myths about the federal reserve

[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.nuwireinvestor.com/2009/12/why-gold-standard-is-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