patrick.net

I've been wondering exactly how that works. The Fed does create currency from nothing, and lends it to favored banks, or buys crap mortgage backed bonds with it, but most of the loans have to be repaid, so you could argue that the newly created currency is mostly temporary. The Fed does "destroy" the currency when it gets repaid. It doesn't really seem like much of a conspiracy there, except of course that the net amount outstanding has been increasing since 1913, destroying purchasing power, causing inflation. Even there, they argue that that's good overall for the economy, because it makes people invest rather than sit on money while it loses value.

But let's say the Fed tips off certain favored people about the direction of interest rates. Now that could be an impressive conspiracy. A small group could trade bonds under various names, always winning every bet. And do you really think the SEC is going to investigate the Fed?

I think I’d rather have X-Ray vision. Or be able to time travel.

To each his own...

I rather be able to control money. Eventually, they will slap an x-ray vision tax or a time travel tax on you.

Remember, superman is defined as someone who wears his underwear outside his pants.

Patrick, may I suggest this book?

http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212

Tatupu, great...what books do you recommend?

I'm no goldbug and think managing (ie inflating) the money supply shouldn't be that big a deal. The main problem came in the 80s when we went along with the idea that we could just borrow money to pay for military expenditures instead of raising taxes to pay for them.

The key to successful borrowing is to create or acquire capital with that borrowing sufficient to repay the loan. The payoff on our ten-trillion dollar military investment has been rather minimal since 1990.

Volatility is a symptom of something going wrong on a lower level. The money supply really took off starting in 1995:

http://research.stlouisfed.org/fred2/series/MZM

This is when China first starting coming online and the great wealth transfer from the US to China began. Back in the old days, Imperial China only settled accounts in silver, draining Europe of its silver and causing the Opium Wars. Now, they've taken good ol' USD, enough to buy 51% of every company on the S&P Energy, Materials, and Industrials, Health Care, and Financials indices.

I’ve been wondering exactly how that works. The Fed does create currency from nothing, and lends it to favored banks, or buys crap mortgage backed bonds with it, but most of the loans have to be repaid, so you could argue that the newly created currency is mostly temporary. The Fed does “destroy” the currency when it gets repaid. It doesn’t really seem like much of a conspiracy there, except of course that the net amount outstanding has been increasing since 1913, destroying purchasing power, causing inflation. Even there, they argue that that’s good overall for the economy, because it makes people invest rather than sit on money while it loses value.

That's right. Let's remember that there are only two choices: inflation or deflation. Very high inflation is bad, no doubt. But you need to have some inflation, say 2-3%/year. Otherwise the economy doesn't expand, jobs aren't created, etc. Also keep in mind that the net amount oustanding has to increase because our population is increasing.
I just don't understand some posters obsession with inflation and sound money. We haven't had an issue with high inflation in the US for at least 20 years, really not since the late seventies. And that was caused by oil--not loose monetary policy.
I agree our government spends too much, but let's fix that problem by electing better people to office. Not by going back to a gold standard that has been proven ineffective. And unworkable.

Peter P says

Patrick, may I suggest this book?

http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212

Thanks Peter. I actually have it on order from the library, but someone else is reading it so I have to wait.

Honest Abe says

while the real personal wealth of society was steadily being diminished through increased prices

There is never increased wages? Assets, short of bubbles like housing, steadily increase in value. You would correct in the fact that inflation steadily moves people up in the tax brackets, but the tax brackets have been steadily lowered also. What inflation hurts is anyone on a fixed income that is not indexed for inflation, or people whose investments are such they cannot keep up with the rate of inflation. However people paying back debt are helped by inflation. Wages increase and the debt is paid back in in steadily decreasing dollars. There are winners and losers in every situation.

Fighting inflation is a laudable worthwhile goal (which the your government is lying about every day, they want inflation, inflation effectively decreases the nation debt) , but short of out of control hyperinflation, moderate inflation is not armageddon. Not really desirable, but not disaster.

Honest Abe says

Tatupu, great…what books do you recommend?

Why don't you start with "The conscience of a liberal" by Paul Krugman.

I think I'm going to vomit. Another selection, by a different author...PLEASE, I'm begging you.

Conscience of a liberal? I rather be Going Rogue.

Now this is the real deal:

http://www.amazon.com/Conscience-Conservative-Barry-Goldwater/dp/0895265400

Barry Goldwater vs Paul Krugman. Hmm... One of them is my hero. Guess who?

I am sure liberals want to make the world better. Perhaps they should do more charity work. The economy is best managed by people who love, and understand, money.

The freer the market the freer the people.

That's what I figured. Conservatives don't want to learn anything new. They just want to listen (AM radio) and read stuff that confirms their worldview.... That's kind of how my 2 year old operates...

I listen to Rush on Internet Radio. Isn't that something new?

taputu70 at least your 2 year old can't vote for servants of the Corporatocracy or screw the masses unlike the conservative adults in this country.

Corporatocracy is infinitely better than the welfare state.

When everyone wants to start his own corporation, we have a culture of entrepreneurship. When everybody wants to collect welfare, we become a society of scum.

Really? Is that why we have Corporate Welfare? Is that why we taxpayers saved Goldman Sachs and AIG with our "gubmint" money? So what would you call your Corporate masters who regularly collect "gubmint" money in the form of Corporate Welfare while evading taxes? (Would that be scum, as you say?)

Please educate me on how Corporations have made this country a better place to live and how they do better than the "gubmit" in actually making sure that social justice and peace reign inside our borders. I'm all ears. Oh, and please don't send me to books and other articles. Please grant me the gift of your intelligence and explain it in detail. And don't give me smarmy "because I said so" arguments, back them up. I'm not some twenty-something software developer. I'm much older and wiser than that and I've worked the corporate life for ten years in my time. That was more than enough to learn what actually drives the Corporatocracy.

So please, now my ears are yours. Educate me.

I am against corporate welfare. It is a direct result of over-regulation. However, if you envy corporate welfare, no one stops you from starting your own company and collect the money. You may actually do pretty well.

Please educate me on how "social justice" is more important than prosperity. Europe is more keen on social democracy yet they have much fewer private jets than the US.

Again, European governments have bigger roles yet they have more violent protest. Americans are more peaceful. Think TEA parties.

If you think corporations are evil, why don't you start your own corporation?

I'm waiting... Are you still evading the question by asking more questions? Sad. Until you do me the courtesy of answering me and educating me, because I asked first, I'm not going to waste my time picking apart what you just wrote. Quid pro quo.

You will never accept anything I say, because you will only "read stuff that confirms" your worldview.

If you do not want to waste time picking apart what I wrote than stop reading. I am under no obligation to educate you, I write only for the entertainment of myself and those who agree with me.

Peter P, at least you admit that you can't back up anything you say and that this is merely "entertainment." I'll make sure I give your comments the attention they deserve from now on in light of your honesty. Thanks, it'll save me lot's of time.

Thanks. Merry Christmas.

Peter--

I might accept what you say, but you have to present your views with logic and data that backs up your ideas. Just saying the same thing over and over doesn't mean it's correct. You have to explain to me why and what your ideas are to fix it.

If you can't do that then you're just wasting all of our time....

Some data:

In 2008 there were 16,605 corporate jets in the world.

Of this number, 11,824 were based in the US, 2,507 were based in Europe, 853 were based in Asia and the Middle East and 150 were based in Oceana. The balance of 1,271 were from elsewhere.

http://blogs.telegraph.co.uk/finance/jameshall/100001847/the-us-tops-the-corporate-jet-league-but-for-how-long/

Jet ownership is a very good measure of business success.

You too! Merry Christmasâ„¢!*

*Brought to you by the Corporatocracy that has successfully transformed Christmas from a religious celebration into a meaningless display of rampant materialism and greed.

Yacht ownership, on the other hand, is more about opulence.

Most large yachts (longer than 300 feet) are NOT owned by Americans. They usually have Middle-Eastern or European owners.

from a religious celebration into a meaningless display of rampant materialism and greed

What if my religion involves materialism and greed? :-)

Peter P says

Jet ownership is a very good measure of business success

Was anyone arguing that Corporate America doesn't waste money on extravagances? Because I think America is definitely #1 in corporate malfeasance...

How does that help your point though?

Corporate jet is not an extravagance. I will get back to you on this. I am hungry. Need to get lunch.

Peter P says

from a religious celebration into a meaningless display of rampant materialism and greed

What if my religion involves materialism and greed?

Then you're in business... ;-)

elvis says

If the Constitution is the underlying document of conservatives, independents, libertarians, Republicans and other freedom loving, patriotic Americans, what is the underlying document of liberals, free-loaders, Democrats, socialists, and elitists? Anyone?

I'm so tired of this canard.

We liberals, patriots, Democrats, free-thinkers, leftists, independents, progressives, freedom loving Americans, and moral human beings operate from the same US Constitution that the conservatives, Corporate Overlords, fascists, fundamentalists, Republicans, and racists pretend to hold in such high regard whilst pissing all over it.

@Elvis

"your kind"?? nice try. Generalizations are a standard tool of AM radio. Glad you've been listening so well...

elvis says

No, your kind are the freedom haters and rights destroyers.

Which party passed the Patriot Act? The largest destroyer of rights in US history...

elvis says

No, your kind are the freedom haters and rights destroyers. Moral human beings don’t kill their own offspring. Capitalism has created the highest standard of living in the world. How many countries in the world have become prosperous through Socialism? (Hint: NONE). Its your kind, the liberal, democratic, socialistic politicians that completely reject the Constitution…through action, and continue the march toward socialism.
“The real destroyer of liberties of the people is he who spreads among them bounties, donations and benefits.” (Translation: he who spreads the wealth).
Ronald Reagan, Oct 27, 1964 (probably said before Owebama was born).

Nice try dude. Keep trying to paint all "liberals" as socialists. But alas, that label doesn't work at all. American Liberals are vehement capitalists. We just want a level playing field. American Conservative Orthodoxy (now that there's a "purity test") wants to give massive "gubmint" subsidies (read "corporate welfare"), tax cuts, and massive controls over labor to their Corporate Masters and the very rich at the expense of the middle classes and poor. Ronnie Raygun wouldn't even meet today's "purity test" for American Conservative Orthodoxy in the Republican party.

tatupu70 says

elvis says

No, your kind are the freedom haters and rights destroyers.

Which party passed the Patriot Act? The largest destroyer of rights in US history…

I can't wait to read this answer if he ever decides to answer it directly instead of using his usual insults, generalizations, and evasions.

Elvis--

Anyone who continues to use "you people" loses all credibility with me. If blaming everything on liberals or Democrats helps you sleep at night, then by all means, keep believing it. But if you would like to grow up and understand how the world really works, try broadening your horizons and opening your mind.

As you may have noticed from the health care debate, Democrats are quite a diverse group with many differing views. Painting them all with the same brush is just small minded.

elvis says

Would anyone dare to quote a liberal, socialist, free-loader, or “Progressive,” with a statement that SUPPORTS individual freedom or liberty for all? You know, something like this: “Who ever would overthrow the liberty of a nation must begin by subduing the freeness of speech” (Did I hear someone say “Fairness Doctrine?”) Benjamin Franklin, 1706 - 1790.

You must be a big fan of orwell. As the FCC opinion killing the "Fairness Doctrine" managed to say, offering opposing viewpoints is actually a restriction on free speech. Perfect orwellspeak. Obedience is freedom, freedom is obedience.

Reagan killed the fairness doctrine because it required users of public airwaves to air opinions on both sides if a broadcaster wanted to air opinions, forcing the right wing broadcasters to include other viewpoints. The key word there is IF. Broadcasters were FREE to not broadcast opinion at all. Broadcaster were FREE to broadcast all the opinion they wanted, as long as they allowed dissenting opinions to be aired. Simple as that. One might note the "Fairness Doctrine" only applied to public airwaves regulated by the FCC. That would be the public airwaves belonging to liberals as well as conservatives.

Some people seem to be very selective in how they apply the word FREE.

Oddly enough if you go to the ACLU website (the institution that is probably the most hated by conservatives) you will find lots of statements by the liberal, socialist, free-loader, “Progressive,” elements that SUPPORTS individual freedom or liberty for all. They just don't always support the selective parts of freedom that Elvis believes in.

Some people seem to be very selective in how they apply the word FREE.

tatupu70 said:

That’s what I figured. Conservatives don’t want to learn anything new. They just want to listen (AM radio) and read stuff that confirms their worldview…. That’s kind of how my 2 year old operates…

then:

As you may have noticed from the health care debate, Democrats are quite a diverse group with many differing views. Painting them all with the same brush is just small minded.

Somehow it is alright to paint conservatives all with the same brush. But doing so to democrats is just small mind.

tatupu70 says

That’s what I figured. Conservatives don’t want to learn anything new. They just want to listen (AM radio) and read stuff that confirms their worldview…. That’s kind of how my 2 year old operates…

Ever think maybe your two year old is on to something? Nah. Just go back to your koolade.

Nomograph, thanks for showing us what I was trying to say to "elvis" in plain English.