Credible Argument for Keeping the Fed

[Kevin_Kennedy]

Really? The money supply should hold where it is now? As the GDP gets ever larger?
Is deflation a good idea?

It just means that the currency gains in value. I see no problem with that. As for GDP, that's not a very reliable statistic since government spending causes GDP to rise.

It just means that the currency gains in value. I see no problem with that.

So if you borrow $1 million to open a factory and the currency gains 5% in value every year, that's not a problem?

It may give me an incentive to pay back the loan quicker, but no I don't see a problem.

 

[Kevin_Kennedy]

Really? The money supply should hold where it is now? As the GDP gets ever larger?
Is deflation a good idea?

It just means that the currency gains in value. I see no problem with that.

No one would ever offer a home loan if we established a built-in system of deflation - which is exactly what would happen if we moved to a fixed standard. There's a limited supply of precious metals. Now, if you want to suggest we fraction those precious metals...well, we're back to the same problem.

We had a deflationary period for about 30 years during the last gold standard, and we experienced a host of contractionary panics.

No one would offer a loan? When they'd be paid back in money that has gained value, not to mention the interest?

For one we've never had a true gold standard, and I'll need the specific time frame that you're referring to in order to reply in any real sense.

 

[WatertheTree]

It just means that the currency gains in value. I see no problem with that.

No one would ever offer a home loan if we established a built-in system of deflation - which is exactly what would happen if we moved to a fixed standard. There's a limited supply of precious metals. Now, if you want to suggest we fraction those precious metals...well, we're back to the same problem.

We had a deflationary period for about 30 years during the last gold standard, and we experienced a host of contractionary panics.

No one would offer a loan? When they'd be paid back in money that has gained value, not to mention the interest?

For one we've never had a true gold standard, and I'll need the specific time frame that you're referring to in order to reply in any real sense.

You guys are over complicating the situation, based on this false need for money to be backed by gold and silver. That is the fallacy. The only real purpose that money being backed by gold and silver has is to prevent governing bodies from printing more money, as is going on now.

The federal reserve banking cartel is bad for two reasons. The first is because they are continually devaluing money by printing it, and the second is the interest attached to it.

(p+i)^n/p^(n-1)
we wonder why the division between the rich and the poor keeps growing

The solution is very simple. Eliminate the federal reserve, or begin a competing currency as Ron Paul has suggested. Replace debt based money with soveriegn money that is not a marker of debt but is instead a marker of value. Instead of privately owned banking cartels printing money and then instead of charging interest for it (which leads to defaults, which leads to banks gaining property and assets by risking and earning nothing) the money should be distributed by the US government to pay for everything it pays for. The new currency would be the currency required to pay taxes, and taxes would equal the amount of money that was generated by the government the previous year. The only changes in money supply would be changes based on population, to ensure that there is enough currency in circulation for transactions to take place.

This simple solution would halt a system of debt>money. Money would not be as scarce as it is today for common people, it would be more scarce for banks or corporations that are currently recieving the new money. Savings would be valued agian. Yes it will mean higher interest rates on loans, but that means higher rates on savings aswell! It also means lower taxes, because government wont have to pay interest to anyone! As they shouldn't.

There is no reason that a new currency needs to be backed by anything. Our current currency isnt, and its working (sort of). The only thing that needs to happen is very strict legislation needs to be written to protect from deficit spending and debt as is now. A currency that is not hidden is secrecy will be very easy to hyper-inflate, so safeguards must be put into place to protect from mindless printing.

Although I am a huge fan of Ron Paul I dont think the gold market is big enough to back a currency anymore. Even if it was its not a good idea because rich people can manipulate the market, as they have done in our history before. I just dont think backing money by gold and silver is the solution. The solution is a fiat money, but just not one attached to debt, and one that is controlled by the government not a banking cartel.

 

[editec]

The FIAT DOLLARS are NOT created out of thin air, exactly.

They are created out of PROMISES TO REPAY that debt.

It just that when people cannot repay those dbts (like now for instance) and all those dollars stop circulating and end up in the hands of a very few (like the estimate $2 trillion in corporate accounts right now?) then those fiat dollars are not doing any of us much good.

 

[Contumacious]

Have you ever had a mortgage? A car loan?
You created money.
I won't tell if you won't.

I didnt create that money dipshit, I borrowed it, and repayed it with interest. Which is the point, which is what you dont understand, cause your ******* retarded.

When you borrowed money, the money supply increased.
I could explain further, but you and your double digit IQ probably can't grasp it.

Mr. Fucktard, Sir:

I have $100.

I lend you $50.00

Now I have 50 and you have 50 . Total Money supply between the two of us $100.

Capisce?

.

 

[8537]

It just means that the currency gains in value. I see no problem with that.

No one would ever offer a home loan if we established a built-in system of deflation - which is exactly what would happen if we moved to a fixed standard. There's a limited supply of precious metals. Now, if you want to suggest we fraction those precious metals...well, we're back to the same problem.

We had a deflationary period for about 30 years during the last gold standard, and we experienced a host of contractionary panics.

No one would offer a loan? When they'd be paid back in money that has gained value, not to mention the interest?

In a deflationary environment I'm better off holding on to dollars and watching them gain value than loaning them out and hoping they get repaid. Money becomes the most liquid asset AND an interest-bearing item. The person borrowing the money, on the other hand, could take your $100 today and pay you back with $95 at the end of the year - I'll take two, thank you very much! Just imagine which assets will benefit.

For one we've never had a true gold standard, and I'll need the specific time frame that you're referring to in order to reply in any real sense.

Britain had a gold standard, with intermittent breaks for crises, from 1696 and about 1795. We had a real, international gold exchange standard between 1871 and 1914.

 

[Kevin_Kennedy]

No one would ever offer a home loan if we established a built-in system of deflation - which is exactly what would happen if we moved to a fixed standard. There's a limited supply of precious metals. Now, if you want to suggest we fraction those precious metals...well, we're back to the same problem.

We had a deflationary period for about 30 years during the last gold standard, and we experienced a host of contractionary panics.

No one would offer a loan? When they'd be paid back in money that has gained value, not to mention the interest?

In a deflationary environment I'm better off holding on to dollars and watching them gain value than loaning them out and hoping they get repaid. Money becomes the most liquid asset AND an interest-bearing item. The person borrowing the money, on the other hand, could take your $100 today and pay you back with $95 at the end of the year - I'll take two, thank you very much! Just imagine which assets will benefit.

For one we've never had a true gold standard, and I'll need the specific time frame that you're referring to in order to reply in any real sense.

Britain had a gold standard, with intermittent breaks for crises, from 1696 and about 1795. We had a real, international gold exchange standard between 1871 and 1914.

Well, again, interest is what incentivizes people to loan out their money in the first place, so whether or not the money gains in value people will still be willing to take the risk.

I can't speak for Britain's gold standard from 1696 to 1795, but I'd be willing to bet there was some coin clipping going on if there were panics as you say. As for the gold exchange standard, it's an inflationary system and can't be compared to a genuine gold standard.

 

[WatertheTree]

The FIAT DOLLARS are NOT created out of thin air, exactly.

They are created out of PROMISES TO REPAY that debt.

It just that when people cannot repay those dbts (like now for instance) and all those dollars stop circulating and end up in the hands of a very few (like the estimate $2 trillion in corporate accounts right now?) then those fiat dollars are not doing any of us much good.

There is never enough dollars to repay the debt. The system is in itself its own cancer and destruction.

 

[8537]

No one would offer a loan? When they'd be paid back in money that has gained value, not to mention the interest?

In a deflationary environment I'm better off holding on to dollars and watching them gain value than loaning them out and hoping they get repaid. Money becomes the most liquid asset AND an interest-bearing item. The person borrowing the money, on the other hand, could take your $100 today and pay you back with $95 at the end of the year - I'll take two, thank you very much! Just imagine which assets will benefit.

For one we've never had a true gold standard, and I'll need the specific time frame that you're referring to in order to reply in any real sense.

Britain had a gold standard, with intermittent breaks for crises, from 1696 and about 1795. We had a real, international gold exchange standard between 1871 and 1914.

Well, again, interest is what incentivizes people to loan out their money in the first place, so whether or not the money gains in value people will still be willing to take the risk.

But they are being paid interest NOT to loan money. They are being paid (we'll call it 5%...) for the act of holding the world's most liquid asset. The world's second most liquid asset suddenly doesn't seem so appealing.

I can't speak for Britain's gold standard from 1696 to 1795, but I'd be willing to bet there was some coin clipping going on if there were panics as you say. As for the gold exchange standard, it's an inflationary system and can't be compared to a genuine gold standard.

What was inflationary about the system in place from 1871 to 1901, and how did the result end up being a 30 year period of deflation if the system was inflationary

 

[Toddsterpatriot]

Well technically a currency wouldn't have to be backed by something of value, but if you have a choice which are you going to use? Worthless paper money, or something of value?

Oil wouldn't make a very good medium of exchange, because it's not as easy to transport as some other choices like gold or silver. Not that it couldn't, but I just don't see it happening. Regardless, it wouldn't be that difficult to transfer from one currency to another if necessary. It happens all the time with people who trade in currencies now, so there's no reason it couldn't be done at a more local level.

Right, you could convert from one currency to another. So which currency do you keep in your bank account? Just one? Ten? More?

That was my question. If you're paid in one and you've borrowed in another, is that an issue for you?

I don't see why it would be. Like I said you could just transfer. I don't see what it would matter what somebody chose to keep in their bank account, except to them.

You don't see why it would be? The currency my debt is in just rose 10%, the currency I'm paid in just dropped 20%, is there a problem now?

 

[Toddsterpatriot]

It just means that the currency gains in value. I see no problem with that. As for GDP, that's not a very reliable statistic since government spending causes GDP to rise.

It just means that the currency gains in value. I see no problem with that.

So if you borrow $1 million to open a factory and the currency gains 5% in value every year, that's not a problem?

It may give me an incentive to pay back the loan quicker, but no I don't see a problem.

If the currency gains 5%, the prices you charge for your goods just dropped 5%. And will drop 5% next year, 5% the year after that, 5% the year after that.

Does that make it easier or harder to pay back your loan?
Does that make it more or less likely you'll borrow the money to open your factory?

Will a bank want to give you a home mortgage if the home is worth 5% less each year?
How much would you have to put down on that home?
20%? That only covers the first 4 years you live there.

 

[Toddsterpatriot]

No one would ever offer a home loan if we established a built-in system of deflation - which is exactly what would happen if we moved to a fixed standard. There's a limited supply of precious metals. Now, if you want to suggest we fraction those precious metals...well, we're back to the same problem.

We had a deflationary period for about 30 years during the last gold standard, and we experienced a host of contractionary panics.

No one would offer a loan? When they'd be paid back in money that has gained value, not to mention the interest?

For one we've never had a true gold standard, and I'll need the specific time frame that you're referring to in order to reply in any real sense.

You guys are over complicating the situation, based on this false need for money to be backed by gold and silver. That is the fallacy. The only real purpose that money being backed by gold and silver has is to prevent governing bodies from printing more money, as is going on now.

The federal reserve banking cartel is bad for two reasons. The first is because they are continually devaluing money by printing it, and the second is the interest attached to it.

(p+i)^n/p^(n-1)
we wonder why the division between the rich and the poor keeps growing

The solution is very simple. Eliminate the federal reserve, or begin a competing currency as Ron Paul has suggested. Replace debt based money with soveriegn money that is not a marker of debt but is instead a marker of value. Instead of privately owned banking cartels printing money and then instead of charging interest for it (which leads to defaults, which leads to banks gaining property and assets by risking and earning nothing) the money should be distributed by the US government to pay for everything it pays for. The new currency would be the currency required to pay taxes, and taxes would equal the amount of money that was generated by the government the previous year. The only changes in money supply would be changes based on population, to ensure that there is enough currency in circulation for transactions to take place.

This simple solution would halt a system of debt>money. Money would not be as scarce as it is today for common people, it would be more scarce for banks or corporations that are currently recieving the new money. Savings would be valued agian. Yes it will mean higher interest rates on loans, but that means higher rates on savings aswell! It also means lower taxes, because government wont have to pay interest to anyone! As they shouldn't.

There is no reason that a new currency needs to be backed by anything. Our current currency isnt, and its working (sort of). The only thing that needs to happen is very strict legislation needs to be written to protect from deficit spending and debt as is now. A currency that is not hidden is secrecy will be very easy to hyper-inflate, so safeguards must be put into place to protect from mindless printing.

Although I am a huge fan of Ron Paul I dont think the gold market is big enough to back a currency anymore. Even if it was its not a good idea because rich people can manipulate the market, as they have done in our history before. I just dont think backing money by gold and silver is the solution. The solution is a fiat money, but just not one attached to debt, and one that is controlled by the government not a banking cartel.

Instead of privately owned banking cartels printing money and then instead of charging interest for it (which leads to defaults, which leads to banks gaining property and assets by risking and earning nothing)

Banks risk nothing when they lend money?
Wow, you are confused about how banking works.

 

[Toddsterpatriot]

I didnt create that money dipshit, I borrowed it, and repayed it with interest. Which is the point, which is what you dont understand, cause your ******* retarded.

When you borrowed money, the money supply increased.
I could explain further, but you and your double digit IQ probably can't grasp it.

Mr. Fucktard, Sir:

I have $100.

I lend you $50.00

Now I have 50 and you have 50 . Total Money supply between the two of us $100.

Capisce?

.

Try the same scenario with a bank and I'll try to talk slowly enough for you to understand.

 

[Toddsterpatriot]

No one would ever offer a home loan if we established a built-in system of deflation - which is exactly what would happen if we moved to a fixed standard. There's a limited supply of precious metals. Now, if you want to suggest we fraction those precious metals...well, we're back to the same problem.

We had a deflationary period for about 30 years during the last gold standard, and we experienced a host of contractionary panics.

No one would offer a loan? When they'd be paid back in money that has gained value, not to mention the interest?

In a deflationary environment I'm better off holding on to dollars and watching them gain value than loaning them out and hoping they get repaid. Money becomes the most liquid asset AND an interest-bearing item. The person borrowing the money, on the other hand, could take your $100 today and pay you back with $95 at the end of the year - I'll take two, thank you very much! Just imagine which assets will benefit.

For one we've never had a true gold standard, and I'll need the specific time frame that you're referring to in order to reply in any real sense.

Britain had a gold standard, with intermittent breaks for crises, from 1696 and about 1795. We had a real, international gold exchange standard between 1871 and 1914.

The person borrowing the money, on the other hand, could take your $100 today and pay you back with $95 at the end of the year

That would be the case in an inflationary environment. Under deflation, he'd owe you the $100 plus interest which would be worth $105 plus interest when he paid you back.

It's harder, not easier, to repay under deflation.

 

[editec]

The FIAT DOLLARS are NOT created out of thin air, exactly.

They are created out of PROMISES TO REPAY that debt.

It just that when people cannot repay those dbts (like now for instance) and all those dollars stop circulating and end up in the hands of a very few (like the estimate $2 trillion in corporate accounts right now?) then those fiat dollars are not doing any of us much good.

There is never enough dollars to repay the debt. The system is in itself its own cancer and destruction.

Yes that is the one of the glitches in the system, I quite agree.

In fact the power of coumpounding interest virtually assure us that most of us are forever destined to be wage slaves working for BIG CAPITAL which has the monopoly of inventing those new dollars.

Tell you how to fix that.

Create a TRULY national reserve.

One where the people borrow DIRECTLY from the US government (at interest).

Thus when the borrowers pay those loans back, they pay it back to the people who control the money supply....the AMERICAN PEOPLE.


Given that the banks themsielves are borrowing money from the FED to loan to us at interest, why bother with the middle men at all?

What value added do they bring to the transation?

None that I can see.

 

[Toddsterpatriot]

The FIAT DOLLARS are NOT created out of thin air, exactly.

They are created out of PROMISES TO REPAY that debt.

It just that when people cannot repay those dbts (like now for instance) and all those dollars stop circulating and end up in the hands of a very few (like the estimate $2 trillion in corporate accounts right now?) then those fiat dollars are not doing any of us much good.

There is never enough dollars to repay the debt. The system is in itself its own cancer and destruction.

Yes that is the one of the glitches in the system, I quite agree.

In fact the power of coumpounding interest virtually assure us that most of us are forever destined to be wage slaves working for BIG CAPITAL which has the monopoly of inventing those new dollars.

Tell you how to fix that.

Create a TRULY national reserve.

One where the people borrow DIRECTLY from the US government (at interest).

Thus when the borrowers pay those loans back, they pay it back to the people who control the money supply....the AMERICAN PEOPLE.


Given that the banks themsielves are borrowing money from the FED to loan to us at interest, why bother with the middle men at all?

What value added do they bring to the transation?

None that I can see.

Banks currently have $1.6 trillion in excess reserves.

They aren't borrowing from the Fed, they're lending to the Fed.

 

[8537]

No one would offer a loan? When they'd be paid back in money that has gained value, not to mention the interest?

In a deflationary environment I'm better off holding on to dollars and watching them gain value than loaning them out and hoping they get repaid. Money becomes the most liquid asset AND an interest-bearing item. The person borrowing the money, on the other hand, could take your $100 today and pay you back with $95 at the end of the year - I'll take two, thank you very much! Just imagine which assets will benefit.

For one we've never had a true gold standard, and I'll need the specific time frame that you're referring to in order to reply in any real sense.

Britain had a gold standard, with intermittent breaks for crises, from 1696 and about 1795. We had a real, international gold exchange standard between 1871 and 1914.

The person borrowing the money, on the other hand, could take your $100 today and pay you back with $95 at the end of the year

That would be the case in an inflationary environment. Under deflation, he'd owe you the $100 plus interest which would be worth $105 plus interest when he paid you back.

It's harder, not easier, to repay under deflation.

Bejeebers! you are correct, of course. And that $105 would be harder to come by because the exchange he made to get the money (either selling goods or labor) was paying less.

 

[WatertheTree]

The FIAT DOLLARS are NOT created out of thin air, exactly.

They are created out of PROMISES TO REPAY that debt.

It just that when people cannot repay those dbts (like now for instance) and all those dollars stop circulating and end up in the hands of a very few (like the estimate $2 trillion in corporate accounts right now?) then those fiat dollars are not doing any of us much good.

There is never enough dollars to repay the debt. The system is in itself its own cancer and destruction.

Yes that is the one of the glitches in the system, I quite agree.

In fact the power of coumpounding interest virtually assure us that most of us are forever destined to be wage slaves working for BIG CAPITAL which has the monopoly of inventing those new dollars.

Tell you how to fix that.

Create a TRULY national reserve.

One where the people borrow DIRECTLY from the US government (at interest).

Thus when the borrowers pay those loans back, they pay it back to the people who control the money supply....the AMERICAN PEOPLE.


Given that the banks themsielves are borrowing money from the FED to loan to us at interest, why bother with the middle men at all?

What value added do they bring to the transation?

None that I can see.

That is the only debt based money I would ever get on board for. That is one of the demands of the OWS movement. The immeadiate forced aquisition of the federal reserve by the us congress for 1 billion dollars.

Nomatter what your social beliefs, nomatter your ideology, nomatter your heritige or political leanings; if you are not behind the OWS movement to rid ourselves of a corrupt system of inequality and enslavement well then your just not American.

 

[8537]

There is never enough dollars to repay the debt. The system is in itself its own cancer and destruction.

Yes that is the one of the glitches in the system, I quite agree.

In fact the power of coumpounding interest virtually assure us that most of us are forever destined to be wage slaves working for BIG CAPITAL which has the monopoly of inventing those new dollars.

Tell you how to fix that.

Create a TRULY national reserve.

One where the people borrow DIRECTLY from the US government (at interest).

Thus when the borrowers pay those loans back, they pay it back to the people who control the money supply....the AMERICAN PEOPLE.


Given that the banks themsielves are borrowing money from the FED to loan to us at interest, why bother with the middle men at all?

What value added do they bring to the transation?

None that I can see.

Banks currently have $1.6 trillion in excess reserves.

They aren't borrowing from the Fed, they're lending to the Fed.

They're keeping reserves at the Fed because the Fed started paying interest on reserve deposits a few years ago. Why put the money elsewhere when the economy sucks and you can get 1% from the Fed?

The Fed has basically changed the equation so that large banks aren't comparing the most liquid asset to any positive return strictly on risk. They're comparing the most liquid asset - and it actually gains value!

 

[Toddsterpatriot]

Yes that is the one of the glitches in the system, I quite agree.

In fact the power of coumpounding interest virtually assure us that most of us are forever destined to be wage slaves working for BIG CAPITAL which has the monopoly of inventing those new dollars.

Tell you how to fix that.

Create a TRULY national reserve.

One where the people borrow DIRECTLY from the US government (at interest).

Thus when the borrowers pay those loans back, they pay it back to the people who control the money supply....the AMERICAN PEOPLE.


Given that the banks themsielves are borrowing money from the FED to loan to us at interest, why bother with the middle men at all?

What value added do they bring to the transation?

None that I can see.

Banks currently have $1.6 trillion in excess reserves.

They aren't borrowing from the Fed, they're lending to the Fed.

They're keeping reserves at the Fed because the Fed started paying interest on reserve deposits a few years ago. Why put the money elsewhere when the economy sucks and you can get 1% from the Fed?

The Fed has basically changed the equation so that large banks aren't comparing the most liquid asset to any positive return strictly on risk. They're comparing the most liquid asset - and it actually gains value!

0.25% actually.