Fed Up

[Avorysuds]

Kevin, the Fed does not print money. That is handled by the treasury and is done in accordance with need.

Just because the Fed buys debt does not mean that the Fed has some how managed to get control of the dollar printers.

We need not print money to borrow it in this electronic age.

The fed does not own a literal printing press that it feeds paper and ink into, of course. But when it buys debt, it is using electronic dollars that are made up out of thin air. The government then spends these new dollars, which enter circulation and expand the money supply.

Then once the money makes it's way into banks, fractional reserve lending takes over, ie banks lend out more money than they have. When all is said and done, the bulk of the money expansion has actually been done by banks lending money into existence, and the original amount created by the fed has been amplified by approximately 10:1. This increase in credit drives interest rates down, which allows the government to borrow cheaply, and also benefits interest-rate sensitive industries (the most recent example being home builders).

ie banks lend out more money than they have.

Of course that is not the case.
Every loan is fully funded.

Why does the FED-R not give all the middle class and poor the option to borrow at .2%?

 

[Toddsterpatriot]

The fed does not own a literal printing press that it feeds paper and ink into, of course. But when it buys debt, it is using electronic dollars that are made up out of thin air. The government then spends these new dollars, which enter circulation and expand the money supply.

Then once the money makes it's way into banks, fractional reserve lending takes over, ie banks lend out more money than they have. When all is said and done, the bulk of the money expansion has actually been done by banks lending money into existence, and the original amount created by the fed has been amplified by approximately 10:1. This increase in credit drives interest rates down, which allows the government to borrow cheaply, and also benefits interest-rate sensitive industries (the most recent example being home builders).

ie banks lend out more money than they have.

Of course that is not the case.
Every loan is fully funded.

Why does the FED-R not give all the middle class and poor the option to borrow at .2%?

You think banks are borrowing from the Fed at 0.2%? How much?

 

[SteadyMercury]

Franky, I don't hear much backlash towards the Fed, at least not from ordinary people.

My first though too, was like wow this piece opened up with a nice big ******* exaggeration. I submit you asked ten people on the street what the Fed did you'd get nine "I dunno" much less actually knowing what recent policy decisions they've made.

 

[The Rabbi]

Most AMericans think the Federal Reserve is a kind of beer or whiskey. They couldn't define the Fed nor what is does if coached on it.
That said, the issue is the increasing politicization fo the Fed. IT was supposed to be an independent body. Thus the long term appointment of the chairman and other features. In fact it has become anything but. Yellin is pursuing a course that makes no sense, allowing inflation to spurt ahead while keeping rates unconscionably low. This hurt middle class savers more than anyone else.

 

[Toro]

Most AMericans think the Federal Reserve is a kind of beer or whiskey.

lol

 

[Dad2three]

Franky, I don't hear much backlash towards the Fed, at least not from ordinary people. There's a fair amount of backlash towards the spending of the administration however.

Yes, and a lot of backlash toward the extroidenary salaries and bonuses of the people who created this debacle.

That seems to be at odds with what Toro is saying, because it was the Fed that chiefly created this debacle.

WORLD WIDE CREDIT BUBBLE AND BUST? Created by the Fed? lol


Examining the big lie: How the facts of the economic crisis stack up


The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.

A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.” It is highly unlikely that a simultaneous boom and bust everywhere else in the world was caused by one set of factors (ultra-low rates, securitized AAA-rated subprime, derivatives) but had a different set of causes in the United States. Indeed, this might be the biggest obstacle to pushing the false narrative.



Examining the big lie: How the facts of the economic crisis stack up | The Big Picture


Though Dubya was the main culprit in the US

http://www.usmessageboard.com/economy/362889-facts-on-dubya-s-great-recession.html

 

[Dad2three]

That seems to be at odds with what Toro is saying, because it was the Fed that chiefly created this debacle.

If you ask most people, they will not know that the Fed is at least partially responsible for the mess. It's an esoteric argument that is above most people's grasp. Or interest.

Yes, I agree. I was simply being a smart-ass because Old Rocks refuses to believe that the Federal Reserve had anything to do with the downturn.

You mean the guy in charge was a 'free market' type guy and 'believed' the markets would self regulate?


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


...."I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.


Greenspan - I was wrong about the economy. Sort of | Business | The Guardian




Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

 

[Dad2three]

They would buy the debt by creating money, which would debase the currency.

Kevin, the Fed does not print money. That is handled by the treasury and is done in accordance with need.

Just because the Fed buys debt does not mean that the Fed has some how managed to get control of the dollar printers.

We need not print money to borrow it in this electronic age.

The fed does not own a literal printing press that it feeds paper and ink into, of course. But when it buys debt, it is using electronic dollars that are made up out of thin air. The government then spends these new dollars, which enter circulation and expand the money supply.

Then once the money makes it's way into banks, fractional reserve lending takes over, ie banks lend out more money than they have. When all is said and done, the bulk of the money expansion has actually been done by banks lending money into existence, and the original amount created by the fed has been amplified by approximately 10:1. This increase in credit drives interest rates down, which allows the government to borrow cheaply, and also benefits interest-rate sensitive industries (the most recent example being home builders).

All true, but Dubya allowed the five investment banks to go from 12-1 leverage to 35-1+ leverage in 2004

The SEC Rule That Broke Wall Street

 

[Dad2three]

That seems to be at odds with what Toro is saying, because it was the Fed that chiefly created this debacle.

If you ask most people, they will not know that the Fed is at least partially responsible for the mess. It's an esoteric argument that is above most people's grasp. Or interest.

Yes, I agree. I was simply being a smart-ass because Old Rocks refuses to believe that the Federal Reserve had anything to do with the downturn.

They could've increased rates or went after the predatory lending, which was the main cause of the crash


"But what we are finding is that there are predatory lending practices, .... We hope the Federal Reserve Board will use their powers to help"

FRB: Complete transcript of public hearing on home equity lending -- September 7, 2000

But they weren't elected to do that, this guy was

DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!



Predatory Lenders' Partner in Crime

Predatory lending was widely understood to present a looming national crisis.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge?

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative

Eliot Spitzer - Predatory Lenders' Partner in Crime

 

[Toro]

If you ask most people, they will not know that the Fed is at least partially responsible for the mess. It's an esoteric argument that is above most people's grasp. Or interest.

Yes, I agree. I was simply being a smart-ass because Old Rocks refuses to believe that the Federal Reserve had anything to do with the downturn.

You mean the guy in charge was a 'free market' type guy and 'believed' the markets would self regulate?


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


...."I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.


Greenspan - I was wrong about the economy. Sort of | Business | The Guardian




Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

There was no one cause, but all bubbles occur because of excess credit or money, and global excess credit was created primarily by the Federal Reserves. That the crisis was global is evidence that the bubble was caused primarily by central banks.

How? By pinning interest rates so low for so long, it lowered the price of credit. All credit is priced off of government interest rates. The United States is the most important economy in the world. The Fed is the most important central bank in the world. Thus, when the Fed lowered rates, central banks around the world had little choice but to follow. Otherwise, their currencies would have become uncompetitive against the dollar. The credit that was created fed into asset markets because consumer prices were being constrained by a global shift in manufacturing to China and because of the after-effects of the tech and stock market bubbles of the 1990s. Thus, there were housing bubbles all around, particularly in those countries with a culture of home ownership and policies which were designed to increase credit to borrowers.

That's not the only reason. I'd put deregulation a distant number two and Wall Street as number three on the list. But both pale in comparison to the gross mis-pricing and mis-understanding of credit and asset markets due to the Fed.

 

[The Rabbi]

Yes, I agree. I was simply being a smart-ass because Old Rocks refuses to believe that the Federal Reserve had anything to do with the downturn.

You mean the guy in charge was a 'free market' type guy and 'believed' the markets would self regulate?


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


...."I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.


Greenspan - I was wrong about the economy. Sort of | Business | The Guardian




Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

There was no one cause, but all bubbles occur because of excess credit or money, and global excess credit was created primarily by the Federal Reserves. That the crisis was global is evidence that the bubble was caused primarily by central banks.

How? By pinning interest rates so low for so long, it lowered the price of credit. All credit is priced off of government interest rates. The United States is the most important economy in the world. The Fed is the most important central bank in the world. Thus, when the Fed lowered rates, central banks around the world had little choice but to follow. Otherwise, their currencies would have become uncompetitive against the dollar. The credit that was created fed into asset markets because consumer prices were being constrained by a global shift in manufacturing to China and because of the after-effects of the tech and stock market bubbles of the 1990s. Thus, there were housing bubbles all around, particularly in those countries with a culture of home ownership and policies which were designed to increase credit to borrowers.

That's not the only reason. I'd put deregulation a distant number two and Wall Street as number three on the list. But both pale in comparison to the gross mis-pricing and mis-understanding of credit and asset markets due to the Fed.

No! You are wrong!
The downturn happened because Bush wanted to cover for the 2 illegal wars he started after he lied the nation into supporting them. Then he used the downturn to reward his crony friends like Dick Cheney who owns Halliburton. That's why he gutted every banking regulation we've ever passed! There was NO regulation of any kind in this country. That's why we had unemplopyment over 30% and people rummaging through trash cans for food.
Pub dupe.

 

[Dad2three]

Yes, I agree. I was simply being a smart-ass because Old Rocks refuses to believe that the Federal Reserve had anything to do with the downturn.

You mean the guy in charge was a 'free market' type guy and 'believed' the markets would self regulate?


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


...."I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.


Greenspan - I was wrong about the economy. Sort of | Business | The Guardian




Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

There was no one cause, but all bubbles occur because of excess credit or money, and global excess credit was created primarily by the Federal Reserves. That the crisis was global is evidence that the bubble was caused primarily by central banks.

How? By pinning interest rates so low for so long, it lowered the price of credit. All credit is priced off of government interest rates. The United States is the most important economy in the world. The Fed is the most important central bank in the world. Thus, when the Fed lowered rates, central banks around the world had little choice but to follow. Otherwise, their currencies would have become uncompetitive against the dollar. The credit that was created fed into asset markets because consumer prices were being constrained by a global shift in manufacturing to China and because of the after-effects of the tech and stock market bubbles of the 1990s. Thus, there were housing bubbles all around, particularly in those countries with a culture of home ownership and policies which were designed to increase credit to borrowers.

That's not the only reason. I'd put deregulation a distant number two and Wall Street as number three on the list. But both pale in comparison to the gross mis-pricing and mis-understanding of credit and asset markets due to the Fed.

Got it, Fed reserves is responsible for the rest of the worlds money policy, even though NO nation doesn't have a central banking system you support and history show's the bubbles created (and bank failures), pre fed reserves


Regulation had almost zero to do with the Dubya subprime crisis, Dubya's lack of REGULATORS and his other policies, however ALLOWED the wall street Banksters to hose US


DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!

Eliot Spitzer - Predatory Lenders' Partner in Crime



FBI saw threat of loan crisis

"It has the potential to be an epidemic,"

A top official warned of widening mortgage fraud in 2004, but the agency focused its resources elsewhere

"We think we can prevent a problem that could have as much impact as the S&L crisis,"

They ended up with fewer resources, rather than more.



Later in 2004 Dubya allowed the leverage rules to go from 12-1 to 35-1+ which flooded the market with cheap money!

The SEC Rule That Broke Wall Street



Yeah, wall street was a distant 3rd



According to a study by the consulting firm Mercer Oliver Wyman, nonconventional lending accounted for approximately half of originations in 2005, but over 85% of profits


Once lenders figured this out they would often try to sell subprime loans even to persons who qualified for a cheaper prime loan. The repackaging of nonconventional mortgages into bonds also became the largest fee generation business for many investment banks including Lehman Bros., Bear Stearns, Merrill Lynch, Morgan Stanley, and Goldman Sachs. Commercial banks and bank holding companies like Bank of America, Wells Fargo, Citibank, and Countrywide Financial also became deeply involved in all stages of the market, from origination to packaging, to servicing.

http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf



For instance, in both 2006 and 2007, well over 40 percent of subprime borrowers were awarded mortgages with either little or no documentation of their ability to pay. With these so-called "liar loans," borrowers did not have to show proof of either earnings or assets.

The Residential Real Estate Crash Index | Stock Discussion Forums



It is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it




Asset managers sought new ways to make money

The credit rating agencies gave their blessing

Fund managers didn’t do their homework

Derivatives were unregulated


The SEC loosened capital requirements


The federal government overrode anti-predatory state laws


Compensation schemes encouraged gambling: Wall Street’s compensation system was—and still is—based on short-term performance, all upside and no downside. This creates incentives to take excessive risks.



Wall Street became “creative”:


Private sector lenders fed the demand


Financial gadgets milked the market


Commercial banks jumped in

Derivatives exploded uncontrollably


Lest We Forget: Why We Had A Financial Crisis - Forbes




The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence. To understand the crisis we have to focus on how the mortgage fraud epidemic produced widespread accounting fraud.

William K. Black: The Two Documents Everyone Should Read to Better Understand the Crisis

 

[Dad2three]

You mean the guy in charge was a 'free market' type guy and 'believed' the markets would self regulate?


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


...."I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.


Greenspan - I was wrong about the economy. Sort of | Business | The Guardian




Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

There was no one cause, but all bubbles occur because of excess credit or money, and global excess credit was created primarily by the Federal Reserves. That the crisis was global is evidence that the bubble was caused primarily by central banks.

How? By pinning interest rates so low for so long, it lowered the price of credit. All credit is priced off of government interest rates. The United States is the most important economy in the world. The Fed is the most important central bank in the world. Thus, when the Fed lowered rates, central banks around the world had little choice but to follow. Otherwise, their currencies would have become uncompetitive against the dollar. The credit that was created fed into asset markets because consumer prices were being constrained by a global shift in manufacturing to China and because of the after-effects of the tech and stock market bubbles of the 1990s. Thus, there were housing bubbles all around, particularly in those countries with a culture of home ownership and policies which were designed to increase credit to borrowers.

That's not the only reason. I'd put deregulation a distant number two and Wall Street as number three on the list. But both pale in comparison to the gross mis-pricing and mis-understanding of credit and asset markets due to the Fed.

No! You are wrong!
The downturn happened because Bush wanted to cover for the 2 illegal wars he started after he lied the nation into supporting them. Then he used the downturn to reward his crony friends like Dick Cheney who owns Halliburton. That's why he gutted every banking regulation we've ever passed! There was NO regulation of any kind in this country. That's why we had unemplopyment over 30% and people rummaging through trash cans for food.
Pub dupe.

http://www.usmessageboard.com/economy/362889-facts-on-dubya-s-great-recession.html

 

[Howey]

Gotta love all these financial "experts" who spend all day posting on an Internet forum instead of managing their portfolio of penny stocks.

 

[Kevin_Kennedy]

If you ask most people, they will not know that the Fed is at least partially responsible for the mess. It's an esoteric argument that is above most people's grasp. Or interest.

Yes, I agree. I was simply being a smart-ass because Old Rocks refuses to believe that the Federal Reserve had anything to do with the downturn.

You mean the guy in charge was a 'free market' type guy and 'believed' the markets would self regulate?


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


...."I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.


Greenspan - I was wrong about the economy. Sort of | Business | The Guardian




Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

Yes, the great "free market" guy Alan Greenspan. Tell me, where did the great free market thinkers state that the economy should be centrally planned by a single organization forcefully and artificially keeping interest rates low and flooding the market with cheap credit? Greenspan was a Randian, right? So find for us where Ayn Rand ever advocated such policies, which it is a historical fact that Greenspan enacted as chief central-planner of the Fed, in her writings. Quote von Mises stating that artificially cheap credit is in line with a free market. I doubt even Milton Friedman, no enemy of the Fed in general, would have supported the reckless policies of Greenspan and Bernanke. So please, find for us where central economic planning, which is what Greenspan did at the Federal Reserve, has anything to do with free markets.

Yes, Greenspan was once a supporter of a free markets, but had long abandoned those views by the time he became the chief central economic planner in the world, and as a staunch supporter of economic interventionism had no problem joining the herds maligning "free markets" after the bubble popped because to do otherwise would be to admit that his current worldview, of central economic planning, is wrong.

 

[Toro]

Got it, Fed reserves is responsible for the rest of the worlds money policy, even though NO nation doesn't have a central banking system you support and history show's the bubbles created (and bank failures), pre fed reserves

I have no idea what you are trying to say.

When credit is mis-priced, it distorts supply and demand.

The Fed mis-priced credit. We had a housing bubble. It's not surprising at all.

 

[Dad2three]

Got it, Fed reserves is responsible for the rest of the worlds money policy, even though NO nation doesn't have a central banking system you support and history show's the bubbles created (and bank failures), pre fed reserves

I have no idea what you are trying to say.

When credit is mis-priced, it distorts supply and demand.

The Fed mis-priced credit. We had a housing bubble. It's not surprising at all.

Yeah, the federal reserve is responsible for the world wide credit bubble (DOZENS of nations), commercial R/W bubble, consumer personal; debt bubble and auto bubble!


Examining the big lie: How the facts of the economic crisis stack up

The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.

Examining the big lie: How the facts of the economic crisis stack up | The Big Picture

 

[Dad2three]

Yes, I agree. I was simply being a smart-ass because Old Rocks refuses to believe that the Federal Reserve had anything to do with the downturn.

You mean the guy in charge was a 'free market' type guy and 'believed' the markets would self regulate?


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


...."I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.


Greenspan - I was wrong about the economy. Sort of | Business | The Guardian




Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

Yes, the great "free market" guy Alan Greenspan. Tell me, where did the great free market thinkers state that the economy should be centrally planned by a single organization forcefully and artificially keeping interest rates low and flooding the market with cheap credit? Greenspan was a Randian, right? So find for us where Ayn Rand ever advocated such policies, which it is a historical fact that Greenspan enacted as chief central-planner of the Fed, in her writings. Quote von Mises stating that artificially cheap credit is in line with a free market. I doubt even Milton Friedman, no enemy of the Fed in general, would have supported the reckless policies of Greenspan and Bernanke. So please, find for us where central economic planning, which is what Greenspan did at the Federal Reserve, has anything to do with free markets.

Yes, Greenspan was once a supporter of a free markets, but had long abandoned those views by the time he became the chief central economic planner in the world, and as a staunch supporter of economic interventionism had no problem joining the herds maligning "free markets" after the bubble popped because to do otherwise would be to admit that his current worldview, of central economic planning, is wrong.

Got it, you 'believe in' the mythical 'free market' that Ayn Rand 'believed in', guess that's why she wrote fiction

Weird the cosest the US has come to laizze affaire garbage was the 1929 GOP depression and Dubya's subprime crash

WORLD WIDE CREDIT BUBBLE AND BUST? Greenspan? lol

The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.


A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.” It is highly unlikely that a simultaneous boom and bust everywhere else in the world was caused by one set of factors (ultra-low rates, securitized AAA-rated subprime, derivatives) but had a different set of causes in the United States. Indeed, this might be the biggest obstacle to pushing the false narrative.


Examining the big lie: How the facts of the economic crisis stack up | The Big Picture


Conservative Ideas Can't Escape Blame for the Financial Crisis


The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.



Politics Most Blatant | Center for American Progress

 

[Shanty]

The Federal Reserve's recent and unprecedented actions in the realm of monetary policy have provoked a backlash among the American people. Trillions of dollars worth of loans and guarantees have been provided to Wall Street firms, while Main Street Americans suffocate under harsh taxation, the prospect of higher debt levels and increasing inflation. These events have awakened many Americans to problems with the Fed's loose monetary policy, the bubbles it has created in the past and the potential hyperinflation it might cause in the future.

One of the fallacies of modern economics is the idea that a central bank is required in order to keep inflation low and promote economic growth. In reality, it is the central bank's monetary policy that causes inflation and depresses economic growth. Inflation is an increase in the supply of money, which in our day and age is directly caused or initiated by central banks. All other things being equal, inflation results in a rise in prices. A so-called "mild" rate of inflation of 3% per year leads to a 56% rise in prices over a 15-year period. Even a "low" rate of inflation of 2% per year leads to a 35% rise over that same period. How is that conducive to long-term growth?

Fed Up - Forbes.com

What caused the inflation before the Fed, and when the dollar was backed by gold?

 

[Shanty]

I don't think anyone believes that is the purpose of FED.



Half right.

What caused inflation and depressed economic growth BEFORE the FED existed?

You see, the FED can be a problem, but the FED does not have to exist for that same problem to manifest.

All it takes are BANKS which lend out money too rapidly, or, if we decentralize and eliminate the FED and a the single currency system, all it takes is private banks which print up too much money.

What it really takes is not a FED but bad banking practices no matter WHAT charter those banks have.




Yes, inflation is caused by the money supply rising faster than the amount of good and services an economy is producing without doubt.

OR...

inflation is caused by the money supply not changing when the amount of goods and services are reduced for reasons having NOTHING TO DO with the banking system.

For example, the spiking in oil prices which is inflates the price of petroeum products (read pretty much everything) has nothing to do with monetary policy.

It's true that inflation could occur without the Federal Reserve, but that is only true under a fiat monetary system. If we had sound money the supply of money would only increase with an increase in the supply of the commodity backing the currency, which would probably be gold.

Yes , I quite agree with you on that point

Just as suicide will prevent a common cold, the gold standard will certainly prevent inflation.

suicide can prevent one from getting a cold again, but the gold standard/specie backed currency didn't stop inflation from happening.