# News & Current Events > Economy & Markets >  Jon Stewart on the Fed, Alan Greenspan

## jorger

Jon Stewart had Alan Greenspan on tonight and he was asking about Fed, Central Bank, Inflation.

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## Vonhayek7

Anyone see this? Jon's questions were very surprising and were pretty risky I think, and i'm surprised Greenspan admitted as much as he did.  Austrians are right, human behavior is not predictable.  Sounds like both of them are endorsing Paul by these observations ha.

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## Vonhayek7

Shoot, posted the same thread.

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## Bradley in DC

I don't have cable now but will watch it online tomorrow, thanks for the heads up.  Alan was on the Lehrer Newshour tonight too.

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## Bradley in DC

> Shoot, posted the same thread.


Merged them, don't worry.  (though I'm sure someone will bitch about it)  For future reference, please hit the button with the red triangle on the right to notify the moderators when threads need to be merged.  (It helps us to provide a link too)

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## MGreen

I was just about to post this. Stewart sounded like a certain presidential candidate. Hopefully he got more people thinking about the central bank.

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## jorger

if you don't have cable it will be on comedycentral.com tomorrow....

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## Brock Landers

That was great...I think Jon's questions were RP-influenced.  Asking why the Fed should exist when the Free market can set interest rates on its own.

That was a classic interview.  I hope someone gets the video linked somewhere in this thread.

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## Bradley in DC

> I was just about to post this. Stewart sounded like a certain presidential candidate. Hopefully he got more people thinking about the central bank.


Thanks for looking before posting--we don't need yet another thread!

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## amonasro

I'm watching it now.  Definitely some interesting points coming up.  Greenspan's suit puts Stewart's to shame

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## RP4ME

Yes it was a teensy start but it fell way short...I odnt think that anyone unfamiliar with our economic baking ssytesm already will "get" taht it is a bad thing. Greesnpan didnt say it was and he did point out any flaws in teh system  - he jsut explained teh "reason " it was created not teh real reason...People want get it at all....only those of us in teh know already..... but its something - but yes it was so censored

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## JPFromTally

He said that we don't live in a free-market society.  It's essentially regulated.  Pretty enlightening stuff.  I think Stewart might be a closet libertarian.  It's funny that him and Tucker don't get along.

http://www.comedycentral.com/

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## rockfree33

Stewart said it right when he said we have a "benevolent" hand instead of a free market.

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## Mordechai Vanunu

Good interview.

Greenspan admitted we don't live in a free market since the Fed controls the money supply and interest rates.

Stewart also pointed out the system benefits those investing in the stock market and hurts the working majority, which Greenspan didn't deny.

Replays today at 7:00 p.m.

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## Cindy

It's the most viewed clip of his right now. It's getting so much traffic, it won't even load for me. I can't wait to see it.

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## randolphus maximus

http://www.comedycentral.com/motherl...l_video=102970

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## american.swan

> It's the most viewed clip of his right now. It's getting so much traffic, it won't even load for me. I can't wait to see it.


clip title?  Clip link?

on comedycentral's site?

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## angelatc

I thought it was pretty obvious that Stewart had not read the book.

I also thought the way that Greenspan phrased his  "almost everybody in the world  decided the gold standard was strangling the economy," statement. Stewart didn't catch it, but to me it implied that Greenspan didn't necessarily agree.

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## cvaldiv1

> I thought it was pretty obvious that Stewart had not read the book.
> 
> I also thought the way that Greenspan phrased his  "almost everybody in the world  decided the gold standard was strangling the economy," statement. Stewart didn't catch it, but to me it implied that Greenspan didn't necessarily agree.


Alan Greenspan was a big gold standard supporter. I do think he sold his soul when he became chairman though. This interview just shows that all of his old support of laissez faire capitalism is still there.

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## Daveforliberty

> I also thought the way that Greenspan phrased his  "almost everybody in the world  decided the gold standard was strangling the economy," statement. Stewart didn't catch it, but to me it implied that Greenspan didn't necessarily agree.


Yes, and he also said that with a gold standard a central bank was not necessary.

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## Slugg

bleh...Greenspan should be an ally.

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## angelatc

> Good interview.
> 
> Greenspan admitted we don't live in a free market since the Fed controls the money supply and interest rates.
> 
> Stewart also pointed out the system benefits those investing in the stock market and hurts the working majority, which Greenspan didn't deny.


That's not entirely true. Lower interest rates apply to consumer borrowing too, especially mortgages.  And I believe a majority of people now have an interest in the stock market, through such vehicles  as 401k retirement plans and mutual funds.

IMHO, the worst "investment" harm comes from the devaluation of the dollar.  There's nothing the working class can do about that, but maximizing investments is all part of that whole personal responsibility thing. If you can afford to have a checking account, you can afford to invest in the stock market.

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## undergroundrr

Besides the strong statement that we don't have a free market, the other point that came out for me was Greenspan's striking implication that the main function of the fed is psychology manipulation.

I too was impressed with the questions Stewart was asking, although he hadn't read Greenspan's memoir.    I can't help thinking discussion of the role of the fed has gotten a lot deeper since RP started to gain publicity.

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## ItsTime

is Greenspan admitting that the fed plays with rates to make us think the things they want us to think?

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## richard1984

So I'm not really sure what to think of the interview--especially the stuff about the gold standard.  How was it "strangling the economy?"  I mean, I understand that people would pull out of the economy when things weren't going so great, and that just made the economy worse, but how is that the gold standard's fault?  Seems like it would help people be _more_ secure in their assets.  
But yeah, I just don't know what to think.  I'm not really sure what to make of Greenspan, either (I mean, he was the chairman of the freakin' Federal Reserve--seems like you'd pretty much have to be a pretty dishonest, greedy, evil motherf*cker to hold that position).  Was he sugarcoating it for us, or was he pretty straightforward and honest?
I don't know...I wish I understood economics better (I'm learning, but I'm not there yet).

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## ChooseLiberty

That was a great interview.

Would it have ever happened along those lines if Stewart hadn't been following Dr. Paul?  

Also Mr. Bubble is in conscious cleaning mode.  Sort of implies how little the Fed chairman is in control.

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## richard1984

> Besides the strong statement that we don't have a free market, the other point that came out for me was Greenspan's striking implication that the main function of the fed is psychology manipulation.
> 
> I too was impressed with the questions Stewart was asking, although he hadn't read Greenspan's memoir.    I can't help thinking discussion of the role of the fed has gotten a lot deeper since RP started to gain publicity.


He was pretty subtle, though.  I don't think most people probably caught that.  Of course, Ron Paul fans would, but for the average Joe...I don't know.

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## AlexAmore

> So I'm not really sure what to think of the interview--especially the stuff about the gold standard.  How was it "strangling the economy?"  I mean, I understand that people would pull out of the economy when things weren't going so great, and that just made the economy worse, but how is that the gold standard's fault?  Seems like it would help people be _more_ secure in their assets.  
> But yeah, I just don't know what to think.  I'm not really sure what to make of Greenspan, either (I mean, he was the chairman of the freakin' Federal Reserve--seems like you'd pretty much have to be a pretty dishonest, greedy, evil motherf*cker to hold that position).  Was he sugarcoating it for us, or was he pretty straightforward and honest?
> I don't know...I wish I understood economics better (I'm learning, but I'm not there yet).


I think by "strangling the economy", he meant for the rich people. The fiat currency of today with the inlfation and all that helps the rich get richer via investments. The gold standard helps the middle class and poor by having a lot of buying power, and no inflation. 

Gold standard = good for workers
Fiat currency = good for investors

I'm no expert on economics, so if anyone wants to correct me then please do.

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## michaelwise

The conversation with Greenspan focused on the psychological nature of the market, and the cheerleaders try to make everyone believe, the market is driven by peoples feelings. To a partial extent this is true. What really drives the market at the end of the day, is the reality of the physical value of the assets, not the psychological value. Don't let them make you believe that it is the intangible question of confidence, but rather, the tangible question of physical reality, which is where the market will eventually determine what things are worth.

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## sickmint79

> That's not entirely true. Lower interest rates apply to consumer borrowing too, especially mortgages.  And I believe a majority of people now have an interest in the stock market, through such vehicles  as 401k retirement plans and mutual funds.
> 
> IMHO, the worst "investment" harm comes from the devaluation of the dollar.  There's nothing the working class can do about that, but maximizing investments is all part of that whole personal responsibility thing. If you can afford to have a checking account, you can afford to invest in the stock market.


by the time those dollars get to little people to invest they've already been inflated though.  when you create 250k to mortgage your house you don't exactly realize the same kind of full power some multi-billion dollar merge on wall street gets to enjoy either.

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## 1000-points-of-fright

> most everybody in the world decided the gold standard was strangling the economy


I thought about this when I first learned what the Fed actually is.  I understand the argument against the Fed and printing money out of thin air, etc.  I also understand the basic idea of the gold standard and why it's good.

But I still have this nagging question about the supply of gold and silver.  It is essentially finite.  How does the economy expand once it's all in circulation.  Sure, people will find undiscovered amounts here and there but not enough to keep the economy expanding at an acceptable rate as Greenspan said in the quote above.

And what about the companies that actually dig up the gold?  They will have control of how much gold gets introduced into the system just like the Fed does with money.

Yes/No/Possibly/Sort of?

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## surf

Jon Stewart knows more about econ than the "maestro." imo, Greenspan showed himself to be pretty weak - totally ignoring the deficient aspect of the FOMC and closed door meetings.

"doesn't (lowering the target fed funds rate) hurt savers?" Stewart asked.

Greenspan showed his true colors when he talked about trying to alter expectations and the mood of the market participants. He slipped up a bit when he said Gold went away as preferred currency "in the 19th century." 

Anyone ever hear about fundamentals?

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## cvaldiv1

It's not the amount of gold in circulation, there is a finite amount of any resource on the planet. What matters is the purchasing power of gold, gold's potential purchasing power is infinite. Most of us are used to thinking in terms of fiat money, and commodity currency is misunderstood for that reason.

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## lucius

> I thought about this when I first learned what the Fed actually is.  I understand the argument against the Fed and printing money out of thin air, etc.  I also understand the basic idea of the gold standard and why it's good.
> 
> But I still have this nagging question about the supply of gold and silver.  It is essentially finite.  How does the economy expand once it's all in circulation.  Sure, people will find undiscovered amounts here and there but not enough to keep the economy expanding at an acceptable rate as Greenspan said in the quote above.
> 
> And what about the companies that actually dig up the gold?  They will have control of how much gold gets introduced into the system just like the Fed does with money.
> 
> Yes/No/Possibly/Sort of?


I agree with you, the true evil is in the inherent deception found in fractional reserve banking, even with a gold standard, bankers still controlled the world. Listen to a far greater man than me:

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin... Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again... Take this great power away from them, or if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit." 

- Sir Joseph Stamp, former president of the Bank of England.

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## angelatc

> by the time those dollars get to little people to invest they've already been inflated though.  when you create 250k to mortgage your house you don't exactly realize the same kind of full power some multi-billion dollar merge on wall street gets to enjoy either.


Well, life isn't fair.  I'm not going to cry because rich people make more money than I do in the stock market.  Like I said, it's the devaluation of the dollar that causes the greater harm.

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## angelatc

> But I still have this nagging question about the supply of gold and silver.  It is essentially finite.  How does the economy expand once it's all in circulation.  Sure, people will find undiscovered amounts here and there but not enough to keep the economy expanding at an acceptable rate as Greenspan said in the quote above.


It's not the supply that matters - it's the value. 

At least, that's how I understand it. Let's say I need bread. You have bread, so I give you one gold coin and you give me bread.  Then the bread factory has a fire, and suddenly bread is hard to find.  You now want me to give you 2 coins for the bread.

Now gold is worth more, in relation to bread, even though the bread hasn't essentially changed and the supply of gold hasn't decreased.

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## Mesogen

> It's not the amount of gold in circulation, there is a finite amount of any resource on the planet. What matters is the purchasing power of gold, gold's potential purchasing power is infinite. Most of us are used to thinking in terms of fiat money, and commodity currency is misunderstood for that reason.


What if I don't want to accept your mostly useless but shiny piece of metal? Guess it's not so infinite.

Gold is only valuable because people psychologically place value in it. They will accept it in exchange for other goods (except at Costco. They don't want it. They want American Express.) 

But if no one wanted it, it would become worthless. The only reason people want it is because other people want it too.





> But I still have this nagging question about the supply of gold and silver.  It is essentially finite.  How does the economy expand once it's all in circulation.  Sure, people will find undiscovered amounts here and there but not enough to keep the economy expanding at an acceptable rate as Greenspan said in the quote above.
> 
> And what about the companies that actually dig up the gold?  They will have control of how much gold gets introduced into the system just like the Fed does with money.
> 
> Yes/No/Possibly/Sort of?


Yes. People with the most gold can hoard it or flood the market at their choosing. But, they can't just issue some bonds here, make some loans there, and bang gold from thin air. That would be the difference.

And about the finite thing. 

The Earth is finite. The economy cannot continue to expand indefinitely. But this is what is required to keep a fiat system going. So one day, inevitably, the fiat system will have to be replaced with something else. And the economy will have to somehow be kept in check, arbitrarily at that.

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## ItsTime

> I agree with you, the true evil is in the inherent deception found in fractional reserve banking, even with a gold standard, bankers still controlled the world. Listen to a far greater man than me:
> 
> "The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin... Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again... Take this great power away from them, or if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit." 
> 
> - Sir Joseph Stamp, former president of the Bank of England.


Thank you  I saved that quote

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## angelatc

> What if I don't want to accept your mostly useless but shiny piece of metal? Guess it's not so infinite.
> 
> Gold is only valuable because people psychologically place value in it. They will accept it in exchange for other goods (except at Costco. They don't want it. They want American Express.)



Would you use something that has a value and a use, like oil?   Where Trance Dance MAster? He's the silver expert - hr told me something about silver being worth "something" because it's used in many industrial processes, if I understood correctly.

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## derdy

Check this out if you haven't already seen it. The Money Masters:
http://video.google.com/videoplay?do...arch&plindex=0

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## Mesogen

> Would you use something that has a value and a use, like oil?   Where Trance Dance MAster? He's the silver expert - hr told me something about silver being worth "something" because it's used in many industrial processes, if I understood correctly.


I was simply trying to make the point that gold, in and of itself, isn't worth a whole lot. The only thing that makes it trade for a lot is psychology. 

But, no I wouldn't use oil. It's a consumable item. Maybe that's why gold is used? It's not consumed? 

Hmm. I guess one would want to use elements because they are not so easily destroyed. In the case of oil, perhaps the real commodity is carbon? 

I think I finally get it now why precious metals are used. 

1. They are not easily destroyed
2. Since (historically speaking) they have been mostly useless otherwise, they can serve as a store of value and not be needed for anything else.
3. They are easily divided and formed into tradable standardized chunks so uniform coins can be made. (try doing that with diamonds)

(Nowadays precious metals are used all over the place as catalysts. Gold, not so much, but it can do a few things chemically here and there. A lot of interesting chemistry uses gold, but I don't think it would be industrially important. Of course, gold leads on microprocessors is essential, and on stereos is nice.)

Anyway, the way it seems to me now, gold was the old "fiat" money. It had value largely by fiat and then by consensus. It's physical properties lent it to being traded in standardized units of measure. The only difference from today's "fiat" money is that it could not be fabricated out of banking tricks ("thin air").

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## lucius

> ...The only difference [gold] from today's "fiat" money is that it could not be fabricated out of banking tricks ("thin air").


The blue text below is an example in gold, of the inherent deception found in fractional reserve banking from 'The Nameless War'. Fascinating, highly-suppressed book, as a decorated WWI war-hero, Member of Parliament and once member of His Majesty's Scottish Guard, Captain Ramsay was imprisoned for over four years under Regulation 18b without charge or trial, because he had discovered and was attempting to expose the orchestrators of WWII. 

"The real objective of the “Glorious Revolution” [English Revolution] was achieved a few years later in 1694, when the Royal consent was given for the setting up of the “Bank of England” and the institution of the National Debt. This charter handed over to an anonymous committee the Royal prerogative of minting money; converted the basis of wealth to gold; and enabled the international moneylenders to secure their loans on the taxes of the country, instead of the doubtful undertaking of some ruler or potentate which was all the security they could previously obtain. 

From that time economic machinery was set in motion which ultimately reduced all wealth to the fictitious terms of gold which the international money lenders control; and drained away the life blood of the land, the real wealth which was the birthright of the British peoples. 

The political and economic union of England and Scotland was shortly afterwards forced upon Scotland with wholesale corruption, and in defiance of formal protests from every county and borough. The main objectives of the Union were to suppress the Royal Mint in Scotland, and to force upon her, too, responsibility for the “National Debt.” The grip of the moneylender was now complete throughout Britain. The danger was that the members of the new joint Parliament would sooner or later, in the spirit of their ancestors, challenge this state of affairs.

To provide against this, therefore, the party system was now brought into being, frustrating true national  reaction and enable the wire-pullers to divide and rule; using their newly-established financial powers to ensure that their own men and their own policies should secure the limelight, and sufficient support form their newspapers, pamphlets, and banking accounts to carry the day. 

Gold was soon to become the basis of loans, ten times the size of the amount deposited. In other words, £100 in gold would be legal security for £1,000 of loan; at 3% therefore £100 in gold could earn £30 interest annually with no more trouble to the lender than the keeping of a few ledger entries. 

The owner of £100 of land, however, still must work every hour of daylight in order to make perhaps 4%. The end of the process must only be a matter of time. The moneylenders must become millionaires, those who own and work the land, the Englishman and the Scotsman, must be ruined.

The process has continued inexorably till now, when it is nearly completed. It has been hypocritically camouflaged by clever propaganda as helping the poor by mulcting the rich. It has been in reality nothing of the kind. It has been in the main the deliberate ruination of the landed classes [middle class], their leaders, and their supplanting by the international moneylenders and their hangers-on."

~Captain A.H.M. Ramsay in ‘The Nameless War’

P.S. Here is who this book is dedicated to:

“To the memory of those Patriots who in 1215 at Runnymede signed Magna Carta and those who 1320 at Arbroath signed the Declaration of Independence this book is dedicated.”

He deftly ties revolution & revolutionary acts to the creation of private centralized banks in a timeline up the end of WW2. His folly like many, best explained by Alan Hart,

“By refusing to come to grips with the truth of history in particular the difference between Zionism and Judaism and why it is perfectly possible to be passionately anti-Zionist without being anti-Semitic [Zionist Leaders] are helping to set up all Jews to be blamed for the crimes of the relative few.”

~Alan Hart

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## nexalacer

The economy would still be able to expand because there are credit options that are not fraud like the fractional-reserve system.  That, along with the real capital savings gold would provide as well as the free-movement of the purchasing power of gold, would allow the economy to expand, though not at the insane rate it does today.  But the rate we have today is what's going to lead us to the depression or recession we will soon face.

Rothbard's The Case for a 100 percent Gold Dollar has a section that covers this.

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## jon_perez

I thought the primary goal of central banks were to keep the value of money stable, as little inflation and deflation as possible.  The EU central bank explicitly states that as its goal.  It's only the US Fed that seems to be trying to prevent a recession/unemployment at the cost of lowering the value of the currency.

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