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Fed offers $100 billion more to banks
news.yahoo.com — As if the 430 Billion already offered to irresponsible lenders wasn't enough, the Fed Chief generously offers another 100Billion dollars of your money to bail out millionaire bankers.
caferrell- 993 diggs
- digg it
- caferrell, on 03/29/2008, -7/+83"The auctions are just one of a series of unorthodox steps the Fed has taken to battle the current crisis. The biggest of those moves was an announcement that it was allowing investment banks to borrow directly from the Fed. Previously, only commercial banks, which face tighter regulations, had that privilege."
It turns out that under the charter of the Federal Reserve Bank that it is absolutely illegal for the Fed to loan money to an investment bank.- grrrrrrrrrrrrrr, on 03/29/2008, -1/+16I believe it was Bill Clinton that demolished the Glass-Steagall Act that formerly separated the Investment Banks from the Commercial Banks, I think now, technically, anyways, there is no real distinction between the two...it certainly would be interesting to see Obama pose a pointed question to Hillary on this issue.
http://www.pbs.org/wgbh/pages/frontline/shows/wall ...- Bodieslikesheep, on 03/29/2008, -2/+10Good luck. Even if Obama or Hillary were to make a "comment", it would merely consist of them either
a) answering in ambigious form
b) referencing how "experienced" or the levels of trust in their administration. (And if you do some research, Democracy Now! has a great article on the people in line to take over cabinet level positions.)
As Immortal Technique says, "It's not the average white person I want to bring it to. In fact, I have more in common with those middle class white people than house negros and sellouts. It is the white man behind the scenes that I need to bring it to."- WhoismP, on 03/29/2008, -0/+3Exactly. I cannot tell you which one of the two is worse. The one that makes up her life story like a Van Damme movie, or the guy that dances around the question, even on his own website. I seriously hope this doesn't come down to the convention, that leaves very little time for the 'chosen one' to get the message out there. One of them has to break and start going full force, and not at ***** throwing.
- PaulOwen, on 03/29/2008, -0/+9QUIIICK PRINT MORE MONEEEEEYYYYY!
- Bodieslikesheep, on 03/29/2008, -2/+10Good luck. Even if Obama or Hillary were to make a "comment", it would merely consist of them either
- DiggzDE, on 03/29/2008, -2/+6"The More You Know"
- StaticThunder, on 03/29/2008, -1/+5Doot doo do doo!
- KMAR66, on 03/29/2008, -1/+4What about me I have student loans that are bleeding me dry
- Wacer, on 03/29/2008, -2/+5Student loans are whole different setup than this discussion. Get good grades, don't booze/drug and hope/pray for the best.
- StaticThunder, on 03/29/2008, -0/+7The more the money inflates, the easier it will be to pay them off.
- sporg, on 03/29/2008, -1/+6Words can not express the incredible anger I am experiencing while reading this article. If the background was a raging petrol fire this picture might come close...
http://www.myps3.com.au/Photo.aspx?id=2523- Olfster, on 03/29/2008, -0/+4You are not alone.
- ronjohn, on 03/31/2008, -0/+1Yes your are definately not alone!!!!
- bufmike, on 03/29/2008, -2/+3Actually they are allowed to. Please read Section 13-3 of the Federal Reserve Act. Don't you hate it when facts get in the way of a good rant??
http://www.federalreserve.gov/generalinfo/fract/se ... - Dodobutt222, on 03/29/2008, -0/+5All I'm wondering is: How the hell do you auction money?
- czargwar, on 03/29/2008, -1/+1Banks bid on them by declaring interest rates they will pay on the loans. It shouldn't go any higher than fed's discount rate
- cheeseysynapse, on 03/29/2008, -0/+3***** - there are no walls between commercial banking and investment banking - why can bank america, wachovia, and jp morgan chase access the fed window while they have both retail deposits and investment banking wings under the same umbrella - the fed is only now catching up to the repeal in glass-steagall
- grrrrrrrrrrrrrr, on 03/29/2008, -1/+16I believe it was Bill Clinton that demolished the Glass-Steagall Act that formerly separated the Investment Banks from the Commercial Banks, I think now, technically, anyways, there is no real distinction between the two...it certainly would be interesting to see Obama pose a pointed question to Hillary on this issue.
- USNavyBlue, on 03/29/2008, -17/+146"It turns out that under the charter of the Federal Reserve Bank that it is absolutely illegal for the Fed to loan money to an investment bank."
Oh - the irnoy of it all. The Fed is unconsitutional itself.
The U.S. Constitution set forth the powers of Congress. In Article 1, Section 8, Congress was given the sole power "To coin money, regulate the value thereof…” Likewise, the Coinage Act of 1792 was signed into law by President George Washington on April 2, 1792. It provided for the establishment of the first mint in Philadelphia.
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
- Thomas Jefferson (before the existence of the privately-owned Federal Reserve)
The banks are required to maintain a portion of their deposits as cash reserves in the form of U.S. note deposits in reserve banks. And the reason we see very few non-interest bearing U.S. notes in circulation is because they are "non-interest bearing" and kept in bank vaults out of circulation.
In December, 1913; with a barequorum present, Congress passed the 16th Amendment to the Constitution (Federal Income Tax) and also passed the unconstitutional "Federal" Reserve Act.
Read Article I, Section 8, Clause 5 and Article 1, Section 10, of the U.S. Constitution that Congress in Dec., 1913, abrogated their Constitutional oath by passing the "Federal" Reserve Act without a Constitutional amendment ratified by three-fourths of the states consenting.
The 16th Amendment was the vehicle to take money out of the working people's pockets to pay for the unearned interest that the Federal Reserve Act creates and this transfers wealth from the working taxpayer to the rich owners of the unconstitutional "Federal" Reserve who do nothing to earn the money because nothing is backing their privately owned Federal Reserve Notes.
This is how they have the unending supply of money to pay for the transfer of wealth, created by the middle income taxpayer, to the super rich.
It is the assertion that the Federal Reserve System is the main reason local governments are in a financial bind is true because the stock owners of the "Federal" Reserve System are raking in all the profits instead of the money going to the people.
If Congress were to repeal the Federal Reserve Act and eliminate this unconstitutional debt interest system, there would be no national debt and over 300 billion dollars that the taxpayers pay annually on just the interest on this debt, which is unearned interest, created by the liberal finance big spenders could be used to fund a public health program for all Americans, infrastructure for bridges and road repairs, school system, local government expenses and senior citizen needs.
Read Article I, Section 8, Clause 5 and Article 1, Section 10, of the U.S. Constitution that Congress in Dec., 1913, abrogated their Constitutional oath by passing the "Federal" Reserve Act without a Constitutional amendment ratified by three-fourths of the states consenting.
The Federal Reserve Board is staffed by appointments rather than by elections, but the U.S. Constitution empowers only Congress to control the value of the dollar.
This divorced monetary policy means the people lost their Constitutional right to control the money system through their elected representatives thereby giving an unelected monopoly of international bankers control of the money system instead of the citizens of the U.S. as defined by the U.S. Constitution.
When the population increases you get additional money into the system only through debt and these owners of the "Federal" Reserve get a royalty on every additional dollar added to the system through unearned interest.
Concluison: Prepare for the worst and expect the best. Keep your poder dry casue you might need it.- motivatedmama, on 03/29/2008, -6/+42Debt = Slavery. Intended effect. End result.
- qwertydvorak, on 03/29/2008, -2/+9just figuring that out ? a couple thousand years ago a book titled "The Bible" said that the borrower is slave to the lender.
- PeppermintPig, on 03/29/2008, -1/+4It bears repeating. :)
- slothlovechunk, on 03/29/2008, -6/+2A little dramatic, don't you think?
- caferrell, on 03/29/2008, -2/+6Shuffle along to your job at the mall little wage slave .
- qwertydvorak, on 03/29/2008, -2/+9just figuring that out ? a couple thousand years ago a book titled "The Bible" said that the borrower is slave to the lender.
- caketank, on 03/29/2008, -11/+17Article I, Section 8, Clause 18.
McCulloch v. Maryland.
The Federal Reserve Act is constitutional. If you don't like it, fine, but try not to stray into nutter territory.- PeppermintPig, on 03/29/2008, -5/+9
So why isn't the Federal Reserve fully part of the government without any ambiguity to the affair?
motivatedmama is correct. But there are SEVERAL reasons why the Fed and the FRN are not merely unconstitutional, but coercive and deceitful.
1. Because the Federal Reserve creates a debt based.. "note" (for lack of a more accurate term, considering a real note makes a PROMISE of payment, whereas the FRN does not! Here, the illegality comes from, ironically, bad use of legal language to describe the function of the money, which is fraud.
2. With no consistent value or auditing of the system and arbitrary print and delivery of the FRN to privileged or selective corporate/private entities, it is therefore hazardous to trust the Federal Reserve or use its product. Bernanke chooses to pussyfoot around the issue of inflation, and therefore he is deceitful. He can get away with his behavior, even in front of Congressmen with questions because his position of authority is relatively secure. This does not in itself make it unconstitutional, but it does when the government employs...
3. "Legal Tender" to describe the nature of the FRN, which mandates that everyone MUST accept FRN notes for all debts. While some may say that this is a reasonable argument for the purposes of paying taxes to the government, it is actually unconstitutional for reasons described in point 1, and belies the question as to why Congress has chosen not to directly provide value-backed currency so as to collect tax with some shred of integrity... And the consequence of authorizing a third party to impose debt on others is to impoverish and enslave them.
4. Because the Federal Reserve manipulates prices of everything in terms of dollars, and because this directly impacts taxation and the context of legislative resolution, the Federal Reserve has the ability to arbitrarily raise taxation without the tacit approval of elected officials, who are assumably the only persons authorized under the constitution to make such decisions, referendum determinations aside.
5. Counterfeiting. There are actually several reasons why the FRN is counterfeit. For one, the Federal Reserve Note is a counterfeit of the true and original Greenback note as was first implemented during Abraham Lincoln's presidency. The true greenback was value-backed while the FRN is not. The FRN is virtually identical in stylization, size, color, etc.
Secondly, FRN may be considered counterfeit because of, again, point 1 which argues the inappropriate use of the legal term note as the FRN describes no redeeming value.
6. If the Federal Reserve produced a value-backed currency, it would be more legitimate, and one of the only ethically challenging issues for the government would be the fact that it ascribes the FRN as "Legal Tender", but it would be of lesser concern if that were true. But neither is true of the FRN, and therefore point 3 is a SERIOUS ethical problem, and legal problem for the US Constitution.- caketank, on 03/29/2008, -3/+7Everything you just said amounts to "the Federal Reserve controls the value of money, and does it in a way that I really don't like because the money isn't backed by a tangible commodity." Yeah, it does. Congress can value money however the hell it wants to. That's an explicit Congressional power, and Congress has chosen to exercise it through the elastic clause by establishing the Federal Reserve.
Like I said, if you don't like it, that's fine. You can argue against the Federal Reserve on policy grounds all day long. You can even call it fraudulent, if that floats your boat. It's just not unconstitutional. If you want it to be unconstitutional, you're going to need to amend the Constitution.- caferrell, on 03/29/2008, -3/+3Actually you are dead wrong. Congress is enjoined to coin money out of gold or silver. Specifically.
- PeppermintPig, on 03/29/2008, -4/+2I disagree: I also said that the government demands people use USD to pay debt, and taxes.
Congress constitutionally cannot choose to have any oversight over a money system not coined in silver or gold, as caferrell points out. By creating the Federal Reserve Act, the argument may be made that they are in violation by conferring legitimacy. What is perhaps more troubling is that a value-backed currency became unbacked without explicitly informing the public to the change. Further troubling is the confiscation of gold in 1933, due to many withdrawing reserve gold in exchange for the fiat notes. This is a testament to the consequences of a bad monetary system, if not outright mistrust.
The Necessary and Proper Clause cannot grant Congress the power to violate the bill of rights. It is also indeed a stretch to suggest that Congress can violate in such explicit a manner the clearly described congressional prohibition on the creation of monetary units other than silver or gold. Relative to the topic at hand is the matter of, or rather the inability of the people to perform an address of grievance to the government in recent years, and particularly troubling considering the Federal Reserve is not apparently accountable to forthrightness and transparency as an extra-legal entity.
The best legal argument against the Federal Reserve would actually concern the matter of fraud and deceit, which is really a contempt of the Federal Government for ascribing 'Legal Tender' to an unstable and unaccountable currency. The Federal Reserve's power to adjust interest rates to banks, which I haven't really covered up to this point, is so obvious a form of racketeering that they should place pictures of the Fed seal in dictionaries next to the word. The net effect of government's action, with special regard to the Federal Reserve, is the creation of transient currency, tending toward impoverishment and slavery by its users.
We can discuss policy or principle all you like, and better we do considering it has a direct impact on how many would choose to interpret constitutional law. If you believe Congress has the authority, let alone moral justification to endorse theft and fraud by a third party, you'll have to amend the constitution.
- caketank, on 03/29/2008, -3/+7Everything you just said amounts to "the Federal Reserve controls the value of money, and does it in a way that I really don't like because the money isn't backed by a tangible commodity." Yeah, it does. Congress can value money however the hell it wants to. That's an explicit Congressional power, and Congress has chosen to exercise it through the elastic clause by establishing the Federal Reserve.
- logosx1, on 03/29/2008, -0/+1You made a valid response, except for accusing the poster of wandering into "nutter" territory. The question of whether the Bank Of The U.S. violated the Constitution was the subject of a great deal of intelligent debate among the founding generation, and the mere fact that John Marshall and his Federalist friends came down on the side of the Bank hardly resolves the issue. Andrew Jackson openly refused to treat McCulloch as correct or binding, and there's no reason the debate cannot continue today.
- PeppermintPig, on 03/29/2008, -5/+9
- earlycj5, on 03/29/2008, -1/+2Poder? casue?
- slothlovechunk, on 03/29/2008, -4/+688 diggs for a post that contradicts itself and has no mention of the first or second banks of the United States.
So congress has the power to coin money, but they don't have the power to do that through whatever means they see necessary? They only get to coin money the way you think it should happen?
I love how you pretend like the interest we pay to the federal reserve is somehow the fault of the federal reserve, and not to overzealous politicians who spend much more than they take in.
Also, yes, Thomas Jefferson was a visionary, but he was not an economic visionary. If you want to quote someone more of an authority on economics around the same time as Jefferson, quote Hamilton. You know, that dude on your 10 dollar bill, the one who helped make the United States a world leader in banking.- dementia, on 03/29/2008, -2/+4We're fighting a losing battle. The masses on digg have decided they don't like the federal reserve, and decided to buy into a lot of ***** reasons to explain their dislike for the federal reserve.
They don't understand the concept of "lender of last resort," and they don't understand how bad things would be right now if the Fed wasn't doing what it's doing.
It's too bad WSJ doesn't have comment threads. I'd love to watch these guys go troll over there and get their ***** knocked in.- caferrell, on 03/29/2008, -2/+4There has been a program of propaganda to make certain that the public accept the existence of the Fed since its illegal operations were initiated in 1913.
There have been studies and piles of books written about this, and certainly not all in favor of the Fed.
There is actually a very good argument that the cheap money the Fed creates to smooth out the down turns in the market is exactly the cause of the "business cycle". There is a very good argument among very competent economists that stable currency will eliminate the need for the "lender of last resort".
There is also evidence that the bank runs at the turn of the 19th century, that were the justification for the creation of the Fed, were the result of inflating the money supply by allowing banks to hold fractional reserves. If the Congress had simply required banks to hold proper reserves and allowed banks that were overextended to crash, the problem would have been solved once and for all.
Instead we have another huge bureaucracy that we pay for but cannot control. The reasoning is that it is good that we cannot control the Fed.
Think about that... It is good that we cannot control our government at the same time that we consider that we live in a democracy?
All of you people who consider yourselves wise because you have learned to repeat what the system tells you are doing the bidding of the millionaire bankers.
The system is set up to screw the little guy by inflating the currency.
And now Bush wants to give oversight of all financial activity to these bankers that are out of our control.
Democracy? Hardly.
- caferrell, on 03/29/2008, -2/+4There has been a program of propaganda to make certain that the public accept the existence of the Fed since its illegal operations were initiated in 1913.
- dementia, on 03/29/2008, -2/+4We're fighting a losing battle. The masses on digg have decided they don't like the federal reserve, and decided to buy into a lot of ***** reasons to explain their dislike for the federal reserve.
- DIGGINPHYSICS, on 03/29/2008, -0/+4For More About How Much Damage The Federal Reserve Is Doing To This Country Google "Fiat Empire" It Should Be A Free Video Download
- AbsurdParadox, on 03/29/2008, -0/+2You know, I don't care of the Fed is constitutional or not. I think the government has no business in currency control in the first place. The market should determine the medium of trade.
- PeppermintPig, on 03/29/2008, -1/+2Agreed. There are more relevant arguments which can be made than to cite the Constitution. Most people prefer to reference law and figures of authority than to discuss principled positions with an emphasis on not dropping context.
- motivatedmama, on 03/29/2008, -6/+42Debt = Slavery. Intended effect. End result.
- smotpoker, on 03/29/2008, -11/+63$100,000,000,000?!
THOSE BITCHES WON'T EVEN GIVE ME FOODSTAMPS, WTF?!@#!- firepowered, on 03/29/2008, -6/+12We're so rich! Need money? Dont worry, we're printing more!
- xadhominemx, on 03/29/2008, -10/+4No. Just because Coast to Coast claims that The Fed just prints money when it needs it doesn't mean it really does.
- 5urr3al5am, on 03/29/2008, -9/+3@smotpoker -- really -- are you a digg troll? that just tries to work up commenters and activity, with dumb and often offensive comments?
- smotpoker, on 03/29/2008, -2/+5What is dumb and offensive about being ***** the gov will help rich people right and left and they and everyone else attacks myself and others who are barely scraping for requesting the slightest aid and makes it near impossible to receive?
- smotpoker, on 03/29/2008, -2/+5What is dumb and offensive about being ***** the gov will help rich people right and left and they and everyone else attacks myself and others who are barely scraping for requesting the slightest aid and makes it near impossible to receive?
- hiphopjon, on 03/29/2008, -10/+15get a job, i'm 14 and i have one
- chijim70, on 03/29/2008, -2/+15then go get your own place and live on it... betting you can't/
- smotpoker, on 03/29/2008, -4/+9Having a job doesn't magically mean you can afford to live off of it. I would call you names and get offended but I will give you the benefit of the doubt and attribute your ignorance to your age
- milliamp, on 03/29/2008, -5/+3Your name is "smotpoker". I have nothing against people that smoke pot, but:
1. If you can afford pot, you don't need foodstamps.
2. Maybe if you quit being a pothead, you would find a better job.
3. While you are busy making excuses, people like hiphopjon are busy kicking ass.- smotpoker, on 03/29/2008, -2/+51. I haven't spent money on pot for nearly a year
2. Maybe if the government didn't take my license/car unnecessarily or society didn't immediately consider minor offenders unworthy of decent jobs I wouldn't be working my ass off trying to support my mother and sister
3. While people like hiphopjon are busy ridiculing people who are working hard to make ends meet with little/no resource to invest, it would be nice if the government didn't make us jump through hoops to get $120 in food stamps every month or halfway starve trying to make due with them - Tyrghast, on 03/29/2008, -1/+2Pot is cheaper than liquor and most foods.
- 5urr3al5am, on 03/29/2008, -2/+3@smotpoker -- sounds like you took risks (maybe in the past now) and are bitching about the consequences?
- smotpoker, on 03/29/2008, -2/+2@5urr3al
That is exactly what I am doing, though not as vehemently as you and the rest of your buddies seem to.
Support legislators and legislation that unjustly/excessively punish minor offenders without regard to circumstance or consequence, you end up having to support many of them, and those who depend on them, to some degree.
When you punish people by marking them for life and, directly or indirectly, remove most or all basic means of supporting themselves, what else do you expect?
I could go on about how my debt to society should have been paid by now, how half of the charges/punishments I have received were unjust in various ways, in what respect flaws in the legal system resulted in flawed convictions and several other factors, but undoubtedly such arguments would be met with the same disregard and condescension that I have experienced thus far.
Just keep in mind that, even if you do not believe mine is such a case, without regarding circumstance you cannot make an accurate assessment of character or expect the same solutions to resolve any/every problem. You may feel it is easier to change people than to change the system, but in the end the system will end up changing everyone and itself become unchangeable and you may not like the result. - 5urr3al5am, on 03/30/2008, -2/+2@smotpoker --
Sounds like you're up against quite a brick wall, why not just move to Canada or Mexico? or a place where their freedoms are inline with your expectations? - smotpoker, on 04/02/2008, -1/+1@5urr3al -
Last time I drove 3 days to Canada to visit my gf's family, they wouldn't let me in. You are apparently barred these days from Canada if you have a misdemeanor on your record and you have to wait 5 years to even apply for a waiver. Don't think I haven't been fantasizing about such a thing for ages but, SURPRISE SURPRISE, I can't and won't up and abandon my family like that when they need me even if I had the resources and/or opportunity. Unfortunately they are as deluded as you are insofar as their respect for the offensively stupid and tyrannical laws and policies that run this country
Oh, and since this is the last time I will bother replying to your petty ridicule, let me just provide you with a pre-emptive: http://digg.com/users/smotpoker/gallery/5903398
That will be all.
- smotpoker, on 03/29/2008, -2/+51. I haven't spent money on pot for nearly a year
- milliamp, on 03/29/2008, -5/+3Your name is "smotpoker". I have nothing against people that smoke pot, but:
- DeskFlyer, on 03/29/2008, -6/+5Stop having babies.
- smotpoker, on 03/29/2008, -5/+6Uhh... If i had babies I would be eligible for food stamps, dumbass.
- turkeyssr, on 03/29/2008, -3/+5If you have a PC and surf Digg or go somewhere and have TIME to surf Digg, you don't deserve welfare. Get a job.
- smotpoker, on 03/29/2008, -4/+3My PC is my job, (which took me a couple of years to save the money to upgrade step-by-step to it's current mediocre usability. I surf digg in between gigs and while waiting on input from employers or on breaks and when I am not working with friends who are kinda enough to help me get small jobs here and there. Eat a *****.
- 5urr3al5am, on 03/30/2008, -1/+3@smotpoker -- the real elephant in the room here is why can't you hold a job? I think I'd be out looking for a job, not using my computer all day? there are high school (and college) kids that work 6-7 hours a day after school at department stores. Chicken is swell.
- smotpoker, on 04/02/2008, -0/+1@5urr3al - Who said I couldn't hold a job? I haven't thus far in part due to legal and financial problems, in part due to ***** up ***** hiring policies that make it excessively hard to keep jobs long enough to get fulltime/benefit hrs and in part (most problematic these days) by not having transportation
- turkeyssr, on 03/29/2008, -3/+5If you have a PC and surf Digg or go somewhere and have TIME to surf Digg, you don't deserve welfare. Get a job.
- Daemion43, on 03/29/2008, -2/+5Yeah, you're supposed to have 14 1/2 babies from 18 different fathers, gain 80 pounds, then sit back and turn on Oprah while you wait for your checks to come.
- smotpoker, on 03/29/2008, -5/+6Uhh... If i had babies I would be eligible for food stamps, dumbass.
- xadhominemx, on 03/29/2008, -11/+4With a user name like pot smoker, I can't imagine that you work very hard to decrease your dependence on taxpayers' dollars.
- smotpoker, on 03/29/2008, -6/+5With a comment like that, I can't imagine you can imagine much regardless
- ronjohn, on 03/31/2008, -1/+2I LOVE YOUR ICON!! CAUSE IT'S A TRUE REPRESENTATION OF OUR COUNTRY RIGHT NOW!!!
- smotpoker, on 04/02/2008, -1/+2Awww shucks
- firepowered, on 03/29/2008, -6/+12We're so rich! Need money? Dont worry, we're printing more!
- chipsngravy, on 03/29/2008, -7/+64Typical corporate double standards. Whenever big business are attempting to drive down wages, outsource jobs, and generally throw workers rights down the toilet they get up on their almighty high horses and preach to the rest of us on the wonders of the free market, routinely regurgitating hackneyed capitalist pieties like "let the market decide".
But as soon as they get themselves in trouble they come grovelling to the government with their hands out, as if they have they God given right to get their grubby mitts on taxpayers money.
The sad thing is our elected representatives don't have the bollocks to stand up to these weasels, and instead dole out our hard earned cash by the barrowful in what amounts to a bonanza for the recipients of corporate welfare.- LordRedSnake, on 03/29/2008, -8/+9I'm against bailouts in principle, but all you people railing against this as being welfare for millionaire bankers are insane. If the financial system collapses, everyone is *****. Normal people like you and I won't be able to get loans to go to college, to buy cars, to buy homes, or to start businesses. People who have been saving up for retirement or who are retired already will have their savings wiped out and nothing to fall back on. The Fed has no choice but to step in and perform its primary duty, which is to be the lender of last resort.
The Fed likely won't even end up lending most of what they pledge, and they'll be repaid anyway. The importance of this action is to reassure the markets that the Fed won't allow a collapse. This game is all about confidence. If the banks think the Fed is going to perform its duty, they'll be more willing to lend to each other and we'll get out of this mess.- charlesray, on 03/29/2008, -7/+7I was going to come on here and post this, thanks for saying it for me. We may all hate it, but the fact remains that the Fed isn't just bailing out "millionaire bankers," they're bailing out all of us. If they don't help, then the financial system collapses and we're all *****. I mean, I'm sure the Paultards want that to happen so they can use their Liberty dollars and feel special, but for the rest of us living in reality, we'd like to have an economy.
- PeppermintPig, on 03/29/2008, -2/+9Bad business must be permitted to die off.
Invest less in Dollar based savings and invest more in yourself and assets of sustainable or growing value (not mere dollar based inflation!!!).- dopplerdog, on 03/29/2008, -2/+4It's all fine for armchair economists to call for "bad business" to die off, but the fact remains that if these banks sink, it won't just be the shareholders that suffer - it'll be people that deposited money in those banks, it'll be the people that work in the banks, it'll be their families, it'll be those businesses that provide services to those people, and *their* employees, ans so on, and so on. It has a cascading effect that is multiplied many times over. A bank rescue is a calculation that needs to balance the pros and cons of allowing inefficiencies in the market versus preventing a major collapse.
When you get an infection in your finger, do you automatically amputate your arm?- PeppermintPig, on 03/29/2008, -0/+3I'm not saying it's fair, but it's certainly a lesson. If people learn from this situation, they'll wake up and take account.
To your analogy, I'll say this: Eventually, if people let this government slide, the infection will get worse and encompass those who currently have the means to stave off their financial ruin. I'm not sure we agree on the cause of the infection. :) - caferrell, on 03/29/2008, -0/+3If bad business is not allowed to die off we teach the financial institutions that they can make incredibly risky loans and pay themselves exhorbitant, unnearned bonuses and it doesn't matter, because the Fed will bail them out.
Look at the way that Bear Stearns did business. It is crystal clear that they were perfectly irresponsible because we have always bailed out struggling banks. Look at the thrift bailout under Reagan.
The next Bear Staerns is already under way.
We need to let these pirates dangle at the end of their own yardarm before the banks become reponsible businessmen.
By the way, there is a lot of talk on this thread that Bear Stearns didn't make out too well with the 10Billion dollar bailout. That is partly true for the investors, but they have the tools to know what is happening with their investments and they need to be responsible. If the poor slob who loses his house and future should be responsible for the decisions that he makes, then I think that the well educated investor can have the same responsibility.
But my friends, the management of Bear Stearns gave themselves over a billion dollars in bonuses three months ago! They already got their share. The fact that they aren't going to jail for fraud and malfeasance of funds should be enough to say that they did very well in the bailout deal - rune420, on 04/06/2008, -0/+1That's not even the worst off it, from how I understand it. If Bear Stearns entire portfolio of derivatives (valued at 13$ trillion, about the same as the entire US GDP last year) was tossed into the open market at once (as would normally happen in a bankruptcy) not only would those derivatives lose nearly all their value, but so would all similar derivatives held by other banks globally. Over 230 trillion dollars would vanish in a few minutes and banks would go bankrupt all across the globe simultaneously.
http://www.moneyweek.com/file/18497/derivatives-th ...
- PeppermintPig, on 03/29/2008, -0/+3I'm not saying it's fair, but it's certainly a lesson. If people learn from this situation, they'll wake up and take account.
- LordRedSnake, on 03/30/2008, -0/+2While bad businesses should surely die off, that attitude doesn't apply to every situation equally. That attitude is what created the Great Depression. The Federal Reserve was established to be the lender of last resort, but when the stock market crashed and the ensuing fear led to runs on banks, the Fed refused to step in and perform its duty. This led to a complete loss of confidence in the banking system and a domino effect of bank failures.
The financial system today is infinitely more complex than in 1929 with everyone doing business with everyone else. Bear Stearns had positions of up to $13 trillion at the time of its near-collapse. That's the size of US GDP. If Bear failed you can bet your ass it would be just the first of many.
In a perfect world the government would not be interfering in the markets to rescue anyone, but as it's creating these problems in the beginning, it better step in to fix them when they get out of hand.
- dopplerdog, on 03/29/2008, -2/+4It's all fine for armchair economists to call for "bad business" to die off, but the fact remains that if these banks sink, it won't just be the shareholders that suffer - it'll be people that deposited money in those banks, it'll be the people that work in the banks, it'll be their families, it'll be those businesses that provide services to those people, and *their* employees, ans so on, and so on. It has a cascading effect that is multiplied many times over. A bank rescue is a calculation that needs to balance the pros and cons of allowing inefficiencies in the market versus preventing a major collapse.
- chijim70, on 03/29/2008, -1/+5If the present system dies off a viable realistic and LEGAL system will rise up immediately to take its place. I completely disagree with you. If this were the case drug dealers/traffickers would have been out of business years ago. The need is there so there will be a social adaption likely seemless to us common folk and if it did collapse i would expect the replacement would be an improvement given that it couldn't rely on corruption in order to exist.
Say you have a big big drug dealer cornering the market on pot in a large city. He keeps inflating the price because he has absolute control. You think all the smaller time dealers willing to sell at reasonable prices wouldn't fill the gap the second the thug wasn't in power?
Be realistic and stop drinking the cool aide.- huckabee, on 03/29/2008, -1/+1You are so right and the analogy to drugs is very appropriate.
- CanIGetAWitness, on 03/29/2008, -0/+4Then when will the insanity stop? It won't. The "bankers" know "***** rolls down hill" and they count on it for exactly the attitude you are displaying.
- LordRedSnake, on 03/29/2008, -8/+9I'm against bailouts in principle, but all you people railing against this as being welfare for millionaire bankers are insane. If the financial system collapses, everyone is *****. Normal people like you and I won't be able to get loans to go to college, to buy cars, to buy homes, or to start businesses. People who have been saving up for retirement or who are retired already will have their savings wiped out and nothing to fall back on. The Fed has no choice but to step in and perform its primary duty, which is to be the lender of last resort.
- americangoy, on 03/29/2008, -7/+45Like it was said before, the FED can ONLY help out banks. REAL banks.
Not financial institutions, like Bear Stearns and their ilk, who make money lying and swindling by dealing in hedge funds and insane loans of the subprime and adjusted rate mortgage variety.
What happened was against the law.
Don't hold your breath waiting for any prosecution...- caferrell, on 03/29/2008, -3/+23Don´t hold your breath for anyone to bail out the dumb pukes who got tempted into buying homes thatwre way too expensive for their incomes. "Those people should have known better and now they will just have to take the consequences of their bad decisions"
Uh....if the poor slob from Terre Haute Indiana should have known better, then uh.... shouldn´t the financial geniuses at Countrywide Finance and Bear Stearns, who gave themselves over 2 billion dollars in bonuses last year, uh.... shouldn´t they have known better too?
How come they shouldn´t be responsible for their bad decisions?
How come JPMorgan offered 1 billion for Bear Stearns and it was going to be accepted, otherwise the firm faced bankruptcy, but then three or four days later they change their offer to ten billion! And guess where the other 9 billion came from?
Hahahaha from your pocket sucker!!!- ltchimpo, on 03/29/2008, -9/+1my pocket? your pocket too deutschbag
- Aokitsune, on 03/29/2008, -0/+5What do you have against Germany?
- caferrell, on 03/29/2008, -1/+2@Ithchimpo, Obviously Mein amigo. And I am happy about it. I hadn't decided if I was going to donate to an orphanage in Africa or a homeless shelter in Milwaukee, now I don't have to do either because I know that the government is stealing my money to give it to the needy in Wall Street financial institutions, so my giving to the needy is now taken care of. Thanks to Ben Bernanke and Dubya
- ltchimpo, on 03/29/2008, -9/+1my pocket? your pocket too deutschbag
- ltchimpo, on 03/29/2008, -3/+8oh wait, nm, re-read. looks like im the deutschbag
- mrloco, on 03/29/2008, -0/+1what? a bag of german??
- bc289, on 03/29/2008, -3/+3You act as if Bear Stearns made out of this like a robber. They took down gigantic losses, and to be quite honest that $2/share price was ridiculously cheap, way too cheap. The building they owned in New York was worth more than that alone.
- PeppermintPig, on 03/29/2008, -1/+2Losing money isn't criminal, but you have some real politically connected criminals who suck at creating wealth and tend to bring everybody else around them down.
- chijim70, on 03/29/2008, -2/+4somehow I don't feel bad for a banker who has a few million+ dollar homes etc. when his business goes under and yet he is still rich. Sorry but I'm going to sleep well tonight if I don't bail that rich guy out with my tax dollars.
People of that ilk don't supply trickle down benefit. They supply trickle down slavery.- bc289, on 03/29/2008, -1/+2how is it that they supply trickle down slavery? Look at the history of Japan in the late 1980s, and what happened when the Bank of Japan allowed Sanyo Securities to fail. After they failed, many others failed as well, and their money market died.
- caferrell, on 03/29/2008, -1/+2And they have come back with a sound system that is more fair and won't collapse like that again. the system has to be allowed to operate.
What we are doing now is to teach the financial institutions that they can lie and cheat and write crappy loans, sell them off as though they were worth something and they will be bailed out.
We are teaching Wall Street the same thing that they learned at the turn of the 19th century, that it doesn't matter what they do, we will bail them out.
Therefore no matter what we do now, you can count on more irresponsible financial activity and the recurring need to bail out banks and other loan sharks. - bc289, on 03/30/2008, -0/+2I don't think that's what we're teaching them. They're not little kids, they learn from their mistakes. And the reason they'll learn is because the banks that have avoided subprime losses the most are being rewarded the most in smaller losses. Many banks are paying the price in subprime writeoffs and dropping share prices. Why would they want this to happen again? This bailout isn't just free money to the banks.
- caferrell, on 03/29/2008, -1/+2And they have come back with a sound system that is more fair and won't collapse like that again. the system has to be allowed to operate.
- bc289, on 03/29/2008, -1/+2how is it that they supply trickle down slavery? Look at the history of Japan in the late 1980s, and what happened when the Bank of Japan allowed Sanyo Securities to fail. After they failed, many others failed as well, and their money market died.
- caferrell, on 03/29/2008, -3/+23Don´t hold your breath for anyone to bail out the dumb pukes who got tempted into buying homes thatwre way too expensive for their incomes. "Those people should have known better and now they will just have to take the consequences of their bad decisions"
- Look4Truth, on 03/29/2008, -3/+29The spigot is on...from our pockets to theirs.
- LordRedSnake, on 03/29/2008, -4/+5And right back to yours. Learn how the financial system works. Bankers aren't swimming around in vaults of gold coins like Scrooge McDuck, they're matching lenders and borrowers, allowing individuals to get loans to improve their lives and allowing businesses to get off the ground. This action is so YOU can get a loan in the future, not to line the pockets of bankers.
- PeppermintPig, on 03/29/2008, -1/+4But Look4Truth isn't saying that at all. You're perceiving his meaning too literally. There are several meanings to the point, though.
Sure, the money comes back in greater supply, and worth less, but it's misleading to look for value in the paper itself.
After a surge of printing or lending, those who receive and transfer the funds (or credit for funds) first get the greatest value out of the money, and as time goes on all money in circulation loses value. - chijim70, on 03/29/2008, -2/+1Trickle down economics is a lie!
If I make a company and it makes millions and i pocket and invest a portion of those millions and the company falls on hard times and I either get bailed out or declare bankruptcy the investors and workers pay the price NOT the guy who made and profited from the company. Even on a short run a guy or group of people making such a company make out like bandits and when the company goes under still retain their profit and million dollar homes, yachts, etc. do you seriously think anyone with the original capitol to get into such a thing would do so if it meant they could PERSONALLY lose everything or anything for that matter? NO they wouldn't. You need to learn how things work if you think things are so tightly connected from the top to the bottom. My roommate a few years back is now head of a stock exchange and trust me... i get it.- bc289, on 03/29/2008, -1/+2How do you get it? Your roommate might head a stock exchange, but what does that say about you? The reason the Fed is "bailing out" those banks is because they need to prevent a major financial crisis. This happens over and over in history, and we see economic collapses because of it. The bankers who took on too much risk by exposing themselves to subprime mortgage took on huge losses. They got what they deserved. The bail out isn't like they're just giving them money.
- Wacer, on 03/29/2008, -1/+3"And right back to yours"
That part of your comment means that regular people should not take responsibility for their finances. You are the typical person that makes the problem worse. I despise comments like this worse than scums. You would rather say "Nothing here folks, move along" than have a moral or Godly quality and warn people to stay away from dangerous traps the rich set for the gullible. Quit posting such messages and taking advantage of them because all you are doing is hurting them. By your statement, you are either dumb or trying to misinform the people.
To set you straight, the banks don't needs vaults of Gold as they print money as needed to a point. Money is not based on gold, it's based on faith. Almost none of this money will reach the populace. It only a front to keep the system up.- bc289, on 03/29/2008, -4/+1Well, where's the value in gold? How is gold any different from paper money? In both you are hoping that others will continue to value it. It's not like gold has many useful properties either. It is just another indirect fiat.
- LordRedSnake, on 03/30/2008, -0/+1You've read me completely wrong. I'm railing against the idea that this is a bailout for bankers. It's a bailout for EVERYONE. So people have to quit the class warfare mentality. Yes people should be responsible for their irresponsible behavior. When the government intervenes to bail out anyone it creates moral hazard, artificially increasing everyone's appetite for risk which ensures that problems will crop up again in the future.
Next time read the comments in context before you decide to throw out baseless judgments. But clearly by your last statement, you show a misguided understanding of the economy clouded by conspiracy theories. Take Econ 101 before you offer any more opinions on the flow of money.
- Look4Truth, on 03/29/2008, -1/+1"And right back to yours."
At a continuing worthless amount AFTER they tax us to high heaven. Here is what the value of our currency is doing because the Fed continues to print mindlessly:
http://quotes.ino.com/chart/?s=NYBOT_DX&v=dmax
That's a good thing?
"Bankers aren't swimming around in vaults of gold coins like Scrooge McDuck, they're matching lenders and borrowers, allowing individuals to get loans to improve their lives and allowing businesses to get off the ground."
The Fed is ILLEGAL under the constitution. The government should be printing the money NOT private greedy bankers making tons of interest. I highly recommend the following documentary on how it all works and why it's not working and will eventually crash:
Money as Debt
http://video.google.com/videoplay?docid=-905047436 ...
"This action is so YOU can get a loan in the future, not to line the pockets of bankers."
That's just a ludicrous statement. Who do you think makes all the cash on the interest? They are destroying our currency so I hardly find them as some kind of friend. They ARE the problem, their machine is breaking down because it was designed that way.- bc289, on 03/29/2008, -1/+1I'm sorry, but you're incredibly ignorant if you think that the value of gold is any more stable than the value of paper dollars. In fact, an argument can be made that under the gold standard, the value of money was much more unpredictable. Under paper money, at least you can expect inflation and have it built into contracts and investments.
Source:
Richard N. Cooper, "The Gold Standard: Historical Facts and Future Prospects," Brookings Papers on Economic Activity 1: 1982, pp. 1-45 - Look4Truth, on 03/29/2008, -0/+1The dollar:
http://quotes.ino.com/chart/?s=NYBOT_DX&v=dmax
Gold:
http://monex.com/images/charts/GBX_LINE_1825DAY.PN ...
If you feel the dollar is where it's at then by all means, stick all your assets there. ALL fiat currencies fail and ours is no exception. The dollar is worth FOUR cents of what it used to be worth. If you find that acceptable, then do what you got to do. But don't say nobody warned you when our economy goes in the crapper.- bc289, on 03/29/2008, -1/+1You call that stability? Go check out my source. Most economists will tell you that gold is no stable currency either.
The dollar is worth four cents of what it used to be worth, but it's ridiculous to compare its value now to back then. The dollar has decreased in value but our real holdings have increased. Real GDP takes into account inflation, and our real gdp has grown. Truth of the matter is, inflation is not as bad as deflation.That's what led to the great depression, a deflationary spiral.
In addition, gold is still a fiat currency. It's just indirect.
- bc289, on 03/29/2008, -1/+1You call that stability? Go check out my source. Most economists will tell you that gold is no stable currency either.
- bc289, on 03/29/2008, -1/+1I'm sorry, but you're incredibly ignorant if you think that the value of gold is any more stable than the value of paper dollars. In fact, an argument can be made that under the gold standard, the value of money was much more unpredictable. Under paper money, at least you can expect inflation and have it built into contracts and investments.
- PeppermintPig, on 03/29/2008, -1/+4But Look4Truth isn't saying that at all. You're perceiving his meaning too literally. There are several meanings to the point, though.
- LordRedSnake, on 03/29/2008, -4/+5And right back to yours. Learn how the financial system works. Bankers aren't swimming around in vaults of gold coins like Scrooge McDuck, they're matching lenders and borrowers, allowing individuals to get loans to improve their lives and allowing businesses to get off the ground. This action is so YOU can get a loan in the future, not to line the pockets of bankers.
- cobbwobbles, on 03/29/2008, -3/+27It's funny how McCain is saying 'don't bail out irresponsible home owners!' but it's ok to bail out the banks that can't get their money back after making loans to poor people? Why not let them sort it out themselves, and get the money from the home owners then? Why hold the hands of the people who knowingly gave out *****, over-complicated loans to people who, let's be honest, they knew might get into exactly this type of situation? They just didn't think about the consequences, didn't think it would come back to them when the whole thing collapsed, the lenders just didn't anticipate how widespread these practices were becoming.
- caferrell, on 03/29/2008, -1/+14@cobbwobbles, I must humbly disagree, the lenders did think about what they were doing and they knew how widespread the practice was. They were sure that when the feces hit the fan that the Treasury Department and the Fed would be standing by, ready with billions of dollars of free money.
They were right.- Aensland, on 03/29/2008, -0/+2Unfortunately, that money isn't exactly 'free'.
- caferrell, on 03/29/2008, -0/+1It was for them, its you and I that will pay for it.
- Aensland, on 03/29/2008, -0/+2Unfortunately, that money isn't exactly 'free'.
- bc289, on 03/29/2008, -1/+3The lenders did not think about what they were doing. What many people are missing is that these people who took on subprime loans are taking HUGE losses. The liquidity the fed provides is not so much a bailout. Many banks have taken huge hits due to their subprime writeoffs, and their stocks have plummeted. Bear Stearns is the main example, but there are others such as Lehman, UBS, and Countrywide (which actually may be up there with Bear) who have taken huge losses. The banks that were smart and did not take on many of the loans did very well, such as Goldman Sachs, Credit Suisse, and JP Morgan. Even their stocks have struggled, however.
- caferrell, on 03/29/2008, -1/+14@cobbwobbles, I must humbly disagree, the lenders did think about what they were doing and they knew how widespread the practice was. They were sure that when the feces hit the fan that the Treasury Department and the Fed would be standing by, ready with billions of dollars of free money.
- Bodieslikesheep, on 03/29/2008, -6/+19Facism: Government (although the Fed being as Federal as FedEx) and industry colluding.
And yes, banking is an industry.
There has been only 1 presidential candidate who offers solutions to stop the same treatment and abuse of the tax payer - even if our taxes pay merely interest on the Fed loaning us our currency. - ltchimpo, on 03/29/2008, -1/+9If only the commodity were tea instead of real estate. Hmmm, makes you think the equivalent of dumping tea into our harbors would be destroying the building of financial institutions. I mean really, what ever happened to the executive jumping out of the fortieth floor window?
- MrLevite, on 03/29/2008, -1/+3They just do it with a big fed parachute now
- coolian, on 03/29/2008, -3/+46Ok, help me understand this *****.
Are these ***** just creating the $100 billion from nowhere and lending it out, and as a result, making the dollar even more worthless in the process?- kelmaster1, on 03/29/2008, -2/+34yes, that is exactly what they are doing. It's called inflation, the hidden tax.
- radu79, on 03/29/2008, -1/+10Kind of strange when you think about it:
If I print my own money, I go to jail.
If they print their money, it's called saving the economy.
- radu79, on 03/29/2008, -1/+10Kind of strange when you think about it:
- xadhominemx, on 03/29/2008, -13/+6No, they're not just creating $100 billion dollars from nowhere, and anyone who tells you so is intentionally trying to mislead you, stupid, woefully ignorant, or some combination of the three. Money like this comes from internal coffers or is backed by bonds or other forms of credit. To say that The Fed is "creating $100 billion from nowhere" is like saying a bank just creates a few hundred thousand dollars whenever it makes a home loan.
Besides, inflation is only at like 4% right now, considerably lower than what you'll get if you just let your savings sit in the bank. Turn off Alex Jones and turn on your brains.- Hangly, on 03/29/2008, -1/+11"To say that The Fed is "creating $100 billion from nowhere" is like saying a bank just creates a few hundred thousand dollars whenever it makes a home loan."
Right on both counts.- xadhominemx, on 03/29/2008, -15/+1*facepalm*
You have no idea how our economy works, do you?- Hangly, on 03/29/2008, -1/+7You're right. The facepalm convinced me.
- deklax, on 03/29/2008, -0/+10The banking industry is quite skilled at privatizing profits and socializing losses.
As far as the federal reserve is concerned, in the case of the investment banks that have been taking these massive loans by the Fed, they are putting up sub prime mortages as collateral which have been deemed worthless by the market because of predatory and unfair lending practices. So no one is willing to buy them for any price, but they are good enough for the government? These massive infusions of cash DO increase already rising inflation. At 7% inflation a year your money will be worth HALF what it is today in 10 years.
As far as the "economy works", banks do loan out as much as 20-30 times the amount of assets they have at hand. Bear Sterns had less than 800M in assets and over 30B in liabilities! In effect, they ARE creating money from nothing by "leveraging their assets" against future value that may or may not ever materialize. Due to corrupt federal regulation, they are able to say "I have 10 dollars in my pocket so I am going to loan out 300, charging 10-30% interest then sell that debt to a third party who will assume liability based on statistical probabilities with the collection process fully back by the government - assuming prices continue to rise; and if they don't, we'll just unload it onto the public sector".- robthom, on 03/29/2008, -0/+4I only understood about half of that, but the half I did understand scared the ***** out of me.
- xadhominemx, on 03/29/2008, -15/+1*facepalm*
- PeppermintPig, on 03/29/2008, -0/+4Okay, I admit, sometimes they do need substrate, ink, and running presses... but that's not always the case. They can just create credit out of thin air.
Anybody telling you a currency without value-backing will be regulated responsibly by people with no accountability to you is a liar, and a dangerous one at that.
- Hangly, on 03/29/2008, -1/+11"To say that The Fed is "creating $100 billion from nowhere" is like saying a bank just creates a few hundred thousand dollars whenever it makes a home loan."
- thefuzz187, on 03/29/2008, -0/+10"Creating Money
To create money, the New York Fed buys government securities from banks and brokerage houses. The money that pays for the securities hasn't existed before, but it has value, or worth, because the securities the Fed has bought with it are valuable.
More new money is created when the banks and brokerages lend the money they receive from selling the securities to clients who spend it on goods and services. These simplified steps illustrate how the process works.
1. The Fed writes a check for $100 million to buy the securities from a brokerage house. The brokerage house deposits the check in its own bank (A), increasing the bank's cash.
2. Bank A can lend its customers $90 million of that deposit after setting aside 10%. The Fed requires all banks to hold 10% of their deposits(in this example, $10 million) in reserve. A couple borrows $100,000 from bank A to buy a new house. the sellers deposit the money in their bank (B).
3. New Bank B has $90,000 (the deposit mine the required reserve) to lend that it didn't have before. A woman borrows $10,000 from bank B to buy a car, and the dealer deposits her check in Bank C.
4. Bank C can now loan $9,000.
This One series of transactions has created $190,099,000 in just four steps. Through a repetition of the loan process involving a wide range of banks and their customers, the $100 million that the Fed initially added to the money supply could theoretically become almost $900 million in new money."
~ The Wall Street Journal. Guide to understanding money & investing
Copyright 1999 by Lightbulb press, inc and Dow Jones & Co., inc.
page. 17- antimac, on 03/29/2008, -0/+1do you have a direct link?
- overshoot, on 03/29/2008, -0/+1http://search.barnesandnoble.com/booksearch/isbnin ...
Click on "Read an Excerpt" below the image of the book cover. Search for "creating money" on the page.
- overshoot, on 03/29/2008, -0/+1http://search.barnesandnoble.com/booksearch/isbnin ...
- antimac, on 03/29/2008, -0/+1do you have a direct link?
- kirrim, on 03/29/2008, -0/+2Dilute the value of the dollar... hmm... could this be the long-awaited plan that will enable the government to pay back its Social Security obligations that are coming due soon?
- mr5150, on 03/29/2008, -1/+1If you and I were to do it, it's called counterfeiting.....but when the FED does it the retards applaud the theft upon the nation.
- kelmaster1, on 03/29/2008, -2/+34yes, that is exactly what they are doing. It's called inflation, the hidden tax.
- aimhelix, on 03/29/2008, -1/+26$300 Stimulus Payment - lol.
- woofers07, on 03/29/2008, -0/+5yeah no *****, half of one month's rent PAID. man I'll probably have to retire after that.
- kelmaster1, on 03/29/2008, -2/+7typical, this is all part of the boom bust cycle. The name of the game is bailout.
- PeppermintPig, on 03/29/2008, -0/+3Boom and bust is something that the government and the Fed profit from AND create themselves. By creating crises, they give an air of legitimacy to their 'services', such as bailout.
Economic fluctuation in an economy such as ours has more to do with what the government is doing more and more. With fiat notes, it's easier to wage wars and have less apparent effects in the economy, at least early on. Later on, inflation..
- PeppermintPig, on 03/29/2008, -0/+3Boom and bust is something that the government and the Fed profit from AND create themselves. By creating crises, they give an air of legitimacy to their 'services', such as bailout.
- LordSkywalker, on 03/29/2008, -3/+28***** it. Why not just make it a trillion? If they're going to just pull this out of their asses, why not make it a more exciting number?
- JCPahl, on 03/29/2008, -2/+5Don't give them ideas. God.
- betterth, on 03/29/2008, -2/+8It's totaled about 450$ billion now. They're getting there! Just give them time =)
- andy3109, on 03/29/2008, -0/+2Thats the cost of the IRAQ war right now.
- sentime, on 03/29/2008, -1/+7lol they probably will ... woo 1 trillion $ bills .. look at our growing GDP
- merher, on 03/29/2008, -4/+16Just another example that fiat money always grows on trees and in the end has no real value. the only 'thing' backing the currency is an ever increasing amount of debt.
I know this and I'm only 18!- temjrpgh, on 03/29/2008, -1/+6Good. Get it out to your cohort.
- Hangly, on 03/29/2008, -2/+5Then run for political office.
- radu79, on 03/29/2008, -0/+3Fiat money is not THAT bad, if done responsibly.
No matter how much I agree with Ron Paul (I even donated 300 bucks to his campaign), I am not sure if the gold based dolalr is the best, because there is only so much gold, and the industry keeps groing, so you will have a deflation coming, which is also not great for the economy.- PeppermintPig, on 03/29/2008, -1/+2So, if you can't afford the gold, then gold is obviously worth more than your personal holdings. :P
The 'gold is expensive' argument conflicts with the 'not enough gold to supply economy'. If there's not enough supply, demand goes up, value goes up. If demand out-paces supply, value should be able to match whatever the economy is worth, but there may be so little gold available as to make it available in coin form... therefore you should always consider diversifying... platinum, gold, silver, copper, etc.
Anyhow, gold and silver are great for currency, but it's better to let private organizations with real auditing provide solutions. We've seen how the government abuses monetary systems.- bc289, on 03/29/2008, -1/+3He wasn't arguing that people can't afford gold. The main argument he made was that gold causes deflation. The rising in value of your currency is NOT good. It was one of the major factors in causing the Great Depression, actually (look up the Deflationary Spiral).
- PeppermintPig, on 03/29/2008, -0/+1If you have a lot of money, and the value of the money rises, that's great... but that doesn't happen with fiat. It never produces a positive effect for the economy because all the time they are printing money, releasing it, and granting credit to manipulate the success of businesses.
We should be judging what our money can buy us, not necessarily the money itself... if the money is backed by gold, then by proxy we are as close to buying gold itself, assuming it's a CERTIFICATE and not a NOTE. A certificate guarantees exchange for the backing substance, whereas a note only promises exchange and does not certify backing.
- PeppermintPig, on 03/29/2008, -0/+1If you have a lot of money, and the value of the money rises, that's great... but that doesn't happen with fiat. It never produces a positive effect for the economy because all the time they are printing money, releasing it, and granting credit to manipulate the success of businesses.
- bc289, on 03/29/2008, -1/+3He wasn't arguing that people can't afford gold. The main argument he made was that gold causes deflation. The rising in value of your currency is NOT good. It was one of the major factors in causing the Great Depression, actually (look up the Deflationary Spiral).
- Daemion43, on 03/29/2008, -1/+5Ron Paul wants a competing Honest Money system. http://action.downsizedc.org/wyc.php?cid=85
This is not the Bretton Woods gold standard
This is not a system only based on gold
This is the only Constitutionally allowed monetary system
bills-of-credit are outlawed in the Constitution, and historically are doomed to fail.- bc289, on 03/29/2008, -3/+3This is a horrible idea. How would having two competing currencies in an economy ever increase efficiencies? You need one currency in an economy. In addition, by having a competing currency that's backed by gold, we take powers away from the fed to stabilize the business cycle (bad), and put that power into RUSSIA'S HANDS, which happens to own some of the largest reserves of gold under land.
- PeppermintPig, on 03/29/2008, -2/+2Competing currencies keep each other honest and competitive, ensuring value for its users. It's such a basic law of economics that you ought to understand it by now. If you don't believe money systems should be able to increase in value, then surely you place greater value in debt than in productivity.
Actually, Daemion43, that is not the only constitutionally allowed monetary system. Congress can only create gold and silver currency, but individuals can create any currency they want.
Otherwise, you're correct about Ron Paul. He's not explicitly advocating a gold standard. It's just easier for detractors to repeat short sound-bites like that which destroy the context which is NECESSARY for understanding what he advocates. - bc289, on 03/30/2008, -2/+2It's not that I don't think money systems should be ABLE to increase in value, it's that deflation hurts economies over and over. It's called a deflationary spiral, and it gives consumers the incentive to save money rather than spend it. In addition, inflation is built into many asset prices already, so this hidden cost that I always hear Ron Paul supports spouting is trivial at best, since it's already built into almost all assets and contracts. The interest rate you earn from banks? It includes both the real interest rate + the inflation rate. In other words, it already INCLUDES the cost of inflation in its return. If you don't believe me, look at TIPS, treasury inflation protected securities, which give you a real rate of return and rise at the rate of inflation. It is always much lower than regular treasury bonds. Expected inflation is really trivial at best, especially when its rate is as low as ours has been for the last two decades.
- PeppermintPig, on 03/30/2008, -0/+2But who are you to say that other people should be spending money? They'll spend money as a necessary consequence of surviving, making their lives enjoyable, and investing/saving for the future (which is an important source of wealth growth). The problem currently is that the Fed and Government are judging the performance of the economy for their own interests, their banking and state interests.
Of course, identical products don't have the same price in every location/situation. Business marks up the assets it wishes to provide to others in order to profit as well as compete/survive in the marketplace. But there is an additional layer of inflation, which I would call artificial inflation caused by taxation of products and regulation of industry, which is caused by government. When businesses are deciding to establish factories and research centers outside the US, it's because the US is overbearing.
When a company has to fire you because they can't afford to pay your inflated wages, we'll see whether that's trivial or not. - bc289, on 03/31/2008, -1/+1You missed my point. Consumption is what drives this economy. Spending is what you NEED. Consumption makes up something like 60% of economic growth. It's a gigantic variable in macroeconomics.
- PeppermintPig, on 04/01/2008, -0/+2I understand your point clearly. Just because the average person doesn't really care about the big picture, that doesn't mean the big picture isn't relevant, but neither is it accurate to say the big picture effectively reflects individual economic circumstances considering the metrics are made by and used for the interests of Government and high volume businesses. It tends to be government which suggests that people should be spending more when the economy is going sour.
While spending is necessary for an economy to work, it's not an informative statement.
Many people are consumers, and there are some very thriftless consumers who have plenty of personal debt from buying UNNECESSARY lifestyle products (That doesn't mean they shouldn't be free to purchase such things, but they do so at their own risk... and they seem to feel they risk less in this welfare economy). I would argue, however, that the government and banking systems encourage poor financial responsibility and set a bad example of it themselves.
At first Bush says everything is fine with the economy, and then he's making a token gesture by sending out paltry stimulus checks with bureaucratic expenses in the millions attached to this activity. - bc289, on 04/02/2008, -1/+1I still disagree. The whole reason the Great Depression was made worse off was because people hoarded their money. You can see this on an individual level or on a macro level. People save their money when incentives are aligned towards that way. Deflation happens to align it that way. Simply look at the history of recessions and depressions when we were on the gold standard to see that this is not just something on an individual basis. It's not just government that suggests people to spend when the economy is going sour. Most economists would say that's how we get out of a recession - spending. Spending, like I said before, drives this economy.
- PeppermintPig, on 03/29/2008, -2/+2Competing currencies keep each other honest and competitive, ensuring value for its users. It's such a basic law of economics that you ought to understand it by now. If you don't believe money systems should be able to increase in value, then surely you place greater value in debt than in productivity.
- bc289, on 03/29/2008, -3/+3This is a horrible idea. How would having two competing currencies in an economy ever increase efficiencies? You need one currency in an economy. In addition, by having a competing currency that's backed by gold, we take powers away from the fed to stabilize the business cycle (bad), and put that power into RUSSIA'S HANDS, which happens to own some of the largest reserves of gold under land.
- BESTenemy, on 03/30/2008, -0/+2"If done responsibly" - and that is the core of the problem. Everything works on paper according to such principle. Hell, even communism works, if implemented properly. The problem is accountability and in a fiat system there is absolutely none. The whose system is a pyramid that swaps credit for collateral over the course of its existence leading to the point where the issuer of currency holds all physical assets and the debtor is an economic slave working to pay off his ever expanding debts.
Gold is ideal in our situations because it restores accountability and puts a cap on credit and runaway inflation. Gold system is actually 2 systems in one. It's paper money (gold redeemable currency) competes with the substance it represents (gold). People still use paper, but they're free to exercise their right to redeem valuables if they doubt the issuer of money. Bank runs are normal and should be allowed to happen. They should not get bailed out by the government or the central bank or the FED. Without the fear of going out of business there is no accountability.
The system of privatizing profits and socializing the losses leads to the exact thing we're having right now. Dissolving the currency to pay off debts leads to eventual loss of trust in currency and to its total devaluation knowns as hyperinflation.
In credit based monetary system such as ours, the credit precedes the asset. The credit is given out on risk assessment, or faith the issuer puts in debtor's ability to produce an asset through the initial investment. In gold backed system the risk is higher, cause the lender of wealth cannot make gold out of nothing, so he's less willing to lend what he might not get back. That is called accountability. In such system the sub prime problem would not have existed because the rist of sub prime lending would've been too high.
Gold is not perfect. It has shortfalls such as the possibility of artificial rate control through segregation, but that is easily solved though introduction of other solid backing alternatives such as silver. You get the best results in the market through competition. Currencies are no different.
Gold's been around for 6000 of years and it's here to stay. Fiat systems rise and collapse, as our system is about to...
- PeppermintPig, on 03/29/2008, -1/+2So, if you can't afford the gold, then gold is obviously worth more than your personal holdings. :P
- StaticThunder, on 03/29/2008, -0/+1The alternative would be to mine more gold and not pay the miners. Is that better? Yes its wrong, but its got nothing to do with the fact that its fiat.Stealing labor is stealing labor.
- brad3378, on 03/29/2008, -0/+1Your age shouldn't be a factor.
- firepowered, on 03/29/2008, -3/+18We're so rich! Need money? Dont worry, we're printing more!
- Misinformant, on 03/29/2008, -3/+32You people are heartless. These bankers might have to have to sell their helicopters and yachts if the government doesn't help.
You would just let that happen?
Disgusting...- mr5150, on 03/29/2008, -1/+1lol...../sarc
- gluecode, on 03/29/2008, -3/+7om nom nom nom nom
- Khast, on 03/29/2008, -3/+6I wonder how long it will be before the BigMac index says USA $3,999.00 at the rate we are going, I will probably be alive.
- Hangly, on 03/29/2008, -0/+3For those who don't know, this is what he's talking about.
http://www.economist.com/markets/bigmac/index.cfm - mciampa1214, on 03/29/2008, -0/+1Not if you keep eating BigMacs...
Dugg for reading the Economist though.
- Hangly, on 03/29/2008, -0/+3For those who don't know, this is what he's talking about.
- bc289, on 03/29/2008, -11/+30Don't get me wrong (but I am sure a lot of you will anyway), what the Fed did was not within their powers. It's extremely controversial, and they may have overstepped their boundaries.
However, with that said, it may have saved us all. Sounds ridiculous I know, especially since all you think the Fed and corporations are all evil, but look at Japan in the late 1980s. They faced a similar crises with a housing and stock market bubble, and with banks about to go under. The BOJ did nothing to help out these banks, and the economy went into what is known as the "lost decade", a decade of stagnant growth. In fact, even today, they still are having trouble getting their economy going. The lost decade had a lot to do with the fact that the BOJ contracted the money supply rather than expanding it, and it also had to do with the fact that banks went under (there were basically bank runs and the banks lost a lot of liquidity) without any help. Sounds like they got what they deserved right? Yes, but the financial system collapsed as all banks were affected.
Look what has been happening here in the U.S. We have had a housing bubble and a subprime mess, and Bear Stearns basically had a bank run happen in one day, forcing them to just about go bankrupt. If Bear Stearns had gone bankrupt and hadn't been sold, it would have affected other financial firms as investors would have been quick to pull their money out. We see this time and time again in history, whether it's with Russia and their financial crisis in the 1990s, or back when we were on the Bretton Woods system in the early 1970s. Liquidity is HUGE, and when there are panics, it goes out the window. What the Fed did may have been illegal, but it provided liquidity at a time when it was needed most. Although we are not yet out of the woods, what the Fed did may have saved us from a "lost decade."
Now here come the buries from the Ron Paul and Zeitgeist supporters....- Bodieslikesheep, on 03/29/2008, -8/+11Your more entitled to your opinion - whatever grudge or preconcieved notion about those who support individual liberty and responsibility. (Ron Paul).
But do not be so quick to write people who support the Zeitgeist/Ron Paul movement.
I would rather stand for something than nothing. And I feel Zeitgeist/Ron Paul promote truth and objectivity in a world of status quo and conformity.- bc289, on 03/29/2008, -7/+3I would rather have people stand for nothing than something, if they don't understand the topic well enough. How is it that zeitgeist/ron paul promotes truth and objectivity? The way you posted your comment, you don't sound objective at all.
- PeppermintPig, on 03/29/2008, -1/+5Because he asks questions of others. He tries to make people think. You know, intelligent discourse.
You may not agree with his solution, but isn't that the pivotal question that goes unanswered: That we assume government SHOULD do x y and z? Ron Paul cites the constitution, and says x y and z are unconstitutional, then he tries to back up his arguments with quotes, citations, and principled arguments... I mean, that's the least I expect from anybody trying to convince me of their position, let alone running for president.
Clinton and Obama have corporate support from banks like Citigroup, who are financially unsolvent... yet Clinton cites Citigroup's chairman as her source of economic advice... that is ***** crazy! Whichever candidate wins, they're going to keep bailing out more banks.- bc289, on 03/29/2008, -5/+1Then tell me, where is your intelligent discourse? I just typed up a response using economic history, and I named a couple examples about the importance of liquidity. You didn't respond to any of it, but only said that Ron Paul uses quotes and citations.
- PeppermintPig, on 03/29/2008, -0/+2Perhaps because I was not directly responding to you. No need to get offended.
I agree with most of your observations, but I don't think we should pump money into bad solutions.
I certainly do not believe the housing bubble has yet deflated.
- PeppermintPig, on 03/29/2008, -1/+5Because he asks questions of others. He tries to make people think. You know, intelligent discourse.
- bc289, on 03/29/2008, -7/+3I would rather have people stand for nothing than something, if they don't understand the topic well enough. How is it that zeitgeist/ron paul promotes truth and objectivity? The way you posted your comment, you don't sound objective at all.
- temjrpgh, on 03/29/2008, -6/+3It'd be a great time for you to buy some US based stock then. I'm buying commodities, uranium, silver, wheat and some other stuff in China and India.
- Hangly, on 03/29/2008, -5/+3The banks were bailed out. No major Japanese bank has failed yet.
- bc289, on 03/29/2008, -4/+3Not true at all. Sanyo Securities, Japan's 4th largest stock broker, failed. What I am talking about was the late 1980s.
Also, Bear Stearns was bailed out in that it was able to sell itself. But it sold itself for a huge loss. Bear Stearns employees lost a huge amount of their wealth. Check out Lehman, UBS, and Countrywide to see if they feel like they've been bailed out.
- bc289, on 03/29/2008, -4/+3Not true at all. Sanyo Securities, Japan's 4th largest stock broker, failed. What I am talking about was the late 1980s.
- radu79, on 03/29/2008, -2/+7Say it saves the economy now..
Then what will prevent big banks/investment companies from doing the same ***** in the future, knowing that the govermnet will bail them out again? new regulations? Come on..- bc289, on 03/29/2008, -5/+2The fear of losses. You act as if the industry is not competitive. Bear Stearns paid for the amount of subprime exposure by selling at a gigantic loss. UBS took huge hits in subprime writeoffs, and their rival Credit Suisse is now surpassing them. Do you really think this bailout is just money they are giving to each and every bank? It's to provide liquidity, it's not just giving them money to do what they want with it. The banks that had the most exposure to subprime are taking the largest hits and losing the most marketshare, and those with the lowest exposure are surviving this mess.
- robthom, on 03/29/2008, -2/+3I have no idea what the ***** your talking about. But what I do know is 2+2 still equals four.
They'll do it again if they get away with it because they'll know that they can. And even if they tainted their brand and couldn't do it as the same entity, they would just start over with a new facade. Wash and repeat.
All that legalese is just smoke and *****.
- robthom, on 03/29/2008, -2/+3I have no idea what the ***** your talking about. But what I do know is 2+2 still equals four.
- bc289, on 03/29/2008, -3/+2That is my point. You don't even know economic history, and yet you still make claims about what we should be doing with our economy. Think about what you're saying. Do you really think you understand enough to be making the calls?
- bc289, on 03/29/2008, -5/+2The fear of losses. You act as if the industry is not competitive. Bear Stearns paid for the amount of subprime exposure by selling at a gigantic loss. UBS took huge hits in subprime writeoffs, and their rival Credit Suisse is now surpassing them. Do you really think this bailout is just money they are giving to each and every bank? It's to provide liquidity, it's not just giving them money to do what they want with it. The banks that had the most exposure to subprime are taking the largest hits and losing the most marketshare, and those with the lowest exposure are surviving this mess.
- PaulBleidl, on 03/29/2008, -1/+2Very spot on the Fed seems to go out of its way to save the market and too keep it going than to destroy it. Think of all that they do that we do not even hear about such as emergency plans. The fear is that they will not be able to sustain it. In the last month look at what has happened and what the response was. They pulled our ass out of the fire and had to do some scary things to do it of which the markets still have not settled all the while the dollar scrapes at near record lows.
- jdaniel284, on 03/29/2008, -0/+3Your post was interesting, but what's up with the Ron Paul snipe as the conclusion?
- bc289, on 03/29/2008, -3/+1He wants to get rid of the Fed when in my opinion they're saving us from some bad years.
- herkimer65, on 03/29/2008, -2/+2While I did disagree, I had no intentions of burying since it was a well thought out and well written comment.
Throwing in the jab at Ron Paul got you the bury.- bc289, on 03/29/2008, -3/+1The Ron Paul jab is because if Ron Paul had his way, we wouldn't have a fed to save our economy right now.
- Bossy, on 03/29/2008, -1/+2So answer this, what created the current economy problem of inflation, runaway spending and credit lending mess? The Fed.
And now they tax me to fix the problem?
And mind you, two competing currencies such as gold vs. fiat -- gold would automatically replace fiat overtime. Who wants worthless ***** of paper other than you?- bc289, on 03/29/2008, -4/+3Inflation is not a current problem of ours. It's higher than where we'd like it to be, but its current levels are still very good compared to other nations as well as when you look at our own history.
The other problems such as runaway spending and credit lending, well that was created by irresponsible consumers and lenders. The companies that were supplying no-doc loans to people who should not have been receiving loans. They created the problem.
Yes, under two competing currencies, one would eventually have to win. And I sure as hell hope gold doesn't win. We used to be on a gold-backed standard, and it's just as worthless as that ***** of paper. How is it any better? If you think gold-backed currency leads to a stable price of money, then you're ignorant. The price level of gold is not stable at all, as studies on the gold-backed era show (see "The Gold Standard: Historical Facts and Future Prospects" by Richard N. Cooper). In addition, you take power away from the Fed to control the business cycle, and you put it in Russia's hands, which happens to own huge gold reserves on their land. - weloveronpaul, on 03/29/2008, -2/+2"Inflation is not a current problem of ours" This is a joke right?
Runaway inflation has zapped the purchasing power of American's. Gold is almost $1000 an once not because the value of gold went up, its because the value of the dollar went down. The dollar is worth 5c compared to the dollar of 1913. American's have been robbed! In the past 5 years the dollar has lost 65% of its value as it relates to other currencies around the world. If you don't think that is a serious problem you must not be thinking this thing through all the way.
I do agree with you that the fed overstepped its bounds but did in fact save us from a possible economic crisis, but they created the situation in the first place. The FED is not the hero by any means. They are robbing America blind.
Lastly, gold is as stable as it gets. Look at history and you will see the price of gold barely moved between 1800 and1900. Gold is the ultimate in stability through history. Inflation did not exists for years. You are simply kidding yourself if you believe the Fed helps us in any way. Look at the Fed leaders and their relationship to the council on foreign relations. Simply put the Fed system is illegal and works against the best interests of the U.S., its time you see that. - bc289, on 03/29/2008, -3/+2Just about everything you said is historically inaccurate. Runaway inflation has not zapped the purchasing power of America because REAL GDP, which takes into account inflation, has grown. Many contracts in the economy have inflation built in so that it this so called hidden tax really doesn't hurt you much at all. In fact, when you consider loans as well, it can help you.
Gold is not stable at all. Check out International Economics - Theory and Policy by Paul Krugman and M. Obstfeld. In Ch. 17 he talks about how during the gold standard era, we saw huge price fluctuations. You can also see Richard N. Cooper, "The Gold Standard: Historical Facts and Future Prospects," Brookings Papers on Economic Activity 1: 1982, pp. 1-45 where he states the same thing.
But hell, you probably won't look at it anyway. In that case, just look at the price of gold in the last two weeks. It has been extremely volatile.
Finally, like I said before, by going back to gold, we put the control of our money supply into the rate of how often we find gold, which is completely arbitrary and not in our control. In fact, if anything, it'd be in Russia's control. I don't know about you, but i don't want them controlling our money supply. - weloveronpaul, on 03/29/2008, -2/+1Paul Krugman does work with the Brookings Institution, a think tank controlled by the Council on Foreign Relations. The Council on Foreign Relations has always had Federal Reserve Chairmen as members, needless to say there is quite a bit of influence on the CFR from the Fed. Look at your source, he is a tool for the man.. Paul was also a staff member for the Council of Economic Advisers; Ben Bernanke was chairman 2005-2006, another blatant connection to the Fed.. Talk about a biased source of garbage information.
Stick to the facts,
There was virtually no inflation during the 1800's while on the gold standard, The Fed Created the Great Depression, The Fed is responsible for our current economic situation, The dollar has lost most of its value since 1913, The Federal Reserve is privately owned and works towards its own best self interests, The Fed does not work towards the best interests of Americans, I could go on and on.
Item Percentage Increase in Price from 1962 to 1998
Hershey bar 1180%
New York Times 1100%
First class postage 700%
Gasoline (gallon) 284%
Hamburger (McDonald's double) 861%
Chevrolet (full size) 790%
Refrigerator freezer 60%
You have been taught lies for a reason. You seem very intelligent, but misinformed. - bc289, on 03/29/2008, -2/+1Yes, and what? You think that because they were fed chairmen, they are going to be biased? Tell me what's wrong with the data first before you point to the credibility of the source. They wrote these papers before they became chairman, so even if you attack the credibility, it doesn't make sense. Stick to the data. Yes Ben Bernanke was chairman... obviously. However, the only thing you really show is that no modern economist thinks the Fed is out to get your money.
You look simply at the nominal prices and not real prices, which is simply ridiculous. You remind me of the old people who talk about things back then used to cost a couple cents. Today, a dollar will buy more than a dollar would back then. ***** the nominal prices, look at the real prices. Real GDP continues to grow, and it's the reason why economic conditions today are so much better than they were in the 1800-1900s.
Seriously, an economist would laugh at you if you brought up nominal prices of items now and back in the 1900s. I know it's not very informative to just be saying that since it won't convince you, but it's true.
- bc289, on 03/29/2008, -4/+3Inflation is not a current problem of ours. It's higher than where we'd like it to be, but its current levels are still very good compared to other nations as well as when you look at our own history.
- weloveronpaul, on 03/29/2008, -2/+1Paul Krugman does work with the Brookings Institution, a think tank controlled by the Council on Foreign Relations. The Council on Foreign Relations has always had Federal Reserve Chairmen as members, needless to say there is quite a bit of influence on the CFR from the Fed. Look at your source, he is a tool for the man.. Paul was also a staff member for the Council of Economic Advisers; Ben Bernanke was chairman 2005-2006, another blatant connection to the Fed.. Talk about a biased source of garbage information.
Stick to the facts,
There was virtually no inflation during the 1800's while on the gold standard, The Fed Created the Great Depression, The Fed is responsible for our current economic situation, The dollar has lost most of its value since 1913, The Federal Reserve is privately owned and works towards its own best self interests, The Fed does not work towards the best interests of Americans, I could go on and on.
Item Percentage Increase in Price from 1962 to 1998
Hershey bar 1180%
New York Times 1100%
First class postage 700%
Gasoline (gallon) 284%
Hamburger (McDonald's double) 861%
Chevrolet (full size) 790%
Refrigerator freezer 60%
You have been taught lies for a reason. You seem very intelligent, but misinformed.
- Bossy, on 03/29/2008, -1/+2So answer this, what created the current economy problem of inflation, runaway spending and credit lending mess? The Fed.
- bc289, on 03/29/2008, -3/+1The Ron Paul jab is because if Ron Paul had his way, we wouldn't have a fed to save our economy right now.
- weloveronpaul, on 03/29/2008, -1/+1Paul Krugman does work with the Brookings Institution, a think tank controlled by the Council on Foreign Relations. The Council on Foreign Relations has always had Federal Reserve Chairmen as members, needless to say there is quite a bit of influence on the CFR from the Fed. Look at your source, he is a tool for the man.. Paul was also a staff member for the Council of Economic Advisers; Ben Bernanke was chairman 2005-2006, another blatant connection to the Fed.. Talk about a biased source of garbage information.
Stick to the facts,
There was virtually no inflation during the 1800's while on the gold standard, The Fed Created the Great Depression, The Fed is responsible for our current economic situation, The dollar has lost most of its value since 1913, The Federal Reserve is privately owned and works towards its own best self interests, The Fed does not work towards the best interests of Americans, I could go on and on.
Item Percentage Increase in Price from 1962 to 1998
Hershey bar 1180%
New York Times 1100%
First class postage 700%
Gasoline (gallon) 284%
Hamburger (McDonald's double) 861%
Chevrolet (full size) 790%
Refrigerator freezer 60%
You have been taught lies for a reason. You seem very intelligent, but misinformed. - bc289, on 03/29/2008, -1/+2Yes, and what? You think that because they were fed chairmen, they are going to be biased? Tell me what's wrong with the data first before you point to the credibility of the source. They wrote these papers before they became chairman, so even if you attack the credibility, it doesn't make sense. Stick to the data. Yes Ben Bernanke was chairman... obviously. However, the only thing you really show is that no modern economist thinks the Fed is out to get your money.
You look simply at the nominal prices and not real prices, which is simply ridiculous. You remind me of the old people who talk about things back then used to cost a couple cents. Today, a dollar will buy more than a dollar would back then. ***** the nominal prices, look at the real prices. Real GDP continues to grow, and it's the reason why economic conditions today are so much better than they were in the 1800-1900s.
Seriously, an economist would laugh at you if you brought up nominal prices of items now and back in the 1900s. I know it's not very informative to just be saying that since it won't convince you, but it's true.
It's about purchasing power, not nominal prices. Today's dollar will buy you more than you ever could back then.- weloveronpaul, on 03/30/2008, -0/+2The Fed benefits from the system it has in place, Period. The Fed wants nothing to do with the gold standard. An economist with obvious connections to the Fed is feeding you this information and you can't see why or how that would be bias? Don't outsmart yourself. The price of gold was $19/ounce from 1800-1930 now its at $980/ounce.
We don't need the Fed, the government can print money itself without taxing the people. Fiat money and this debt based system will collapse under its own weight.- bc289, on 03/30/2008, -1/+2I don't know what to say anymore to someone who relies on "Period" to back up what they say. You're like any other conspiracy theorist who attacks solely on the basis of credibility. Are the majority of economists connected to the fed? Because the majority of economists would laugh in your face at the idea of a gold-backed standard. The price of gold is not stable, and the fact that its price has risen shows nothing about how it would be a good currency. In fact, it shows just that the value of gold is just as unstable as any other currency, except that it is rising. You act as if that's a good thing, but in reality it just shows your ignorance on economics. Stop relying on nominal prices and look at real prices.
- weloveronpaul, on 03/30/2008, -0/+2The Fed benefits from the system it has in place, Period. The Fed wants nothing to do with the gold standard. An economist with obvious connections to the Fed is feeding you this information and you can't see why or how that would be bias? Don't outsmart yourself. The price of gold was $19/ounce from 1800-1930 now its at $980/ounce.
- andreegal, on 03/29/2008, -0/+2You make interesting points, but it all asumes that "Although we are not yet out of the woods, what the Fed did may have saved us from a "lost decade."" I would say that what the fed has done, may get the US in a "lost decade"
- bc289, on 03/30/2008, -1/+1no, it's not all based on that assumption. You have it backwards, you put my conclusion as my assumption, when in reality it's just the conclusion based on what has happened in the past....
- andreegal, on 03/29/2008, -0/+1Its a different climate out there and with measures like this foreign investors loose confidence check this from the Wall Street Journal :
"While cash continues to pour into the U.S. from abroad, this flow has been slowing. In 2007, foreigners' net acquisition of long-term bonds and stocks in the U.S. was $596 billion, down from $722 billion in 2006, according to Treasury Department data. From July to December as jitters about securities linked to US subprime mortgages spread, net purchases were just $121 billion, a 65% decrease from the same period a year earlier. Americans, meanwhile, are investing more of their own money abroad." ("A US Debt Reckoning" Wall Street Journal)
Just to put it our there...
- Bodieslikesheep, on 03/29/2008, -8/+11Your more entitled to your opinion - whatever grudge or preconcieved notion about those who support individual liberty and responsibility. (Ron Paul).
- johnstar, on 03/29/2008, -3/+11America's economy is a ticking ***** time bomb. I knew that ***** when I was in high school (ten years ago).
- annenk38, on 03/31/2008, -0/+1This whole ***** "crisis" could be resolved instantly if every foreclosed home was required to be auctioned off within, say, 30 days. With no reserve. Instead, the government starts another "leave no banker behind" program.
- ZeroIce, on 03/29/2008, -1/+13I bet the Rockefeller's have a big smile right now.
- temjrpgh, on 03/29/2008, -1/+6no doubt.
- Wacer, on 03/29/2008, -2/+3This money scheme is derived from the British Rothschilds. The British banking system is involved in this banking scam as well.
The Rothschild family (often referred to simply as the Rothschilds), is an international banking and finance dynasty of German Jewish origin that established operations across Europe, and was ennobled by the Austrian and British governments.
This problem is not a Jewish problem but a group of greedy people that know only one thing. The power of money. - herkimer65, on 03/29/2008, -0/+2Yes, with the stains of blood on his fangs.
- beyondinfinity, on 03/29/2008, -3/+5I hate money.
- PeppermintPig, on 03/29/2008, -0/+1But I love value!
- cheeseysynapse, on 03/29/2008, -0/+2thats like saying i hate socket wrenches - money is only a tool
- brad3378, on 03/29/2008, -0/+1I hate debt.
- mweels, on 03/29/2008, -0/+11
Its all a game, we still have plenty of military might.
Oh *****, that all takes gas. Were f'd.- 955701, on 03/29/2008, -0/+1Good thing we've planted a dozen bases in Iraq then, huh?
- HappyScrappy, on 03/29/2008, -2/+3Summary confuses loans with gifts.
- afastingartist, on 03/29/2008, -11/+9would you people stop the conspiracy theories. The Credit system in America is going to change after this, no amount of action by the fed will prevent that. These "millionaire bankers" have probably already lost most of their portfolios. The fed is not bailing out "millionaire bankers" in some conspiracy to rob the taxpayers. A major bank failing is the equivalent to our economy driving into an oak tree at 85 mph, and you should be glad that the Fed isn't making a major policy error that would drive us into recession.
- sentime, on 03/29/2008, -3/+5lol so clueless ... oh yeah some bankers are down from 2 billion to 100 million ... omg omg poor babies. I'd like to see an average american make in a lifetime what the wallstreet crooks make in 1 year .. ever after all these "losses"
- jamie329, on 03/29/2008, -0/+3If the Fed allowed the investment banks to fail, our faith in the economy would disappear, and then the economy itself would disappear. Don't you get it? Bailing out the investment banks IS about the average american. If the Fed just sat back and let them all tank, who do you think suffers in the end? The average american.
- vmass20, on 03/29/2008, -0/+1Ya we get it.... you don't. so you'd rather bend over backwards so a few man can control the market than have a restart and get back our fair market? Thats the way to see the big picture.. selfish one you are. And no its NOT about the average american. leave your home!
- jamie329, on 03/29/2008, -0/+3If the Fed allowed the investment banks to fail, our faith in the economy would disappear, and then the economy itself would disappear. Don't you get it? Bailing out the investment banks IS about the average american. If the Fed just sat back and let them all tank, who do you think suffers in the end? The average american.
- Aensland, on 03/29/2008, -2/+3The credit system is going to change? O rly?
- mr5150, on 03/29/2008, -1/+2Your a ***** retard.....study up before you make such foolish statements unless your a part of the system that looks to profit from the FED injection of Fiat.
This injection of funds is no good for our nation of people who will inevitably wear the burden of repayment for these funds not to mention the impending wave of inflation bearing down on us because of this move by the FED. - weloveronpaul, on 03/29/2008, -0/+2Do you realize the Fed created the situation we are in? Do you know JP morgan bought Bear Stearns for $10 a share, it was trading at $72 a share a week earlier. The fed also gave jp morgan a $29 Billion credit line. jp morgan is part of the fed. Hmm sounds fishy right? Senator Dodd is looking into the conflict of interest that is apparent with "J.P. Morgan chief executive Jamie Dimon. Specifically, Mr. Dimon held a Federal Reserve Bank of New York board seat while his bank was talking with the Fed about The Bear Stearns takeover."
http://www.financialweek.com/apps/pbcs.dll/article ...
The Federal Reserve does not work for the best interests of the U.S. and its citizens. That is the truth.
- sentime, on 03/29/2008, -3/+5lol so clueless ... oh yeah some bankers are down from 2 billion to 100 million ... omg omg poor babies. I'd like to see an average american make in a lifetime what the wallstreet crooks make in 1 year .. ever after all these "losses"
- SilverBlade2k, on 03/29/2008, -2/+6Good thing I'm a Canadian
- Wacer, on 03/29/2008, -1/+2America and Canada are such major trading partners that it would hurt both nations if the system was to fall.
- 18Zulukiller, on 03/29/2008, -1/+0If the Us goes under they'll take the whole worlds economy with them.
- cobbwobbles, on 03/31/2008, -0/+0Can I be your wife for citizenship? I make great apple pie.
- Wacer, on 03/29/2008, -1/+2America and Canada are such major trading partners that it would hurt both nations if the system was to fall.
- ronjohn, on 03/29/2008, -4/+17Let me get this straight banks get over 500 billion because they fugged up but people during Katrina couldn't get water for 3 days and couldn't cross over into the next town either. Real classy America Real Classy. I blame you know who... (the dude Kanye West was talking about)
- MrLevite, on 03/29/2008, -2/+1The banks are getting money just like Katrina-affected areas did. As the devastation to the region became clear, Congress quickly passed two emergency appropriations bills (H.R. 3673 and H. Res. 432) totaling $62.3 billion. The Federal Emergency Management Agency (FEMA) received $60 billion; the Department of Defense received $1.9 billion; and the Army Corps of Engineers received $400 million, all with very few strings attached.
Blame whoever you want, but if Americans wouldn't have taken out huge loans to buy houses that were way out of their price range, then we wouldn't be in this mess. I don't understand how everyone wants to complain when the gov't takes a bold, unprecedented action to fix a problem that ultimately American citizens created. The reality is that our economy appears to be headed down the tubes and we as citizens are partially to blame, just as the banks are for allowing us to shoot ourselves in the foot. The bottom line is that we need to stop living above our means. The national debt will always exist as long as citizens continue to spend more than they have.
So I say to the gov't: Do whatever is necessary to fix this mess and make sure it doesn't happen again. If we're lucky, things will bounce back and we can pass new laws to prevent this type of thing from repeating. (kind of like what happened after Katrina)- ronjohn, on 04/21/2008, -0/+1Umm while they were voting on money people were still without water for 3 days like I said!!! Peole were without out water for 3 days while they talked about billion dollar aid. Last time I checked the victims were living in trailers and misplaced to other states..... You are correct amercans are to blame for that mess and I dont th
- MrLevite, on 03/29/2008, -2/+1The banks are getting money just like Katrina-affected areas did. As the devastation to the region became clear, Congress quickly passed two emergency appropriations bills (H.R. 3673 and H. Res. 432) totaling $62.3 billion. The Federal Emergency Management Agency (FEMA) received $60 billion; the Department of Defense received $1.9 billion; and the Army Corps of Engineers received $400 million, all with very few strings attached.
