Federal Reserve Audit

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Mr. Perfect
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Re: Federal Reserve Audit

Post by Mr. Perfect »

Juggernaut Nihilism wrote:Mr. P, stop with the "whatever comes after the Fed' generalities. You enjoy telling other people their economic views are too stupid to merit a response, then refraining from offering concrete proposals of your own so as not to expose them to scrutiny, and calling that a debate victory. Which it might be if everyone here wasn't completely familiar with the tired old tactic. So what comes after the Fed, in Mr Perfect's perfect world? Floating interest rates? Gold standard?
I've studied economics JN. In fact, I was a guest teacher at the local CC this summer and taught Econ 101 (Macro). It was something i wanted to do for a long time and everything kind of came together. I'm not saying that for any reason other than at the moment I am particularly sharp at constructing marginal output curves and the like, so before we go there consider this.

Nobody debates Sears' capital financing program. Nobody debates the pricing models of craigslist participants. Nobody discusses a nationalized career management bureau where adult Americans show up and the government tells them what to do with their life. We just don't debate it. All of this happens naturally without any central planning whatsoever.

This is very difficult for someone like yourself who is hard wired as a central planning overthinking meddler. My experience reading your material is you seem to want to put your hand in everything and put your spin on it. We don't need you to do that. I've got by my whole life without any input from you whatsoever and I'm very happy with the results. That's not to say that your not a fun hip cat or whatever, but I don't think you have any business influencing the government to tell me how I can make a living or how I should handle my financial or investment decisions, for starters.

I don't assume that anyone needs me to tell them how to use money, other than say from a perspective of financial education. If my neighbors want to use cocaine or potato chips as money as they trade their household items to each other I honestly couldn't care less. It's their business. I can't motivate myself to butt in and tell them they need to first set up a central potato chip bank and they need 11 board governors and what not. I firmly believe all of that stuff will take care of itself.

Collectivism has so infected your brain that you can't imagine money without government policy. Almost no economic activity depends on government policy, money is the same way. We have black markets all over the world that operate very stably despite the government, not because of it. Human beings somehow managed to use money for thousands and thousands of years across many cultures without ever hearing of Ben Bernanke or a Federal Reserve. we can do it again. I don't need Fed governors in order to buy and sell products, I can easily find a medium of exchange without them. So can everyone else.
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Juggernaut Nihilism
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Re: Federal Reserve Audit

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That's your answer? Amend the part of the constitution that gives Congress the power to coin and regulate currency, and just let people use cigarettes and bottles of bourbon as dollars and cents? Brilliant. You've obviously studied this stuff and I'm out of my depth.

The truth is that you don't have anything to say accept to call me names and make general statements about how smart and informed you are without actually backing it up with an argument. You're becoming a right-wing Ibby. A typical post reads something like, "There should be no such thing as money, let people use dog turds if they like... and I should know, I taught a course at a community college! And whatever you're saying is wrong because you are basically Stalin." I don't remember you always being like this.

Calling me a collectivist or a supporter of central planning is so laughable that it becomes apparent that you just say it reflexively to anyone you perceive to be disagreeing with you, like some people use "racist".
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Mr. Perfect
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Re: Federal Reserve Audit

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Er, why do you think if the Fed were to say fail in some way, that people would end up using dog turds? And even if they did, why do you think that would be bad? I mean speaking plainly, isn't it perfectly obvious that if central banks were to fail to the point that their currencies were rejected that traditional precious metals would immediately take their place? What is your problem with this? How remedial does this conversation have to get?

And I do think that your natural impulse is central planning, sort of maybe subconscious. It's not meant as put down IMO you have sort of a big blind spot. I would never dream that anyone would need to come up with some kind of "plan" if the Fed failed, there are thousands of years of history to draw from for alternatives that don't require any planning.
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Juggernaut Nihilism
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Re: Federal Reserve Audit

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Mr. Perfect wrote:Er, why do you think if the Fed were to say fail in some way, that people would end up using dog turds? And even if they did, why do you think that would be bad? I mean speaking plainly, isn't it perfectly obvious that if central banks were to fail to the point that their currencies were rejected that traditional precious metals would immediately take their place? What is your problem with this? How remedial does this conversation have to get?

And I do think that your natural impulse is central planning, sort of maybe subconscious. It's not meant as put down IMO you have sort of a big blind spot. I would never dream that anyone would need to come up with some kind of "plan" if the Fed failed, there are thousands of years of history to draw from for alternatives.
So you support ending the Fed and letting it be replaced by an ad hoc precious metals standard, but not one with any pesky government interference, such as regulation of weights and measures, I assume. Let the free market sort out who is reputable minter and who is a scam artist. Now we're getting somewhere. That's a stupid idea, by the way.
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Re: Federal Reserve Audit

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It worked for thousands of years. Don't shoot the messenger. And it will probably happen whether you like it or not, so you may want to bone up on how to sort out the reputable minter thing.
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Re: Federal Reserve Audit

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Gold and silver coins have been regulated for thousands of years by whoever issued them. The issuers tended to be "government" (various kings, generals, emperors and the likes, with some town councils thrown in for good measure).
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Mr. Perfect
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Re: Federal Reserve Audit

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Yes that's true of course, but governments tend to write all kinds of regulations that are lower than market standards and pat themselves on the back in the process. Economists call those kinds of regulations "ineffectual" off the top of my head.
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Re: Federal Reserve Audit

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Mr. Perfect wrote:Economists call those kinds of regulations "ineffectual" off the top of my head.
Mr. Perfect wrote:It worked for thousands of years.
Ineffectual or not, the system appears to be working.
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Mr. Perfect
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Re: Federal Reserve Audit

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Opinions vary. We all have to make bets in life.
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Re: Federal Reserve Audit

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And in all honesty I may need to apologize, I may not have made my self clear.

So in the interest of clarity, let me restate my position.

I do not believe any central planning needs to occur to have money, just as there is no central plan that made people understand they need food, therefore I do no advocate any kind of central plan.
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Enki
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Re: Federal Reserve Audit

Post by Enki »

Marcus wrote: Gotta disagree, JN. America was founded on and independence gained as an escape from the religious, social, and economic tyranny of the old world. The American experiment is the Reformation writ politically.
The Protestants had already gained power in England, Puritans were not being persecuted in England at the time of the Revolutionary War. Yes, they fled persecutions when Cromwell was overthrown, but that's a century before the Boston Tea Party, which is what I Was referring to.
Trying to reduce the American experiment to purely economic discontent is entirely too simplistic.
No one did that, I said a specific event, the Boston Tea Party was a revolt against a state enforced corporate monopoly, vis a vis the tea monopoly granted to the British East India company. You're the one trying to reduce it to your favored stomping grounds of religion. It's not reducible to that either. Religious, economic, political, industrial and personal freedoms were all at stake.
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Juggernaut Nihilism
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Re: Federal Reserve Audit

Post by Juggernaut Nihilism »

Mr. Perfect wrote:And in all honesty I may need to apologize, I may not have made my self clear.

So in the interest of clarity, let me restate my position.

I do not believe any central planning needs to occur to have money, just as there is no central plan that made people understand they need food, therefore I do no advocate any kind of central plan.
Back when I would complain that banks with special privileges bestowed upon them by the Federal Reserve were able to borrow money at artificially low interest rates and speculate with it, you threw a fit and called me an durian. Now you're all for abolishing the Fed and going back to free market private issue coinage. :lol:

I was against central banking since back when you were frothing at the mouth at any insinuation that the banking sector be regulated, and defending its ability to pay itself billions in bonuses with taxpayer money, you Johnny Come Lately. The fact that you can accuse me of being in favor of central planning, and that I can't imagine the world without a federally controlled currency, shows that you're not paying attention and just repeating packaged arguments.
"The fundamental rule of political analysis from the point of psychology is, follow the sacredness, and around it is a ring of motivated ignorance."
Mr. Perfect
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Re: Federal Reserve Audit

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Juggernaut Nihilism wrote: Back when I would complain that banks with special privileges bestowed upon them by the Federal Reserve were able to borrow money at artificially low interest rates and speculate with it, you threw a fit and called me an durian. Now you're all for abolishing the Fed and going back to free market private issue coinage. :lol:
No I didn't. If you go look up that exchange I'm pretty sure I called you an durian because you believed that anyone intended the program to be anything other than corrupt.

Sort of like people standing around watching a building burn and you start yelling "look the building is on fire! Do something!". Yeah, everyone knows.
I was against central banking since back when you were frothing at the mouth at any insinuation that the banking sector be regulated,
It sounds like you have a foggy memory. Deregulation in my mind means no Fed. I want total deregulation, always have, ever since I read Greenspan and Ayn Rand talk about it back in those kids books.
and defending its ability to pay itself billions in bonuses with taxpayer money, you Johnny Come Lately. The fact that you can accuse me of being in favor of central planning, and that I can't imagine the world without a federally controlled currency, shows that you're not paying attention and just repeating packaged arguments.
I'm not sure you're following the thread of conversation, it sounds like you haven't.

My arguments back then were when people were outraged about bonuses they were idiots because they expected anything different. The corruption was built in the moment TARP/QE was conceived.

Also, it missed the point, bonuses are/were a drop in the bucket, complaining about the poor work of your last car detailer as you head toward a bridge abutment.
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Juggernaut Nihilism
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Re: Federal Reserve Audit

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Well, then maybe I am mistaken. I don't read every thread here, so if I've misinterpreted your position on the financial industry, fine. My personal feeling is that you can't slip a sheet of paper between the government and the banks, and that the banks are merely another regulatory arm of the federal power structure, intended specifically to direct commerce and enrich privileged interests. I have no use for the financial industry as it currently exists, and I don't consider it a legitimate business model. If you don't disagree with that, then I think where we differ is in whether this ought to be a problem for government. You are asking the obvious question: JN, if you think the financial industry is an arm of government, how can you ask the government to regulate the government? And my answer, weakly, is that it's all we've got. The parliamentary process was used to bring the Federal Reserve into being, it can be used to eliminate it. Do I think it's likely? No. I am realistic about the fact that the oligarchs have the upper hand. What I don't quite understand about your position is how you think anything will change when you support Goldman Sachs' right to pour unlimited funds into our political process to continue to ensure its goals are met.

And where else we differ is that you don't seem to have an intermediate game, only a short and long game. In the short run, you don't think government ought to be interfering in any way with the operations, incentives, or compensation of the banks, because government interference is bad. In the long run, you think that the Federal Reserve system of privileged banks operating as arms of the government is also a bad thing and that it should be done away with. Fine. But what of the area in the middle, otherwise known as reality, in which the Federal Reserve is not going anywhere any time soon, and the banks continue to misallocate capital and destroy public faith in industry and government?

Also, you are ostensibly a spokesman for the mainstream Republican party, but almost no mainstream Republican agrees with you on this. Every mainstream Republican considers the banks to be "private industry" and is stands against regulation not because it misses the point that foxes would be guarding the hen house, but because the banks are private business interests with a right to operate freely in the market without government interference. The only ones talking like you on this are the Ron Paul psychos. Republicans could do themselves a huge favor by simply making the distinction between the financial industry and the rest of the business world... throw the banks under the bus, and denounce the financial industry as being an overgrown government-created and dependent monster that has nothing to do with legitimate business like a steel mill or a software company or FedEx. Mitt Romney and Paul Ryan are nowhere near this perspective as far as I can tell.
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Zack Morris
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Re: Federal Reserve Audit

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Mr. Perfect wrote:It worked for thousands of years. Don't shoot the messenger. And it will probably happen whether you like it or not, so you may want to bone up on how to sort out the reputable minter thing.
How do you know it worked? If it worked so well, we wouldn't have moved toward a fiat system.
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Re: Federal Reserve Audit

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Mr. Perfect wrote:It worked for thousands of years. Don't shoot the messenger. And it will probably happen whether you like it or not, so you may want to bone up on how to sort out the reputable minter thing.
Debasement of the [Roman] currency

Image
The exact reason that Roman coinage sustained constant debasement is not known, but the most common theories involve inflation, trade with India, which drained silver from the Mediterranean world, and inadequacies in state finances. It is clear from papyri that the pay of the Roman soldier increased from 900 sestertii a year under Augustus to 2000 sestertii a year under Septimius Severus and the price of grain more than tripled indicating that fall in real wages and a moderate inflation occurred during this time.[10]
Another reason for debasement was lack of raw metal with which to produce coins. Italy itself contains no large or reliable mines for precious metals, therefore the precious metals for coinage had to be obtained elsewhere. The majority of the precious metals that Rome obtained during its period of expansion arrived in the form of war booty from defeated territories, and subsequent tribute and taxes by new-conquered lands. When Rome ceased to expand, the precious metals for coinage then came from newly mined silver, such as from Greece and Spain, and from melting older coins.
Without a constant influx of precious metals from an outside source, and with the expense of continual wars, it would seem reasonable that coins might be debased to increase the amount that the government could spend. A simpler possible explanation for the debasement of coinage is that it allowed the state to spend more than it had. By decreasing the amount of silver in its coins, Rome could produce more coins and "stretch" its budget. As time progressed the trade deficit of the west because of its buying of grain and other commodities led to a currency drainage in Rome.
Two problems with a precious metal standard:

1/ It can be fiddled with as with anything else

2/ Little, if any, correlation with the amount of precious metal being produced and economic growth

A currency pegged to a basket of commodities in proportion to their global usage makes more sense to me.

_____

As for a Federal Reserve audit, I doubt that I'll see it in my lifetime.
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Re: Federal Reserve Audit

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I find it incredible that the market is not permitted to fall even a few percentage points without the Fed stepping in with new action. Even with equities near all time highs, just a 5% drop would result in calls for intervention. It's absurd.
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Re: Federal Reserve Audit

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Juggernaut Nihilism wrote:I find it incredible that the market is not permitted to fall even a few percentage points without the Fed stepping in with new action. Even with equities near all time highs, just a 5% drop would result in calls for intervention. It's absurd.
Do not a majority of boomers rely on their 401(k) [and equity in their residence] for their future retirement?
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Juggernaut Nihilism
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Re: Federal Reserve Audit

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Typhoon wrote:
Juggernaut Nihilism wrote:I find it incredible that the market is not permitted to fall even a few percentage points without the Fed stepping in with new action. Even with equities near all time highs, just a 5% drop would result in calls for intervention. It's absurd.
Do not a majority of boomers rely on their 401(k) [and equity in their residence] for their future retirement?
Sure. It's just that 5% over a period of time is nothing. That's just normal market fluctuation. It's not a crisis requiring intervention. But we have determined that even a drop of a few percentage points must not be allowed to happen.
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Re: Federal Reserve Audit

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Juggernaut Nihilism wrote:
Typhoon wrote:
Juggernaut Nihilism wrote:I find it incredible that the market is not permitted to fall even a few percentage points without the Fed stepping in with new action. Even with equities near all time highs, just a 5% drop would result in calls for intervention. It's absurd.
Do not a majority of boomers rely on their 401(k) [and equity in their residence] for their future retirement?
Sure. It's just that 5% over a period of time is nothing. That's just normal market fluctuation. It's not a crisis requiring intervention. But we have determined that even a drop of a few percentage points must not be allowed to happen.
It's a bit bizarre.

What I wonder about is if everything is under control, then why has the US Fed set the fed funds rate at historical lows for an unprecedented length of time?

I assume it to enable the financial institutions to recapitalize on the lending spread.
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Re: Federal Reserve Audit

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That seems to be the idea, but if so it is a very inefficient way of getting credit into the economy because credit extension is still low, whether due to cautious lenders or lack of demand. Most of it is going into government debt and asset speculati... oh, I guess I just answered my question. Interest rates go up and the value of the paper being held by banks goes down, ditto for their asset positions. It goes to show you that if you ignore what the Fed says, but watch what it does, the economy is far weaker than we are being led to believe.
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Re: Federal Reserve Audit

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Juggernaut Nihilism wrote:I find it incredible that the market is not permitted to fall even a few percentage points without the Fed stepping in with new action. Even with equities near all time highs, just a 5% drop would result in calls for intervention. It's absurd.
Is it correlated to the market? I think the Fed is more concerned about maximum employment, overall inflation, and interest rates. Those are its core objectives.
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Re: Federal Reserve Audit

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Typhoon wrote: A currency pegged to a basket of commodities in proportion to their global usage makes more sense to me.
That still won't satisfy the Mr. Perfects and the Alphs of the world. They'll claim it's all a conspiracy concocted by central planners to serve their own interests. I remember when Alph hilariously claimed that the CPI is a "tool" of the elites designed to report only what they want us to see, implying that it was being continually manipulated and refined. You can't satisfy the terminally paranoid.
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Re: Federal Reserve Audit

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Zack Morris wrote:
Typhoon wrote: A currency pegged to a basket of commodities in proportion to their global usage makes more sense to me.
That still won't satisfy the Mr. Perfects and the Alphs of the world. They'll claim it's all a conspiracy concocted by central planners to serve their own interests. I remember when Alph hilariously claimed that the CPI is a "tool" of the elites designed to report only what they want us to see, implying that it was being continually manipulated and refined. You can't satisfy the terminally paranoid.
Nor can you convince the terminally deluded . . . ;)
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Re: Federal Reserve Audit

Post by Juggernaut Nihilism »

Zack Morris wrote:
Typhoon wrote: A currency pegged to a basket of commodities in proportion to their global usage makes more sense to me.
That still won't satisfy the Mr. Perfects and the Alphs of the world. They'll claim it's all a conspiracy concocted by central planners to serve their own interests. I remember when Alph hilariously claimed that the CPI is a "tool" of the elites designed to report only what they want us to see, implying that it was being continually manipulated and refined. You can't satisfy the terminally paranoid.
Well, we can debate the reasons, but thewe have changed the way we calculate CPI over the years. And none of te changes has ever resulted in inflation being reported higher. In fact, in the early 80s it was changed expressly to report a lower number because it was decided that cost of living increases tied to inflation were getting out of hand.

There are still people who track inflation by the old methodology for those who are interested. What you find is that if inflation were reported EXACTLY the same way it was in 1980, we would be looking at 6-7% annually in 2012. The main reason this is significant is that if we use the 1980 method of calculating inflation, real wages today are at the same level they were in 1961 even though GDP is six times higher.
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