and wage levels

no inflation raises the risk of our economy slipping into deflation or a deflationary spiral; decreases in prices causes wages to fall and less goods to be produced, which causes prices to fall further causing further decreases in wages, goods production and employment

----------


## Mini-Me

> no system is perfect, but a small annual inflation rate can be beneficial to many people
> 
> banks don't generally want much inflation, they make money by lending it and collecting it back later, with interest, if loans are paid back in money worth less than the original loan, then banks lose out


...not if high inflation rates lead to steadier business for the banks.

----------


## Travlyr

> no system is perfect, but a small annual inflation rate can be beneficial to *many* people


"Many" being a few thousand at the expense of billions.




> banks don't generally want much inflation, they make money by lending it and collecting it back later, with interest, if loans are paid back in money worth less than the original loan, then banks lose out


An asset based monetary system is honest and liberating, while the banker's debt based fiat monetary system is dishonest and enslaving.

----------


## Mini-Me

> the average american worker today is some 36 times richer than his or her counterpart was back in 1895


Yes, and if not for inflationary monetary policy, the technological and infrastructural developments responsible for that would have made that number much higher than 36.  We have become wealthier despite, not because of, the Fed and inflation...or at the very least, any benefits that WERE due to them (e.g. our trade deficit) have been fleeting, because they're about to come crashing down on us like a trillion ton asteroid straight out of China.




> a zero inflation monetary policy is likely to lead to unpredictability and instability, a 2% inflation rate policy that maintains a constant rate of inflation, allow firms to make reasonable prediction in the future about price and wage levels


I'm not seeing the whole "unpredictability and instability" thing, myself.




> no inflation raises the risk of our economy slipping into deflation or a deflationary spiral; decreases in prices causes wages to fall and less goods to be produced, which causes prices to fall further causing further decreases in wages, goods production and employment


You're putting the cart before the horse here.  First, explain how your hypothetical deflationary spiral begins (without a central bank creating an unstable credit environment, please), and then someone can explain why it would end rather than turn into a perpetual spiral at all.

----------


## dujac

> "Many" being a few thousand at the expense of billions.
> 
> 
> An asset based monetary system is honest and liberating, while the banker's debt based fiat monetary system is dishonest and enslaving.


it didn't work like that throughout history, the 19th century economy in the usa was erratic

economic instability as a result of gold and silver imports from the americas, in the 16th and 17th century, lead to the downfall of spain as a leading world power

----------


## dujac

> Yes, and if not for inflationary monetary policy, the technological and infrastructural developments responsible for that would have made that number much higher than 36.  We have become wealthier despite, not because of, the Fed and inflation...or at the very least, any benefits that WERE due to them (e.g. our trade deficit) have been fleeting, because they're about to come crashing down on us like a trillion ton asteroid straight out of China.
> 
> 
> I'm not seeing the whole "unpredictability and instability" thing, myself.
> 
> 
>  explain how your hypothetical deflationary spiral begins


people are less likely to spend a dollar if they know it will be worth more in the future

----------


## Mini-Me

> it didn't work like that throughout history, the 19th century economy in the usa was erratic
> 
> economic instability as a result of gold and silver imports from the americas, in the 16th and 17th century, lead to the downfall of spain as a leading world power


I'm rusty.  This was probably due to slow, inefficient, and infrequent delivery of gold reserves to reconcile trade deficits, right?  (That's a genuine question).  In any case, do note that I don't advocate a government-run gold standard, like the gold standards of old.  They are indeed problematic (even if not so much as the current fiat system).

----------


## PlzPeopleWakeUp

I love Big Brother.

----------


## Mini-Me

> people are less likely to spend a dollar if they know it will be worth more in the future


That means they're more likely to save it, and savings provide the capital for new businesses to start.  The savings provide capital for just the right number of new businesses, in fact, rather than a glut of businesses during booms, which all have the same idea and then crash and burn in a huge cluster.  (This is due in large part to there not being enough room for all of them to start up and make their way at once, due to a limited number of consumer dollars and a limited labor pool.)

In any case, the only dollars people will not spend are discretionary dollars.  They still have to eat, and they still have to fill their tank, and they're still probably going to pay their utility bills and rent/mortgages (unless they own outright), and they're still going to buy consumer necessities.  They might eat a little less, or a little thriftier, but they're still going to pay to eat (and keep the farmers producing ).

It's only luxury items that people will hold out on, and even that is pretty hypothetical.  Do you know why?  It's because we already have a test case in the real world, right now:  Look at the technology industry.  Because it is not highly regulated, it has not stagnated, and it's progressing fast enough to defy even inflation.  Consumer tech devices become more capable and less expensive every single year.  Look at hard drive prices, memory prices, processor prices, etc.  They all keep going down, but people keep buying them.  Until the recession, we had a nonstop consumer spending spree on items that endlessly went down in price (actually, buying is picking back up again, although I really think people should be saving still...).  Do you know why?  It's because people have time preferences, and not everyone is going to sit around and endlessly wait for things to get cheaper and cheaper and cheaper if they want/need something now.  Especially if people know their wages/salaries will be worth more next year, they're not going to be extraordinarily tight with their money.

Also, note that technology prices go down DRAMATICALLY every year.  In contrast, price deflation in other sectors (due to gradually increasing production) would be more on the order of a few percent.  Given that, the technology industry already has far "worse" price deflation than the more gentle economy-wide deflation that a steady monetary base would create...yet it hasn't created a deflationary spiral of non-spending. 

Still, what if it really did happen, and people suddenly engaged in disproportionate saving?  Well, first, interest rates would drop, which would reduce some incentives for that.  Anyway, if people do decrease their spending, demand for luxury products goes down, and there's no sense in continuing to produce more than demand allows.  What's wrong with that though?  The reduction in supply begins to increase prices again, which encourages people to say, "Oh crap, I'd better spend my money now before it's worth nothing" according to your mental model...although really, I'd say it encourages people to say, "Meh.  I'll wait for prices to go down again," and continue saving.  Maybe they'll eventually buy the same luxury products again, or maybe not (in which case, were they really all that necessary? ).  Either way, the increased savings lead to capital investment and people being able to realize new companies to produce goods/services that are or will be in high demand (and those new companies can reduce the unemployment caused by the downswing in demand for another company's product).

----------


## Mogambo Guru

> no inflation raises the risk of our economy slipping into deflation or a deflationary spiral; decreases in prices causes wages to fall and less goods to be produced, which causes prices to fall further causing further decreases in wages, goods production and employment


Can you please site one time that this has happened?(without a totally credit/fiat based currency)

Thanks.

----------


## dujac

> ???
> 
> In 1895 I could go to the tailor and buy a nice suit for an ounce of gold.
> I can do the same today. Just harder to save up that much money today.
> 
> As I look around and see all this cheap $#@! made in china full of toxic chemicals...
> We are not richer, commodities are price controlled, oil prices subsidized, and we live in an world full of fancy electronics made cheap by moore's law.
> 
> I want 20 acres of land. Sorry that will cost you a few million, and if you do get it then your going to have pay up big time every year for it. Perhaps I could interest you in an ipod? YAY we're 36% richer.
> ...


in 1895 it took the average worker over a month of labor to be able to buy a bicycle, now it takes a day or two

the 20th century brought vast improvements in nearly every category

i have 30 acres and i didn't pay anything near a million for it

----------


## Mogambo Guru

> people are less likely to spend a dollar if they know it will be worth more in the future


Eventually there is a point when people decide to spend that money...  What good does it do a person to just keep stockpiling money forever without realizing the fruits of your labor??  Besides, if they have it in savings, that means it is being lent out to businesses to expand the economy.

You seem to base a lot of your "theories" on the foundation of a credit based system as we have today..  Obviously things are different with sound money vs a totally fiat money, but you seem to carry over these "theories" from the fiat system and think that they are applicable in a sound money system..  (like a deflationary death spiral)
I suggest you learn to "think" rather that regurgitate lies that have been cast off as "facts" these past 100 years.

*maybe you should just stick to wine*

----------


## dujac

> Eventually there is a point when people decide to spend that money...  What good does it do a person to just keep stockpiling money forever without realizing the fruits of your labor??  Besides, if they have it in savings, that means it is being lent out to businesses to expand the economy.
> 
> You seem to base a lot of your "theories" on the foundation of a credit based system as we have today..  Obviously things are different with sound money vs a totally fiat money, but you seem to carry over these "theories" from the fiat system and think that they are applicable in a sound money system..  (like a deflationary death spiral)
> I suggest you learn to "think" rather that regurgitate lies that have been cast off as "facts" these past 100 years.
> 
> *maybe you should just stick to wine*


show me something i wrote that you think is a lie

----------


## Bossobass

Myth #1: Stability.

FR Act, 1913. WWI, 1914. Along with that, the Fed Gov got the right to TAX its citizen's INCOME. America enters a world war that is none of its business for the first time. 




> Where did the money come from to buy all these munitions? Then as now there were, the experts agreed, three basic ways to raise the money: *(1) raising taxes, (2) borrowing from the public, and (3) printing money.* In the Civil War the government had had simply printed the famous greenbacks. *In World War I it was possible to "print money" in a more roundabout way. The government could sell a bond to the newly created Federal Reserve. The Federal Reserve would pay for it by creating a deposit account for the government, which the government could then draw upon to pay its expenses.* If the government first sold the bond to the general public, the process of money creation would be even more roundabout. In the end the result would be much the same as if the government had simply printed greenbacks: *the government would be paying for the war with newly created money.*
> 
> *Heavy reliance on the Federal Reserve meant, of course, that the stock of money increased rapidly. As shown in Table 1, the stock of money rose from $20.7 billion in 1916 to $35.1 billion in 1920, about 70 percent. The price level (GDP deflator) increased 85 percent over the same period.*





> *In October 1917 Congress responded to the call for higher taxes with the War Revenue Act.* This act increased the personal and corporate income tax rates and established new excise, excess-profit, and luxury taxes. *The tax rate for an income of $10,000 with four exemptions (about $140,000 in 2003 dollars) went from 1.2 percent in 1916 to 7.8 percent.* For incomes of $1,000,000 the rate went from 10.3 percent in 1916 to 70.3 percent in 1918. These increase in taxes and the increase in nominal income raised revenues from $930 million in 1916 to $4,388 million in 1918. *Federal expenditures, however, increased from $1,333 million in 1916 to $15,585 million in 1918. A huge gap had opened up that would have to be closed by borrowing.*


Then the first "bubble". The roaring 20s. The Stock Market Speculation Bubble. This, of course, led to The Great Depression. Since then, on average, there has been a recession every 4.5 years.

Myth #2: Full Employment.  From 1900-1913 unemployment averaged 3%. Since the FR Act, the average unemployment in the US has been 4.5%, but that's aside from the Central Bank caused inflation/recession business cycles (there were 19 business cycles during the 20th century), during which recessions, the average unemployment was 10%, which, as mentioned earlier, occurred every 4.5 years on average, and skewed by the fact that the Fed changes the way it calculates inflation and unemployment at will.

Myth #3: Low Inflation. Since the Fed was handed control of the US Dollar, it has lost 98% of its original value. From 1900-1913, inflation was less than 1%. Since then, WWI, WWII, Korean "Police Action", Vietnam "Dominoes Game" all saw high double digit inflation and debt that will never be repaid. Even with the deflation of the Great Depression, the inflation rate has averaged 5 times what it was before the FR Act.

Myth #4: The member banks don't profit from top secret foreknowledge of wars, interest rates, money supply inflation/contraction, business cycle inflation/recession, the next bubble, etc.

Well, what the $#@! does one say to that sort of imbecilic bull$#@!? I dunno.

Myth #5: All Fed Apologists cant kiss my ass. That is patently false... kiss away.

It's Miller Time.

Bosso

----------


## Mogambo Guru



----------


## dujac

> Myth #1: Stability.
> 
> Then the first "bubble". The roaring 20s. The Stock Market Speculation Bubble. This, of course, led to The Great Depression. Since then, on average, there has been a recession every 4.5 years.


what about these?

Panic of 1797
Depression of 1807
Depression of 1815
Panic of 1819
Panic of 1825
Panic of 1837
Panic of 1847
Panic of 1857
Panic of 1866
Black Friday (1869)
Depression of 1873
Panic of 1884
Panic of 1890
Panic of 1893
Depression of 1896
Panic of 1901
Panic of 1907
Panic of 1910-1911

----------


## Travlyr

> it didn't work like that throughout history, the 19th century economy in the usa was erratic


All due to bimetallism, fiat money, and government monopoly protections. Everybody, except bankers and politicians, can do much, much better in the 21st century with honest sound money.

----------


## dujac

> All due to bimetallism, fiat money, and government monopoly protections. Everybody, except bankers and politicians, can do much, much better in the 21st century with honest sound money.


what do you think gives gold its value?

and just so you know, there are extremely rare things that have little to no value

----------


## Mogambo Guru

slow gradual inflation is good
slow gradual deflatoin is bad
central banks provide stability and are good for an economy
that a sound money standard cant work
deflationary spiral



> i think it's better to have stability rather than wild fluctuations, like in the 18th & 19th century


  Ever stop to think about this a little more??  we didnt experiment with central banks back then??



> gold & silver are volatile commodities, they're not all that sound when it comes to using them as currency
> 
> its inelasticity of supply is the primary problem


this is its primary benefit.. the supply of money does not matter, that only changes price structure and enables redistribution of wealth and manipulation




> i don't hate capital savings, but i think deflation is more problematic than inflation


if you dont hate savings, why do you prefer to punish it?  also, again the lie that slow deflation is worse than slow inflation..




> a zero inflation monetary policy is likely to lead to unpredictability and instability


based on what??




> economic instability as a result of gold and silver imports from the americas, in the 16th and 17th century, lead to the downfall of spain as a leading world power


I am not sure about this, but was the real downfall of spain because it overextended itself??  Lack of gold/silver being the symptom of the problem rather than the cause of the problem??  I am not sure..



That should be a start..  I am very curious about this "deflationary death spiral"  LOL

----------


## hazek

dujac I have 1 simple question for you:

Can you explain to me in simple terms why is it that it used to be enough for the man of a family to have 1 job and they could afford a nice house and raise 3 children and provide them with everything they needed, pay for their education, have two cars and go on a vacation 2 times a year when nowadays all members of the family have to tear themselves apart just to make ends meet and they probably have some debt on top?

What might be the reason for that? Hmmmm

----------


## Travlyr

> what do you think gives gold its value?


Desirability, divisibility, durability, scarcity, portability.




> and just so you know, there are extremely rare things that have little to no value


 And there are plentiful things that are way overpriced... houses and cars.

----------


## dannno

> in 1895 it took the average worker over a month of labor to be able to buy a bicycle, now it takes a day or two
> 
> the 20th century brought vast improvements in nearly every category
> 
> i have 30 acres and i didn't pay anything near a million for it


Bicycles used to be hand made, now due to technology they are very cheap to produce large quantities. 

A nice hand-made toga and hand-made shoes used to cost about 1 oz. of gold back in the days of Rome. Today a hand-made suit and hand-made shoes cost about 1 oz of gold. Let's keep these comparisons more realistic.

----------


## dujac

> Desirability, divisibility, durability, scarcity, portability.


you're ticking off what you think are gold's characteristics, not what gives it value

----------


## hazek

> what do you think gives gold its value?
> 
> and just so you know, there are extremely rare things that have little to no value


The fact that you're asking this question shows just how little understanding you have of what money really is and how it came about. Do us all a favor and go to: http://mises.org/media.aspx?action=search&q=money and brush up your economics. Thanks!

----------


## Mini-Me

> what about these?
> 
> Panic of 1797
> Depression of 1807
> Depression of 1815
> Panic of 1819
> Panic of 1825
> Panic of 1837
> Panic of 1847
> ...


That's a lot to answer in one post, no?  There have been some books written on 19th century panics and depressions from an Austrian point of view though.  Here are a few by Rothbard:
A History of Money and Banking in the United StatesThe Mystery of BankingThe Panic of 1819

There are a bunch of others by various authors which address at least one.  I wish it was all in one place for easy reference, but...blah.  Right or wrong, the Austrians are at least able to address these panics and defend the ABCT in light of them.

BTW, gold gets its value the same way everything else does:  As a function of supply and demand.  Demand exists for industrial and cultural reasons, but primarily because it had historical value as money, and many people are smart enough to realize that fiat money is a terribly misguided fad in the grand scheme of things.  It became money in the first place because its nearly ideal characteristics (I'll add chemical and physical stability to Travlyr's list) make it a better (if imperfect) choice of money than probably any other substance on earth, or possibly in the entire universe, interestingly enough (gold is rare everywhere).

----------


## Mogambo Guru

> what about these?
> 
> Panic of 1797  
> Depression of  
> Depression of 1815
> Panic of 1819
> Panic of 1825
> Panic of 1837
> Panic of 1847
> ...


Ahem...  These were not caused because of sound money... Main causes were manipulations to sound money and the creation and destruction of central banks, among other things.  Also, many of these I think were regional.  

and what about 


> changes in the government's regulatory, fiscal, trade and monetary policies. Cycles in agriculture, consumption, and business investment, and the health of the banking industry also contribute to these declines.


Many of those crisis are the result of paper currency, central banks, wars, governments..  not a sound monetary system.

----------


## dujac



----------


## dannno

> you're ticking off what you think are gold's characteristics, not what gives it value


No, that is what gives it value as a currency. What gives fiat currency value? The guns behind them. Yes, violence.. what a great way to give currency value

----------


## dannno

> 


You mean we've had increases in technology that have led to higher productivity since 1890? Wow, who would have thunk it..

----------


## hazek

dujac are you going to answer my simple question?

----------


## Travlyr

Oh boy! Here we go with the charts and graphs. Yea. 

Do yourself a favor and follow hazek's friendly advice.




> The fact that you're asking this question shows just how little understand you have of what money really is and how it came about. Do us all a favor and go to: http://mises.org/media.aspx?action=search&q=money and brush up your economics. Thanks!

----------


## Mogambo Guru

> you're ticking off what *you think are gold's characteristics*, not what gives it value


another lie... gold has been desired for thousands of years, care to dispute that?
it is durable, care to dispute that?
it is divisible, care to dispute that?
it is scarce, care to dispute that?
it is portable, care to dispute that?

These are essential functions of money, arent they?

----------


## Mini-Me

> dujac are you going to answer my simple question?


I doubt it.  He has so many posts to pick from that he's just ignoring the stronger ones.  I really wish he'd concede that I refuted his idea of a "deflationary spiral" in post 54 though.

Anyway...time to eat.  LUVUBAI!

----------


## hazek

> it is durable, care to dispute that?
> it is divisible, care to dispute that?
> it is scarce, care to dispute that?
> it is portable, care to dispute that?
> 
> These are essential functions of money, arent they?


They're not if you are a banker/politician and want to rob the public blind.

----------


## Mogambo Guru

Pulls the GDP on us, LOL...  GDP is basically a measure of money changing hands...  so long as we can continue to borrow, we can have a +GDP!

How about the fact that Q42010, it took $6 of credit to produce each $1 of GDP?

----------


## dujac

> There have been some books written on 19th century panics and depressions from an Austrian point of view though.  Here are a few by Rothbard
> 
> BTW, gold gets its value the same way everything else does:  As a function of supply and demand.


yes, with an emphasis on demand

and it's the same thing that makes fiat money valuable


i've read rothbard, his anti-government/political bias skews much of his work

----------


## Mogambo Guru

.. and everyone on this forum for that matter.

----------


## Mini-Me

> yes, with an emphasis on demand
> 
> and it's the same thing that makes fiat money valuable


It's trivial to create high demand for something when you make it a coercive monopoly (legal tender) and tax the crap out of alternatives though. Get rid of all that enforcement and we'll see what kind of currency the market really demands. 





> i've read rothbard, his anti-government/political bias skews much of his work


That's probably fair to say, but can you name an economist this is untrue of?  Political views greatly color economic views.  *For instance, even if I agreed with Keynesian theory, I believe it's foolish/insane to expect a government to actually implement it honestly and responsibly (instead of using it as an excuse to always run deficits, year in and year out).*  My views on power, incentives, and corruption are intrinsically related to my views on the viability of certain economic institutions.  Anyway, Rothbard at least tries to seriously and honestly address criticisms and alternative views, unlike charlatans like Krugman.  (To be fair though, I'm not actually assuming you subscribe to Krugman's views either; there are plenty of mainstream economists who are actually respectable, even if I think they use the wrong methodology and come to some of the wrong conclusions.)

Anyway, if you're going to respond to any of my posts, please respond to post 54 after reading and considering the whole thing.  Unless you're just here to troll, I really think it might give you another perspective on the "deflationary spiral" you fear.

Okay, I really have to go now.

----------


## Mogambo Guru

> yes, with an emphasis on demand
> *
> and it's the same thing that makes fiat money valuable*
> 
> 
> i've read rothbard, his anti-government/political bias skews much of his work


another lie to the list!  Fiat is accepted because people are forced to accept it for all debts private and public...  not because they choose to accept it in a free market sense.

Just because people that have been born into a system for over 100 years and they dont really understand, doesnt mean they would freely choose to accept fiat if they knew better.

Why would someone CHOOSE to save using money that is worth less and less over time??  That is your own labor being robbed.

----------


## dujac

> Oh boy! Here we go with the charts and graphs. Yea. 
> 
> Do yourself a favor and follow hazek's friendly advice.


notice who posted a stack of graphs and charts before i responded with one graph

when looking for accurate information, it's best to consult sources that have as little bias as possible; the mises institute is extremely politically biased and the information there reflects that

----------


## Travlyr

> when looking for accurate information, it's best to consult sources that have as little bias as possible; the mises institute is extremely politically biased and the information there reflects that





> No, that is what gives it value as a currency. What gives fiat currency value? The guns behind them. Yes, violence.. what a great way to give currency value


That is about as accurate as it gets ... it's the guns behind them.

----------


## hazek

> notice who posted a stack of graphs and charts before i responded with one graph
> 
> when looking for accurate information, it's best to consult sources that have as little bias as possible; the mises institute is extremely politically biased and the information there reflects that


Ahahahaha and the economists in bed with the government that you listen to are not? Please just give up the trolling.

You have to understand something. You can't say practically anything that would convince anyone of us that you (Keynesian school) are right and the Austrian school of economics is wrong. If that's your goal you better just stop.

----------


## Mogambo Guru

> notice who posted a stack of graphs and charts before i responded with one graph
> 
> when looking for accurate information, it's best to consult sources that have as little bias as possible; the mises institute is extremely politically biased and the information there reflects that


Exactly.  But information from the Fed or keynesian school isnt bias, right?

----------


## dujac

> That is about as accurate as it gets ... it's the guns behind them.


how do you explain gold salesmen accepting us dollars in exchange for gold?

----------


## Travlyr

> how do you explain gold salesmen accepting us dollars in exchange for gold?


Profit.

----------


## Mogambo Guru

> Ahahahaha and the economists in bed with the government that you listen to are not? Please just give up the trolling.
> 
> You have to understand something. You can't say practically anything that would convince anyone of us that you (Keynesian school) are right and the Austrian school of economics is wrong. If that's your goal you better just stop.


+1

That about wraps this up...

----------


## hazek

> how do you explain gold salesmen accepting us dollars in exchange for gold?


Because if they don't men in costumes with guns come banging on their doors demanding they do.

----------


## Mogambo Guru

So what is the next myth you would like to clarify for us?

----------


## dujac

> Exactly.  But information from the Fed isnt bias, right?


the federal reserve may have some bias, although i'm not sure what it would be

they are nonpartisan and they're required to report accurate information due to legal liabilities and banking regulations

whereas people like alex jones can say things like, "there's no income tax law"; if he's sued he'll just invoke his first amendment rights

the federal reserve is held to a higher standard than this

----------


## Travlyr

> +1
> 
> That about wraps this up...


Yep. The only people who should be arguing for keeping the counterfeiting cabal in power are those who benefit from their destructive activity. There is plenty of good information readily available so that no one can claim ignorance, anymore.

----------


## dujac

> Ahahahaha and the economists in bed with the government that you listen to are not? Please just give up the trolling.
> 
> You have to understand something. You can't say practically anything that would convince anyone of us that you (Keynesian school) are right and the Austrian school of economics is wrong. If that's your goal you better just stop.


the only school of economic thought more archaic than the keynesians are the austrians

----------


## hazek

Guys, this is my last post. This person obviously didn't come here to learn so I'm going stop feuling his trolling. 

I invite you to do the same.

----------


## Mogambo Guru

> the federal reserve may have some bias, *although i'm not sure what it would be*
> 
> they are nonpartisan and they're required to report accurate information due to legal liabilities and banking regulations
> 
> whereas people like alex jones can say things like, "there's no income tax law"; if he's sued he'll just invoke his first amendment rights
> 
> the federal reserve is held to a higher standard than this


sounds about right.  

& who said anything about alex jones and the income tax?  I havent heard anyone in this thread state we dont have to pay it, we are full aware that if we dont we will be in big trouble.
But since you bring it up, didnt the world function before the income tax??  Sure, there were still poor people and unemployed people, but I thought the income tax was going to solve our problems??  If we just pay a little income tax we will be able to take care of the less fortunate and so on ......  seems these problems are bigger today.  and we have a totally unpayable debt, burdened to us and future generations born into debt.  Its just wonderful.

----------


## dujac

> So what is the next myth you would like to clarify for us?


that john kennedy tried to usurp the federal reserve's power with executive order 11110

----------


## Mogambo Guru

> that john kennedy tried to usurp the federal reserve's power with executive order 11110


Personally, i dont really think there is a need for that...  others may have a different opinion, but I dont believe that.  Although he may have not liked the idea of the federal reserve central bank, I dont put my name on the idea that he was going to usurp its powers and that they had him assassinated.

----------


## Mini-Me

> the federal reserve may have some bias, although i'm not sure what it would be
> 
> they are nonpartisan and they're required to report accurate information due to legal liabilities and banking regulations
> 
> whereas people like alex jones can say things like, "there's no income tax law"; if he's sued he'll just invoke his first amendment rights
> 
> the federal reserve is held to a higher standard than this


...which is why they're so damn opposed to a full audit, right?  I mean, if they're audited all the time and held to such high standards of accountability, surely what Ron Paul proposes isn't so outrageous. 

The Fed is a marriage between the federal government (and military-industrial complex) and the member banks and shareholders.  It's a symbiotic relationship that's in both of their interests...but not ours.

----------


## low preference guy

another myth that is out there is that the federal reserve prints money

Source

----------


## Mogambo Guru

Another thing to consider..  Since you favor 2%(the fed suggests 2% i believe) inflation(which is nothing more than theft to begin with), and inflation is an increase of the money supply, and the money supply only grows via debt....  you are saying we must continually keep creating more and more debt, since it is not possible(according to you) to have prolonged slow deflation, no matter the monetary system.

That seems a little...  odd?  sinister?  dumb?  Im not sure exactly, but it sure doesn't sit right.

----------


## dujac

> Personally, i dont really think there is a need for that...  others may have a different opinion, but I dont believe that.  Although he may have not liked the idea of the federal reserve central bank, I dont put my name on the idea that he was going to usurp its powers and that they had him assassinated.


you might be surprised how many people think that kennedy was opposed to the federal reserve

----------


## Mini-Me

> Another thing to consider..  Since you favor 2%(the fed suggests 2% i believe) inflation(which is nothing more than theft to begin with), and inflation is an increase of the money supply, and the money supply only grows via debt....  you are saying we must continually keep creating more and more debt, since it is not possible(according to you) to have prolonged slow deflation, no matter the monetary system.
> 
> That seems a little...  odd?  sinister?  dumb?  Im not sure exactly, but it sure doesn't sit right.


Actually, the current system demands continued borrowing simply to maintain even a 0% inflation rate, in order to replenish extinguished money when loans are repaid.  Otherwise, we'd have a rapid reduction of the money supply and rapid deflation (which is much different from price deflation due to increased abundance), with catastrophic economic results, and then tons of people would default on loans, and there would be mayhem.  This kind of behavior also makes the system quite difficult to manage.

...just saying.

----------


## dujac

> ...which is why they're so damn opposed to a full audit, right?  I mean, if they're audited all the time and held to such high standards of accountability, surely what Ron Paul proposes isn't so outrageous. 
> 
> The Fed is a marriage between the federal government (and military-industrial complex) and the member banks and shareholders.  It's a symbiotic relationship that's in both of their interests...but not ours.


hr 1207 would likely have politicized the federal reserve's monetary policy

----------


## Mogambo Guru

> you might be surprised how many people think that kennedy was opposed to the federal reserve


He probably did oppose the federal reserve, or maybe just opposed our monetary system, I just dont believe the "fed" had him whacked.

----------


## Mogambo Guru

> hr 1207 would likely have politicized the federal reserve's monetary policy


OMG...  really?  We are worried about the federal reserve being politicized!!! 

You're a riot.

----------


## dannno

> how do you explain gold salesmen accepting us dollars in exchange for gold?


Because there is a group of people with guns out there willing to enforce the fiat currency.. take that away and do you think gold salesmen would accept fiat currency for their gold?

----------


## Mini-Me

> hr 1207 would likely have politicized the federal reserve's monetary policy


Do you seriously believe that based on your own critical thinking, or are you just parroting the same tired sound bite you heard from some corrupt shill?  Seriously, think about it for a second (and think about post 54 too, please).  What is it about actual, real, bonafide accountability that is so scary and creates such fear of monetary policy being "politicized," unless there's actually something going on that would deservedly invite politicization?  Current policy demands blind, obedient trust in both the competence and benevolence of anointed "elites," and only the truly naive could consider that acceptable.

Also, note that you're back-pedaling:  You say they're regularly audited and held to high standards of accountability, but a measure that actually holds them accountable cannot be allowed to pass because it would "politicize" them.  If any kind of real transparency is so politicizing and cannot be permitted, what does that say about how rigorous previous audits have been, and what does that say about the supposed high standards the Fed is already being held accountable to?  Think about it without blind faith in authority for a moment.  (Hint:  It means previous audits haven't been rigorous, and the Fed is actually not held accountable right now at all.  There is no escaping this conclusion if you are to remain honest to yourself.)

----------


## dannno

> hr 1207 would likely have politicized the federal reserve's monetary policy


It's already politicised.. they are slaves to the politicians and will do anything to fund their unconstitutional spending so they can go back and make more promises to the people that they can't actually fulfill. 

The audit simply would have shed light on their activities so the public can finally their unscrupulous behaviour.

----------


## Mogambo Guru

+1 Danno

I also like this chart of total debt per sector...  Cant for the life of me see how people think this is sustainable.... doubling about every 10 years.



Gotta create that debt to get that money.... otherwise people would not be able to function in an economy, or so Im told to believe.

----------


## dujac

> OMG...  really?  We are worried about the federal reserve being politicized!!! 
> 
> You're a riot.


the federal reserve is set up to be independent of partisan politics and doesn't depend on congress for funding, so yes, people that understand how the federal reserve works were concerned that hr 1207 would have politicized the federal reserve's monetary policy




> He probably did oppose the federal reserve, or maybe just opposed our monetary system, I just dont believe the "fed" had him whacked.


 records indicate that kennedy and the federal reserve were nearly always in agreement on policy matters and he signed legislation to give the fed more authority to issue currency; kennedy was in favor of phasing out silver certificate currency

----------


## dujac

> Also, note that you're back-pedaling:  You say they're regularly audited and held to high standards of accountability, but a measure that actually holds them accountable cannot be allowed to pass because it would "politicize" them.


you're mistaken, what i've consistently said is that the federal reserve is abundantly audited

the one thing that isn't audited is monetary policy

here are the audits, look for yourself

http://www.federalreserve.gov/boardd...ss/default.htm

----------


## Mini-Me

> you're mistaken, what i've consistently said is that the federal reserve is abundantly audited
> 
> the one thing that isn't audited is monetary policy
> 
> here are the audits, look for yourself
> 
> http://www.federalreserve.gov/boardd...ss/default.htm


You mean to say the only thing that really matters is the only thing that isn't audited.   Have you ever considered that the Federal Reserve's very secrecy politicizes it and undermines trust in both monetary policy and government?  If they're behaving appropriately, secrecy is the last thing they should want, because it gives the public the impression that something's wrong (which, of course, is true ).

Anyway, your mental wall of naivete and blind faith in authority is pretty impenetrable, so this line of discussion isn't going anywhere.  Let's move back to another subject you raised, which I addressed in *POST 54.*

----------


## low preference guy

> you're mistaken, what i've consistently said is that the federal reserve is abundantly audited
> 
> the one thing that isn't audited is monetary policy
> 
> here are the audits, look for yourself
> 
> http://www.federalreserve.gov/boardd...ss/default.htm


Is it audited? OK. So answer this: Give me the complete lists of foreign central banks to whom the Fed lent money. Also, what's the exact amount of gold in Fort Knox and who and when verified it most recently?

----------


## Danke

http://www.rayservers.com/images/Mod...yMechanics.pdf

http://www.bankreorealestate.com/vid...chauf-cpa.html

----------


## dujac

> Is it audited? OK. So answer this: Give me the complete lists of foreign central banks to whom the Fed lent money. Also, what's the exact amount of gold in Fort Knox and who and when verified it most recently?


here's the gold information:

http://www.fms.treas.gov/gold/current.html

i'll have to look for the list of banks, which i'm not inclined to do, since i suspect you will continue to maintain you current opinion

here's where you can find it:

http://www.federalreserve.gov/moneta...pr_default.htm

----------


## Mini-Me

> here's the gold information:
> 
> http://www.fms.treas.gov/gold/current.html


Ah, a report by "Department of the Treasury, Financial Management Service," with the gold verified annually by the US Treasury's very own Inspector General.  I applaud you with your presentation of accurate and independently verified information.   Hint:  You won't find independent verification, because that's one of the things they're fighting tooth and nail against.  Of course, that's not suspicious at all, is it? 




> i'll have to look for the list of banks, which i'm not inclined to do, since i suspect you will continue to maintain you current opinion
> 
> here's where you can find it:
> 
> http://www.federalreserve.gov/moneta...pr_default.htm


Hint:  You won't find a reliable report, because it's one of the major things the Fed, its shills, and its apologists are doing everything they can to keep under wraps.

Reliably determining these things was the whole point of the legislation you said would "politicize" the Fed.  *If you really thought this information was already publicly available, you must necessarily concede that revealing it for real/opening it up to verification would not unnecessarily "politicize" the Fed.  So, why exactly do you oppose HR 1207 again?*

----------


## dujac

> why exactly do you oppose HR 1207 again?


at times the fed needs to be able to act quickly in controlling credit

if congress were able to interfere with open market operations, the result could be disastrous

----------


## low preference guy

> at times the fed needs to be able to act quickly in controlling credit
> 
> if congress were able to interfere with open market operations, the result could be disastrous


it will fail no matter what. central economic planning doesn't work.

the dollar has lost 98% of its value since the fed was created. between the foundation of the nation and 1913, it gained 16%.

and you're still waiting for something disastrous to occur?

----------


## Danke

> yes and anybody can read the federal reserve act
> 
> there are no individual owners of federal reserve bank stock, it's owned by member banks
> 
> here's a link to the federal reserve act
> 
> http://www.federalreserve.gov/aboutthefed/fract.htm


Are you a bank or a banker?  You know the in the original Federal Reserve Act it was only for banks to use Federal Reserve Notes.

----------


## dujac

> it will fail no matter what. central economic planning doesn't work.


i think it's working pretty well, there hasn't been a depression in nearly 80 years

and it's not really central economic planning, it's regulating the value of currency

----------


## Mini-Me

> at times the fed needs to be able to act quickly in controlling credit


Because central planning works, right?  Maybe the Fed should also start controlling the price of potatoes, and you know, everything else.  That'd be a GREAT idea!




> if congress were able to interfere with open market operations, the result could be disastrous


Oh, well now I understand!  Since we haven't had any major financial disasters lately, we need to maintain the wise and benevolent Fed's power and secrecy to ensure they can continue magically insulating us with their central planning voodoo from everything bad, like imaginary housing market crashes (etc.). 

You believe that a full audit of the Federal Reserve and all of its activities would expose no shenanigans, correct?  In that case, explain how a squeaky clean, unobjectionable audit is going to convince Congress to take it upon themselves to interfere in monetary policy.  (Hint:  It won't.  They'll only risk interference, something politically dangerous for them, if the audit shows that they were wrong to give the Fed so much unilateral authority in the first place.)  Of course, if the audit IS objectionable (and it would be, barring some kind of coverup), then we WANT someone to step in.




> i think it's working pretty well, there hasn't been a depression in nearly 80 years


No, of course not, not if you play semantics and redefine the term "depression" out of existence.  Back in the day, recessions a whole lot smaller than this one were called depressions.




> and it's not really central economic planning, it's regulating the value of currency


Speaking of playing semantics and redefining terms...

----------


## low preference guy

> i think it's working pretty well, there hasn't been a depression in nearly 80 years


working pretty well? huh?

the dollar has lost 98% of its value since the fed was created. between the foundation of the nation and 1913, it gained 16%.

aren't you aware that one of the natural functions of money is store of value?

just look at the last 10 years. gold had quadrupled its value in terms of dollars. and there isn't even a central bank trying to prop up the value of gold! the fed is definitely doing a lousy job!

----------


## dujac

> Are you a bank or a banker?  You know the in the original Federal Reserve Act it was only for banks to use Federal Reserve Notes.


no, i'm not a banker

show me what you're talking about

----------


## dujac

> working pretty well? huh?
> 
> the dollar has lost 98% of its value since the fed was created. between the foundation of the nation and 1913, it gained 16%.
> 
> aren't you aware that one of the natural functions of money is store of value?
> 
> just look at the last 10 years. gold had quadrupled its value in terms of dollars. and there isn't even a central bank trying to prop up the value of gold! the fed is definitely doing a lousy job!


do you think the fed was doing a better job in 1980 when gold's price plunged?

the most important function of money is as a medium of exchange

----------


## Mini-Me

> do you think the fed was doing a better job in 1980 when gold's price plunged?
> 
> the most important function of money is as a medium of exchange


You mean when Volcker increased interest rates?  Yes, in my estimation they were doing a MUCH better job then for a brief number of years, following decades of absurdly stupid monetary and fiscal policy which led to stagflation (not so infallible now are you, Mr. Phillips Curve?).  Gold's price plunged in response to their change of course, after having spiked in anticipation of complete disaster.  They weren't doing as well as the market could have, but they came closer to what the market would have done, meaning they certainly did better than they've been doing all the other years since 1913.  It's just a trivial problem making enormous moral hazard magnets like the Fed perform that well on a consistent basis though, right?

----------


## ssantoro

If we don't have a total accounting of all Fed activities, What keeps the fed from funding commercial member banks that could be funneling money to terror orgs?

----------


## low preference guy

> the most important function of money is as a medium of exchange


but it's not the only one, and we would've been much better off if money was a store of value. because it isn't, it forces many people who want to store their wealth to gamble in the stock market, which result in disastrous bubbles.

and you said we haven't had a major depression in the last 80 years? what the heck are you talking about? isn't what we are going through right now the major recession since the great depression? real unemployment is close to 20%, when you count discouraged workers. are you sure you're talking about the united states?

----------


## dujac

> You mean when Volcker increased interest rates?  Yes, in my estimation they were doing a MUCH better job then for a brief number of years, which was why gold's price plunged.  They weren't doing as well as the market could have, but they came closer to what the market would have done, meaning they certainly did better than they've been doing all the other years since 1913.


are you saying that you think interest rates should be raised, now?

----------


## Danke

> no, i'm not a banker
> 
> show me what you're talking about


Read the original Federal Reserve Act.

----------


## dujac

> and you said we haven't had a major depression in the last 80 years? what the heck are you talking about? isn't what we are going through right now the major recession since the great depression? real unemployment is close to 20%, when you count discouraged workers. are you sure you're talking about the united states?


the recession ended over a year ago and we had positive real gdp growth in all four quarters of 2010

----------


## Mini-Me

> are you saying that you think interest rates should be raised, now?


I'm saying it's appallingly arrogant of anyone to think they should be the arbiter of rates, because markets are too complex to plan and account for all the variables, and that's charitably assuming that you can trust the motives of the people making the decisions in the first place.  (The calculation and coordination problems are insolvable by central planning...but, you know, bringing the bacon home for your buddies is perfectly achievable.).  I'm saying interest rates should be left entirely to the market, which is responsive to its own needs and self-correcting.

As to my personal opinion, I think the market probably would increase rates, and I think it would probably be for the better, but I'm not an expert...and anyone who thinks they are is a danger to us all.  Have you ever read Friedrich Hayek's Nobel Prize acceptance speech, _The Pretense of Knowledge_?

----------


## dujac

> Read the original Federal Reserve Act.


i've read it many times, your question is ambiguous

----------


## BlackTyrone

> that john kennedy tried to usurp the federal reserve's power with executive order 11110


And G Edward Griffin agees with you on that.  But seems you dismiss his scholarship...

----------


## low preference guy

> the recession ended over a year ago and we had positive real gdp growth in all four quarters of 2010


are you serious? are you really making an argument based on the phony and manipulated GDP number? you are aware that if the government just borrows money and wastes it, that raises the GDP, right?

----------


## Mini-Me

> the recession ended over a year ago and we had positive real gdp growth in all four quarters of 2010


Hypothetically speaking, let's say the government borrows a hundred trillion dollars and spends it on men digging ditches and filling them back up again.  The GDP would skyrocket, but would you really count that as a recovery?

----------


## dujac

> I'm saying it's appallingly arrogant of anyone to think they should be the arbiter of rates, because markets are too complex to plan and account for all the variables.  (The calculation and coordination problems are insolvable by central planning).  I'm saying interest rates should be left entirely to the market, which is responsive to its own needs and self-correcting.
> 
> As to my personal opinion, I think the market probably would increase rates, and I think it would probably be for the better, but I'm not an expert...and anyone who thinks they are is a danger to us all.


history shows that free markets often fail to function in a stable fashion and interest rates were abused by unscrupulous bankers prior to 1913; the federal reserve helped bring some stability and order to financial markets

----------


## low preference guy

> history shows that free markets often fail to function in a stable fashion and interest rates were abused by unscrupulous bankers prior to 1913; the federal reserve help bring some stability and order to financial markets


yes, the Fed brought the greatest depression in American History. that's the type of stability and order i love!

----------


## Mini-Me

> history shows that free markets often fail to function in a stable fashion and interest rates were abused by unscrupulous bankers prior to 1913; the federal reserve helped bring some stability and order to financial markets


A shallow, kindergarten-level reading of history shows that, yes.  A more thoughtful analysis considering deeper side effects and chain reactions shows that it's pretty much always the government's fault (or more specifically, coercion's fault, since government is just the primary mechanism of coercion).  It's a good thing the Federal Reserve brought so much stability and order to financial markets, or the Great Depression, gold confiscation and revaluation, and all the disastrous government programs like Social Security and endless wars might have happened after it was created instead of beforehand.  (Oh, wait.)  There's certainly no better solution to stop unscrupulous bankers than to move them right next to the seat of governmental power and give them exclusive and secretive power over monetary policy, with you-scratch-my-back-I'll-scratch-yours symbiosis with the federal government.

Seriously, your mental gymnastics are ASTOUNDING.

----------


## Mini-Me

> yes, the Fed brought the greatest depression in American History. that's the type of stability and order i love!


LOL, I keep echoing your posts.

----------


## ssantoro

Read the article. Ben Bernanke admitted the Fed caused the great depression.

" In 2002 Ben Bernanke (then a Federal Reserve governor, today the chairman of the Board of Governors) made this startling admission in a speech given in honor of Friedman’s 90th birthday: “I would like to say to Milton and Anna: Regarding the Great Depression, you’re right. We did it. We’re very sorry.”

http://www.thefreemanonline.org/feat...lton-friedman/

----------


## dujac

> And G Edward Griffin agees with you on that.  But seems you dismiss his scholarship...


i really don't think a bachelor's degree in speech/communications and a cfp designation, qualifies him as a scholar

----------


## low preference guy

> Read the article. Ben Bernanke admitted the Fed caused the great depression.


and he is convinced that the cause was that the Fed didn't print enough money! buckle up!

----------


## Mini-Me

> Read the article. Ben Bernanke admitted the Fed caused the great depression.
> 
> " In 2002 Ben Bernanke (then a Federal Reserve governor, today the chairman of the Board of Governors) made this startling admission in a speech given in honor of Friedman’s 90th birthday: “I would like to say to Milton and Anna: Regarding the Great Depression, you’re right. We did it. We’re very sorry.”
> 
> http://www.thefreemanonline.org/feat...lton-friedman/


Yes, but Bernanke believes it's because they didn't print ENOUGH money...a "mistake" he's hellbent on rectifying.  He will stop at nothing to prove his theory, even if it takes destroying the whole currency and having to be forcibly removed from his position.

----------


## low preference guy

> LOL, I keep echoing your posts.


oops! it happened again!

----------


## dujac

> Read the article. Ben Bernanke admitted the Fed caused the great depression.
> 
> " In 2002 Ben Bernanke (then a Federal Reserve governor, today the chairman of the Board of Governors) made this startling admission in a speech given in honor of Friedman’s 90th birthday: “I would like to say to Milton and Anna: Regarding the Great Depression, you’re right. We did it. We’re very sorry.”
> 
> http://www.thefreemanonline.org/feat...lton-friedman/


you realize that monetary science has changed a little bit in the last 80 years, don't you?

----------


## Mini-Me

> i really don't think a bachelor's degree in speech/communications and a cfp designation, qualifies him as a scholar


Credentials never legitimately qualify anyone as a scholar.  Quality of research does.  For the record, I'm not sold on G. Edward Griffin anyway, though.

----------


## low preference guy

> you realize that monetary science has changed a little bit in the last 80 years, don't you?


yeah, that's what allowed Bernanke to accurately state that there was no housing bubble!

----------


## ssantoro

> and he is convinced that the cause was that the Fed didn't print enough money! buckle up!


I don't care what Bernanke thinks should have been done. I believe it was purposely done by the elite to steal from the american people. But at least he admits it was the fed. just saying.

----------


## dujac

> Seriously, your mental gymnastics are ASTOUNDING.


it's you that's leaping and twisting

----------


## ssantoro

> you realize that monetary science has changed a little bit in the last 80 years, don't you?


Nothing has changed the Fed and its powerbrokers are pushing UN agenda and facism with no borders their on the 100 year plan. Wake Up.

----------


## ssantoro

http://video.google.com/videoplay?do...0303867390173# 

educate yourself and stop being part of the problem.

----------


## shocker315

> the only school of economic thought more archaic than the keynesians are the austrians




 Keynsesian:  



 Austrian: 





-------------
Dujac...just some advice friend.  

All these economic (and strawman) arguments you are bringing up in this thread have been throughly discussed in these forums for years.  If you think everyone here just jumped on the "End the Fed" bandwagon yesterday, because we've never considered the points you bring up...you are mistaken.  You aren't gonna come in here educate eveyone with assertions none of us have heard before.  

But it will be fun to watch you try....getting the popcorn out.

----------


## hugolp

Too bad I missed this, but now is too long to go back and answer.

I am sure dujac claimed that the Fed is not a source of financial inestability and used the GDP of the XIX century without saying that the sources about GDP are not reliable and there are different versions.

----------


## dujac

> http://video.google.com/videoplay?do...0303867390173# 
> 
> educate yourself and stop being part of the problem.


i have a great education and i know how to fact check, you should try it


Ms. MacNab, who has testified before Congress, said that at each of the trials prosecutors showed how the accused took out of context sections of the law and court decisions while ignoring other sections, including those shown to them by I.R.S. agents.

“People who are drawn into this movement just refuse to acknowledge facts that show their beliefs have no basis in fact,” she said. “Most of them have failed, their business has failed, their marriage has failed, and instead of taking responsibility for it they want to blame the government.”

http://www.nytimes.com/2006/07/31/mo...ewanted=1&_r=1

----------


## ssantoro

> Keynsesian:  
> 
> 
> 
>  Austrian: 
> 
> 
> 
> -------------
> ...


Well Said.

----------


## low preference guy

> the only school of economic thought more archaic than the keynesians are the austrians


hahahahaha!!!!!!

----------


## Fox McCloud

and _any_ amount of inflation will cause interest rates to be driven down which will set in motion the dreaded boom/bust cycle.

----------


## Mini-Me

> it's you that's leaping and twisting


Of course, which is why I'm the one REFUSING TO RESPOND TO POST NUMBER 54.

----------


## Mini-Me

> hahahahaha!!!!!!


To be fair, he's alluding to a point that a lot of people here do tend to gloss over:  Neoclassical economists (which I assume is the school he subscribes to, unless he's a Chicago guy...doubtful) are technically different from Keynesians in that they have their own microeconomic basis, but they've melded it with a lot of Keynesian theory (neoclassical synthesis), so their macroeconomic theories still borrow a lot of the same Keynesian concepts we criticize (which is why we don't really bother to make a distinction on this board, I suppose).

----------


## low preference guy

> To be fair, he's alluding to a point that a lot of people here do tend to gloss over: * Neoclassical economists are technically different from Keynesians* in that they have their own microeconomic basis, but they've melded it with a lot of Keynesian theory (neoclassical synthesis), so their macroeconomic theories still borrow a lot of the same Keynesian concepts we criticize (which is why we don't really bother to make a distinction on this board, I suppose).


thanks.

it could also be argued that technically, they are very similar.

----------


## low preference guy

I'd like to say one thing to dujac: Great job myth busting! Your logic, well-thought arguments, and answers to all our objections caused us all to change our minds. Can't wait till you address the rest of the myths!




> i'd like to address the myths, one at a time
> 
> 
> *myth number one*

----------


## Mogambo Guru

This guy thinks it working!  Losing our manufacturing, and replacing it with generations of debt!  Brilliant!  

And we cant pay down the debt, because that would be deflationary.. and he says that deflation is bad and we must have continual inflation.  

How do you consider this sustainable?  Wont rates have to rise one day?  Our average debt rollover is about 4.5 - 5 years.  We could be in the hurt bag real fast if we need to fight off inflation soon..  (like having net positive interest rates)

----------


## low preference guy

> This guy thinks it working!  Losing our manufacturing, and replacing it with generations of debt!  Brilliant!  
> 
> And we cant pay down the debt, because that would be deflationary.. and he says that deflation is bad and we must have continual inflation.  
> 
> How do you consider this sustainable?  Wont rates have to rise one day?  Our average debt rollover is about 4.5 - 5 years.  We could be in the hurt bag real fast if we need to fight off inflation soon..  (like having net positive interest rates)


Monetary policy has advanced a lot in the last 80 years. Bernanke has it under control. He'll print money without causing inflation. He'll spend enough so that the economy recovers, but not so much to cause inflation. He has it under control.

/sarcasm

----------


## Cowlesy

hah damn you guys are still going?  Sorry I let him stay this long --- figured everyone could use someone to sharpen their rhetoric on.

----------


## low preference guy

> hah damn you guys are still going?  Sorry I let him stay this long --- figured everyone could use someone to sharpen their rhetoric on.


Let him stay! We're having a party!

----------


## Mini-Me

> hah damn you guys are still going?  Sorry I let him stay this long --- figured everyone could use someone to sharpen their rhetoric on.


Cowlesy, you have to understand:

----------


## Travlyr

> hah damn you guys are still going?  Sorry I let him stay this long --- figured everyone could use someone to sharpen their rhetoric on.


lulz... yes the pencils are sharpened.

----------


## klamath

> what about these?
> 
> Panic of 1797
> Depression of 1807
> Depression of 1815
> Panic of 1819
> Panic of 1825
> Panic of 1837
> Panic of 1847
> ...


But the biggest point is the federal reserve DIDN'T stop these business boom and bust cycles like you stated earlier. They will always happen because it is human nature. Should congress create a central energy system to stop the boom and bust prices of energy prices? Should the meetings on setting the energy prices be kept secret as well?

----------


## dujac

> But the biggest point is the federal reserve DIDN'T stop these business boom and bust cycles like you stated earlier.


i didn't say they stopped them, i said the fed brings stability

----------


## Mini-Me

> i didn't say they stopped them, i said the fed brings stability


Hey, you're still here!  I was beginning to think you might forget to answer post 54, which addressed your stability/deflation fears!

----------


## dujac

> Hey, you're still here!  I was beginning to think you might forget to answer post 54, which addressed your stability/deflation fears!


if you can compose a concise question, i might consider it

----------


## hugolp

> i didn't say they stopped them, i said the fed brings stability


How can you say with straight face that a central bank is not a source of financial inestability, using a list of panics that mainly includes panics that happened when central banks or some type of centralized financial regulation were in place? Seriously, how can you say central banks are not a source of financial inestability using a list that includes panics that happened with a central bank?

----------


## low preference guy

> if you can compose a concise question, i might consider it


hmmm....

that's not a good strategy to bust myths...

----------


## dujac

> How can you say with straight face that a central bank is not a source of financial inestability, using a list of panics that mainly includes panics that happened when central banks or some type of centralized financial regulation were in place? Seriously, how can you say central banks are not a source of financial inestability using a list that includes panics that happened with a central bank?


i can say it because there hasn't been a depression in nearly 80 years

----------


## Seraphim

Do you mean stable transfer of wealth from the working class who perpetually have the value of their wage reduced at a rate faster than inflation (mostly on NECESSITY GOODS) to the ruling class who have built their wealth through violence, coersion and manipulation?





> i didn't say they stopped them, i said the fed brings stability

----------


## Seraphim

There's one going on right now. Go lapp up some more GOVT propaganda.




> i can say it because there hasn't been a depression in nearly 80 years

----------


## hugolp

> i can say it because there hasn't been a depression in nearly 80 years


Not answering my question and using a (false) political talking point ... You are a joke.

Try answering my question to show you want an honest economical debate.

----------


## Sola_Fide

Great thread.

Good to see Mini-me back laying waste to all enemies.

----------


## dujac

> Do you mean stable transfer of wealth from the working class who perpetually have the value of their wage reduced at a rate faster than inflation (mostly on NECESSITY GOODS) to the ruling class who have built their wealth through violence, coersion and manipulation?


no, i don't accept myths

----------


## hugolp

> no, i don't accept myths


Says the guy that claims that panics that happened under a central bank are prove that central banks are not a source of finacial inestability.

----------


## dujac

> Says the guy that claims that panics that happened under a central bank are prove that central banks are not a source of finacial inestability.


you seem to be confused

----------


## Legend1104

*Myth:*

*The Federal Reserve Doesn't Suck.*

----------


## low preference guy

> you seem to be confused


dude, you're hilarious. just so you know, this post of yours is _not_ convincing, if you don't explain how hulgolp is confused.

you sound a lot like ben bernanke.

----------


## hugolp

> you seem to be confused


It have to tell you that you are quite weak. The guys they sent previously were much more capable and had more knowledge about monetary history. You can not even argue.

----------


## dujac

> It have to tell you that you are quite weak. The guys they sent previously were much more capable and had more knowledge about monetary history. You can not even argue.


you don't know what you're talking about

----------


## hugolp

> you don't know what you're talking about


Then you wont have any problem answering to my question, instead of evading it like you have been doing for almost a page and a half.

Why are you using panics that happened under a central bank (or some sort of centralized credit regulations) to prove that central banks are not a source of financia inestability?

Show the forum how clueless I am. Come on.

----------


## low preference guy

> you don't know what you're talking about


that's a winning argument right there!

----------


## dujac

> Then you wont have any problem answering to my question, instead of evading it like you have been doing for almost a page and a half.
> 
> Why are you using panics that happened under a central bank (or some sort of centralized credit regulations) to prove that central banks are not a source of financia inestability?
> 
> Show the forum how clueless I am. Come on.


financia inestability?

----------


## hugolp

> financia inestability?


Come on, answer to the question.

Why are you using panics that happened under a central bank (or some sort of centralized credit regulations) to prove that central banks are not a source of financial inestability?

----------


## low preference guy

> financia inestability?


is that the best you can do?

i bet hugo's english is way better than your spanish. anyway, he asked you the same question before and his statement was clear. it's obvious that you're clueless.

----------


## heavenlyboy34

> *Myth:*
> 
> *The Federal Reserve Doesn't Suck.*


Guys, don't feed this troll.  Just my $ .02 worth.

----------


## Andrew-Austin

> you seem to be confused


You seem to be a troll. lol

Here I am reading this thread hoping it will actually be interesting, and you keep coming up with these short meaningless responses. 




> i have a great education and i know how to fact check


Maybe you should ask for a refund on that "great education", since they didn't even teach you how to form proper sentences and arguments. Never mind that you keep spewing out infantile propaganda like "there have been no depressions in 80 years" and "HR1207 would politicize the already heavily politicized Fed". Yes, maybe we can eliminate recessions as well if we relabel them as frowny face times.

----------


## Mini-Me

> if you can compose a concise question, i might consider it


How about**:  If you still believe gradual deflation would lead to spending drops and a deflationary spiral, why does my technology industry example not convince you otherwise?

----------


## WilliamShrugged

> Then you wont have any problem answering to my question, instead of evading it like you have been doing for almost a page and a half.
> 
> Why are you using panics that happened under a central bank (or some sort of centralized credit regulations) to prove that central banks are not a source of financia inestability?
> 
> Show the forum how clueless I am. Come on.


Lol....Nice

----------


## Mini-Me

> You seem to be a troll. lol
> 
> Here I am reading this thread hoping it will actually be interesting, and you keep coming up with these short meaningless responses. 
> 
> 
> 
> Maybe you should ask for a refund on that "great education", since they didn't even teach you how to form proper sentences and arguments. Never mind that you keep spewing out infantile propaganda like "there have been no depressions in 80 years" and "HR1207 would politicize the already heavily politicized Fed". Yes, maybe we can eliminate recessions as well if we relabel them as frowny face times.


We can eliminate frowny-face times too if the government can end them by borrowing tons of money and giving it to ditch-diggers.  It increases the GDP, amirite?!?

----------


## amy31416

This thread...awesome display of our side's prowess on this issue. The fellow/troll in question started out sounding authoritative, but has been reduced to a quivering mass of generic Jell-O.

Good work guys, and thanks for the mini-education/refresher.

----------


## Sola_Fide

Just read this entire thread.

This poor guy got demolished.  You mean, heartless free-marketeers!:collins:

----------


## DamianTV

> i'd like to address the myths, one at a time
> 
> 
> *myth number one*
> 
> *the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders*
> 
> anyone that disagrees with this being a myth is welcome to disclose evidence against the assertion


The $#@! the Federal Reserve isnt operated for Profit.  

What do you think the Prime Rate is?  For our Benefit?  Prime Rate is the Interest charged on all the money currently in existence!  So if they create the money, then charge interest on its existence, how can that ever be repaid since the total debt exceeds all the money in existence?  If you said The United States Treasury, and the Treasury controlled the issue of currency, and that currency had no interest attached, then I would agree with you, but otherwise, I call complete and total $#@!ing bull$#@!.

(speaking just for the USA of course...)

(and no offense directed at you personally...)

----------


## steph3n

> the average american worker today is some 36 times richer than his or her counterpart was back in 1895


Depends on what you mean by rich, having goods, or being in huge debt?!

----------


## Austrian Econ Disciple

Dujac....the average American today has something like 110,000$ in FEDERAL debt, not even counting State/Local and personal debt. The average American today is bankrupt and third world status. Wait until the bill comes home. Debt is ILLUSORY wealth. Wait until the Chinese and other creditors start flooding the FRN's they hold into America and buying up all the properties and goods. Wait until they start calling for payments and interest hikes on the debt that will take place. There is one solution to the problem, but until people realize the extent of the problem nothing will get done. Also, the people in 1895 were vastly richer than we are today. Here's a great video to watch:

----------


## Austrian Econ Disciple

> This thread...awesome display of our side's prowess on this issue. The fellow/troll in question started out sounding authoritative, but has been reduced to a quivering mass of generic Jell-O.
> 
> Good work guys, and thanks for the mini-education/refresher.


The power of Mises, Rothbard, and Bastiat is immutable! Immutable I say!  (Oh yeah, Jorg Guido Hulsmann rocks the socks too)

----------


## dujac

> The $#@! the Federal Reserve isnt operated for Profit.  
> 
> What do you think the Prime Rate is?  For our Benefit?  Prime Rate is the Interest charged on all the money currently in existence!  So if they create the money, then charge interest on its existence, how can that ever be repaid since the total debt exceeds all the money in existence?  If you said The United States Treasury, and the Treasury controlled the issue of currency, and that currency had no interest attached, then I would agree with you, but otherwise, I call complete and total $#@!ing bull$#@!.
> 
> (speaking just for the USA of course...)
> 
> (and no offense directed at you personally...)


the federal reserve turns its net profit over to the treasury


Federal Reserve earned $45 billion in 2009

By Neil Irwin, Washington Post Staff Writer  1/12/2010

The Fed will return about $45 billion to the U.S. Treasury for 2009, according to calculations by The Washington Post based on public documents. That reflects the highest earnings in the 96-year history of the central bank. The Fed, unlike most government agencies, funds itself from its own operations and returns its profits to the Treasury.

http://www.washingtonpost.com/wp-dyn...011103892.html



here's an model illustrating where the money to pay interest comes from


Create a balance sheet for five people and a bank.     

People's Assets: 4 Coins 
 Liabilities: Loan for 4 Coins   

Bank's  Assets: 5 Loans of 4 coins @ 25%/yr  
Liability: Owner Equity - 20 coins   Let each person on the island hire another of the five to do something.  No. 1 collects coconuts for No. 2 for a wage of 4 coins. No 2 collect wood for No 3 for a wage of 4 coins. No. 3 collect animal hides for No. 4 for a wage of 4 coins.

  Each person now has spent his 4 coins and also received 4 coins as wages. Each person now has a balance sheet with:  Assets: 4 coins + 4 coins worth of some material.  Liabilities: Loan for 4 coins to the bank.   Now each person can take their 4 coins to the bank and open a savings account (or better yet - the bank will have created checking accounts so that no one will need to carry the coins around. 

 Person (1-5) Balance sheet  Assets: 4 Coin Bank Account + 4 coins in Materials  Liabilities: 4 coin loan from bank + 4 coins worth of equity   

Imagine now that each person, now with a positive net value, plans to process his materials into a salable product. Requests a loan from the bank, using the materials (Coconuts, wood, etc.) as collateral. The banker now has the 20 coins that were deposited, to make loans with. Given that there is only one bank an no regulatory body overseeing the bank, we can hope that the bank will issue less than the full 20 coins in loans. After all a customer may withdraw a portion of his deposit at anytime. The banker chooses to maintain 25% reserve ratio.   Eventually these loans will be spent and re-deposited, and re-loaned again less the second round of addition to the banks reserve since the banks loans have increased again. The total value of the money created is due to the "Multiplier effect". 

 This multiplier effect is limited to the Initial Reserve divided by the reserve requirement (ex. 20 coins/25%) to a max money supply of 80 coins in loans from the initial 20. The 20 coins end up as reserves supporting 80 coins in loans. The 20 coins cannot support more than 80 coins in loans at a 25% reserve ratio.   As you can see where this is going. it isn't difficult to come up with the interest to pay the loans as the money supply (coins and/or deposits) increases.

----------


## japes

> here's an model illustrating where the money to pay interest comes from
> 
> 
> Create a balance sheet for five people and a bank.     
> 
> People's Assets: 4 Coins 
>  Liabilities: Loan for 4 Coins   
> 
> Bank's  Assets: 5 Loans of 4 coins @ 25%/yr  
> ...



It seems to me from your example that our island buddies and all their descendants are stuck owing money forever. This also assumes the bank will never be dishonest (beyond already counterfeiting money), there will never be a default on a loan. Even under the best scenario your example will never scale. It might work if a central planner is trying to take care of Robinson Crusoe but it has proven to be devastating as things grow.  Top down, centralized, authoritarian control of anything, let alone our money supply will never work in the long run. But you know that don't you? Anyway, I'll leave you with this quote from Hayek (though I suspect you're well read in Hayek),




> How can the combination of fragments of knowledge existing in different minds bring about results which, if they were to be brought about deliberately, would require a knowledge on the part of the directing mind which no single person can possess? To show that in this sense the spontaneous actions of individuals will, under conditions which we can define, bring about a distribution of resources which can be understood as if it were made according to a single plan, although nobody has planned it, seems to me indeed an answer to the problem which has sometimes been metaphorically described as that of the "social mind."


BTW,  I'm pretty sure you're playing the devil's advocate in this discussion to keep us sharp. If so, you did a good job showing us only cowards, criminals, and fools would want a central bank to control their money.

----------


## dujac

> cowards, criminals, and fools


these are the people making up myths about the federal reserve


*this myth for example:

the federal reserve act was authored by wall street bankers and a few senators in a secret meeting on jekyll island*


there was a meeting on jekyll island and they wrote a proposal that didn't include a publicly appointed board of governors, but it never passed congress

----------


## Teaser Rate

Nice try to dispel some basic myths about the Fed dujac, but you have to understand that many posters here have an irrational hatred of the Fed and will attack anyone and anything which doesn't share their view. 

The post below illustrates this quite well:




> Ahahahaha and the economists in bed with the government that you listen to are not? Please just give up the trolling.
> 
> You have to understand something. You can't say practically anything that would convince anyone of us that you (Keynesian school) are right and the Austrian school of economics is wrong. If that's your goal you better just stop.


In other words: _nothing you can say can prove me wrong._ 

When you arrive at any conclusion like this one, it's evident that your belief is based on faith, not evidence. I'm not sure why so many people here are so dogmatic about something as dull as monetary policy. I've studied it in school myself and I found it to be boring and uninteresting. 

My education has lead me to believe that having an independent central bank is probably beneficial to a nation's economy, but I'm open to new evidence. Many people here have suggested to me that competing currencies would work better,  but no one has been able to explain exactly how that system would work or how the transition would occur.

Btw, dujac if you want to understand many anti-Fed activists' worldview, check out this video it will scare you that anyone believes it to be true. 




> Keynsesian:  
> 
> 
> 
>  Austrian: 
> 
> 
> 
> 
> ...


I find it amusing that someone who claims knowledge in the economics of banking would call Bernake a Keynesian. (and would also misspell the term)

----------


## dujac

> Btw, dujac if you want to understand many anti-Fed activists' worldview, check out this video, it will scare you that anyone believes it to be true.


yea, i've seen it before, although i don't think i got through the whole thing

i'm well aware of the libertarian view on things and i don't expect any of them to change their minds, but i think it's a good idea to dispel myths, no matter how entrenched they are

----------


## hugolp

> I find it amusing that someone who claims knowledge in the economics of banking would call Bernake a Keynesian. (and would also misspell the term)


Bernanke is a keynesian.




> yea, i've seen it before, although i don't think i got through the whole thing
> 
> i'm well aware of the libertarian view on things and i don't expect any of them to change their minds, but i think it's a good idea to dispel myths, no matter how entrenched they are


Just quit the act and answer to the question you are trying to avoid:

Why are you using panics that happened under a central bank (or some sort of centralized credit regulations) to prove that central banks are not a source of financial inestability?

----------


## dujac

> Bernanke is a keynesian.
> 
> 
> 
> Just quit the act and answer to the question you are trying to avoid:
> 
> Why are you using panics that happened under a central bank (or some sort of centralized credit regulations) to prove that central banks are not a source of financial inestability?


banks and credit have been regulated since this country began, so that statement makes it obvious your assertion is rigid and unreasonable

----------


## hugolp

> banks and credit have been regulated since this country began, so your statement makes it obvious you're assertion is rigid and unreasonable


False. Your assertion just show you are ignorant in monetary history.

----------


## dujac

> False. Your assertion just show you are ignorant in monetary history.


you're projecting

----------


## Sola_Fide

> banks and credit have been regulated since this country began, so that statement makes it obvious your assertion is rigid and unreasonable



Wrong.

----------


## hugolp

> you're projecting


Hahaha. You are a joke.

You come here arrogantly saying that things are better now with the Fed than before and you do not even know how things were before. You are a joke.

Anyway, if you want to have a *rational* debate Im up for it.

----------


## dujac

> Hahaha. You are a joke.
> 
> You come here arrogantly saying that things are better now with the Fed than before and you do not even know how things were before. You are a joke.
> 
> Anyway, if you want to have a *rational* debate Im up for it.


your twisting of my words indicates a lack of rationality




> Wrong.


 the 'massachusetts bay mint act' was passed in 1652

----------


## klamath

> i didn't say they stopped them, i said the fed brings stability


What stability?? You mean the pure panic of the nations leaders in oct 2008 and the meltdown of the economy? Do you mean the great depression? 
I am not a foaming at the mouth fed hater but you have to work  a lot harder to convince me that the ultra low interest rates the fed set to "stabilize the economy" of the early 2000's didn't set up the housing bubble  beyond what would have happened under a competitive banking system.

----------


## dujac

> What stability?? You mean the pure panic of the nations leaders in oct 2008 and the meltdown of the economy? Do you mean the great depression? 
> I am not a foaming at the mouth fed hater but you have to work  a lot harder to convince me that the ultra low interest rates the fed set to "stabilize the economy" of the early 2000's didn't set up the housing bubble  beyond what would have happened under a competitive banking system.


there has been no depression in nearly 80 years, that's an indication of stability

----------


## Mogambo Guru

Im still waiting on an example of this deflationary death spiral...  Among other things..

----------


## Mogambo Guru

PLease address these "myths"


slow gradual inflation is good
slow gradual deflatoin is bad
central banks provide stability and are good for an economy
that a sound money standard cant work
deflationary spiral



> i think it's better to have stability rather than wild fluctuations, like in the 18th & 19th century


  Ever stop to think about this a little more??  we didnt experiment with central banks back then??



> gold & silver are volatile commodities, they're not all that sound when it comes to using them as currency
> 
> its inelasticity of supply is the primary problem


this is its primary benefit.. the supply of money does not matter, that only changes price structure and enables redistribution of wealth and manipulation




> i don't hate capital savings, but i think deflation is more problematic than inflation


if you dont hate savings, why do you prefer to punish it?  also, again the lie that slow deflation is worse than slow inflation..




> a zero inflation monetary policy is likely to lead to unpredictability and instability


based on what??




> economic instability as a result of gold and silver imports from the americas, in the 16th and 17th century, lead to the downfall of spain as a leading world power


I am not sure about this, but was the real downfall of spain because it overextended itself??  Lack of gold/silver being the symptom of the problem rather than the cause of the problem??  I am not sure..



That should be a start..  I am very curious about this "deflationary death spiral"  LOL

----------


## dujac

> Im still waiting on an example of this deflationary death spiral...  Among other things..


i'm addressing federal reserve myths here, there are plenty of examples of deflation, if you want to read about them, go ahead

----------


## archangel689

Can the Government spend us out of a recession?







.

----------


## hugolp

> there has been no depression in nearly 80 years, that's an indication of stability


Stagflation.

----------


## dujac

> Stagflation.


relative stability

----------


## Seraphim

Look at the DATA. The numbers. REALITY. Extending artificially cheap credit by expanding (inflating) the money supply has effectively HALVED the value of the average persons wage over the last 40 years.

Mortgage payments alone now compose VASTLY more of people's income...and that's with TWO people per household HAVING to work jsut to stay afloat.

The middle class used to only have to have one person working in the household to hold down a comfortable and enjoyable lifestyle. Now both mom and dad need to work their cattle asses off just to make the base required payments on all their debt based "wealth"...let alone pay the debt off in a reasonable time frame.

But hey..when the AVG Westerner is in debt by about 300K each (Govt debt IS YOUR DEBT TOO)...There's nothing wrong with that. GO back to work slave! PAY THAT DEBT TO YOUR MASTERS!

Debt based currency forceably pushed on us is counter productive and immoral. But hey, some people love rationalizing their world view they have emotionally attached themselves too because it's easier to swallow propaganda and keep your mouth shut.





> no, i don't accept myths

----------


## Seraphim

Please logically explain how, for example, 2% annualized wage increases with 12% rises (6 fold disparity) in NECESSITY LIVING COSTS is stability...I'd love to see you explain that.

Your comment was "Relative stability" in relation to stagflation.

You spout off Orwellian nonsense.




> relative stability

----------


## dujac

*myth: the federal reserve act and paper money are unconstitutional*

the federal reserve system is a reasonable use of the constitution's 'necessary and proper' clause

many court rulings, including the supreme court, have upheld this interpretation of the usc


Section 8 - Powers of Congress

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

----------


## Seraphim

Having debt based currency is necessary how?

You fail. You havn't answered any questions, you simply evade and deflect. You lose. You really, really lose. 

Bye bye troll.




> *myth: the federal reserve act and paper money are unconstitutional*
> 
> the federal reserve system is a reasonable use of the constitution's 'necessary and proper' clause
> 
> many court rulings, including the supreme court, have upheld this interpretation of the usc
> 
> 
> Section 8 - Powers of Congress
> 
> To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

----------


## dujac

> Having debt based currency is necessary how?
> 
> You fail. You havn't answered any questions, you simply evade and deflect. You lose. You really, really lose. 
> 
> Bye bye troll.


currency isn't really based on debt, but let's say it is, just for the sake of this argument

if you were in charge, what would you base currency on?

----------


## driller80545

> *myth: the federal reserve act and paper money are unconstitutional*
> 
> the federal reserve system is a reasonable use of the constitution's 'necessary and proper' clause
> 
> many court rulings, including the supreme court, have upheld this interpretation of the usc
> 
> 
> Section 8 - Powers of Congress
> 
> To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.



Wow, this is a stretch. Using one part of the constitution to nullify another part. Why doesn't Congress simply farm out all of it duties to its cronies as it has the for the bankers and call it necessary and proper. Good job fellas.

----------


## dujac

> Wow, this is a stretch. Using one part of the constitution to nullify another part.


what part do you think is nullified?

----------


## Mogambo Guru

> currency isn't really based on debt, but let's say it is, just for the sake of this argument
> 
> if you were in charge, what would you base currency on?

----------


## Seraphim

It is absolutely based on debt. Fiat is debt based currency that gets expanded via fractional reserve lending policies and GOVT debt when they borrow the cash and post up bonds as collateral.

If I were in charge I would open the market to competition and allow the market place to decide how capital will flow. All legal tender laws would be repealed. This would EPITOMIZE a democratic process. 





> currency isn't really based on debt, but let's say it is, just for the sake of this argument
> 
> if you were in charge, what would you base currency on?

----------


## dujac

> It is absolutely based on debt. Fiat is debt based currency that gets expanded via fractional reserve lending policies and GOVT debt when they borrow the cash and post up bonds as collateral.
> 
> If I were in charge I would open the market to competition and allow the market place to decide how capital will flow. All legal tender laws would be repealed. This would EPITOMIZE a democratic process.


how would the currency be distributed?

----------


## Seraphim

My government would hold your hand as you pass it to the cashier. You know...just in case you get nervous...Shall we hold your winky too?

Money is a commodity. The marketplace figures things out extradordinarily well. My gut tells me coined metals and honest deposit banks offering paper receipt slips indicating a 100% backing of said commodities would win out.

I'm done intellectually coddling you.





> how would the currency be distributed?

----------


## hazek

LOL you guys are still feeding this troll?

----------


## hugolp

*dujac*, give us the third myth you are like going to totally debunk.

I cant wait.

----------


## heavenlyboy34

> LOL you guys are still feeding this troll?


+10000.  I warned them not to keep feeding him, but do they listen? NOOOOO!  /facepalm

----------


## dujac

> My government would hold your hand as you pass it to the cashier. You know...just in case you get nervous...Shall we hold your winky too?
> 
> Money is a commodity. The marketplace figures things out extradordinarily well. My gut tells me coined metals and honest deposit banks offering paper receipt slips indicating a 100% backing of said commodities would win out.
> 
> I'm done intellectually coddling you.


the marketplace didn't figure out pollution and acid rain very well, most polluters just ignored damages until they were sued, then the cuyahoga river caught on fire and things changed

the problem was that there were no market incentives for polluters to clean up; unregulated markets have plenty of imperfections

----------


## archangel689

http://mises.org/rothbard/genuine.asp

----------


## Seraphim

They were sued. That is the market place solving an issue. Perfection is unattainable. So don't even try. What we need are the necessary conditions to adapt and improve as efficiently as possible.





> the marketplace didn't figure out pollution and acid rain very well, most polluters just ignored damages until they were sued, then the cuyahoga river caught on fire and things changed
> 
> the problem was that there were no market incentives for polluters to clean up; unregulated markets have plenty of imperfections

----------


## dujac

*myth: the federal reserve is owned and controlled by foreigners*


federal reserve banks are owned exclusively by the participating commercial banks and s&ls in the federal reserve bank's district; no person or non-bank can own any shares

----------


## dujac

> They were sued. That is the market place solving an issue. Perfection is unattainable. So don't even try. What we need are the necessary conditions to adapt and improve as efficiently as possible.


yes, but it was inefficient and ineffective

things didn't improve until the federal government got involved and laid down regulations

----------


## hugolp

> *myth: the federal reserve is owned and controlled by foreigners*
> 
> 
> federal reserve banks are owned exclusively by the participating commercial banks and s&ls in the federal reserve bank's district; no person or non-bank can own any shares


Im not very impressed. I was expecting something more spectacular.

----------


## dujac

> Im not very impressed. I was expecting something more spectacular.


the point isn't to impress anyone, it's to dispel myths that are constantly being told, about the federal reserve

----------


## heavenlyboy34

> the point isn't to impress anyone, it's to dispel myths that are constantly being told, about the federal reserve


Except it doesn't.  I don't know of anyone who claims the FED is owned or controlled by foreigners.  You've been pulling stuff out of your arse throughout this entire thread.

----------


## archangel689

"The ﬁnancial elites of this country, notably the Morgan, Rockefeller, and Kuhn, Loeb interests, were responsible for putting through the Federal Reserve System, as a governmentally created and sanctioned cartel device to enable the nation’s banks to inﬂate the money supply in a coordinated  fashion, without suffering quick retribution from depositors or noteholders demanding cash."

----------


## low preference guy

> *myth: the federal reserve is owned and controlled by foreigners*
> 
> 
> federal reserve banks are owned exclusively by the participating commercial banks and s&ls in the federal reserve bank's district; no person or non-bank can own any shares


geez, doesn't the Fed have enough money to pay a smarter person to come here to troll?

i guess those devalued dollars can't buy anything anymore.

----------


## Fox McCloud

> the marketplace didn't figure out pollution and acid rain very well, most polluters just ignored damages until they were sued, then the cuyahoga river caught on fire and things changed
> 
> the problem was that there were no market incentives for polluters to clean up; unregulated markets have plenty of imperfections


This is because we don't have private property rights anymore, thanks, in part, to (ironically) progressive judges who struck down lawsuits where individuals were suing railroad companies and factories for damaging their crop/property--you can't claim that it's a market failure when you don't even allow the market to work or  have those incentives you mention, to begin wtih.

----------


## dujac

> Except it doesn't.  I don't know of anyone who claims the FED is owned or controlled by foreigners.  You've been pulling stuff out of your arse throughout this entire thread.


you may not know of anyone who claims the federal reserve is owned or controlled by foreigners, but there are plenty that make that claim; eustace mullins is just one of many that have been saying it for decades


"What John Moody did not know, or did not tell his readers, was that the most powerful men in the United States were themselves answerable to another power, a foreign power, and a power which had been steadfastly seeking to extend its control over the young republic of the United States since its very inception. This power was the financial power of England, centered in the London Branch of the House of Rothschild. The fact was that in 1910, the United States was for all practical purposes being ruled from England, and so it is today. The ten largest bank holding companies in the United States are firmly in the hands of certain banking houses, all of which have branches in London."

http://www.apfn.org/apfn/reserve.htm

----------


## Bossobass

> *myth: the federal reserve is owned and controlled by foreigners*
> 
> 
> federal reserve banks are owned exclusively by the participating commercial banks and s&ls in the federal reserve bank's district; no person or non-bank can own any shares


It's always good to have a poster who knows enough to dispel myths for us. So, which banks hold a controlling interest through ownership of that stock and, in turn, who owns controlling interest in those banks?

Or, is it just another part of the bull$#@! story that these men must remain invisible while controlling the currency of the United States of America so that they can "retain their imperative of independence"?

Bosso

----------


## dujac

> It's always good to have a poster who knows enough to dispel myths for us. So, which banks hold a controlling interest through ownership of that stock and, in turn, who owns controlling interest in those banks?
> 
> Or, is it just another part of the bull$#@! story that these men must remain invisible while controlling the currency of the United States of America so that they can "retain their imperative of independence"?
> 
> Bosso


the only controlling interest is the federal reserve board

The Federal Reserve is not controlled by private banks, but by a publicly appointed board of governors. Many confuse "owning" and "controlling". Private banks, while they may own shares in the individual Federal Reserve Banks, do not have any control over the Federal Reserve System, much like how a private individual may own shares of a large corporation, but has little say in the day to day operations.

----------


## Dr.3D

And the Federal Reserve doesn't give money to foreign banks... LOL....  RIGHT!

They hope no one will ever find out they have been giving money to foreign banks.

----------


## Travlyr

> *myth: the federal reserve is owned and controlled by foreigners*
> 
> 
> federal reserve banks are owned exclusively by the participating commercial banks and s&ls in the federal reserve bank's district; no person or non-bank can own any shares


"Paul Warburg was born in Hamburg, Germany, to a successful Jewish banking family."




> Paul Warburg became known as a persuasive advocate of central banking in America, in 1907 publishing the pamphlets "Defects and Needs of Our Banking System" and "A Plan for A Modified Central Bank". His efforts were successful in 1913 with the founding of the Federal Reserve System. He was appointed a member of the first Federal Reserve Board by President Woodrow Wilson, serving until 1918.


Such a nice fellow to come over to America and help us out by transforming our banking system from an honest system of trading to a dishonest system of creating money out of nothing. Yes sir, quite the outstanding hero.




> The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
> John Maynard Keynes

----------


## dujac

> And the Federal Reserve doesn't give money to foreign banks... LOL....  RIGHT!
> 
> They hope no one will ever find out they have been giving money to foreign banks.


they lend money and do credit swaps

----------


## Dr.3D

> they lend money and do credit swaps





> Foreign banks also benefited from the Fed's aid. They included Swiss bank UBS, which borrowed more than $165 billion, Deutsche Bank ($97 billion) and the Royal Bank of Scotland ($92 billion).


http://news.yahoo.com/s/ap/20101201/...crisis_lending

http://www.washingtonpost.com/wp-dyn...120106870.html

They sure do!

----------


## dujac

> [Lenin is said to have declared that] The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.


i've added the part that was left out

http://www.pbs.org/wgbh/commandinghe...inflation.html

----------


## Travlyr

> i've added the part that was left out
> 
> http://www.pbs.org/wgbh/commandinghe...inflation.html


yeah... I wasn't alive then, but whoever really said it first sure was right weren't they? And the wealth transfer continues...

----------


## dujac

> They sure do!


my point is that the money wasn't given to them and it was paid back

----------


## dujac

> yeah... I wasn't alive then, but whoever really said it first sure was right weren't they? And the wealth transfer continues...


have you ever considered that maybe you're being influenced by propaganda from foreign or internal enemies of the united states?

----------


## dujac

> yeah... I wasn't alive then, but whoever really said it first sure was right weren't they? And the wealth transfer continues...


don't worry, i'm accustomed to fabricated quotes and misinformation from anti-government types

----------


## amy31416

> don't worry, i'm accustomed to fabricated quotes and misinformation from anti-government types


Irony. Lots of it.

----------


## dujac

> Irony. Lots of it.


how so?

----------


## Travlyr

> My education has lead me to believe that having an independent central bank is probably beneficial to a nation's economy, but I'm open to new evidence. Many people here have suggested to me that competing currencies would work better,  but no one has been able to explain exactly how that system would work or how the transition would occur.


_"A Cross of Gold"_ by Dr. Edwin Vieira is quite explicit on how real money works and how to make the transition. It is a very interesting article. The link is in my signature line for your convenience.

----------


## Travlyr

> don't worry, i'm accustomed to fabricated quotes and misinformation from anti-government types


For the record ... I'm pro-government.

----------


## dujac

> _"A Cross of Gold"_ by Dr. Edwin Vieira is quite explicit on how real money works and how to make the transition. It is a very interesting article. The link is in my signature line for your convenience.


gold salesmen really know how to work the crowd

----------


## Travlyr

> don't worry, i'm accustomed to fabricated quotes and misinformation from anti-government types


This is from the article YOU posted!



> Keynes is often viewed as an economist who tolerated and supported mild inflation as an unfortunate byproduct of sustained, managed, economic prosperity. Yet this excerpt from The Economic Consequences of the Peace, written just at the end of World War I, *makes clear how fully he understood inflation's potential to destroy the fabric of society.* It is also prophetic regarding the fate of all government attempts to control the price of goods by force of law. Its later passages also illuminate (by analogy) the negative effects on international trade of any currency crisis (such as the devaluation of Thailand's baht that triggered the Asian economic contagion in 1997). The predicament of the responsible German trader facing rapid fluctuation in international currency values has been reproduced innumerable times across the world in the modern era of floating currency markets.

----------


## Dr.3D

> gold salesmen really know how to work the crowd


They sure do, so many banks keep that stuff in their vaults, one would think it was money.

----------


## archangel689

None of your arguments really defend the fed in any substantial way. What are you getting at? 


"Our problem with fiat currencies as in germany or colonial america has always been, and with no exception whatsoever the integrity of the politicians. They are who we cannot trust with our future and must be restrained for the good of the people" -- Martin Armstrong

----------


## dujac

> This is from the article YOU posted!


he acknowledged the problems associated with his theories

and you won't find any fabricated quotes or misinformation, posted by me

----------


## dujac

> None of your arguments really defend the fed in any substantial way. What are you getting at?


as i said before, i'm not defending the fed, i'm dispelling myths

----------


## Bossobass

> the only controlling interest is the federal reserve board
> 
> The Federal Reserve is not controlled by private banks, but by a publicly appointed board of governors. Many confuse "owning" and "controlling". Private banks, while they may own shares in the individual Federal Reserve Banks, do not have any control over the Federal Reserve System, much like how a private individual may own shares of a large corporation, but has little say in the day to day operations.


So, if I own 53% of a corporations stock, I have no say in its affairs, but rather, its board of directors do instead?




> *A May, 1976 report of the House Banking and Currency Committee indicated: "The Rothschild banks are affiliated with Manufacturers Hanover of London in which they hold 20 percent ... and Manufacturers Hanover Trust of New York." The Report also revealed that Rothschild Intercontinental Bank, Ltd., which consisted of Rothschild banks in London, France, Belgium, New York, and Amsterdam, had three American subsidiaries: National City Bank of Cleveland, First City National Bank of Houston, and Seattle First National Bank. It is believed, that the Rothschilds hold 53% of the stock of the U.S. Federal Reserve.*





> Ohio Senator, Warren G. Harding, who was elected to the Presidency in 1920, said in a 1921 Congressional inquiry, that the Reserve was a private banking monopoly. He said: *"The Federal Reserve Bank is an institution owned by the stockholding member banks. The Government has not a dollar's worth of stock in it."* His term was cut short in 1923, when he mysteriously died, leading to rumors that he was poisoned. This claim was never substantiated, because his wife would not allow an autopsy.





> *A June 15, 1978 Senate Report called "Interlocking Directorates Among the Major U.S. Corporations" revealed that five New York banks had 470 interlocking directorates with 130 major U.S. corporations: Citicorp (97), J. P. Morgan Co. (99), Chase Manhattan (89), Manufacturers Hanover (89), and Chemical Bank (96).* According to Eustace Mullins, these banks are major stock holders in the FED. In his book World Order, he said that these five banks are "controlled from London." Mullins said: "Besides its controlling interest in the Federal Reserve Bank of New York, the Rothschilds had developed important financial interests in other parts of the United States ... The entire Rockefeller empire was financed by the Rothschilds."





> In 1919, John Maynard Keynes, later an advisor to Franklin D. Roosevelt, wrote in his book The Economic Consequences of Peace:
> 
> *"Lenin is to have declared that the best way to destroy the capitalist system was to debauch the currency ... By a continuing process of inflation, governments can confiscate secretly and unobserved, an important part of the wealth of their citizens ... As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless..."*





> Congressman Charles August Lindbergh, Sr., father of the historic aviator, said on the floor of the Congress: "This Act establishes the most gigantic trust on Earth ... *When the President signs this Act, the invisible government by the Money Power, proven to exist by the Money Trust investigation, will be legalized* ... This is the Aldrich Bill in disguise ... The new law will create inflation whenever the Trusts want inflation ... From now on, depressions will be scientifically created ... The worst legislative crime of the ages is perpetrated by this banking and currency bill."





> On December 15, 1931, Rep. Louis T. McFadden, who for more than ten years served as Chairman of the Banking and Currency Committee in the House of Representatives, said: *"The Federal Reserve Board and banks are the duly appointed agents of the foreign central banks of issue and they are more concerned with their foreign customers than they are with the people of the United States. The only thing that is American about the Federal Reserve Board and banks is the money they use..."*





> On May 23, 1933, McFadden brought impeachment charges against the members of the Federal Reserve:
> 
> "Whereas *I charge them jointly and severally with having brought about a repudiation of the national currency of the United States in order that the gold value of said currency might be given to private interests...*
> 
> I charge them ... with having arbitrarily and unlawfully taken over $80,000,000,000 from the United States Government in the year 1928...
> 
> I charge them ... with having arbitrarily and unlawfully raised and lowered the rates on money ... increased and diminished the volume of currency in circulation for the benefit of private interests...
> 
> I charge them ... with having brought about the decline of prices on the New York Stock Exchange...
> ...





> Each year, billions of dollars are 'earned' by Class A stockholders, from U.S. tax dollars which go to the FED to pay interest on bank loans.





> Sen. Barry Goldwater wrote in his book With No Apologies: "Does it not seem strange to you that these men just happened to be CFR (Council on Foreign Relations) and just happened to be on the Board of Governors of the Federal Reserve, that absolutely controls the money and interest rates of this great country. *A privately owned organization ... which has absolutely nothing to do with the United States of America!"*


Yep, the Senate Report, McFadden, Goldwater, Keynes, Harding, Mullins, Lindberg ... these guys (and many more) were all apparently less educated than yourself.

Bosso

----------


## dujac

> So, if I own 53% of a corporations stock, I have no say in its affairs, but rather, its board of directors do instead?
> 
> Yep, the Senate Report, McFadden, Goldwater, Keynes, Harding, Mullins, Lindberg ... these guys (and many more) were all apparently less educated than yourself.
> 
> Bosso


we're talking about the federal reserve banks, not an ordinary corporation's stock





> I charge them ... with having conspired to transfer to foreigners and international money lenders, title to and control of the financial resources of the United States...


*myth: congressman louis mcfadden exposed the federal reserve scam in the congressional record*

mcfadden is another one that said the federal reserve was controlled by foreign bankers; he moved to impeach president hoover in 1932 and introduced a resolution bringing conspiracy charges against the board of governors of the federal reserve

the impeachment resolution was defeated by a vote of 361 to 8 and mcfadden lost any credibility that he may have once had

----------


## driller80545

> have you ever considered that maybe you're being influenced by propaganda from foreign or internal enemies of the united states?


A very good question for you to ask yourself!

----------


## StilesBC

dujac, 

After reading this entire thread, I am really disappointed in you.  I thought by investing my time in reading this entire thread, I would be encouraged to learn something.  Perhaps be directed toward a new line of reasoning that questioned Austrian Theory or even questioned its skepticism of the FRS.  But you have done nothing but parrot the same old arguments that have been demolished in decades past.  

I make an effort to read some leading economists who are NOT Austrian - Niall Ferguson, Bill Black, Simon Johnson, Steve Keen, Rogoff & Reinhart.  I find I can learn just as much from them, even though I disagree with many of their starting assumptions (usually the objectives of "equality" or "reaching equilibrium").  You, sir, offer no such benefit to my Saturday afternoon; a complete malinvestment of my time.  

You Fail.

----------


## Zippyjuan

Who owns the Federal Reserve?
http://www.federalreserve.gov/genera...faq/faqfrs.htm



> The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.
> 
> As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."
> 
> *The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.*

----------


## heavenlyboy34

> we're talking about the federal reserve banks, not an ordinary corporation's stock
> 
> 
> 
> 
> *myth: congressman louis mcfadden exposed the federal reserve scam in the congressional record*
> 
> mcfadden is another one that said the federal reserve was controlled by foreign bankers; he moved to impeach president hoover in 1932 and introduced a resolution bringing conspiracy charges against the board of governors of the federal reserve
> 
> the impeachment resolution was defeated by a vote of 361 to 8 and mcfadden lost any credibility that he may have once had


So, because McFadden lost a popularity contest (aka a vote), he was wrong?   Only in congress can right and wrong be determined by majority vote. /facepalm

----------


## dujac

> A very good question for you to ask yourself!


not only have i asked it, i've spent years investigating it

----------


## dujac

> So, because McFadden lost a popularity contest (aka a vote), he was wrong?   Only in congress can right and wrong be determined by majority vote. /facepalm


the impeachment vote was only one aspect of it, the accusations were investigated and then dropped for lack of merit

senator benjamin strong, accused mcfadden of coming down with the malady that so often afflicts nap-less children, drink-less drunkards, and the last person in line for chocolate cake - bellyaching

----------


## Dr.3D

> The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the *Reserve Banks issue shares of stock to member banks*. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and *ownership of a certain amount of stock is, by law, a condition of membership in the System*. *The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.*


I just love that last part.
*1. "Reserve Banks issue shares of stock to member banks"*

In other words, Reserve Banks admit member banks into the club since it a required to have those "stocks" to be a member.

*2." ownership of a certain amount of stock is, by law, a condition of membership in the System"*

Thus it is an exclusive club and by law, only chosen institutions may be members.

*3. "The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year."*

A member may not transfer their membership to any other entity but will be given money for being a member of the "non-profit" organization.  This would lead one to believe the member banks are making a profit from the dividends, no matter how small it may be.

Why even call those stocks?   They don't follow the customary rules of a normal stock. They should have been called non-transferable membership certificates.

Sounds to me like this is a club that launders money through it's "member banks".

----------


## dujac

> Why even call those stocks.   They don't follow the customary rules of a normal stock. They should have been called non-transferable membership certificates.


it doesn't follow customary rules of a normal stock, because it isn't normal stock and why should you care what it's called?

----------


## Fox McCloud

Myths about Dujac:

*Myth number one*

*Dujac is a Ron Paul Forum member attempting to bust Federal Reserve myths*.

While the Ron Paul Forum troll member known as "Dujac" has posted a number of common Federal Reserve fallacies circulating the net, he has focused much more time and effort into spewing common one-liners regarding the legitimacy of the Fed in "regulating" the dollar and keeping "stability" constant. When confronted, however, the member deflects strong attacks and arguments by ignoring them completely and instead switching gears to something else, or by posting further myths which most already know to be myths.

----------


## Dr.3D

> it doesn't follow customary rules of a normal stock, because it isn't normal stock and why should you care what it's called?


For the same reason I don't like paper being called money.   
For the same reason I don't like names that contradict the purpose of a bill.    PATRIOT.... not patriotic, Net Neutrality.... not neutral.   
Names are often used to make people see something that isn't there.   

One wouldn't call a dog a horse, unless he were trying to fool people into thinking a dog is a horse.

----------


## dujac

> For the same reason I don't like paper being called money.   
> For the same reason I don't like names that contradict the purpose of a bill.    PATRIOT.... not patriotic, Net Neutrality.... not neutral.   
> Names are often used to make people see something that isn't there.   
> 
> One wouldn't call a dog a horse, unless he were trying to fool people into thinking a dog is a horse.


where do you think money comes from?

----------


## Cowlesy

> Myths about Dujac:
> 
> *Myth number one*
> 
> *Dujac is a Ron Paul Forum member attempting to bust Federal Reserve myths*.
> 
> While the Ron Paul Forum troll member known as "Dujac" has posted a number of common Federal Reserve fallacies circulating the net, he has focused much more time and effort into spewing common one-liners regarding the legitimacy of the Fed in "regulating" the dollar and keeping "stability" constant. When confronted, however, the member deflects strong attacks and arguments by ignoring them completely and instead switching gears to something else, or by posting further myths which most already know to be myths.


Yeah, well we've wasted enough time with this dude.

----------


## Dr.3D

> where do you think money comes from?


Ha ha ha.... nobody is going to fool me into thinking it comes from a printing press, the memory of a computer, or better yet from thin air.

----------


## jdmyprez_deo_vindice

I am really sorry I missed this and now I cannot dance with the troll. This makes me a sad panda!

----------


## Dr.3D

> I am really sorry I missed this and now I cannot dance with the troll. This makes me a sad panda!


Yeah, I was just starting to have fun with him.

----------


## heavenlyboy34

In a way, it's sad to see the troll ban-hammered.  It's not often we get pro-FED schills in here to pwn.

----------


## heavenlyboy34

> I am really sorry I missed this and now I cannot dance with the troll. This makes me a sad panda!


Buck up!  He may yet join under a different user name and come back to play.

----------


## Mini-Me

Dammit.  Before his repetitive "80 years without a depression" chant, the guy used his idea of a "deflationary death spiral" as his justification for saying the Fed increases stability.  The idea was that if prices gradually go down, people will all wait in concert to buy anything, consumer demand will go down, and we'll enter a deflationary death spiral.  The technology industry's rapid price reductions prove him wrong (the reason is called time preference), but he repeatedly refused for over TWO HUNDRED posts to respond to that refutation.  FAIL, FAIL, FAIL.

ZippyJuan is a MUCH better myth-buster and Fed-defender, because at least he's willing to engage you.
*In any case, Zippy:*  I agree with Dr.3D's response to your post:  It's indeed a myth that the Fed keeps all interest profit, because it really does return it to the Treasury after expenses and member dividends.*  However, the 6% dividends blatantly contradict the idea that the Federal Reserve is "not-for-profit."  According to Cowlesy's numbers, those dividends amounted to $1.4 billion in 2009.  As he said, "I'll take it!"  The big banks profit more from the environment of easy credit (and necessity of perpetual lending) that the Fed creates though; the Fed's existence places the banking industry in an artificially elevated position at the heart of the economy.

*Also, in reponse to DamianTV:  Given perfect management, it really would be sustainable for the Fed to charge interest, because the interest does NOT disappear into a black hole.  The Treasury gets the interest profits after expenses and dividends, and the government as you know spends every dime it gets.  (Similarly, expenses go to employees, etc. and possibly kickbacks and manicures for all I know, and the dividends go to shareholders, which also means they're returned to the fat cats in the general economy.)  Since the interest money recirculates back into the general economy the usual way (through spending ), debtors to the Fed can use those same exact dollars to pay their principal with.  It's true that if every dollar to the Fed were to be paid back, there wouldn't be enough in circulation for the very last debtor to pay his interest (and diffusion of the remaining money supply throughout the economy would make it difficult for the last several percent to pay), but that's irrelevant given that the whole point of the system is to keep going.  It relies on perpetual loans to keep the money supply stable, and allowing everything to be paid back without replenishing the money supply would be catastrophic anyway, interest or not.  Whereas specie money is stable by default, debt-based fiat money relies on an intricate balancing act to replace old loans with new ones.  It's madness in my opinion, and the most sensible reason anyone would have thought of a system like this is to benefit themselves or a certain class or industry (i.e. bankers).  (On top of the weirdness of the system itself, the Fed's constant inflationary tendencies are destructive to the poor and middle class, but that's the tradeoff they're willing to make. )

Actually, I just thought of something:  As I mentioned, in order for the system to keep running, the Fed has to continually lend out more money to replace old money.  However, the only way to encourage other banks (etc.) to borrow this money is with low rates, and they will still only want to borrow it if they're able to lend enough out to their own customers...by enticing them with low rates.  As such, an economy with debt-based fiat money seems to inherently require lower interest rates to remain a stable money supply than an economy with specie-based money would.  In other words, not only does the Fed necessitate an economy with tons of debtors, but it has no choice but to entice them with easy money.  (However, inflation itself is still their fault, because it means they're still setting the rates lower than they even need to be.)  *What this means is, even if we had 0% inflation under the Fed, the Federal Reserve System would still inherently discourage saving and encourage borrowing and spending, relative to using specie money.*

----------


## Bossobass

> Who owns the Federal Reserve?
> http://www.federalreserve.gov/genera...faq/faqfrs.htm





> The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.
> 
> As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."
> 
> The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.


This sounds like a toothpaste ad. ^^^

The stock pays a guaranteed dividend for life. The Corporation is guaranteed a profit, from which it extracts "all expenses", which are subject to no oversight or review and total in the billions of dollars (one certainly couldn't skim any of that). Any and all losses it may incur are absorbed by the Treasury Dept. (taxpayers). Any and all insider trading of top secret OMC information by member banks is subject to no law or investigation. It has unlimited resources to capitalize failed banks of its choice. It has the power to let banks it chooses to fail. It is non-profit so that it pays no taxes of any kind to no one for any reason. It has the power to require zero reserves of banks at its sole discretion. It has the power to lend unlimited amounts of taxpayer cash to anyone it chooses with any terms it pleases without oversight or audit or revealing that information under oath before Congress.

Etc., etc.

Most importantly, it is incapable of conspiring to secretly profit, circumvent the Constitution, influence legislation or justice, or in any way ever make a mistake or break any laws of any kind. Trust Zippy, he somehow knows this instinctively and from reading the Fed's web site. Of course, Fed Worship is a religion that requires one has to have that faith because an audit or FOIA requests are out of the question, overwhelming majority of Congress and court orders notwithstanding.

And, it gives all da money back to da people.

Bottom line: Mandate of economic stability, full employment and low inflation. Fail, fail, fail.

Time for Regime Change. If no one owns it, then who should give a $#@! if we end the Fed?

Bosso

----------


## jclay2

Have scientists studied the psyche of a troll. Bet that would be interesting. Why post against a brick wall? Unless this guy is a paid fed official / government type (wouldn't be surprised), why would he waste his time? Better yet, why do we waste our time? Maybe it is just good practice to keep our debating skills sharp?

----------


## heavenlyboy34

> Have scientists studied the psyche of a troll. Bet that would be interesting. Why post against a brick wall? Unless this guy is a paid fed official / government type (wouldn't be surprised), why would he waste his time? Better yet, why do we waste our time?* Maybe it is just good practice to keep our debating skills sharp?*


That's the only reason I bothered with this thread.  Shredding trolls like the OP is akin to batting practice.

----------


## japes

> Dammit.  Before his repetitive "80 years without a depression" chant, the guy used his idea of a "deflationary death spiral" as his justification for saying the Fed increases stability.  The idea was that if prices gradually go down, people <snip>....


Thanks Mini-me. You're awesome.

----------


## Mini-Me

> Thanks Mini-me. You're awesome.


LOL, thanks, but I just wanted to hear him admit he was wrong about something after being cornered on it. :-/

----------


## low preference guy

> LOL, thanks, but I just wanted to hear him admit he was wrong about something after being cornered on it. :-/


I don't think he is paid to say he is wrong...

----------


## Chester Copperpot

I see the little $#@! dujac was banned.. what did I miss?


Anything  in the last 20 pages that perhaps was entertaining?

Did this guy see the light or is he a paid fed shill?

----------


## Mini-Me

> I see the little $#@! dujac was banned.. what did I miss?
> 
> 
> Anything  in the last 20 pages that perhaps was entertaining?
> 
> Did this guy see the light or is he a paid fed shill?


I thought it was kind of entertaining, but...I'm one of those easily amused types, so you know how that goes. 

I really doubt he was being paid.  The Fed, the banks, and the establishment in general easily have enough money to hire better shills.  Unless their top reps are all hanging out on the Mises forums or something, I'd like to think they'd send us someone a little more experienced than a bottom-of-the-barrel undergraduate intern.  That guy was more Digg/Reddit caliber, if not Youtube.  Assuming they do their research, I imagine they'd send us someone more like ZippyJuan instead.   (j/k Zippy...I think. )

----------


## Teaser Rate

> Yeah, well we've wasted enough time with this dude.


Maybe its not my place to comment on this, since Im not fully aware of the challenges moderators and administrators here face, but I find it a little disturbing that dujac got banned from posting here for nothing more than voicing an unpopular belief. As far as I can tell, he always remained civil, he didnt start multiple nonsense threads, he didnt spam or plagiarize, and his descending viewpoint was confined to a single thread everyone was free to ignore. But apparently, theres not enough room in a forum whose banner reads _liberty forest_ for such a thread.  

I think there is a significant risk for any group of people who share similar views to become overwhelmed by confirmation bias and become motivated by emotion instead of reality._ i.e. Theres a difference between supporting Ron Paul because you believe he is the best candidate and supporting Ron Paul because his name is Ron Paul._ 

Crossing certain lines such as banning perfectly civil and reasonable posters for unpopular opinions raises huge red flags in my opinion. 


_"That's one thing about freedom; you have to tolerate the nonsense too."_ -Ron Paul

----------


## hugolp

> Maybe it’s not my place to comment on this, since I’m not fully aware of the challenges moderators and administrators here face, but I find it a little disturbing that dujac got banned from posting here for nothing more than voicing an unpopular belief. As far as I can tell, he always remained civil, he didn’t start multiple nonsense threads, he didn’t spam or plagiarize, and his descending viewpoint was confined to a single thread everyone was free to ignore. But apparently, there’s not enough room in a forum whose banner reads _liberty forest_ for such a thread.  
> 
> I think there is a significant risk for any group of people who share similar views to become overwhelmed by confirmation bias and become motivated by emotion instead of reality._ i.e. There’s a difference between supporting Ron Paul because you believe he is the best candidate and supporting Ron Paul because his name is Ron Paul._ 
> 
> Crossing certain lines such as banning perfectly civil and reasonable posters for unpopular opinions raises huge red flags in my opinion. 
> 
> 
> _"That's one thing about freedom; you have to tolerate the nonsense too."_ -Ron Paul


I dont agree, but he has been banned for trolling, not for voicing a different opinion. Ask Zippy how many times he has been baned.

----------


## hazek

I'm really disappointed by you guys. Why ban a troll? His power comes solely from your replies so why not just stop replying like I did?

----------


## Danke

> I thought it was kind of entertaining, but...I'm one of those easily amused types, so you know how that goes. 
> 
> I really doubt he was being paid.  The Fed, the banks, and the establishment in general easily have enough money to hire better shills.  Unless their top reps are all hanging out on the Mises forums or something, I'd like to think they'd send us someone a little more experienced than a bottom-of-the-barrel undergraduate intern.  That guy was more Digg/Reddit caliber, if not Youtube.  Assuming they do their research, I imagine they'd send us someone more like ZippyJuan instead.   (j/k Zippy...I think. )


He is Zippy's understudy.  Zippy thought he was ready to move beyond Digg/Reddit and Youtube.  Apparently not.

----------


## Carson



----------


## Bossobass

> Maybe its not my place to comment on this, since Im not fully aware of the challenges moderators and administrators here face, but I find it a little disturbing that dujac got banned from posting here for nothing more than voicing an unpopular belief. As far as I can tell, he always remained civil, he didnt start multiple nonsense threads, he didnt spam or plagiarize, and his descending viewpoint was confined to a single thread everyone was free to ignore. But apparently, theres not enough room in a forum whose banner reads _liberty forest_ for such a thread.  
> 
> I think there is a significant risk for any group of people who share similar views to become overwhelmed by confirmation bias and become motivated by emotion instead of reality._ i.e. Theres a difference between supporting Ron Paul because you believe he is the best candidate and supporting Ron Paul because his name is Ron Paul._ 
> 
> Crossing certain lines such as banning perfectly civil and reasonable posters for unpopular opinions raises huge red flags in my opinion. 
> 
> 
> _"That's one thing about freedom; you have to tolerate the nonsense too."_ -Ron Paul


You have to know the difference between what is freedom vs what is defamation.

If I meet someone who is saying something like; "Let me dispel the myths about Ron Paul. Myth #1: Ron Paul has integrity. This is patently false because Ron Paul is a liar, a racist and a con artist", I would certainly not view that as freedom to go on unchallenged forever.

We work hard to arrive at the truth and post the facts. It's no secret that there are many people who dislike that to the point of planting shills to dissuade noobs by calling those facts "myths".

So, just as you have the freedom to attempt a similar underhanded bull$#@! stunt, the mods have the freedom to plant a size 11 shoe up your ass for it.

dujac has the freedom to find a forum that appreciates his posting style.

Bosso

----------


## Mini-Me

> Maybe it’s not my place to comment on this, since I’m not fully aware of the challenges moderators and administrators here face, but I find it a little disturbing that dujac got banned from posting here for nothing more than voicing an unpopular belief. As far as I can tell, he always remained civil, he didn’t start multiple nonsense threads, he didn’t spam or plagiarize, and his descending viewpoint was confined to a single thread everyone was free to ignore. But apparently, there’s not enough room in a forum whose banner reads _liberty forest_ for such a thread.  
> 
> I think there is a significant risk for any group of people who share similar views to become overwhelmed by confirmation bias and become motivated by emotion instead of reality._ i.e. There’s a difference between supporting Ron Paul because you believe he is the best candidate and supporting Ron Paul because his name is Ron Paul._ 
> 
> Crossing certain lines such as banning perfectly civil and reasonable posters for unpopular opinions raises huge red flags in my opinion. 
> 
> 
> _"That's one thing about freedom; you have to tolerate the nonsense too."_ -Ron Paul


The ban did come pretty quickly, but I'm confident it wasn't for his views.  (As Hugolp mentioned, ask ZippyJuan how many times he's been banned.)  If you read the whole thread and the progression of his comments, it becomes obvious he was posting not to have a genuine discussion but to troll.  If anyone posted something he didn't have a canned response to, he'd ignore it and change the subject or obnoxiously repeat the same previously addressed canned one-liners in response to someone else's post.  That's not to say I'm gleefully licking his blood off the bottom of Cowlesy's banhammer or anything, because you're right:  He did in fact remain civil (if uncooperative), he didn't spam, etc.  However, make no mistake that he wasn't interested in intellectually honest debate or being "reasonable."

All that said, some of the myths he posted about really are myths in whole or part (even if his extended analysis and ultimate conclusions were...terrible? ), so he may have actually done us a service by starting this thread anyway.  Clarifying the whole dividends/profits thing in the first few pages helped me too.

----------


## DamianTV

Frankly, I'm glad that dujac got banned.  There is not one single person in this forum that actually believes that the Federal Reserve is good for anything but its own profits.

----------


## archangel689

myths

----------


## Zippyjuan

Wow.  A lot has been going on since I last checked in.  I have to do a bunch of reading to get caught up.  Dujac got banned, eh?  Attitude?  Improper behavior? Hopefully not for having a dissenting opinion. Differences of opinion are a good thing.  Makes it more interesting having two sided discussions.  Otherwise you get things like:
 "Ron Paul is cool. "
"Yeah, I like Ron too.  He's cool."
"Uh, so what do you want to talk about?"
"I dunno. What's on TV?"

Looks like this thread is dead anyways. Thanks for some of the comments people made about me in it.

----------


## Carson

The thread may be dead but someone needs to post a picture of a kitten to mellow everyone out for sure!

----------


## neumoljiv

> Ha ha ha.... nobody is going to fool me into thinking it comes from a printing press, the memory of a computer, or better yet from thin air.


where does money come from, then?

----------


## TexanRudeBoy

> *the recession ended over a year ago* and we had positive real gdp growth in all four quarters of 2010


Tell that to the millions out of work.............

----------


## Carson

> Tell that to the millions out of work.............


I wonder how much of the growth was related to the printing of money.

Oh Yah. The QE2 thing. They printed up bonds to buy with their printed up money. Sort of a double whammy if both are counted in the gross domestic product.

----------


## Dr.3D

> where does money come from, then?


It comes from work.   Printing currency is much easier and cheaper than mining for real money.    Work is involved to create the gold and silver used in coining real money.    That real money is exchanged for equal amounts of labor and used as needed to buy what that amount of labor will purchase.

Paper is worth only what people will believe it is worth rather than some specific amount of labor used to create it.   This is the difference between paper and real money.   Paper can never be real money because it is much too easy to print up.    Gold and silver are much more difficult to produce and thus have a value all their own.

Paper is a deception, capable of being devalued at a whim, where as real gold and silver coins are not able to be devalued except through an equal amount of labor to produce more of them.

----------


## neumoljiv

> It comes from work.   Printing currency is much easier and cheaper than mining for real money.    Work is involved to create the gold and silver used in coining real money.    That real money is exchanged for equal amounts of labor and used as needed to buy what that amount of labor will purchase.
> 
> Paper is worth only what people will believe it is worth rather than some specific amount of labor used to create it.   This is the difference between paper and real money.   Paper can never be real money because it is much too easy to print up.    Gold and silver are much more difficult to produce and thus has a value all it's own.
> 
> Paper is a deception, capable of being devalued at a whim, where as real gold and silver coins are not able to be devalued except through an equal amount of labor to produce more of it.


so money is mined from the earth, when was it first unearthed/discovered?

----------


## Dr.3D

> so money is mined from the earth, when was it first unearthed/discovered?


Money can be anything that requires labor to produce.   It is a commodity.  Gold and silver are just two of the better forms of it.

----------


## neumoljiv

> Money can be anything that requires labor to produce.   It is a commodity.  Gold and silver are just two of the better forms of it.


at its core, money is an abstract concept that represents labor/wealth

----------


## Chester Copperpot

> at it's core, money is an abstract concept that represents labor/wealth


the fed needs to go bye bye.. theyre ripping everybody off

----------


## neumoljiv

> …theyre ripping everybody off


how's that

----------


## Zippyjuan

> Money can be anything that requires labor to produce.   It is a commodity.  Gold and silver are just two of the better forms of it.


I see money as simply a medium of exchange- not a commodity. You can use commodities for money if you like- but money does not have to be a commodity. We trade our labor for money which we can then exchange for goods and services with others. Most money today does not even exist in physical form- it is electronically transmitted.

----------


## Mogambo Guru

> at its core, *money is an abstract concept* that represents labor/wealth


No, but nice try at a segway to fiat currency as money...

----------


## neumoljiv

> No, but nice try at a segway to fiat currency as money...


it's no try, it's a fact; money was invented by man

----------


## low preference guy

> at its core, money is an abstract concept that represents labor/wealth


no. money is just the most exchangeable commodity.

----------


## neumoljiv

> no. money is just the most exchangeable commodity.


so, you think money wasn't invented by man?

----------


## Mogambo Guru

What is wrong with you?  Multiple people have commented on something you say, and you reply




> so, you think money wasn't invented by man?


when I cant find anyone even talking about that.

It is not an abstract concept, that is why I underlined that part of your comment above..  Money is a real physical asset, that typically is easily transferred for other forms of wealth, or goods.  

Money should be the byproduct of being productive, not debt.

Why do YOU prefer money as debt?

----------


## japes

I think neumoljiv is dujac reincarnated...soon to be banned.

----------


## Dr.3D

> I think neumoljiv is dujac reincarnated...soon to be banned.


I'm pretty sure you are correct.   I just can't understand why that guy keeps coming here to argue for the scam known as the Federal Reserve.

----------


## neumoljiv

> What is wrong with you?  Multiple people have commented on something you say, and you reply
> 
> 
> 
> when I cant find anyone even talking about that.
> 
> It is not an abstract concept, that is why I underlined that part of your comment above..  Money is a real physical asset, that typically is easily transferred for other forms of wealth, or goods.  
> 
> Money should be the byproduct of being productive, not debt.
> ...


i don't prefer money as debt

here's a plainly worded explanation of my assertion that money is an abstract concept:

"I am not only claiming that money is the greatest invention of all time, I am going so far as to say that if money had not been invented then it would be impossible for you to be enjoying the standard of living that you enjoy today.  

What is money? Is it the coins and notes of your currency? Is it your credit card? Is it the check that you write to pay you bills? No, it's none of these things. Each of those items is only a representation of money.  

*Money is an abstract concept.* It is an agreement between people. There is no actual money. It is an idea and it only exists while we agree that it exists. We agree that certain items, such as a dollar bill, represent certain amounts of money. We agree that certain physical objects, such as your house, have a certain monetary value. The whole thing is a brilliant exercise in human imagination.  

If you think that there is a true, intrinsic value to money and that it is not just an exercise in imagination then think about this little hypothetical scenario. 

 I find myself stranded, with Peter Schiff, on a little island in the middle of the ocean. There is no food. We have been there quite some time and are starving to death. As luck would have it I have managed to get Peter tied up and I'm lowering him into the cooking pot in preparation for a long overdue dinner. But Peter remembers that he has with him a blank check and a pen. How much money do you think he has to give me in order to buy his freedom?  

With the shadow of certain death from starvation looming overhead, and no rescue in sight, the only currency acceptable on this island is food, and unfortunately for Peter, at this point in time he falls into the food category. All the money in the world has no value on this island because all the population of this island, except Peter, no longer agrees to the concept of money.  

Now that we agree on the abstract nature of money let's look at why it is such a great invention.  

Prior to the invention of money the human race had not progressed past the Stone Age. This is confirmed by the study of history, archeology and of the people that exist today in societies that have never invented money.

  Having money allows for the division of labor and the division of labor allows for increasing specialization of skills. Specialization of skills leads to more sophistication of tools and eventually to the invention of totally new processes and products. This in turn leads to enhancement of lifestyle. "

continued at link

if you dislike this info source, i can certainly produce more scholarly ones

----------


## Teaser Rate

> It is not an abstract concept, that is why I underlined that part of your comment above..  *Money is a real physical asset*, that typically is easily transferred for other forms of wealth, or goods.


Actually, the vast majority of money in existence today is virtual.

----------


## AlexMerced

The Myths are Myths, and it's important that we critique the fed accurately to be taken seriously.

Seriously, even with it actual structure it isn't hard to make the case for it's abolishment, we don't need cloak and dagger and conspiracies to call for the end of the Fed.

The mere economic effects of it's existence and policies are very damning in themselves.

----------


## AlexMerced

> I see money as simply a medium of exchange- not a commodity. You can use commodities for money if you like- but money does not have to be a commodity. We trade our labor for money which we can then exchange for goods and services with others. Most money today does not even exist in physical form- it is electronically transmitted.


Your missing the point, it becomes a medium of exchange cause it's prdictability of value, when you have a central bank constantly devaluing a currency that function is heavily disrupted.

Also, it'd be VERY HARD for Fiat money to exist without threats of force, cause it be hard for anyone to convince people to begin trading using pure paper. Even in the days of John Law they were using securities such as stock and bonds of money, while easily inflatable, it was still a real asset. A US dollar isn't really a true debt... it's merely something you use or go to jail.

----------


## Teaser Rate

> Your missing the point, it becomes a medium of exchange cause it's prdictability of value, when you have a central bank constantly devaluing a currency that function is heavily disrupted.


Actually, you have it backwards, the dollar's store store of wealth is predictable because there is a central bank which controls the inflation rate. Assuming that the Fed continues to meet its target of ~2% inflation, the value of your dollars is going to remain stable, unlike something like a piece of gold or silver whose value can sporadically appreciate or depreciate at any given time.   




> Also, it'd be VERY HARD for Fiat money to exist without threats of force, cause it be hard for anyone to convince people to begin trading using pure paper. Even in the days of John Law they were using securities such as stock and bonds of money, while easily inflatable, it was still a real asset. A US dollar isn't really a true debt... it's merely something you use or go to jail.


Here's a question for you: if people only use dollars because they're forced too; then why is it that people across the world accept US dollars ?

----------


## low preference guy

> the dollar's store store of wealth is predictable because there is a central bank which controls the inflation rate.


hahahahahahahaha!!!!

----------


## Travlyr

> Actually, the vast majority of money in existence today is virtual.


Under the control of a very few exclusive global elite rulers who freely travel the world profiting from wars, control of earth's resources, politicians, military, police, media, educational institutions, health care, and auto industry while more and more people everyday are losing their jobs, homes, and hope for a better future.

Their dishonest central planning system of control sucks and should be illegal.

----------


## neumoljiv

> Under the control of a very few exclusive global elite rulers who freely travel the world profiting from wars, control of earth's resources, politicians, military, police, media, educational institutions, health care, and auto industry while more and more people everyday are losing their jobs, homes, and hope for a better future.
> 
> Their dishonest central planning system of control sucks and should be illegal.


the point i'm making in post #328 is that money began as an abstract concept, or in simpler terms, as an invention by mankind

----------


## Travlyr

> the point i'm making in post #328 is that money began as an abstract concept, or in simpler terms, as an invention by mankind


You should read "The Mystery of Banking" by Murray N. Rothbard because you misunderstand the origin of money. It starts with the basic necessities.

A wealthy individual has more resources than he/she needs ... more food, water, shelter, warmth, health, and products. Food spoils, so rather than growing & storing 80 years worth of food, people combine their labor with land to produce fresh food on a continuous basis and trade their excess food for luxury items. Rather than everybody having to produce their own food, people can produce other goods, like a motorcycle or whatever, and trade the products they produced from mixing their labor with resources for food. Real money is a tangible asset that makes trading easy, honest, just as valuable but longer lasting than fresh food.

----------


## Mogambo Guru

Money is an asset, not an abstract concept.  Being created by man, and abstract concepts, are not mutually exclusive.

----------


## heavenlyboy34

> Money is an asset, not an abstract concept.  Being created by man, and abstract concepts, are not mutually exclusive.


Sound money is an asset, not the fiat stuff we all carry around nowadays.

----------


## Sola_Fide

> Actually, you have it backwards, the dollar's store store of wealth is predictable because there is a central bank which controls the inflation rate.



:collins:

How about "creates it"?

----------


## neumoljiv

> You should read "The Mystery of Banking" by Murray N. Rothbard because you misunderstand the origin of money.


i read it long ago, rothbard's political views skew his objectivity





> Money is an asset, not an abstract concept.  Being created by man, and abstract concepts, are not mutually exclusive.


money can be many things, but the fact is that it was created by man, not discovered in nature and currently, it's primary value is based on being a medium of exchange

if you want a 'store of value', there are many alternatives

----------


## Danke

dujac  
Banned

Last Activity:02-20-2011 08:46 AM

___________________________________

neumoljiv  
Member

Join Date:02-21-2011

----------


## Danke

//

----------


## neumoljiv

> //


what's your point?

----------


## Travlyr

> You should read "The Mystery of Banking" by Murray N. Rothbard because you misunderstand the origin of money. It starts with the basic necessities.





> i read it long ago, rothbard's political views skew his objectivity



You should read it again for comprehension this time.

----------


## neumoljiv

> You should read it again for comprehension this time.


what do you think i didn't comprehend?

----------


## Travlyr

> what do you think i didn't comprehend?


The origin of money is from nature. Food is money. It just doesn't preserve as well as gold.

----------


## neumoljiv

> The origin of money is from nature. Food is money. It just doesn't preserve as well as gold.


food is food, it takes abstract thinking to conceive it as money

----------


## Travlyr

> food is food, it takes abstract thinking to conceive it as money


This is why I refer "The Mystery of Banking" to you. You could learn some truths.
If I have two fish, and you have four eggs, then we can use a fish and two eggs as a valuable medium of exchange for a nice balanced meal. What it takes to understand that food is money is not abstract thinking but honesty and comprehension.

----------


## neumoljiv

> This is why I refer "The Mystery of Banking" to you. You could learn some truths.
> If I have two fish, and you have four eggs, then we can use a fish and two eggs as a valuable medium of exchange for a nice balanced meal. What it takes to understand that food is money is not abstract thinking but honesty and understanding.


i think you understand that sort of barter is inefficient and generally archaic, over time the understanding of money theories have advanced to more productive and useful forms

----------


## Travlyr

> i think you understand that sort of barter is inefficient and generally archaic, over time the understanding of money theories have advanced to more productive and useful forms


Yes. And this is most likely why gold, silver, and other commodities keep rising in value against the Fed's dollar.

----------


## neumoljiv

> Yes. And this is most likely why gold, silver, and other commodities keep rising in value against the Fed's dollar.


generally, what goes up, comes down

----------


## IBleedNavyAndOrange

> generally, what goes up, comes down


Could you offer some evidence on why you think the value of gold will drop in terms of FRNs

----------


## neumoljiv

> Could you offer some evidence on why you think the value of gold will drop in terms of FRNs


do you think it'll go up forever?

----------


## Dr.3D

> do you think it'll go up forever?


LOL, do you think the value of the current U.S. dollar will stay as high as it is forever?

----------


## Fox McCloud

> generally, what goes up, comes down


I don't think anyone here is arguing that it'll trend upward, quickly, forever, but that it'll trend upward forever, as long as the Fed maintains a policy of inflation.

----------


## neumoljiv

> I don't think anyone here is arguing that it'll trend upward, quickly, forever, but that it'll trend upward forever, as long as the Fed maintains a policy of inflation.


look at historical fluctuations in precious metal prices




> LOL, do you think the value of the current U.S. dollar will stay as high as it is forever?


i've already said that generally, what goes up, comes down

but, one important difference between gold and us dollars, is elasticity of supply

----------


## IBleedNavyAndOrange

> do you think it'll go up forever?


Actually I was just hoping for evidence that what you're saying is true.

But to answer your question, I think that eventually the gold price in FRNs will be stable. And by that I mean that no amount of FRNs will purchase any amount of gold. The caveat is that the current trend ends in its logical conclusion.

----------


## neumoljiv

> Actually I was just hoping for evidence that what you're saying is true.
> 
> But to answer your question, I think that eventually the gold price in FRNs will be stable. And by that I mean that no amount of FRNs will purchase any amount of gold. The caveat is that the current trend ends in its logical conclusion.


what you wrote reminds me of this rhetoric from 1988




at 2:45 ron paul said, "I anticipate, and many Austrian free market economists anticipate, that the recession that's coming will not be a recession at all but it will a depression and it will probably be bigger than the one we had in the 1930s"

----------


## Danke

> what you wrote reminds me of this rhetoric from 1988
> 
> 
> 
> 
> at 2:45 ron paul said, "I anticipate, and many Austrian free market economists anticipate, that the recession that's coming will not be a recession at all but it will a depression and it will probably be bigger than the one we had in the 1930s"


Title to that video: "ron paul is a dishonest politician"  huh?

----------


## Chester Copperpot

Seems like a depression is the only way to fix this bubble for the last 50+ years...

----------


## Teaser Rate

> Under the control of a very few exclusive global elite rulers who freely travel the world profiting from wars, control of earth's resources, politicians, military, police, media, educational institutions, health care, and auto industry while more and more people everyday are losing their jobs, homes, and hope for a better future.
> 
> Their dishonest central planning system of control sucks and should be illegal.


Since Im not in the mood to delve into your paranoid fantasies, Ill respond by saying this: most money is virtual because its _convenient_. It doesnt make sense for me to send an envelope filled with cash every time I want to buy something online or to carry purses filled with cash every time I want to make a large purchase.  

Most money would be virtual under a gold standard or any other kind of monetary system capable of working in a modern economy. Your response is a total non sequitur.

----------


## Dr.3D

> look at historical fluctuations in precious metal prices
> 
> 
> 
> i've already said that generally, what goes up, comes down
> 
> but, one important difference between gold and us dollars, is elasticity of supply


Do these go back far enough?
 

As to elasticity.  The supply of precious metals is not very elastic, this is true, but which is better, infinite elasticity or finite elasticity?  

Well, we can think about this a bit a come to the conclusion, something that is of infinite elasticity may be thinned to the point of being worthless.  It's sort of like stretching the amount of coffee in a coffeepot by adding more water.   We can get some pretty weak coffee if we fill half a pot of coffee to the top with water.    Of course that wouldn't even be weak if we compared it with what we would find in the pot after we had poured it out into a lake and then refilled the pot from that lake.  Yes, the supply of coffee was able to be elastic to the point of not being recognizable as coffee.  Now just think of the coffee being the value found in the coffeepot and the water mixed with it as not changing the value of the coffee, but rather diluting that value. I doubt people would think to remove water from the coffeepot as that would be harder to do.

One should take to note what can happen with infinite elasticity, the currency can easily be diluted to the point of becoming worthless. (look at what happened to the elastic currency in Zimbabwe or any other country where their currency failed.  Mexico comes to mind.)

Now a finitely elastic supply may in time cause deflation.  Is this a bad thing?  Of course not, it doesn't rob the people holding it.  This is unlike people holding infinitely elastic currency, where the people holding it are being robbed by inflation (a growing supply).

It should seem quite simple, people would prefer not to be robbed and would choose a currency with a finitely elastic supply.  As the population grows, each measure of the finitely elastic currency increases in value.   This works great for those saving for their retirement.

----------


## Teaser Rate

> :collins:
> 
> How about "creates it"?


A low, stable and predictable rate of inflation is preferable to a fixed supply of money or a supply whose quantity and/or intrinsic value is vulnerable to external shocks. 




> Seems like a depression is the only way to fix this bubble for the last 50+ years...


What bubble ? And how would a depression help fix anything ? What problem did the Great Depression correct ?

----------


## Danke

> A low, stable and predictable rate of inflation is preferable to a fixed supply of money or a supply whose quantity and/or intrinsic value is vulnerable to external shocks.


I'd prefer an honest monetary system void of central manipulation.  Deflation would benefit wage earners and savers.  Workers would benefit from their increased productivity.  It wouldn't be siphoned off via inflation.

----------


## Teaser Rate

> I'd prefer an honest monetary system void of central manipulation. * Deflation would benefit wage earners and savers.  Workers would benefit from their increased productivity.  It wouldn't be siphoned off via inflation.*


Rather than go into a long explanation about the problems of deflation, I'll just ask a simple question which should hopefully have the same effect: 
_
If what you say about deflation is true, then why didn't wage earners and savers benefit from the deflation which occurred in the 1930s ?_

----------


## Danke

> Rather than go into a long explanation about the problems of deflation, I'll just ask a simple question which should hopefully have the same effect: 
> _
> If what you say about deflation is true, then why didn't wage earners and savers benefit from the deflation which occurred in the 1930s ?_



You mean an environment heavy with government intervention?  Like gold revaluation by decree and paying farmers to dump products like milk out instead of selling it at a reduced price?

Yeah, free markets suck.

----------


## Fox McCloud

> Rather than go into a long explanation about the problems of deflation, I'll just ask a simple question which should hopefully have the same effect: 
> _
> If what you say about deflation is true, then why didn't wage earners and savers benefit from the deflation which occurred in the 1930s ?_


wages weren't allowed to fall with said deflation, essentially putting in place a very high minimum wage that exacerbated the unemployment problem.

Also, it's not really an apples to apples comparison you're making here--Austrians don't suggest that severe deflation is a good thing, at all, but that a mild, continual deflation benefits everyone...to suggest that they're in favor if any deflation (let alone one created by the government) is fallacious.

----------


## Teaser Rate

> You mean an environment heavy with government intervention?  Like gold revaluation by decree and paying farmers to dump products like milk out instead of selling it at a reduced price?
> 
> Yeah, free markets suck.


That doesn't answer my question. 




> wages weren't allowed to fall with said deflation, essentially putting in place a very high minimum wage that exacerbated the unemployment problem.
> 
> Also, it's not really an apples to apples comparison you're making here--Austrians don't suggest that severe deflation is a good thing, at all, but that a mild, continual deflation benefits everyone...to suggest that they're in favor if any deflation (let alone one created by the government) is fallacious.


The post I was responding to made the claim that deflation is good, and I thought that by asking him a question which would force him to study an empirical example of the problems associated with deflation, he might have gone back on his original statement or at least clarified it. Surprisingly enough, it didn't work.

I admit that your point about low, stable deflation being potentially beneficial does have some merit. The most important part of a monetary system is its stability, having a low stable inflation or deflation rate is much better than having large fluctuations in either direction. I tend to believe that low inflation is better than low deflation for a couple of reasons: 

1-The economy already works under the assumption of low inflation, the transition to deflation would cause many problems for lenders and borrowers. How many more people would default on their mortgage if their wages kept going down and their payments were to remain the same? To justify such disruptions in the market, youd need a very good reason to initiate the transition, and I dont see one right now.  

2-Prices have an easier time adjusting higher than adjusting lower. This may be for purely psychological reasons, but its much easier to suppliers to raise their prices than to lower them because its easier to give their employees a pay raise than a pay cut, even if the absolute purchasing power of their wages remains the same. 

I guess that a culture which would be exposed to a deflationary environment for long enough would eventually adjust to it, but I dont see how the potential benefits of such a system justify the huge costs of its transition.

I think it's much easier to focus on reforming the Fed by narrowing down its number of mandates and level of discretion rather than to try to reform the entire monetary system from the ground up.

----------


## Danke

> That doesn't answer my question.


  lol, figures.  So you have no answer.  Not surprised.

----------


## Mogambo Guru

> Rather than go into a long explanation about the problems of deflation, I'll just ask a simple question which should hopefully have the same effect: 
> _
> If what you say about deflation is true, then why didn't wage earners and savers benefit from the deflation which occurred in the 1930s ?_



They did.  

But another point is that the great depression was a result from fiat money, not sound money.  The great depression was similar to the housing bust, it was the markets way of reallocating resources to a more productive direction instead of a credit induced speculative bubble.

----------


## neumoljiv

> As to elasticity.  The supply of precious metals is not very elastic, this is true, but which is better, infinite elasticity or finite elasticity?


monetary control is the ideal, if it is managed properly

----------


## low preference guy

> monetary control is the ideal, if it is managed properly


theft is not ideal. coercion is not ideal.

increasing the money supply is theft as it redistributes purchasing power from the average person to those who use the money first.

control of the money supply by a central bank  can only be achieved with legal tender laws, which infringe upon the freedom of contract. people are forced to agree to a specific method of payment.

----------


## Mogambo Guru

> monetary control is the ideal, if it is managed properly


LOL.  Give it up.  































Managed properly...  HAHAHAhahaha, yep, you got that right.

----------


## Teaser Rate

> They did.  
> 
> *But another point is that the great depression was a result from fiat money, not sound money.*  The great depression was similar to the housing bust, it was the markets way of reallocating resources to a more productive direction instead of a credit induced speculative bubble.


Actually, the Great Depression was caused in large part by the gold standard.

----------


## low preference guy

> Actually, the Great Depression was caused in large part by the gold standard.



hahahahaha!!!!

if only the Fed printed more money!

----------


## neumoljiv

> theft is not ideal. coercion is not ideal.
> 
> increasing the money supply is theft as it redistributes purchasing power from the average person to those who use the money first.
> 
> control of the money supply by a central bank  can only be achieved with legal tender laws, which infringe upon the freedom of contract. people are forced to agree to a specific method of payment.


that's like saying you're forced to drive on the right side of the road and there would be more freedom if each individual could choose which side of the road he wants to drive on

----------


## low preference guy

> that's like saying you're forced to drive on the right side of the road and there would be more freedom if each individual could choose which side of the road he wants to drive on


lol. you're an idiot.

----------


## neumoljiv

> lol. you're an idiot.


you're projecting

----------


## Mogambo Guru

> Actually, the Great Depression was caused in large part by the gold standard.


Misleading;

A government controlled gold standard, with a fixed price.  Maybe you just dont get it..  that is not sound money.  

Golds price was FIXED while paper currency was increasing.  The roaring twenties was a credit induced bubble, enabled by control over currency through the federal reserve.

----------


## low preference guy

> dujac  
> Banned
> 
> Last Activity:02-20-2011 08:46 AM
> 
> ___________________________________
> 
> neumoljiv  
> Member
> ...





> what's your point?


Did you really not get his point?




> you're projecting





> you're projecting


hmmm....

----------


## neumoljiv

> Did you really not get his point?


no, i don't, explain it to me

----------


## Fox McCloud

> 1-The economy already works under the assumption of low inflation, the transition to deflation would cause many problems for lenders and borrowers. How many more people would default on their mortgage if their wages kept going down and their payments were to remain the same? To justify such disruptions in the market, youd need a very good reason to initiate the transition, and I dont see one right now.


1. The market is capable of reacting and changing its behavior very rapidly to various situations, especially in the digital age, where information is relayed almost instantaneously--the recent conflict in the middle-east is perfect evidence of this, in action; oil prices adjusted almost immediately to reflect the new problems in the oil supply line. Under a deflationary regime, this would just be written differently; mortgage contracts and terms would be different. 

2. I'd argue the reason prices have a more difficult time adjusting lower than higher is primarily because we [i]do[/o] and have primarily lived in an inflationary environment; when prices are typically seen or expected to increase year after year, due to inflation, cuts in the nominal wage are viewed as highly negative; under a deflationary environment, these views would (at least IMHO) quickly vanish.

I'd say the costs of switching over to a slightly deflationary environment wouldn't be so great as the costs imposed by the boom-bust cycle that are associated with an inflationary environment.

2-Prices have an easier time adjusting higher than adjusting lower. This may be for purely psychological reasons, but its much easier to suppliers to raise their prices than to lower them because its easier to give their employees a pay raise than a pay cut, even if the absolute purchasing power of their wages remains the same. 

I guess that a culture which would be exposed to a deflationary environment for long enough would eventually adjust to it, but I dont see how the potential benefits of such a system justify the huge costs of its transition.

I think it's much easier to focus on reforming the Fed by narrowing down its number of mandates and level of discretion rather than to try to reform the entire monetary system from the ground up.[/QUOTE]

----------


## Zippyjuan

Under what conditions do people's wages go down? That normally occurs during economic downturns. A person either loses their job and a new one does not pay as much or they get their hours cut. You don't usually go into work and your boss says he will pay you less this year than he paid you last year.  If you are experiencing falling wages, you already have economic problems. Falling wages feeds the weaker economy- people with less money buy fewer things and that means that businesses are selling less and they need fewer people so they either lay them off or reduce their hours which further reduces their wages.

----------


## shocker315

If prices of goods and services are falling during a period of deflation, employers demand wage reductions to maintain a profit and stay in business.   But many note the workers’ wages are “sticky” and resistant to reduction.  However,  if wages are reduced at the same rate of price deflation of goods and services then....*there is no net change in the real purchasing power of the workers*, despite their reduction in wages.   Under these circumstances, demand for goods and services can be maintained during falling wages.    So, why should wages be “sticky” at all?... if workers can still have the same real purchasing power, despite reduced wages,  since all goods and services they buy are costing less and less? 

Wages are "sticky" precisely because of minimum wage laws, union contracts, government intervention, and workers general lack of education regarding the relationship of wages vs purchasing power.  The result is, wages are not allowed to decline during price deflation...thus employers are forced to lay off workers.  With unemployment you get no wages at all, and falling aggregate demand.   If barriers to “flexible wages” were removed, unemployment would be low during times of price deflation, workers would still maintain their purchasing power, profit margins of employers would be maintained....(But then the political ruling class would have no reason to interfere in the economy for their benefit.)  

Note,  in the current state on inflation with “flexible currency",  workers wages are ALSO reduced… _but in a hidden manner not one in a million workers are able to diagnose_.  During inflationary periods,  with workers’ wages being “sticky" and inflexible, rising prices and static wages allows for larger profit margins for their employers…thus once again full employment is maintained,  AND at wages workers are a comfortable with.    However, with rising prices and static wages the *real purchasing power of the workers is diminished.*  They no longer can purchase the goods and services they are accustomed to.  Thus, _this is effectively the same as a real wage reduction_. But in this scenario, demand is reduced since prices are rising during effective wage reductions. 

 As workers can no longer afford goods and services they are accustomed to,  they blame their employers for the “income gap”.   Workers then demand socialist government interference, assistance, and unionization to make up for the loss of purchasing power.   Then end result is the capitalist employers must either give in to pressure and pay more, resulting in long term losses and going out of business (unless they get a bailout from the government from whom they have lobbied), or lay off workers who then demand even more government assistance from their politicians.  In this scenario, the political ruling class is well pleased.

----------


## Teaser Rate

> 1. The market is capable of reacting and changing its behavior very rapidly to various situations, especially in the digital age, where information is relayed almost instantaneously--the recent conflict in the middle-east is perfect evidence of this, in action; oil prices adjusted almost immediately to reflect the new problems in the oil supply line. Under a deflationary regime, this would just be written differently; mortgage contracts and terms would be different.


How would contracts be written and enforced in a deflationary environment? I have a hard time understanding how even a simple loan would work. Heres an example: you agree to loan me $1000 at 2% interest for a year, under the current 2% inflationary system we agree that Ill pay you back $1040. Under a 2% deflationary system, I would only have to pay you back $1000 to pay for the interest, at which point, youd have no incentive to make the deal. A deflationary system would artificially raise the interest rate of borrowing money, destroying potential economic growth in the process. 

Assuming that Im missing something and that contracts could be written in a way to fully adjust for deflation, you would still have the problem of millions of present contracts which assume inflation and cannot be re-written without heavy government involvement. If you were to lock into a 25yr mortgage tomorrow and the Fed were to adopt a deflationary policy next year, youd be screwed into making higher payments than you agreed to for 24 years or lose all your equity by foreclosing.  This situation would be replicated for millions and homeowners and small businesses and its effects would have lasting destructive effects on the economy and would ultimately result in a substantial transfer of wealth from the middle class to the financial sector. 




> 2. I'd argue the reason prices have a more difficult time adjusting lower than higher is primarily because we [i]do[/o] and have primarily lived in an inflationary environment; when prices are typically seen or expected to increase year after year, due to inflation, cuts in the nominal wage are viewed as highly negative; under a deflationary environment, these views would (at least imho) quickly vanish.


I disagree with that point because I dont think that most people would become economically literate enough to accept pay cuts without significant friction. For instance, I dont think the average person today fully understands inflation and its implications.  




> I'd say the costs of switching over to a slightly deflationary environment wouldn't be so great as the costs imposed by the boom-bust cycle that are associated with an inflationary environment.


Ill concede the point that our current system does create some distortions in the marketplace, as all money is a veil; however, I dont see why that distortion would cease to exist under a deflationary environment as prices would likely continue to adjust in an imperfect manner. 

If your point is about the specific actions of the Fed, and not the inherent disruptions of an inflationary system, then your argument is about reforming it, not abolishing it.

----------


## Teaser Rate

> Misleading;
> 
> A government controlled gold standard, with a fixed price.  Maybe you just dont get it..  that is not sound money.  
> 
> Golds price was FIXED while paper currency was increasing.  The roaring twenties was a credit induced bubble, enabled by control over currency through the federal reserve.


What exactly do you mean by sound money ? Under the gold standard, the dollar was a coupon which was redeemable for a certain amount of gold. Wouldn't any commodity-backed currency work the same way ?

----------


## Jordan

> What exactly do you mean by sound money ? Under the gold standard, the dollar was a coupon which was redeemable for a certain amount of gold. Wouldn't any commodity-backed currency work the same way ?


No.  

See, under a world with "competing currencies" we're going to have all different kind of standards released by private companies and the supply of money will grow perfectly with the expansion of the economy because the things we produce will be monetized.  Essentially, competing currencies means barter, but with a new label so as not to sound so barbaric.

Obviously there are a number of oversights here, namely the fact that most anyone could affect the supply of money with ease as the currencies are...well, commodities.  Also, raw commodities make up such a small percentage of overall production that we'd literally throw all our resources at digging up, growing, or extracting new "currencies" until we explore every last inch of earth and every drop of the seas.  

Basically, take all the available supply of commodities and assign them a relative price compared to the world supply of money.  In the end what you have is a race to the bottom, with what should be some of the most inexpensive goods becoming the most expensive due only to fears about what the current system is doing to the price of these goods.  Wait..what?

----------


## Mogambo Guru

> What exactly do you mean by sound money ? Under the gold standard, the dollar was a coupon which was redeemable for a certain amount of gold. Wouldn't any commodity-backed currency work the same way ?


The more dollar coupons that were created were claims to gold.  The amount of gold did not change, but the number of coupons that were supposed to be redeemable in gold increased.  The dollar value of gold should have gone up, instead of being artificially fixed by government.

You should look into the timeframe from 1800-1900... and then think and compare it with the timeframe from 1900-today.

How did we; 
1. become increasingly more productive
2. have more products
3. take on a massive inflow of workers(immigrants)
4. by 1900 work fewer hours, yet could buy more
5. all the while the dollar would buy you more by 1900 than in 1800

In a steady delfationary enviornment, you dont necessarily have to take a "pay cut" to compensate for the lower prices that are a result in increased productivity.  
You could work LESS hours, and still be able to purchase the same amount of goods you were used to, because your money gained a little value based on the increase of productivity.(the price of goods went down, you can now work LESS to buy the same.. your standard of living increased.. that is the goal, to work LESS not more)  This also opens the door for more people to enter the workforce.  Inflation prevents people from entering the workforce because even if you become more efficient/productive, you must continue to work more to make up for the loss in purchasing power in your money.

Think about it, if your money is ultimately a claim to the labor you put into society, and you become more productive (your time is more valuable, you can produce more in the same amount of time) then why would it make sense for you money to keep going down in value? 

This also weens out the unproductive endeavors of an economy.  Today it seems to me that we create a lot of crap just so our money has goods to chase...  We could be a much more efficient and productive society without all the crap.  Inflation is what enables inefficiencies to exist and grow, like a cancer.





.. and also think of the debt load we have accumulated since 1971, and also we have introduced another worker in the household(working wife) to keep the standard of living.  People were increasing their standard of living without a lifetime of debt before, and on one wage.  

Overall point, based on how much more productive we have become, we should have a lot more free time on our hands.  Think about some basics..  "many hands make light work"  Somehow we have been bucking that trend, and inflation is the reason.

----------


## Teaser Rate

> No.  
> 
> See, under a world with "competing currencies" we're going to have all different kind of standards released by private companies and the supply of money will grow perfectly with the expansion of the economy because the things we produce will be monetized.  Essentially, competing currencies means barter, but with a new label so as not to sound so barbaric.
> 
> Obviously there are a number of oversights here, namely the fact that most anyone could affect the supply of money with ease as the currencies are...well, commodities.  Also, raw commodities make up such a small percentage of overall production that we'd literally throw all our resources at digging up, growing, or extracting new "currencies" until we explore every last inch of earth and every drop of the seas.  
> 
> Basically, take all the available supply of commodities and assign them a relative price compared to the world supply of money.  In the end what you have is a race to the bottom, with what should be some of the most inexpensive goods becoming the most expensive due only to fears about what the current system is doing to the price of these goods.  Wait..what?


Your post made my head hurt. 

+rep

----------


## Teaser Rate

> The more dollar coupons that were created were claims to gold.  The amount of gold did not change, but the number of coupons that were supposed to be redeemable in gold increased.  The dollar value of gold should have gone up, instead of being artificially fixed by government.


How can the dollar value of gold go up if a dollar is a coupon for a specific amount of gold?




> You should look into the timeframe from 1800-1900... and then think and compare it with the timeframe from 1900-today.
> 
> How did we; 
> 1. become increasingly more productive
> 2. have more products
> 3. take on a massive inflow of workers(immigrants)
> 4. by 1900 work fewer hours, yet could buy more
> 5. all the while the dollar would buy you more by 1900 than in 1800


We also did have frequent bank runs, panics and depressions under that monetary system. 




> *In a steady delfationary enviornment, you dont necessarily have to take a "pay cut" to compensate for the lower prices that are a result in increased productivity. * 
> You could work LESS hours, and still be able to purchase the same amount of goods you were used to, because your money gained a little value based on the increase of productivity.(the price of goods went down, you can now work LESS to buy the same.. your standard of living increased.. that is the goal, to work LESS not more)  This also opens the door for more people to enter the workforce.  Inflation prevents people from entering the workforce because even if you become more efficient/productive, you must continue to work more to make up for the loss in purchasing power in your money.


Yes you do. I’ll try to explain it this way: assuming there is a fixed number of dollars in the economy, prices will have to drop as productivity increases and you have the same amount of money chasing an increasing supply of goods. 

For a manufacturer, this means that he takes in less revenue and needs to cut his expenses, by either reducing production, laying off workers or getting them to accept a pay cut. The unemployed and underemployed workers then have less money to spend, which causes prices to go down further, which continues the deflationary spiral until you have what happened in the Great Depression. 




> Think about it, if your money is ultimately a claim to the labor you put into society, and you become more productive (your time is more valuable, you can produce more in the same amount of time) then why would it make sense for you money to keep going down in value?


I explained my arguments in a previous post, I’ll copy and paste the response below.




> I tend to believe that low inflation is better than low deflation for a couple of reasons: 
> 
> 1-The economy already works under the assumption of low inflation, the transition to deflation would cause many problems for lenders and borrowers. How many more people would default on their mortgage if their wages kept going down and their payments were to remain the same? To justify such disruptions in the market, you’d need a very good reason to initiate the transition, and I don’t see one right now.  
> 
> 2-Prices have an easier time adjusting higher than adjusting lower. This may be for purely psychological reasons, but it’s much easier to suppliers to raise their prices than to lower them because it’s easier to give their employees a pay raise than a pay cut, even if the absolute purchasing power of their wages remains the same. 
> 
> I guess that a culture which would be exposed to a deflationary environment for long enough would eventually adjust to it, but I don’t see how the potential benefits of such a system justify the huge costs of its transition.





> This also weens out the unproductive endeavors of an economy.  *Today it seems to me that we create a lot of crap just so our money has goods to chase...  We could be a much more efficient and productive society without all the crap.*  Inflation is what enables inefficiencies to exist and grow, like a cancer.


This is not an economic point; it’s a point about personal reference which has absolutely nothing to do with the topic at hand.

I also addressed the distorting effect of inflation in a previous post, and I’ll copy and paste that part below, again. (btw, you might want to read all my previous posts in this thread before you respond)




> I’ll concede the point that our current system does create some distortions in the marketplace, as all money is a veil; however, I don’t see why that distortion would cease to exist under a deflationary environment as prices would likely continue to adjust in an imperfect manner.





> 


I don’t know where you got that chart from because the one from the Dept. of Labor paints a vastly different picture. 






> 


If I had a nickel for every time I’ve had to post this chart, I’d be a rich man by now.



For all intents and purposes, the value of a currency over 50 or 100 years doesn't matter, no one keeps their money in their mattresses anymore and prices and interest rates adjust to the inflation rate. What really matters is the stability of its short-term value, and the data show that the Fed has done a good job of stabilizing it.




> .. and also think of the debt load we have accumulated since 1971, and also we have introduced another worker in the household(working wife) to keep the standard of living.  People were increasing their standard of living without a lifetime of debt before, and on one wage.  
> 
> Overall point, based on how much more productive we have become, *we should have a lot more free time on our hands.*  Think about some basics..  "many hands make light work"  Somehow we have been bucking that trend, and inflation is the reason.


We do. We also have more debt because we have a much higher standard of living than we did in the 1970s. Here’s a great post from another thread which illustrates this better than I can.

----------


## low preference guy

> For all intents and purposes, the value of a currency over 50 or 100 years doesn't matter, no one keeps their money in their mattresses anymore and prices and interest rates adjust to the inflation rate.


Right. No one needs to save for retirement. /sarcasm

Thankfully this whole nonsensical paper money system will collapse in a few years.

----------


## Mogambo Guru

> How can the dollar value of gold go up if a dollar is a coupon for a specific amount of gold?
> 
> 
> 
> We also did have frequent bank runs, panics and depressions under that monetary system. 
> 
> 
> 
> Yes you do. Ill try to explain it this way: assuming there is a fixed number of dollars in the economy, prices will have to drop as productivity increases and you have the same amount of money chasing an increasing supply of goods. 
> ...


Your post made my head hurt...  not in a positive way.

----------


## neumoljiv

myth: the federal reserve is responsible for running up the national debt

----------


## IBleedNavyAndOrange

> Yes you do. I'll try to explain it this way: assuming there is a fixed number of dollars in the economy, prices will have to drop as productivity increases and you have the same amount of money chasing an increasing supply of goods.


Isnt that a false assumption?  (Edit) fixed number of dollars in the economy (/edit)

----------


## PeacePlan

It is a myth that it is Federal and it has reserves.

----------


## jclay2

> myth: the federal reserve is responsible for running up the national debt


Share about half the blame. Without the federal reserve, the market would have to loan us all of the debt and I don't think they could stomach it without massive interest rate increases which consequently would add a LOT more debt and so on....

----------


## PeacePlan

> Right. No one needs to save for retirement. /sarcasm
> 
> Thankfully this whole nonsensical paper money system will collapse in a few years.


Watch what you ask for. When it does collapse and it will, no one will escape from it. I talked with a old guy about the depression and what it was like. One thing he said to me that sticks in my mind is: the people today would end up eating each other as they don't have the survival skills of those in the 1930's

When we do get the collapse we will see the same people who caused it come out with how they will solve it. Many people will be scared and maybe hungry and will see them as the only hope. Just like when we are at war our Liberties get taken and I think even more may be taken with a collapse..

Collapse will be no bed of roses don't fool yourself it will be hard times for everyone.

----------


## low preference guy

> Watch what you ask for. When it does collapse and it will, no one will escape from it.


It won't collapse because I "ask for it". Do you think Barny Madoff's ponzi scheme would still be working if no one "asked for it"?

I recognize the inevitability of the collapse and I am partly glad due to the positives effects it will bring. But if it were up to me it wouldn't collapse, because it never would've started.

----------


## Danke

> Watch what you ask for. When it does collapse and it will, no one will escape from it. I talked with a old guy about the depression and what it was like. One thing he said to me that sticks in my mind is: the people today would end up eating each other as they don't have the survival skills of those in the 1930's


Umm.. I am surrounded by healthy organic food eating liberals that don't own guns.

I'll adapt.

----------


## neumoljiv

> It is a myth that it is Federal and it has reserves.


the usa holds 8,133.5 tons of gold reserves, much more than any other country

the federal reserve is an independent entity within the government, having both public purposes and private aspects

http://www.federalreserve.gov/genera...q/faqfrs.htm#5

----------


## Danke

> the usa holds 8,133.5 tons of gold reserves, much more than any other country


 Where does the "usa" hold this gold?  Has it been independently audited recently?

----------


## neumoljiv

> Where does the "usa" hold this gold?  Has it been independently audited recently?


the gold is held in ft knox and a few federal reserve banks

it's audited and looked after quite closely, but out of obvious security concerns, much of that info isn't made public

----------


## jclay2

> the gold is held in ft knox and a few federal reserve banks
> 
> it's audited and looked after quite closely, but out of obvious security concerns, much of that info isn't made public


Fed Troll? Just wondering...

----------


## low preference guy

> it's audited and looked after quite closely


how do you know? do you work for the Fed?

----------


## neumoljiv

> how do you know? do you work for the Fed?


no, i'm an independent businessman

visit the new york federal reserve bank and you can see the gold

http://www.newyorkfed.org/education/.../goldvault.pdf

----------


## Bossobass

Just as the Fed or any bank would NEVER accept a non-audited financial statement to satisfy criteria for a loan, neither do we accept "come and have a peek at some of the gold here in the NY Fed's basement, tourist" as proof of US gold holdings.

I mean, really, you gotta be $#@!tin' with this...




> visit the new york federal reserve bank and you can see the gold
> 
> http://www.newyorkfed.org/education/.../goldvault.pdf


Bosso

----------


## neumoljiv

> Just as the Fed or any bank would NEVER accept a non-audited financial statement to satisfy criteria for a loan, neither do we accept "come and have a peek at some of the gold here in the NY Fed's basement, tourist" as proof of US gold holdings.
> 
> I mean, really, you gotta be $#@!tin' with this...
> 
> 
> 
> Bosso


the gold is audited, but why should they disclose every little detail?  you wouldn't accept the numbers anyway


here's one of the reasons the fed doesn't play patty cake, anymore:

Vault doors containing this gold really are little more than compartments within the giant vault. They have been sealed with a special tape designed to show breakage and tampering. Hot sealing wax covers both ends, holding them to a card that was signed at the time of the dealing by three representatives of the government. 

One persistent rumor that there was no gold left in Ft. Knox resulted in the first opening of the depository to the public in 1974. The cause: Dr. Peter David Beter, a Washington attorney, whose  book “Conspiracy Against the Dollar,” makes an attack on international monetary reform and the Rockefeller interests. 

Beter charged that “powerful Americans have secretly permitted $20 billion worth of gold to be removed from Ft. Knox.” The weekly publication National Tattler picked up the story, blazed it into headlines, and members of Congress soon began to receive inquiries from constituents.  

 Ed Busch, of WPAA Radio, Dallas, Texas, gave Beter a forum to continue with his charges. The Treasury initially refused comment, not wishing to dignify the charges by way of rebuttal.  Soon, however, congressional pressure for an answer mandated a statement, made informally, that Beter’s view was “ridiculous.”

http://www.numismaticnews.net/articl...x_opened_doors

----------


## YumYum

> no, i'm an independent businessman
> 
> visit the new york federal reserve bank and you can see the gold
> 
> http://www.newyorkfed.org/education/.../goldvault.pdf


Is it something like this?

----------


## neumoljiv

> Is it something like this?


here's one photo



if you google image: "new york federal reserve vault" you can see more photos

----------


## Trimbeaux

Got to love the sheep, defending the institution of central banking with a monopoly to create war after war. Millions upon millions dead in the last century alone because every career (bribed) corrupt politician or 2-bit dictator can inflate their national debt to infinity and wage endless war on credit (but profits for those lucky 1%). Thank you banking clans and corporations for making it possible that I will never see peace again in my life time.

By the way, the gold should be stored in Fort Knox not the Fed NYC and it should be .995 fine delivery gold, but there isn't any, only .85 fineness coin melt. America has been looted for decades.

----------


## YumYum

What's this doing there? Somebody pulled a quicky.

----------


## neumoljiv

> By the way, the gold should be stored in Fort Knox not the Fed NYC and it should be .995 fine delivery gold, but there isn't any, only .85 fineness coin melt. America has been looted for decades.


why should it only be at ft knox

and i'm reposting think link from #407, for you

http://www.numismaticnews.net/articl...x_opened_doors

----------


## Travlyr

Lulz... YumYum. Your pictures are more recent.

----------


## neumoljiv

> Lulz... YumYum. Your pictures are more recent.


here's the story that goes with the photo he posted:

http://www.snopes.com/photos/crime/drugmoney.asp

----------


## Danke



----------


## Trimbeaux

To neumoljiv:

You need to do some reading, here is my link. Start going through the the older archived articles first if you are going to defend the banking elite.
By the way, I have not come to my conclusions just reading neithercorp, I have researched this for 20 plus years of reading varying opinions and books.

http://neithercorp.us/npress/

----------


## neumoljiv

> To neumoljiv:
> 
> You need to do some reading, here is my link. Start going through the the older archived articles first if you are going to defend the banking elite.
> By the way, I have not come to my conclusions just reading neithercorp, I have researched this for 20 plus years of reading varying opinions and books.
> 
> http://neithercorp.us/npress/


i read the link, you're mistaking sales pitches and propaganda for truth

gold salesmen, economic terrorists and miscreants have been saying that sort of thing for more than 20 years, i remember seeing a lot of that kind of thing in the 1970's and of course it has been around for many decades if not centuries; i hardly think reading propaganda counts as legitimate research

----------


## Trimbeaux

Oh our discussion is over, only you and the almighty state have the truth the rest of us are reading propaganda and opinions. You didn't read one article in the archives did you, you can come clean. You just made a quick glance and had to run back here and yell TERRORIST! MISCREANT!
But we are supposed to take everything you post as the pure truth. My research is my opinion and I have read all points of view that I can in the time that I have available but you won't admit that your point of view is just your opinion also. You proclaim everything else is terrorists and miscreants, wow you sound like a government stooge or blind patriot that believes USA right or wrong, like or leave it. 

Later troll.


PS: I apologize to all for feeding the troll.

----------


## Dr.3D

> here's one photo
> 
> 
> 
> if you google image: "new york federal reserve vault" you can see more photos


LOL @ the "Gold bugs".

----------


## neumoljiv

> Oh our discussion is over, only you and the almighty state have the truth the rest of us are reading propaganda and opinions. You didn't read one article in the archives did you, you can come clean. You just made a quick glance and had to run back here and yell TERRORIST! MISCREANT!
> But we are supposed to take everything you post as the pure truth. My research is my opinion and I have read all points of view that I can in the time that I have available but you won't admit that your point of view is just your opinion also. You proclaim everything else is terrorists and miscreants, wow you sound like a government stooge or blind patriot that believes USA right or wrong, like or leave it. 
> 
> Later troll.
> 
> 
> PS: I apologize to all for feeding the troll.


i read a couple of the articles in the archive, but it's not the first time i've seen this stuff, as i said before

 i don't support everything the government says, so i'm no stooge and certainly not a blind patriot

here's another example of the sort of propaganda and misinformation i'm talking about**:




the narrator, william t still, now admits that the video contains inaccuracies and fabrications

----------


## Trimbeaux

I never mentioned or seen Money Masters. I have no opinion on it and if it is in one of his articles I will check it out. I have read most of his articles but did not come across it.
Brandon Smith's articles are well written and include many posts from daily news reports from AP, Reuters and other main stream sources. It is his opinion of world events with evidence from sources from different news outlets around the world which he includes with links in his articles. He gives his opinion for people to survive these tough times ahead. You are dishonest to discredit someone when you barely read any of his work.

----------


## neumoljiv

> I never mentioned or seen Money Masters. I have no opinion on it and if it is in one of his articles I will check it out. I have read most of his articles but did not come across it.
> Brandon Smith's articles are well written and include many posts from daily news reports from AP, Reuters and other main stream sources. It is his opinion of world events with evidence from sources from different news outlets around the world which he includes with links in his articles. He gives his opinion for people to survive these tough times ahead. You are dishonest to discredit someone when you barely read any of his work.


giordano bruno is another gloom and doom guy, people like him have an ulterior motive




when the time comes and their predictions don't occur, they always have an excuse

----------


## Fox McCloud

> How would contracts be written and enforced in a deflationary environment? I have a hard time understanding how even a simple loan would work. Heres an example: you agree to loan me $1000 at 2% interest for a year, under the current 2% inflationary system we agree that Ill pay you back $1040. Under a 2% deflationary system, I would only have to pay you back $1000 to pay for the interest, at which point, youd have no incentive to make the deal. A deflationary system would artificially raise the interest rate of borrowing money, destroying potential economic growth in the process. 
> 
> Assuming that Im missing something and that contracts could be written in a way to fully adjust for deflation, you would still have the problem of millions of present contracts which assume inflation and cannot be re-written without heavy government involvement. If you were to lock into a 25yr mortgage tomorrow and the Fed were to adopt a deflationary policy next year, youd be screwed into making higher payments than you agreed to for 24 years or lose all your equity by foreclosing.  This situation would be replicated for millions and homeowners and small businesses and its effects would have lasting destructive effects on the economy and would ultimately result in a substantial transfer of wealth from the middle class to the financial sector.


I agree that rewriting current contracts would be quite a problem, but this is always the case when you move from a public/socialized/government owned/controlled type system to a private one; there will always be issues, hiccups, and problems along the way; sure, the adjustment period would take a while, but that's just the way things are--I don't really see this as a barrier to not removing the Fed from society--it's just something that has to be done.

In any event, contracts would be no different under deflation as they would be under inflation; if you have a $1000 loan (for 1 year) with 2% annual inflation with a 2% interest rate, then the bank won't make any money on said loan---that said, under our current system, banks will take into account what the inflation rate is likely to be and factor that into the interest paid...likewise, with inflation, it would be the same way, only they'd be making an opposite assumption in terms of money's value. 






> If your point is about the specific actions of the Fed, and not the inherent disruptions of an inflationary system, then your argument is about reforming it, not abolishing it.


The only reform I'd ever advocate for the Fed is that it would merely be a computer that increases the money supply by 3% annually; no funds rate, no interest payed on Fed deposits, nothing--just a computer.

That said, I'd only support this in the near term; as it's still a form of price fixing and will inevitably still cause a boom-bust cycle

----------


## Trimbeaux

neimo

Okay I promise I am done wading in here, Glenn Beck lol. First you compare Neithercorps to: Economic terrorists, miscreants and Gold salesmen and then hit me with Money Masters which had nothing to do with it and now Glenn Beck and the dreaded doom and gloomers. I never watch Glenn Beck by the way because I do not watch Fox News. Which comes back to....you did not read much of anything from Neithercorps. You are too much my friend I will just say that we just do not agree on anything an leave it at that. You believe your information is the only truth, and from the links through out this thread that you posted I think that you are the one with the propaganda not me. Of course you will come back with the ulterior motive in the next post. You sure you do not work for the Federal Reserve?

Oh well stalemate bud.

Anyway good luck.

Done.

----------


## neumoljiv

> neimo
> 
> Okay I promise I am done wading in here, Glenn Beck lol. First you compare Neithercorps to: Economic terrorists, miscreants and Gold salesmen and then hit me with Money Masters which had nothing to do with it and now Glenn Beck and the dreaded doom and gloomers. I never watch Glenn Beck by the way because I do not watch Fox News. Which comes back to....you did not read much of anything from Neithercorps. You are too much my friend I will just say that we just do not agree on anything an leave it at that. You believe your information is the only truth, and from the links through out this thread that you posted I think that you are the one with the propaganda not me. Of course you will come back with the ulterior motive in the next post. You sure you do not work for the Federal Reserve?
> 
> Oh well stalemate bud.
> 
> Anyway good luck.
> 
> Done.


it's gerald celente and i read a fair number of the articles, but from your reply, it seems that you didn't watch any of the two and a half minute video

----------


## Teaser Rate

> Isnt that a false assumption?  (Edit) fixed number of dollars in the economy (/edit)


If you want to speculate about the dynamics of a deflationary monetary system, I'd say it would be a fair assumption to make. Do you have another scenario in mind ?




> Watch what you ask for. When it does collapse and it will, no one will escape from it. I talked with a old guy about the depression and what it was like. One thing he said to me that sticks in my mind is: the people today would end up eating each other as they don't have the survival skills of those in the 1930's
> 
> When we do get the collapse we will see the same people who caused it come out with how they will solve it. Many people will be scared and maybe hungry and will see them as the only hope. Just like when we are at war our Liberties get taken and I think even more may be taken with a collapse..
> 
> Collapse will be no bed of roses don't fool yourself it will be hard times for everyone.


How and why would such a collapse occur? Did I miss a memo about a incoming asteroid or something ? 

Btw, the quote in your sig is attributed the the wrong person. Gerald Ford was the first one to say it, not Jefferson.

----------


## Teaser Rate

> I agree that rewriting current contracts would be quite a problem, but this is always the case when you move from a public/socialized/government owned/controlled type system to a private one; there will always be issues, hiccups, and problems along the way; sure, the adjustment period would take a while, but that's just the way things are--I don't really see this as a barrier to not removing the Fed from society--it's just something that has to be done.


How would you suggest the government handle the transition? Would you support forcefully adjusting the nominal value of all contracts by decree or would you rather let borrowers incur huge losses through no fault of their own? Also, how would you suggest the government deal with its foreign debt? It has issued billions of dollars worth of long-term Treasury bonds, and having to make larger than formerly agreed upon payments is going to exasperate our already dire debt problem.   

I disagree that this transition _has_ to be done if its high costs cant be justified in a concise, quantifiable way. Throwing ourselves head first in a depression in order to trade the negative effects of stable inflation for the negative effects of stable deflation seems like an example of the cure being worse than the disease to me. 




> In any event, contracts would be no different under deflation as they would be under inflation; if you have a $1000 loan (for 1 year) with 2% annual inflation with a 2% interest rate, then the bank won't make any money on said loan---that said, under our current system, banks will take into account what the inflation rate is likely to be and factor that into the interest paid...likewise, with inflation, it would be the same way, only they'd be making an opposite assumption in terms of money's value.


The point of my example was to illustrate that a deflationary environment would artificially raise the costs of borrowing money and thus reduce investment and economic growth. In both scenarios, the lender gets the same amount of purchasing power back; however under the deflationary scenario, he can make the same gains by keeping his money in the bank and not have to take any risk. This essentially raises the price of borrowing money in absolute terms. 




> The only reform I'd ever advocate for the Fed is that it would merely be a computer that increases the money supply by 3% annually; no funds rate, no interest payed on Fed deposits, nothing--just a computer.


I find this to be an interesting idea; Milton Friedman had advocated for a similar system, although I believe that empirical work has shown that the proposal does have some problems. Id prefer a New Zealand type system myself, but I find the computer idea to be much more sensible than most proposals around here.   




> That said, I'd only support this in the near term; as it's still a form of price fixing and will inevitably still cause a boom-bust cycle


Unless you can solve the problems of such a transition, Im afraid that sentiment is an example of the perfect being the enemy of the good.

----------


## IBleedNavyAndOrange

> If you want to speculate about the dynamics of a deflationary monetary system, I'd say it would be a fair assumption to make. Do you have another scenario in mind ?


Sorry I wasn't more clear the first time. The way you laid it out, with a fixed amount of money in circulation, then what you're saying is right.

What I meant is that whatever serves as money, be it metal coins, cigarettes or flower petals people are going to literally make money. They will find new sources of metal to coin, they will roll cigarettes, they will grow more flowers.

The point being that money is in the control of the people generally and not controlled by a cartel.

----------


## Teaser Rate

> Sorry I wasn't more clear the first time. The way you laid it out, with a fixed amount of money in circulation, then what you're saying is right.
> 
> What I meant is that whatever serves as money, be it metal coins, cigarettes or flower petals people are going to literally make money. They will find new sources of metal to coin, they will roll cigarettes, they will grow more flowers.
> 
> The point being that money is in the control of the people generally and not controlled by a cartel.


First off, something like 97% of the worlds money is virtual, so short of a total collapse of the world financial system, were never going to go back to using physical gold coins or cigarettes to conduct transactions. There are two main options, using coupons or using fiat money. All major western economies used to operate under the gold standard a century ago and then progressively transitioned to fiat money. The main reason for this was monetary independence, the gold standard needlessly tied countries monetary policies together and what happened in a foreign country could trigger a depression at home. A good example of this is when France started hoarding gold in the late 20s; Ill quote from Douglas Irwins paper on the subject:




> The gold standard was a key factor behind the Great Depression, but why did it produce such an intense worldwide deflation and associated economic contraction? While the tightening of U.S. monetary policy in 1928 is often blamed for having initiated the downturn, France increased its share of world gold reserves from 7 percent to 27 percent between 1927 and 1932 and effectively sterilized most of this accumulation. This gold hoarding created an artificial shortage of reserves and put other countries under enormous deflationary pressure. Counterfactual simulations indicate that world prices would have increased slightly between 1929 and 1933, instead of declining calamitously, if the historical relationship between world gold reserves and world prices had continued. The results indicate that France was somewhat more to blame than the United States for the worldwide deflation of 1929-33. The deflation could have been avoided if central banks had simply maintained their 1928 cover ratios.


For those interested, the entire paper can be found here. (PDF warning)


Under fiat money, the value of a countrys currency is under its full control; which means that as long as the central bank remains independent and the people running it are competent, we shouldnt worry about wild fluctuations in the rate of inflation. The central banks ability to stabilize the value of the currency is essential to promote economic growth. If you want to lend or borrow money for a period of 5 or 10 years, you dont want to take the risk of the currency unexpectedly appreciating or depreciating.  

Now that weve gotten all that out of the way, I can finally address your point. Why wouldnt having separate private corporations issuing separate coupons for exchange be a good thing? Well, for a few reasons: 

It would be hard to control counterfeit and fraud. Theres enough counterfeiting going on as it is right now with the full force of the law tracking those who do it, imagine how easy it would be to make fake bills in a word where there are 5 or 10 types of currencies and no central authority to verify their authenticity. You also have to account in the incentives the currency issuers have to cheat, instead of having our money being issued by a frequently audited governmental body who is appointed by our democratically elected government, wed have our money being issued by corporations with no oversight. So unless you want an intrusive government regulatory system to control the currency issuers (which you probably dont if you want this system), you always run the risk of a CEO printing a trillion Walmart dollars for his own salary. 

There would be a major coordination problem between multiple currencies as most people dont want to have multiple types of dollars and tens of credit cards in their wallets and retailers wont want to have to use multiple prices, scanners and cash registers, etc. Having one currency has huge benefits due to economies of scale. 

The value of a commodity backed currency can never be as stable as the value of centrally-managed fiat money because of potential external shocks. If I borrow $1000 worth of money for one year in gold-backed coupons and something like a terrorist attack or a mine collapse occurs, I might be forced to pay more back than I agreed to and as such will be less eager to make the deal. The biggest weakness of paper value is also its greatest strength; it has no intrinsic value, so we can always control its price. 

You might also want to look at Jordans amusing post for another good reason why competing currencies would be a silly idea. 

So to finally answer your question, I assumed a fixed number of dollars in the economy because I wanted to isolate the issue to deflation and not have to deal with intricacies of decentralized money creation.

----------


## japes

> ...All major western economies used to operate under the gold standard a century ago and then progressively transitioned to fiat money. The main reason for this was monetary independence, the gold standard needlessly tied countries monetary policies together and what happened in a foreign country could trigger a depression at home...


How is this substantially different than what we have now? What prevents a nation from hoarding dollars instead of gold? Any fiat based nation can print tons of their currency and purchase dollars. In my mind having fiat currency does not sufficiently protect us from another nation wrecking havoc. Nor does it sufficiently isolate one nation's economy from another. I'd much rather take my chances with competing currencies than with ANY kind of central planning. If one nation decides they want to hoard gold  a free society may choose another currency for a time. I'm okay with that. I'm definitely not an expert here. I appreciate your thoughtful responses in this thread. As long as dujac and his doppelganger neumoljiv are not posting replies, I'm learning something.

----------


## Teaser Rate

> *How is this substantially different than what we have now? What prevents a nation from hoarding dollars instead of gold? Any fiat based nation can print tons of their currency and purchase dollars.* In my mind having fiat currency does not sufficiently protect us from another nation wrecking havoc. Nor does it sufficiently isolate one nation's economy from another. I'd much rather take my chances with competing currencies than with ANY kind of central planning. If one nation decides they want to hoard gold  a free society may choose another currency for a time. I'm okay with that. I'm definitely not an expert here. I appreciate your thoughtful responses in this thread. As long as dujac and his doppelganger neumoljiv are not posting replies, I'm learning something.


Well, not really because the exchange rate between currencies is flexible. If the Fed were to print a trillion dollars to buy Euros, then the Euro would appreciate against the dollar. The early 20th century gold standard lacked this balancing mechanism.

----------


## japes

> Well, not really because the exchange rate between currencies is flexible. If the Fed were to print a trillion dollars to buy Euros, then the Euro would appreciate against the dollar. The early 20th century gold standard lacked this balancing mechanism.


I'm sure you're right but my main point was that central banks still have the power to wreck havoc on an economy. A fiat standard does not seem any safer than non-fiat. What prevents a central planner from making huge mistakes with fiat? Apparently nothing. I think history shows us more often than not centralizing power is a threat to liberty. When flawed humans are in charge of where the money flows, it will eventually flow to the flawed humans in charge.

----------


## Teaser Rate

> *I'm sure you're right but my main point was that central banks still have the power to wreck havoc on an economy.* A fiat standard does not seem any safer than non-fiat. What prevents a central planner from making huge mistakes with fiat? Apparently nothing. I think history shows us more often than not centralizing power is a threat to liberty. When flawed humans are in charge of where the money flows, it will eventually flow to the flawed humans in charge.


Of course they do, but thats a risk you have to take with all forms of central power. The military has also been frequently misused throughout history, but I dont think thats a good enough reason to disband national defense. 

The choice you have to make is whether youd rather take the risks of the bad leadership and insufficient oversight of central planners or accept the high coordination costs of emergent currencies. 

Since the Fed has done a reasonably good job of keeping inflation stable over the past 30 years and the inherent problems of decentralized currencies havent been solved yet, Im inclined to believe that a radical change away from the dollar wont accomplish a positive result. 

Of course I might be wrong and anyone who disagrees with me is free to try to refute the objections I raised against competing currencies in this previous post.

----------


## low preference guy

> Of course they do, but that’s a risk you have to take with all forms of central power. The military has also been frequently misused throughout history, but I don’t think that’s a good enough reason to disband national defense.


Legal tender laws violate freedom of contract. Thus, they shouldn't exist. Period.

----------


## Sola_Fide

> The military has also been frequently misused throughout history, but I dont think thats a good enough reason to disband national defense.


Yes it is.  In fact the centralization of military affairs today is a fine example of why it shouldn't exist in its current form.




> Since the Fed has done a reasonably good job of keeping inflation stable over the past 30 years...



LoLoLoLoL

----------


## japes

> Of course they do, but thats a risk you have to take with all forms of central power. The military has also been frequently misused throughout history, *but I dont think thats a good enough reason to disband national defense.*


But it might be a good enough reason to restructure the military.




> The *choice* you have to make is whether youd rather take the risks of the bad leadership and insufficient oversight of central planners or accept the high coordination costs of emergent currencies.


I would choose the latter. However I'm afraid the choice will be made for us if the whole fiat system collapses. 




> Since the Fed has done a reasonably good job of keeping inflation *stable* over the past 30 years and the inherent problems of decentralized currencies havent been solved yet...


The Fed has done a good job of keeping a *stable* supply of money flowing away from the producers/savers into the pockets of spenders/bankers. If that's the kind of stability you want then you've got it.  




> Im inclined to believe that a radical change away from the dollar wont accomplish a positive result.


I agree, moving the USA off of the _Federal Reserve Note_ will cause deep hurting. No easy way out now. Again, we might not have a choice at some point if things continue going the way they are. Meth addicts have similar dilemmas. 




> ...I might be wrong and anyone who disagrees with me is free to try to refute the objections I raised against competing currencies in this previous post.


And I may be as well. I still need to do some reading on pros/cons of competing currencies. I know this topic has been discussed in much detail here on the RP forums. That's probably the only reason you haven't been answered point for point already.

----------


## Teaser Rate

> Legal tender laws violate freedom of contract. Thus, they shouldn't exist. Period.


If youre going to make ideological arguments to address utilitarian concerns, you might as well say that the state shouldnt exist because all taxation is theft. 




> Yes it is.  In fact the centralization of military affairs today is a fine example of why it shouldn't exist in its current form.
> 
> 
> 
> 
> LoLoLoLoL







> But it might be a good enough reason to restructure the military.
> 
> 
> I would choose the latter. However I'm afraid the choice will be made for us if the whole fiat system collapses. 
> 
> 
> The Fed has done a good job of keeping a *stable* supply of money flowing away from the producers/savers into the pockets of spenders/bankers. If that's the kind of stability you want then you've got it.  
> 
> 
> ...


Your post seems to rely on the assumption that we're on the verge of a financial abyss. What do you base this on ?

----------


## low preference guy

> If you’re going to make ideological arguments to address utilitarian concerns, you might as well say that the state shouldn’t exist because all taxation is theft.


You want to use the guns and violence of the state to interfere between two people making a contract. I oppose to that and you call it "an ideological argument". You're an authoritarian. If any nut uses guns to attempt against your life of liberty, you have no bases for criticizing him, as he is just doing the same thing you defend.

----------


## Dr.3D

> snip~
> Since the Fed has done a reasonably good job of keeping inflation stable over the past 30 years and the inherent problems of decentralized currencies haven’t been solved yet, I’m inclined to believe that a radical change away from the dollar won’t accomplish a positive result. 
> ~snip


 
Source: http://data.bls.gov/cgi-bin/cpicalc.pl

If you mean stable as in steadily rising, I guess you are correct.

----------


## Teaser Rate

> Source: http://data.bls.gov/cgi-bin/cpicalc.pl
> 
> If you mean stable as in steadily rising, I guess you are correct.


From a previous post: 




> For all intents and purposes, the value of a currency over 50 or 100 years doesn't matter, no one keeps their money in their mattresses anymore and prices and interest rates adjust to the inflation rate. What really matters is the stability of its short-term value, and the data show that the Fed has done a good job of stabilizing it.

----------


## Dr.3D

> From a previous post:


Exactly my point....
There has been no deflation at all since 1950. And it doesn't matter where one keeps their money, it still get stolen from them by inflation.

Edit: And here is a better representation of that same chart.

----------


## Teaser Rate

> You want to use the guns and violence of the state to interfere between two people making a contract. I oppose to that and you call it "an ideological argument". You're an authoritarian. If any nut uses guns to attempt against your life of liberty, you have no bases for criticizing him, as he is just doing the same thing you defend.


By that kind of logic, everyone who refuses to accept anarcho-capitalism in its purest form is a violent authoritarian who deserves to be mugged.

----------


## low preference guy

> By that kind of logic, everyone who refuses to accept anarcho-capitalism in its purest form is a violent authoritarian who deserves to be mugged.


No. I'm not even an anarcho-capitalist.

And you go way further than those who just defend taxation. You also attack freedom of contract.

By your logic, any authoritarian dictator should just defend himself by saying this:





> By that kind of logic, everyone who refuses to accept anarcho-capitalism in its purest form is a violent authoritarian who deserves to be mugged.

----------


## Teaser Rate

> Exactly my point....
> There has been no deflation at all since 1950. And it doesn't matter where one keeps their money, it still get stolen from them by inflation.
> 
> Edit: And here is a better representation of that same chart.


There's no transfer of wealth if the rate of inflation meets its expected value. Wages, government benefits, prices, etc. all anticipate and adjust to it. As I mentioned in my previous post, if you were to keep all your money in your mattress, then yes, it would lose value over time, however if you keep it in a savings account or pension fund, then you'll be fine.

----------


## Dr.3D

> There's no transfer of wealth if the rate of inflation meets its expected value. Wages, government benefits, prices, etc. all anticipate and adjust to it. As I mentioned in my previous post, if you were to keep all your money in your mattress, then yes, it would lose value over time, however if you keep it in a savings account or pension fund, then you'll be fine.


So my pension, I am now collecting is going to rise with inflation?    Doesn't say that in my contract.

----------


## low preference guy

> *There's no transfer of wealth if the rate of inflation meets its expected value*. Wages, government benefits, prices, etc. all anticipate and adjust to it. As I mentioned in my previous post, *if you were to keep all your money in your mattress, then yes*, it would lose value over time, however if you keep it in a savings account or pension fund, then you'll be fine.


I.e., there is a transfer of wealth.

----------


## efiniti

> If you’re going to make ideological arguments to address utilitarian concerns, you might as well say that the state shouldn’t exist because all taxation is theft. 
> 
> 
> 
> 
> 
> 
> 
> Your post seems to rely on the assumption that we're on the verge of a financial abyss. What do you base this on ?


That's the avg-to-avg change.  That tells you how much the Fed is inflated *on top of* the already existing inflation.  Do you understand what kind of effect a positive year to year average has every single year?

Here is the outcome:

ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

The annual average is what you should be looking at.  Notice how its NOT linear after the US cut its ties to gold.  Its parabolic.  The income disparity is about to get torn a new $#@!.

----------


## efiniti

> There's no transfer of wealth if the rate of inflation meets its expected value. Wages, government benefits, prices, etc. all anticipate and adjust to it. As I mentioned in my previous post, if you were to keep all your money in your mattress, then yes, it would lose value over time, however if you keep it in a savings account or pension fund, then you'll be fine.


Yes there is a transfer of wealth, as long as there is a positive inflation rate.  

Secondly, there are no guaranteed minimum returns on savings rates unlike the minimum wage.  Bank of America's regular savings account interest rate is 0.05%.  What's the inflation rate again? ...

----------


## efiniti

> Actually, you have it backwards, the dollar's store store of wealth is predictable because there is a central bank which controls the inflation rate. Assuming that the Fed continues to meet its target of ~2% inflation, the value of your dollars is going to remain stable, unlike something like a piece of gold or silver whose value can sporadically appreciate or depreciate at any given time.


Did you forget about the pesky little fractional reserve ratio? 




> Here's a question for you: if people only use dollars because they're forced too; then why is it that people across the world accept US dollars ?


People are forced to pay in dollars due to legal tender laws in the local country.  People across the world accept dollars because they know we are forced to use them.

----------


## japes

> Your post seems to rely on the assumption that we're on the verge of a financial abyss. What do you base this on ?


I don't know that we're on the "verge" of anything calamitous. I can't predict the future but I do see a decline happening and I'm lacking confidence in the Federal Reserve. The more I understand how the Fed works the less I want to use FRNs. The more I see how our congress is spending our nations wealth, the less I want to use FRNs. There are many other reason I think we are headed for a financial disaster (could be 10-15 years down the line, who knows?). Everyone has to make his own choices based on the facts at hand. At this point I'm short the Fed and long gold and silver based on what I'm seeing. I'll continue to use FRNs as long as I'm forced to. If you're confident in FRNs then by all means stock up (pun intended).

----------


## Carson

A stable currency you can bank on for your future should be a fact of life not a game.

----------


## japes

> For all intents and purposes, the value of a currency over 50 or 100 years doesn't matter, *no one keeps their money in their mattresses anymore* and prices and interest rates adjust to the inflation rate...


The reason people do not hold on to FRNs is because people intuitively understand they are worth-less as time goes on. People hold on to things that are worthy of being held on to. I have an 1883 silver Morgan dollar my great-great-grandpa stored away under his mattress. In 1940 that dollar would buy about 5 gallons of gas. Today it can buy about 8 gallons of gas. Right now my one dollar FRN can buy about 1/4 gallon of gas.

I favor a society that rewards savers. A financial system in which the wealth of hard working producers is passed on to future generations.

----------


## ababba

> I favor a society that rewards savers. A financial system in which the wealth of hard working producers is passed on to future generations.


A dollar invested in the S&P 500 in 1940 would be worth 18 times more in real terms today. Stocks are claims to those hard working producers. Dollar bills and gold have no link to hard working producers.

----------


## Travlyr

A silver dollar saved from 1964 is worth 26.72 times more in real terms today.

Random Year Morgan / Peace Silver Dollar (Cull)
Off Quality, Cull, Damaged, Cleaned, Polished, etc! (Dates from 1878 - 1935) 
APMEX Buy Price - $26.72

----------


## japes

> A dollar invested in the S&P 500 in 1940 would be worth 18 times more in real terms today.


Does that take into account inflation and the tax on capital gains? I didn't do the math, I'm just curious. I have nothing against the S&P.




> Stocks are claims to those hard working producers.


So? Where did I say anything contrary to this? Why did you even bring this up? I was not comparing silver to stocks or even denigrating stocks. I have nothing against investing in companies that produce. 




> Dollar bills and gold have no link to hard working producers.


Dude, what he hell are you talking about? My point was that a silver dollar from 1883 held its buying power. Would you like to take umbrage with that? It took work to produce the silver dollar. My great-great-grandpa was paid in silver for his hard work.  He would be happy to know his silver dollar, which was "linked" to his "productive" hard work, held its value.

----------


## ababba

> Does that take into account inflation and the tax on capital gains? I didn't do the math, I'm just curious. I have nothing against the S&P.
> 
> 
> So? Where did I say anything contrary to this? Why did you even bring this up? I was not comparing silver to stocks or even denigrating stocks. I have nothing against investing in companies that produce. 
> 
> 
> Dude, what he hell are you talking about? My point was that a silver dollar from 1883 held its buying power. Would you like to take umbrage with that? It took work to produce the silver dollar. My great-great-grandpa was paid in silver for his hard work.  He would be happy to know his silver dollar, which was "linked" to his "productive" hard work, held its value.


It includes CPI inflation (real terms) but not taxes. 

Your point was that you want an economy that rewards saving and investing in productive businesses. This is the thing that is most highly rewarded in the US (over bonds, money and gold). This is true even in an environment with very high inflation. 

Saving dollar bills in a mattress or holding gold doesn't directly contribute to expanding the economies capital stock like investing in firms does. The thing that results in economic growth is rewarded the most. 

The OPs point was that people don't invest in currency so the long run value of currency is irrelevant to whether the economy rewards or punishes savers.

----------


## ababba

Travlyr

How did you adjust for inflation there, with the CPI or some other measure?

I think you're clearly wrong, but I want to give you a chance to prove me wrong.

----------


## Mogambo Guru

<facepalm> @ all the misinfo appearing in this thread....  ugh.

----------


## Dr.3D

> It includes CPI inflation (real terms) but not taxes. 
> 
> Your point was that you want an economy that rewards saving and investing in productive businesses. This is the thing that is most highly rewarded in the US (over bonds, money and gold). This is true even in an environment with very high inflation. 
> 
> Saving dollar bills in a mattress or holding gold doesn't directly contribute to expanding the economies capital stock like investing in firms does. The thing that results in economic growth is rewarded the most. 
> 
> The OPs point was that people don't invest in currency so the long run value of currency is irrelevant to whether the economy rewards or punishes savers.


Bull $#@!!  People should be able to save without being robbed.   They should also be able to invest as they wish without having to be forced to do so to keep their money from becoming less valuable.   A good currency retains it's value over time, it doesn't slowly become less valuable.  

As it is right now, no one is free to save their money without changing it over to gold and silver, then surprise of all surprises, some $#@! decided if they did that, they should have to lose some of what they saved through a capital gains tax.    It's a rigged system and it's rigged to keep people in poverty.

----------


## japes

> Your point was...


Nope, you missed the point and I have no compulsion to try explaining it again. You seem to be more interested in fighting straw men than actually understanding.

----------


## Travlyr

> Travlyr
> 
> How did you adjust for inflation there, with the CPI or some other measure?
> 
> I think you're clearly wrong, but I want to give you a chance to prove me wrong.


In 1964, a silver dollar = $1 FRN; In 2011, a silver dollar = $26.72 FRN.

----------


## Dr.3D

> In 1964, a silver dollar = $1 FRN; In 2011, a silver dollar = $26.72 FRN.


This is true.   I remember as a kid, going to the gasoline station with a one gallon container to get fuel for my lawn mower.  One FRN now wouldn't even fill that container to half way.   With a silver dollar, it would be filled to the top and I would get change.  There is no need to take in for inflation, as that is the reason the FRN isn't worth as much as it was back in 1960.

----------


## ababba

> In 1964, a silver dollar = $1 FRN; In 2011, a silver dollar = $26.72 FRN.


You just gave the definition of nominal, not real.

----------


## Carson

They rip us all off before you ever have a chance to save. 

Say you start with a million and in thirty years the counterfeiters have it devalued by ten times. Then you spend the money you saved for your future and it will buy you a hundred thousand dollars. 

I sure you can see that. 

Say you earned a million dollars over that thirty year period. You've still been taken to the cleaners. Maybe by not as much but incrementally it adds up to robbery.

Has anyone ever told you that the stock market went up today because the money people are buying it with isn't worth as much now?





Don't forget those capital gains you owe on your false prifits.

----------


## ababba

> Bull $#@!!  People should be able to save without being robbed.   They should also be able to invest as they wish without having to be forced to do so to keep their money from becoming less valuable.   A good currency retains it's value over time, it doesn't slowly become less valuable.  
> 
> As it is right now, no one is free to save their money without changing it over to gold and silver, then surprise of all surprises, some $#@! decided if they did that, they should have to lose some of what they saved through a capital gains tax.    It's a rigged system and it's rigged to keep people in poverty.


There are a multitude of ways to save that yield returns greater than the rate of inflation. Money market accounts, corporate bonds, treasury bills, inflation indexed bonds, inflation indexed annuities etc. Almost all of these can be directly converted to and from currency at any point in time instantly. There are very few legal restrictions on the types of bonds or investment vehicles that can be created. 

People respond to the fact that money yields a zero interest rate while other investments yield positive interest rates. This seems good to me because the investment is channeled into productive resources for the most part instead of being used to hoard money.

----------


## low preference guy

> There are a multitude of ways to save that yield returns greater than the rate of inflation. Money market accounts, corporate bonds, treasury bills, inflation indexed bonds, inflation indexed annuities etc. Almost all of these can be directly converted to and from currency at any point in time instantly. There are very few legal restrictions on the types of bonds or investment vehicles that can be created. 
> 
> People respond to the fact that money yields a zero interest rate while other investments yield positive interest rates. This seems good to me because the investment is channeled into productive resources for the most part instead of being used to hoard money.


right. like gambling in the stock market in crashing it, while losing the money of savers at the same time. what a great idea. very productive

also, people don't "hoard money" when they save. when interest rates are high, they put it in the bank, and that's loaned out to business who invest and grow the economy.

----------


## ababba

> right. like gambling in the stock market in crashing it, while losing the money of savers at the same time. what a great idea. very productive
> 
> also, people don't "hoard money" when they save. when interest rates are high, they put it in the bank, and that's loaned out to business who invest and grow the economy.


The stock market over time has had returns dramatically exceeding inflation. I'm not talking about speculative rapid buying and selling, but buying and holding over a lifetime, maybe slowly buying more over time. We live in a free market, where productive investment is funded by capital like stocks, bonds and private equity. This is a good thing even if there is risk involved. The stock market allows people to group their investments together so that a bunch of small investors can fund giant investment projects. 

The people that put the money in the bank can put it in a money market fund. You can draw checks on a money market fund. You can convert it to currency relatively quickly. It earns a higher return than the rate of inflation. Bank accounts often pay lower interest rates than money market accounts for several reasons. One is that the bank is providing a service, namely checking, atms and other transactions. Another is that bank account balances are often very small, and there are fixed costs for the bank to run each account.

----------


## Carson

Bonds? That is one of those pieces of paper they print up promising, when the time comes, to print up enough money to pay you back plus interest.

Some people see a problem with this.

----------


## ababba

> Bonds? That is one of those pieces of paper they print up promising, when the time comes, to print up enough money to pay you back plus interest.
> 
> Some people see a problem with this.


If you don't want government bonds, try corporate bonds, international bonds or annuities by insurance companies. I think government bonds are less likely to default but suit yourself.

----------


## low preference guy

> If you don't want government bonds, try corporate bonds, international bonds or annuities by insurance companies. I think government bonds are less likely to default but suit yourself.


Of course, governments have enough guns and thugs to steal from people. But the criminal enterprise at some point will collapse and it will pay back in worthless paper.

----------

