A Must Read-Economics made simple

RStringfield said:
I thought the Fed was totally private. If it is then your question needs to be rephrased.

But to answer what I think you meant, the Fed could just print the money and give it to the Treasury, without any debt incurred by the Treasury to the Fed. It would have the same effect as monetizing the debt, but might make the transaction a little more transparent to conspiracy theorist who find dark sinister plots in the shell game.

You are simply over complicating the process. When the government (I can call it that because I do not maintain the silly notion that the Fed is private) prints money it devalues currency. Period. It does not matter if it uses the currency to buy debt from the public or just hands it over to the Treasury. The only thing it could do to avoid inflation caused by the printing press is to immediately burn, destroy, or keep the new money out of circulation entirely.

Edit: deleted my own confusion of the shell game here.
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Since I responded earlier to the first half of your post I will just respond to the highlighted part of your post now.

If the federal reserve is part of the government then it seems to be the boss:

I wanted to post a youtube video where Alan Greenspan says no other branch of the federal govt can override decisions made at the federal reserve.. But I cant seem to post links until I make 15 posts.


All excessive printing of money causes inflation - true. But federal reserve notes are the worst because in addition to inflation they also create debt. So now people (and governments) have to deal with inflation AND a loan payment.
 
Inflation is the least of the problems with fiat money. The bigger problem is the oligarchical financial/industrial/state complex that is created when 'value' is created out of nothing and used to control others.
 
AssHatZombie said:
Inflation is the least of the problems with fiat money. The bigger problem is the oligarchical financial/industrial/state complex that is created when 'value' is created out of nothing and used to control others.
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Thats a big part of the problem that alot of people dont even seem to think about.. Federal govt can bend and shape any state to its will thru the use of bribery.. They don't call it that of course, but grant money, or federal projects in home states, or the threat of removing federal aid from those states that dont comply,etc.

Thats the best part about silver or gold backed money.. The power stays with the people. Having gold or silver money is the economic equivalent of having a gun and exercising your 2nd amendment rights...
 
evince said:
Prolongation of the depression
Economic historians, such as UC Berkeley professor Barry Eichengreen, blame the gold-exchange standard (different from a true gold standard) of the 1920s for prolonging the depression.[8] The gold standard limited the Federal Reserve's control over monetary policy. As a result, the Fed could not lower interest rates as an expansionary policy to stimulate the Great Depression to an end. Rather, the Fed defended the fixed price of dollars in respect to the gold standard by raising interest rates, trying to increase the demand for dollars. Higher interest rates intensified the deflationary pressure on the dollar and reduced investment in the U.S. Central banks. The banks converted dollar assets to gold in 1931, reducing the Federal Reserve's gold reserves. This speculative attack on the dollar created a panic in the U.S. banking system. Fearing imminent devaluation of the dollar, many foreign and domestic depositors withdrew funds from U.S. banks to convert them into gold or other assets.[9] Since the gold standard depressed demand for dollars, interest rates rose. Due to the Federal Reserve's reluctance to abandon the gold standard and float the U.S. currency as Britain had done, recovery in the United States was slower than in Britain. It wasn't until 1933 when the United States finally decided to abandon the gold standard that things began to improve.[10]
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That reminds me of a personal story of mine.

When I was a boy my dad used to tell me how we used to be on a gold standard but then there wasnt enough gold, so we switched to silver, then there wasnt enough silver so we went to paper, and here we are today...

The problem with this, is that there is ALWAYS enough gold or silver to back a currency. The banks simply created way more paper money than they were allowed too. If the banks and federal reserve had strictly adhered to the gold standard there would have been no "roaring 20s" boom and no 'great depression' bust.
Inflationary booms are always followed by deflationary busts as a normal cleansing mechanism of the market.

Blaming the gold standard for causing the great depression is kinda like blaming "dope sickness" on when people run out of drugs.

It is the fact that people are on drugs in the first place that is the real problem; and so it is with our endless credit/debt/fiat money system.
 
Mike Mitrosky said:
That reminds me of a personal story of mine.

When I was a boy my dad used to tell me how we used to be on a gold standard but then there wasnt enough gold, so we switched to silver, then there wasnt enough silver so we went to paper, and here we are today...

The problem with this, is that there is ALWAYS enough gold or silver to back a currency. The banks simply created way more paper money than they were allowed too. If the banks and federal reserve had strictly adhered to the gold standard there would have been no "roaring 20s" boom and no 'great depression' bust.
Inflationary booms are always followed by deflationary busts as a normal cleansing mechanism of the market.

Blaming the gold standard for causing the great depression is kinda like blaming "dope sickness" on when people run out of drugs.

It is the fact that people are on drugs in the first place that is the real problem; and so it is with our endless credit/debt/fiat money system.
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United States
Gold reserves: 8,133.5 tonnes
Percentage of Reserves: 77.4%
Gold Reserve Value: $301 billion

The United States Bullion Depository in Kentucky, a.k.a. Fort Knox, is the most famous gold stockpile in the world. This veritable fortress holds the bulk of the nation's gold reserves, the remainder of which is held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office.

The total gold reserves of the United States is 8,133.5 tonnes, almost three times greater than its closest rival, Germany.

Total value? $300 billion at today's prices...just a fraction of the $1.4 trillion deficit the country ran last year.

http://goldnews.bullionvault.com/gold_reserves_102020094
 
tom prendergast said:
United States
Gold reserves: 8,133.5 tonnes
Percentage of Reserves: 77.4%
Gold Reserve Value: $301 billion

The United States Bullion Depository in Kentucky, a.k.a. Fort Knox, is the most famous gold stockpile in the world. This veritable fortress holds the bulk of the nation's gold reserves, the remainder of which is held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office.

The total gold reserves of the United States is 8,133.5 tonnes, almost three times greater than its closest rival, Germany.

Total value? $300 billion at today's prices...just a fraction of the $1.4 trillion deficit the country ran last year.
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Well you can back a currency by any ratio you want. Theres certainly not enough gold to back the dollar at the old price of $35/Oz or $20/Oz..But make it $10,000/Oz.. Make it something and stick to it.

Do your gold numbers include the gold held by the federal reserve banks? They have a bunch too.
 
Mike Mitrosky said:
Well you can back a currency by any ratio you want. Theres certainly not enough gold to back the dollar at the old price of $35/Oz or $20/Oz..But make it $10,000/Oz.. Make it something and stick to it.

Do your gold numbers include the gold held by the federal reserve banks? They have a bunch too.
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Well, you claim to be the expert, you ought to be able to tell me. Anyway, the current spot price for gold bullion is $1178 per troy ounce.

http://www.monex.com/monex/controller?pageid=prices
 
tom prendergast said:
United States
Gold reserves: 8,133.5 tonnes
Percentage of Reserves: 77.4%
Gold Reserve Value: $301 billion

The United States Bullion Depository in Kentucky, a.k.a. Fort Knox, is the most famous gold stockpile in the world. This veritable fortress holds the bulk of the nation's gold reserves, the remainder of which is held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office.

The total gold reserves of the United States is 8,133.5 tonnes, almost three times greater than its closest rival, Germany.

Total value? $300 billion at today's prices...just a fraction of the $1.4 trillion deficit the country ran last year.

http://goldnews.bullionvault.com/gold_reserves_102020094
Click to expand...

precisely~~~get it.
 
Mr. Spite said:
Wow, INPUT from the shareholders? That's awfully fascist for an entity who's job is to regulate banks. Why should banks be able to communicate with those who are regulating them? Absurd and laughable.
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Yah, Mr. Spite, its sort of like having the foxes regulating the foxes with no concern or input from the chickens, isn't it?
 
Ice Dancer said:
The Financial Mess - The Real Deal
By Michael Mitrosky
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Excellent!! This is very close to the truth of the mater. Too bad I don't have the time to read all the replies but I will put in my two cents.

Yes the FR is a PRIVATE company and although the GOV chooses the BOD? it is only for show. The banks OWN government. Not vice versa. It is indeed a Private entity run by European Elites.

The real reason for the global economic woes is INFLATION. Created by the FEDERAL RESERVE and its branches like the IMF and WORLD BANK.

This is bang on. The people that made up this economic system were brilliant. Making interest out of money that doesn't exist. They threw out some crumbs, sold it to the politicians and then sold it to the people.

Then when they realized their money was depreciating at a rapid rate? They changed the rules again. Making the currency dependent on the size of the GDP. Increasing their dollar value around the world. And weakening everyone else's. Then using that money that really has no value at all, to buy the real wealth around the planet. Basically the elites scammed the entire planet and now own everything.

It will be interesting to see what scam they come up with next, to bail them selves out of this mess....Probably what they always do. Make wars and use that as an excuse to why their lives are so miserable.

The only thing I dont agree with is the solutions and how to fix the economy.

I think Ron Paul had some good ideas. Like shutting down the FR(which was designed to keep the wealthy rich at the expense of the poor that are paying the inflationary tax), auditing banks and the FR which has never been done. And nationalizing the banks.

Production means nothing if people are not buying those products. Depressions would be ok in a socialist society but not a capitalist, because you need to keep money constantly flowing for it to work. Or you would need to remove debt, altogether. People would have to buy everything in cash so that if consumption slowed down they could weather it by laying off a few people. And as long as these people's houses are payed for(and have some savings), it will be ok. If not there is always the local Church/Unemployment insurance.

All this I agree with also.

But in order to do this we need to decrease the size of government and increase personal liberty. We need to completely eradicate the Federal Reserve and Income Tax, and cut government spending by over $1.3 trillion a year. (which is how much the government collects each year from the personal and corporate income taxes). Basically, if we just follow the United States Constitution we can fix our problems.

Thhis I do not agree with.

The article stated:Imagine with no more corporate income tax, how many companies would be coming back to America to open up shop here again. There would be so many companies coming here to open up shop and creating jobs, we would probably need illegal aliens to work them.

My thoughts:


Corporations are leaving because their are poorer people to exploit. Its America's fault for buying foreign goods and it is the GOV's fault for allowing this lopsidedness. These Corporations should be taxed heavily. Now I understand the goal is to unite the world into one giant market but too many people that shouldn't be suffering are suffering. Their needs to be a trade balance. Not this ridiculous trade imbalances that make importers and exporters extremely wealthy at the expense of jobs in North America.
 
the solution is to have all individuals learn the arts of agricultural and homesteading, so each man can be an island, separate from the disease of hierarchical society imposed by global psychopathic murderers.
 
tom prendergast said:
United States
Gold reserves: 8,133.5 tonnes
Percentage of Reserves: 77.4%
Gold Reserve Value: $301 billion

The United States Bullion Depository in Kentucky, a.k.a. Fort Knox, is the most famous gold stockpile in the world. This veritable fortress holds the bulk of the nation's gold reserves, the remainder of which is held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office.

The total gold reserves of the United States is 8,133.5 tonnes, almost three times greater than its closest rival, Germany.

Total value? $300 billion at today's prices...just a fraction of the $1.4 trillion deficit the country ran last year.

http://goldnews.bullionvault.com/gold_reserves_102020094
Click to expand...

From what I understand? The majority of the GOLD in America is owned by European Elites. After Europe was devastated by 2 wars? The European Elites that were the richest in the world? Transferred all their wealth to invest in the USA. I think something like 90%+ of GOLD in America is European owned. Just to show the comparison.

Then after the FEDERAL reserve came and started making money out of nothing? They used this valueless money to buy all the REAL wealth in the world and left everyone with the bill. Basically IOU's(DEBT).

So how much of that gold is actually owned by America? Since more than likely it was used to pay off debt.

Smart aren't they? They robbed you and continue to do so without none being the wiser. Now they own every country and there is no real sovereignty.That is why Ford said.

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford
 
AssHatZombie said:
the solution is to have all individuals learn the arts of agricultural and homesteading, so each man can be an island, separate from the disease of hierarchical society imposed by global psychopathic murderers.
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Too many people not enough land. Though thanks to technology? That is not necessary. We have what it takes to provide cheap food and products. The problem is that they use technology to further enslave us, not aid us. This is why capitalism is a failure and socialism is superior.
 
Currency is too amenable to manipulation by its creator. We need a global barter system. This pisses off fascists because they only exist by using money to push people around, and generally have no skill to offer other that assholery and contempt for others.
 
wiseones2cents said:
Too many people not enough land. Though thanks to technology? That is not necessary. We have what it takes to provide cheap food and products. The problem is that they use technology to further enslave us, not aid us. This is why capitalism is a failure and socialism is superior.
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wrong. every person living today on earth could all live comfortably in texas.

The scarcity mentality is propagated to get people to kill each other.
 
Socialism is not the answer. price fixing and excessive collectivism is not the answer.

Trade is not the problem. Fiat currency manipulation of reality is the problem. When money is created people stop working for money and start figuring out how to suck up to the money's creator.
 
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