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ktb
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Registered: 02/10/06
Posts: 435
Location: Boston, MA
 
Re:What Does Any of It Mean Anymore
Monday, July 10 2017 @ 08:25 AM CDT

Quote by: chikoppi

https://stevenpinker.com/publications/better-angels-our-nature



Wow...Reading it now. Incredibly dense, but it does make me feel we're moving in the right direction. Thank you again, for all your calm, informative and reasoned comments in the forums.

With respect to the Fed, don't they charge the banks interest to loan them this "free money"? If that is true it is an amazing scam.
bronco
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Registered: 05/31/04
Posts: 563
Location: N/A
 
Re:What Does Any of It Mean Anymore
Monday, July 10 2017 @ 12:28 PM CDT

To answer kdb, yes the Fed does charge interest to "loan" other banks. Of course, then the other banks turn around and loan out .9 for every dollar they have on deposit. This is fractional banking where the bank can essentially loan out ten times as much money as they have on deposit although regulations make it a little more complicated than that. This why a run on the bank such as in the film "It's A Wonderful Life" can easily push a bank under because they never have enough deposits to cover all of their loans. Any combination of bad loans that can't be collected because of bankruptcy or depositers that withdraw their money as cash can cause this.

So now we have a war against cash. The banks want to outlaw it and actually have now in parts of Europe where you can't pay for anything with paper currency. There are many cases now where the police in the US have confiscated large amounts of cash found on traffic stops without any proof that it was gained illegally. No arrests are made, no convictions sought or made and yet the individuals have to spend a fortune going through the court system to try and get it back.

If this does not violate the US Constitution's ban on illegal search and seizures, then what does?
bronco
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Registered: 05/31/04
Posts: 563
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Re:What Does Any of It Mean Anymore
Monday, July 10 2017 @ 12:46 PM CDT

Chikoppi, you keep putting words in my mouth. I never said the Fed was the reason for the wage inequality. I simply pointed out that if you didn't get raises to coincide with an expansion of the money supply, then your purchasing power was being decreased.

I probably think we can agree that we don't like the "trickle down" method of stimulating the economy where all the money is fed in the top end and then through various financial transactions is suppose to work it's way down to the good ole, almost extinct middle class. The poor get taken care of by the government and charity but no such thing exists for the "working poor". I am retired, make less than $30,000 a year but the government taxes me on about a third of my social security. I actually think that is ok and don't mind paying taxes to maintain a stable country but when you see the enormous waste and out right theft with very few problems being solved, well . . . then I start to write.

Who is going to report the transactions you refer to. The news media owned by the corporations, who are owned by roughly the same people as benefit from these transactions?
And yes there are at least scandals that have arisen recently where the big banks have been caught manipulating gold, silver and commodity markets. Then the usual thing has been to slap their hands, fine them an amount of money that never equals the illegal gain they have made and it is business as usual.
MikeRobinson
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Registered: 08/29/11
Posts: 718
Location: Chattanooga, TN United States
 
Re:What Does Any of It Mean Anymore
Monday, July 10 2017 @ 01:47 PM CDT

I certainly do agree that the US Government is abusing its “privileges of seignorage” to its ultimate disadvantage ... “printing” multiple millions of US Dollars every minute in order to Buy Things for Itself.™

However, I don’t think that “this alone, ipso facto,” will ever actually result in some form of catastrophic melt-down, because, hell, let’s face it, lots of other Governments are doing very similar things, and have been doing it for decades.   All of these parties are acting with full awareness of one another.

What I do expect, however, is that the current-generation Nations of the World will be much less tolerant of these things, as the world’s trade-situation becomes increasingly unbalanced because of it.   Other nations will not continue to be content to settle their differences in the purely-abstract, purely-computerized world of a Currency Trading Floor.   They’re going to be asking, “where’s the beef?”   And, rightfully so.

No matter what the “currency units” may say, it really does (IMHO) all come down to trade.   And, trade consists of things which each partner must produce.   They must in fact be partners, and they must in fact produce.   The days of “race to the bottom” trade (sic) agreements are, I think, about to come to a sudden and decisive end.   (The nascent breakup of the EU being the first example.)   The United States of America, in particular, has been feasting at the world’s diner on its leftover magic from World War II, but let’s face it:   nearly all of the people who actually remember that war, as anything other than children, are now dead.

What’s the one-and-only (IMHO) global trade strategy that actually works?   I think, “<<my_country>> first!”   Adoption of this principle will of course mean that many proposed trade agreements are never entered into ... but also that the now-very-few that are, will be well worth doing.   They will be the ones that actually strengthen(!) the citizens(!) of both nations at the same time – not just the shareholders of one particular company which profess to owe allegiance to no nation on Earth at all.

Just as the British finally realized that “Britain really does matter, if only to Britons,” it just might be that the United States of America is just about to re-discover that We Can Do It!™   In which case:   “Hang on to your hat!   The million-pound elephant has just now, finally, woken up!”
chikoppi
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Registered: 04/02/04
Posts: 1966
Location: N/A
 
Re:What Does Any of It Mean Anymore
Monday, July 10 2017 @ 01:54 PM CDT

bronco, I'm with you on a number of fronts, especially with respect to regulation of financial institutions. I'm dismayed that so many members of congress have lobbied for lifting of regulatory restrictions with Dodd-Frank barely in the rear-view.

Real wages are a problem. The economy is strong, but people don't feel it because, as you observe, the profit does not "trickle down" (I had hoped Kansas would have put the final nail into that myth, but I still hear it frequently). Corporations won't pay higher wages unless they absolutely have to, no matter how much money they have or how many tax breaks they are given. That's the lever I think needs adjustment.

“Ya, that idea is dildos.” Skwisgaar Skwigelf
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Dadai.2
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Registered: 09/09/08
Posts: 1750
Location: Frisco, Texas 😎 USA
 
Re:What Does Any of It Mean Anymore
Tuesday, July 11 2017 @ 09:38 AM CDT

This quote is attributed to Thomas Jefferson.

‘We must not let our rulers load us with perpetual debt. We must make our selection between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat, in our drink, in our necessities and comforts, in our labors and in our amusements, for our callings and our creed, our people, must come to labor sixteen hours in the twenty-four, give earnings of fifteen of these to the government for their debts and daily expenses; and the sixteenth being insufficient to afford us bread, we must live.

‘We have not time to think, no means of calling the mis-managers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow suffers. Our landholders, too, retaining indeed the title and stewardship of estates called theirs, but held really in trust for the treasury, must.be contented with penury, obscurity and exile, private fortunes are destroyed by public, as well as by private extravagance.

‘This is the tendency of all human governments. A departure from principle becomes a precedent for a second; that second for a third; and so on, till the bulk of society is reduced to mere automatons of misery, to have no sensibilities left, but for sinning and suffering. And the forehorse of this frightful team is public debt. Taxation follows that, and in its train, wretchedness and oppression.’
Thomas Jefferson. (1743-1826).

Take a listen >>> Texas Tango
bronco
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Registered: 05/31/04
Posts: 563
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Re:What Does Any of It Mean Anymore
Thursday, July 27 2017 @ 12:52 AM CDT

Chikoppi, I think the only real difference we have is that you do not seem to understand that the "investor class" and corporations you mention are one and the same as the Fed. You seem to think of the Fed as this separate, standalone public servant who seeks to stabilize our currency and interest rates. This, of course, is how they promote themselves.

Just keep repeating to yourself. The Federal Reserve is a privately held corporation which has owners, stockholders, like any other corporation. These stockholders are paid dividends, legally and aboveboard. It is my suggestion that there is a great deal more money passing hands in very unethical if not illegal deals. Until some truly independent auditor is given free reign to look at any and all transactions, there will be no way to know. It will be hard even then because as we know, if you are powerful enough you can just clean your hard drives with bleach because your Aunt Harriet's beef stew recipe was on there.

Who are these owners of the Fed? Well good luck with that one. They are owned by other banks, some of whom are foreign banks, and those in turn are owned by other banks, holding corporations, mutual funds, etc. It is impossible to find the name of an individual who benefits from the Fed's immense power. And yet they do exist. Believe me they do exist.


chikoppi
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Registered: 04/02/04
Posts: 1966
Location: N/A
 
Re:What Does Any of It Mean Anymore
Thursday, July 27 2017 @ 08:56 AM CDT



Quote by: bronco
Chikoppi, I think the only real difference we have is that you do not seem to understand that the "investor class" and corporations you mention are one and the same as the Fed.


Why would I not understand that? The purpose of the Fed is supervise banks and guide monetary policy, which is chiefly accomplished by managing the monetary supply and liquidity of member banks (about 40% of privately held banks, or "900 state member banks and 5,000 bank holding companies"). Those member institutions are themselves subject to audits. There are no "invisible transactions."

Here's the most recent independent audit of the Fed Board of Governors:

https://oig.federalreserve.gov/reports/board-financial-statements-2016-2015-mar2017.pdf

There is clearly a tension between the goals of "maximum employment" and "stable prices," and as bankers the Fed is likely to have a bias toward the banking system. But they aren't the only finincial regulator in town and the inflation rate isn't something that can be hidden.

Congress would really like the ability to command monetary policy, which is a staggeringly horrible notion. That's why the Fed is designed to make independent decisions with respect to policy. They're supposed to be looking out for the banks.

https://www.brookings.edu/blog/ben-bernanke/2016/01/11/audit-the-fed-is-not-about-auditing-the-fed/

Quote by: bronco
[...
It is impossible to find the name of an individual who benefits from the Fed's immense power. And yet they do exist. Believe me they do exist.


Every member institution and every shareholder benefits. I've no doubt influential Fed officers benefit from knowing impending changes to monetary policy in advance of their competitors. We all benefit from a more stable banking system and keeping the loons in congress from wrenching inflation back and forth based on the election cycle.

I don't carry any water for the banking system or the "investor class." I think both should be more tightly regulated and greater attention paid to wages and employment (and education, healthcare, and the justice system). What I don't see is evidence of some grand conspiracy involving the Fed.

“Ya, that idea is dildos.” Skwisgaar Skwigelf
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bronco
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Registered: 05/31/04
Posts: 563
Location: N/A
 
Re:What Does Any of It Mean Anymore
Friday, July 28 2017 @ 01:04 PM CDT

Okay I knew you were going to pull that word out - conspiracy - sooner or later. If you are trying to prove a conspiracy then of course you have a padded jacket waiting at Uncle Sam's House of the Looney, right?

Well let's not go there okay. Let's deal with facts which is what I have been trying to do, not prove some conspiracy. Here's a biggy. If Congress hadn't given away the right to create currency to a private corporation, how much debt would we now have?

The anwer is zero, zilch, none, not a nickel. How can that possibly be? Well when the Treasury Department issued currency it was interest free. They weren't borrowing the money from anyone, they were creating/issuing it as the Constitution gave them the right.

I think that Congress broke the Constitution when they gave the rights to the Fed but that is cause for another different argument. What we did was let a private corporation create money out of thin air and then charge us interest on it. Every Federal Reserve transaction either creates debt or profit and loss. The argument for giving them this incredible power is that they would not let politics sully their decision making. Oh of course not they would simply take into account various indexes, statistics etc. and leave the politics to the Congress who had so generously created them in the first place.

In this way, using their Monetary Policy, they would regulate interest rates as needed, nip inflation in the bud and provide a stable economy. And most importantly they would keep Congress from overspending and covering it by printing more dollars.

Anyone see Congress cutting down their spending because of this new design? Nope, not me. As I said before it is only that now when we overspend, we create debt that the people of the United States owes instead of printing our own dollars to cover the budget shortfall.

So now there are even more dollars being produced out of thin air to cover the interest on the National Debt which is just as much a budget item as hurricane relief, food stamps, Medicare etc. So how does it help to keep us from printing more dollars? It doesn't, it actually creates more demand for more dollars.

Because we don't just issue our own dollars to pay for things, we create debt by having the Treasury auction off bonds and notes that are interest bearing. Who currently buys most of these? The Japanese, Chinese, god forbid the Ruski's? Nope, you guessed it. It is the Fed who buys over 90% of our debt.

So now we have come full circle. We create debt by having them create the currency and then they turn around and buy the debt. And remember they are at least partially owned by foreign banks. Is this really a good thing? We let Congress pass responsibility that they should bear for our currency and now we don't even know who we owe the debt to. What if the Fed decideds to stop buying the debt? No one else wants it which is what I was saying when I said our money was worthless.

There has even been talk at some point of a "reset". This would be similar to a bankruptcy in that our currency would be revalued after paying off the current debt with Treasury notes. The Fed wouldn't get full value for the debt they hold but would get enough that they would be fabulously wealthy. So you know who gets hurt the most if they do that right? It's not Bill Gates, it's you and me.

 
chikoppi
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Registered: 04/02/04
Posts: 1966
Location: N/A
 
Re:What Does Any of It Mean Anymore
Friday, July 28 2017 @ 04:18 PM CDT

Quote by: bronco
Well let's not go there okay. Let's deal with facts which is what I have been trying to do, not prove some conspiracy. Here's a biggy. If Congress hadn't given away the right to create currency to a private corporation, how much debt would we now have?


Debt occurs when the government sells treasury notes, bonds, and securities. The largest shares of federal debt are owed to foreign investors ($6.3T) and to the social security fund ($2.8T).

https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124

Quote by: bronco
In this way, using their Monetary Policy, they would regulate interest rates as needed, nip inflation in the bud and provide a stable economy. And most importantly they would keep Congress from overspending and covering it by printing more dollars.

Because we don't just issue our own dollars to pay for things, we create debt by having the Treasury auction off bonds and notes that are interest bearing. Who currently buys most of these? The Japanese, Chinese, god forbid the Ruski's? Nope, you guessed it. It is the Fed who buys over 90% of our debt.


That's simply inaccurate. During the height of the recession the Fed purchased 70% of the treasury debt issued in 2013. In years since they've purchased about 50%. They currently hold only about 12.5% of the total.

https://www.nytimes.com/2014/02/22/business/economy/no-surprise-fed-was-biggest-buyer-of-treasuries-in-2013.html

https://www.nationalpriorities.org/campaigns/us-federal-debt-who/

[wikipedia
In late November 2008, the Federal Reserve started buying $600 billion in mortgage-backed securities. By March 2009, it held $1.75 trillion of bank debt, mortgage-backed securities, and Treasury notes; this amount reached a peak of $2.1 trillion in June 2010. Further purchases were halted as the economy started to improve, but resumed in August 2010 when the Fed decided the economy was not growing robustly. After the halt in June, holdings started falling naturally as debt matured and were projected to fall to $1.7 trillion by 2012. The Fed's revised goal became to keep holdings at $2.054 trillion. To maintain that level, the Fed bought $30 billion in two- to ten-year Treasury notes every month.


If you're concerned about the national debt, the discussion to have is about the deficit. The Fed is at worst a contributing enabler, but it's hardly the culprit and it has been instrumental in staving off the worst of the effects of the recession and stabilizing inflation. Given that President and Congress appoint the board of Fed, I'd rather have them holding that share than foreign powers.

If you want a deep dive on "where the money went" and a serious economic problem that needs to be addressed:

http://www.philosophicaleconomics.com/2014/03/foreignpm/

“Ya, that idea is dildos.” Skwisgaar Skwigelf
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