Federal Reserve Succumbs To Election Politics

[LadyGunSlinger]

Yes.

Go ahead.. I have to hear this.. Explain plz.

When you run too much external debt, you devalue your currency to gold. That has happened throughout history.

You can run as much internal debt as you want, as long as the money stays in the country.

The gold standard removes the need for a Central Banking System thus eliminating maipulation of our monetary policy which creates debt in turn- it's main goal to make banks and people behiolden to them..

 

[Toro]

If he's so knowledgeable on history and monetary policy, why his he pushing to repeat (on a scale never seen before) the past blunders in fiat currency? He's either been reading "Corky's version of history and economics" or he's a fucking dunce of un-measurable caliber.

Quantitative easing occurred in the 1930s. We didn't have massive inflation, we didn't have monetary chaos.

During 1932, with congressional support, the Fed purchased approximately $1 billion in Treasury securities (half, however, was offset by a decrease in Treasury bills discounted at the Reserve Banks). At the end of 1932, short-term market rates hovered at 50 basis points or less. Quantitative easing continued during 1933-36. In early April 1933, Congress sought to prod the Fed into further action by passing legislation that (i) permitted the Fed to purchase up to $3 billion in securities directly from the Treasury (direct purchases were not typically permitted) and, if the Fed did not, (ii) also authorized President Roosevelt to issue up to $3 billion in currency.2 The Fed began to purchase securities in the open market in April at the modest pace of $50 million per week.

Short History of Quantitative Easing in the 1930s - Global Economic Watch - Global Economic Crisis: Cengage Resource Center

Look, I'm not defending what Bernanke is doing. We might get massive inflation and gold at $5,000, I don't know. But it is simply historically factually incorrect to say that QE always leads to monetary chaos. That is flat out wrong. We had it in the 30s, and when they stopped, it contributed to the sharp 1937-38 recession. They've had QE in Japan and deflation for 20 years.

 

[Toro]

Go ahead.. I have to hear this.. Explain plz.

When you run too much external debt, you devalue your currency to gold. That has happened throughout history.

You can run as much internal debt as you want, as long as the money stays in the country.

The gold standard removes the need for a Central Banking System thus eliminating maipulation of our monetary policy which creates debt in turn- it's main goal to make banks and people behiolden to them..

The currency can be devalued without a central bank.

 

[TakeAStepBack]

Yes.

Go ahead.. I have to hear this.. Explain plz.

When you run too much external debt, you devalue your currency to gold. That has happened throughout history.

You can run as much internal debt as you want, as long as the money stays in the country.

You're making a strong case for specie. Keep going...

 

[LadyGunSlinger]

If he's so knowledgeable on history and monetary policy, why his he pushing to repeat (on a scale never seen before) the past blunders in fiat currency? He's either been reading "Corky's version of history and economics" or he's a fucking dunce of un-measurable caliber.

Quantitative easing occurred in the 1930s. We didn't have massive inflation, we didn't have monetary chaos.

During 1932, with congressional support, the Fed purchased approximately $1 billion in Treasury securities (half, however, was offset by a decrease in Treasury bills discounted at the Reserve Banks). At the end of 1932, short-term market rates hovered at 50 basis points or less. Quantitative easing continued during 1933-36. In early April 1933, Congress sought to prod the Fed into further action by passing legislation that (i) permitted the Fed to purchase up to $3 billion in securities directly from the Treasury (direct purchases were not typically permitted) and, if the Fed did not, (ii) also authorized President Roosevelt to issue up to $3 billion in currency.2 The Fed began to purchase securities in the open market in April at the modest pace of $50 million per week.

Short History of Quantitative Easing in the 1930s - Global Economic Watch - Global Economic Crisis: Cengage Resource Center

Look, I'm not defending what Bernanke is doing. We might get massive inflation and gold at $5,000, I don't know. But it is simply historically factually incorrect to say that QE always leads to monetary chaos. That is flat out wrong. We had it in the 30s, and when they stopped, it contributed to the sharp 1937-38 recession. They've had QE in Japan and deflation for 20 years.

I would agree with you normally if debt were not 110% of GDP which we've never seen..

 

[LadyGunSlinger]

When you run too much external debt, you devalue your currency to gold. That has happened throughout history.

You can run as much internal debt as you want, as long as the money stays in the country.

The gold standard removes the need for a Central Banking System thus eliminating maipulation of our monetary policy which creates debt in turn- it's main goal to make banks and people behiolden to them..

The currency can be devalued without a central bank.

Not so.. So long as the supply of gold does not change too quickly, then the supply of money will stay rasonably stable..

 

[LadyGunSlinger]

If every country is on the Gold standard we only have one currency to base value on which means STABILITY.

 

[TakeAStepBack]

If he's so knowledgeable on history and monetary policy, why his he pushing to repeat (on a scale never seen before) the past blunders in fiat currency? He's either been reading "Corky's version of history and economics" or he's a fucking dunce of un-measurable caliber.

Quantitative easing occurred in the 1930s. We didn't have massive inflation, we didn't have monetary chaos.

During 1932, with congressional support, the Fed purchased approximately $1 billion in Treasury securities (half, however, was offset by a decrease in Treasury bills discounted at the Reserve Banks). At the end of 1932, short-term market rates hovered at 50 basis points or less. Quantitative easing continued during 1933-36. In early April 1933, Congress sought to prod the Fed into further action by passing legislation that (i) permitted the Fed to purchase up to $3 billion in securities directly from the Treasury (direct purchases were not typically permitted) and, if the Fed did not, (ii) also authorized President Roosevelt to issue up to $3 billion in currency.2 The Fed began to purchase securities in the open market in April at the modest pace of $50 million per week.

Short History of Quantitative Easing in the 1930s - Global Economic Watch - Global Economic Crisis: Cengage Resource Center

Look, I'm not defending what Bernanke is doing. We might get massive inflation and gold at $5,000, I don't know. But it is simply historically factually incorrect to say that QE always leads to monetary chaos. That is flat out wrong. We had it in the 30s, and when they stopped, it contributed to the sharp 1937-38 recession. They've had QE in Japan and deflation for 20 years.

We were also not off the gold standard entirely, not 16 trillion and counting in debt and the state governments were in much better condition (the entire public included) financially than they are today.

If i'm not mistaken, the federal government confiscated gold during this time period also.

 

[Toro]

The gold standard removes the need for a Central Banking System thus eliminating maipulation of our monetary policy which creates debt in turn- it's main goal to make banks and people behiolden to them..

The currency can be devalued without a central bank.

Not so.. So long as the supply of gold does not change too quickly, then the supply of money will stay rasonably stable..

That's not the issue. Regardless if the supply of gold is stable, if private or public debts run too high, or if there is some other imbalance, a government can change the exchange rate of gold to currency, devaluing the currency. This is what has happened to countries in the past. A central bank wasn't needed.

 

[LadyGunSlinger]

The currency can be devalued without a central bank.

Not so.. So long as the supply of gold does not change too quickly, then the supply of money will stay rasonably stable..

That's not the issue. Regardless if the supply of gold is stable, if private or public debts run too high, or if there is some other imbalance, a government can change the exchange rate of gold to currency, devaluing the currency. This is what has happened to countries in the past. A central bank wasn't needed.

You just made my point entirely.. I said the GOLD STANDARD, not fiat money.

 

[Toro]

We were also not off the gold standard entirely, not 16 trillion and counting in debt and the state governments were in much better condition (the entire public included) financially than they are today.

If i'm not mistaken, the federal government confiscated gold during this time period also.

Yeah, they did.

We cut the last vestiges of the gold standard on August 15 1971. Since then, debt in the financial system has soared, and the price of gold has risen almost as much as stocks. We may eventually go back to some sort of gold standard, or something that is not a pure fiat system. IMHO, this crisis is a failure of modern economics.

 

[Toro]

Not so.. So long as the supply of gold does not change too quickly, then the supply of money will stay rasonably stable..

That's not the issue. Regardless if the supply of gold is stable, if private or public debts run too high, or if there is some other imbalance, a government can change the exchange rate of gold to currency, devaluing the currency. This is what has happened to countries in the past. A central bank wasn't needed.

You just made my point entirely.. I said the GOLD STANDARD, not fiat money.

Fiat money means there is nothing backing it. That doesn't mean paper money doesn't exist. Gold per se didn't circulate. The gold standard in the US from 1870 to 1913 was based on exchangeable bills to an ounce of gold. That ratio can change during times of imbalance, and countries did that in the past. It is true that when the currency is anchored to something tangible, crises tend to be less common, but it is false to say that they never happen.

 

[LadyGunSlinger]

We were also not off the gold standard entirely, not 16 trillion and counting in debt and the state governments were in much better condition (the entire public included) financially than they are today.

If i'm not mistaken, the federal government confiscated gold during this time period also.

Yeah, they did.

We cut the last vestiges of the gold standard on August 15 1971. Since then, debt in the financial system has soared, and the price of gold has risen almost as much as stocks. We may eventually go back to some sort of gold standard, or something that is not a pure fiat system. IMHO, this crisis is a failure of modern economics.

You just made his point also..

 

[TakeAStepBack]

We were also not off the gold standard entirely, not 16 trillion and counting in debt and the state governments were in much better condition (the entire public included) financially than they are today.

If i'm not mistaken, the federal government confiscated gold during this time period also.

Yeah, they did.

We cut the last vestiges of the gold standard on August 15 1971. Since then, debt in the financial system has soared, and the price of gold has risen almost as much as stocks. We may eventually go back to some sort of gold standard, or something that is not a pure fiat system. IMHO, this crisis is a failure of modern economics.

I'm quite intimately familiar with the history of our monetary system. This crisis is a failure at central planning of economics. The same as it ever was.

 

[Toro]

We were also not off the gold standard entirely, not 16 trillion and counting in debt and the state governments were in much better condition (the entire public included) financially than they are today.

If i'm not mistaken, the federal government confiscated gold during this time period also.

Yeah, they did.

We cut the last vestiges of the gold standard on August 15 1971. Since then, debt in the financial system has soared, and the price of gold has risen almost as much as stocks. We may eventually go back to some sort of gold standard, or something that is not a pure fiat system. IMHO, this crisis is a failure of modern economics.

You just made his point also..

His point was that QE always leads to monetary chaos. That's not true. FDR changed the exchange rate of gold ie devalued, the government ran deficits (of 4% to GDP), and the Fed conducted QE. We didn't have massive inflation. Japan has no gold standard and has also conducted QE. It failed, but it didn't lead to inflation.

 

[Toro]

We were also not off the gold standard entirely, not 16 trillion and counting in debt and the state governments were in much better condition (the entire public included) financially than they are today.

If i'm not mistaken, the federal government confiscated gold during this time period also.

Yeah, they did.

We cut the last vestiges of the gold standard on August 15 1971. Since then, debt in the financial system has soared, and the price of gold has risen almost as much as stocks. We may eventually go back to some sort of gold standard, or something that is not a pure fiat system. IMHO, this crisis is a failure of modern economics.

I'm quite intimately familiar with the history of our monetary system. This crisis is a failure at central planning of economics. The same as it ever was.

As am I.

And you are probably correct.

 

[Oddball]

We cut the last vestiges of the gold standard on August 15 1971. Since then, debt in the financial system has soared, and the price of gold has risen almost as much as stocks. We may eventually go back to some sort of gold standard, or something that is not a pure fiat system. IMHO, this crisis is a failure of modern economics.

It can't be a failure of "modern economics" any more than a plugged p-trap is the fault of modern plumbing.

Fact remains, to carry the metaphor forward, that the pimps for the worthless fiat currency that is the USD keep insisting that they can make water flow uphill.

 

[Toro]

We cut the last vestiges of the gold standard on August 15 1971. Since then, debt in the financial system has soared, and the price of gold has risen almost as much as stocks. We may eventually go back to some sort of gold standard, or something that is not a pure fiat system. IMHO, this crisis is a failure of modern economics.

It can't be a failure of "modern economics" any more than a plugged p-trap is the fault of modern plumbing.

Fact remains, to carry the metaphor forward, that the pimps for the worthless fiat currency that is the USD keep insisting that they can make water flow uphill.

Dude, any plumbing analogy goes way, way over my head.

 

[LadyGunSlinger]

We cut the last vestiges of the gold standard on August 15 1971. Since then, debt in the financial system has soared, and the price of gold has risen almost as much as stocks. We may eventually go back to some sort of gold standard, or something that is not a pure fiat system. IMHO, this crisis is a failure of modern economics.

It can't be a failure of "modern economics" any more than a plugged p-trap is the fault of modern plumbing.

Fact remains, to carry the metaphor forward, that the pimps for the worthless fiat currency that is the USD keep insisting that they can make water flow uphill.

Dude, any plumbing analogy goes way, way over my head.

LOL He's simply saying the debt is not a result of modern economics.. FIAT CURRENCY is worthless, PERIOD.

 

[Toro]

It can't be a failure of "modern economics" any more than a plugged p-trap is the fault of modern plumbing.

Fact remains, to carry the metaphor forward, that the pimps for the worthless fiat currency that is the USD keep insisting that they can make water flow uphill.

Dude, any plumbing analogy goes way, way over my head.

LOL He's simply saying the debt is not a result of modern economics.. FIAT CURRENCY is worthless, PERIOD.

lol

Gee, thanks.