History of the Federal Reserve and The Fed Conspiracy

No mention of the hundreds of billions they pocketed in the low interest phase, or the hundreds of billions they're picking up in the form of public assistance the one year they had a tough time, huh?

The name of the game is consolidation. Before the Fed, new banks were being founded. Since then, the number of surviving banks is down every year.

The government rarely collects as much money in taxes as it spends...

Because the private company has the government-granted authority to spend public money at any rate it can generate it. Yeesh!

You mean consolidated:

Manufactures Hanover -> JPMorgan Chase Bank
Chemical Bank -> JP Morgan Chase Bank
Bankers Trust Company -> Deutsche Bank
Chase Manhattan Bank -> Deutsche Bank and JP Morgan Chase Bank


Now, who gets the favorable end of all these deals from the U.S. and E.U. taxpayers? Ohhh yeah, JP Morgan and Deutsche Bank.

Weird coincidence.

 

Paper backed by gold or even a gold coin itself can be "counterfeited" in a variety of ways. Consider some imaginary currencies:

• Actual gold coins: Anyone holding the coin could shave off scrapings of gold and pile the dust up to be melted down. How do you know the coin you're accepting is not a gold-plated copy or less than its stated weight?
• Federal note backed by gold: The treasury could print up more certificates regardless of gold supply. The gold supply could dwindle due to government theft & corruption.
• Private bank note backed by gold: All the same problems of a federal gold note, PLUS the chance that your bank goes out of business and won't redeem the certificate.

 

MONEY = DEBT

Don't try and refute, just let it soak in.

 

Sometimes, I love Ron Paul so much it hurts.

http://www.youtube.com/watch?v=Jbi-0Tg1b_g

He actually gets Bernanke to admit that the FED can cause malinvestment by manipulating interest rates, and that the FED may contribute to the business cycle. All on the record.

I'm posting this here because it's pretty nerdy, but I might post it to the RP thread as well.

 

I found the last part pretty interesting Ron Paul says the market makes mal investments because of how the fed sets interest rates so therefore because the market place is so perfect the market place should set interest rate

 

You're correct up until the very end.

First, I've been posting about this here for awhile. It's the Austrian Business Cycle Theory, you can read more on it at Wikipedia if you like.

However, Paul is not saying that the market place is so perfect, but rather that the FED creates moral hazard by manipulating rates artificially. It's preferable to have the market set the rate of return based upon available capital, demand, negotiation and merit.

Simply put, it's unlikely the market would have set a 1% rate such as Greenspan did on overnight rates, and was a trigger for the Housing boom/meltdown. Not unless the market had an excess of capital.

And capital is savings, which is deferred consumption or productive gain. We already know the current market doesn't have savings, much of everything is used for consumption, thus real capital is scarce, and the rates should be much, much, much higher...

Now if it becomes very lucrative to accumulate capital, then more people will rush to it, capital will be more readily available, and rates will fall. When the capital is scarce again, the cycle starts over.

The FED, arbitrarily raises and lowers rates to add/subtract liquidity from the system, to ramp it up or choke it so-to-speak. When the FED does what it is doing now, lowering rates when we have a negative savings rate and a capital crisis on Wall Street, is the opposite of rational market behavior.

 

Not sure how much you know about markets but the market place does set the interest rates, it may not set the interest rate on loans made by the fed to the banks or from banks to banks over night but it sets just about everything else.


They set the prices on 10 year government treasuries which is what is used to set loan prices on 30 year mortgages.

This time last year when the feds interest rates where at 5.25% the market was setting junk bond yields 2% above government treasuries, record low spreads now the spread is to 9% not year in decades.

The market place is pricing government securities yields below inflation. That's not rational.

The point I'm trying to make is that the market place operates on two functions fear and greed which is why you need someone like the fed to be a rational party in irrational times.

As for capital is savings which we don't save, I believe you have a limited view of the market, true we don't save but the people of japan do, and so do people in other countries and that money comes flowing into our countries.

What is irrational is removing capital from a capital crisis which is what your suggest we should be doing.

 

You absolutely drive me bat sh1t crazy because it seems like I am always having to lead you to the truth.

No it doesn't, so much else of your post is based on a false premise.

Again, this is based on a false premise. The only time I can think of when the FED was rational, was when Paul Volcker was running it, and he had the guts to put in 20% interest rates to save the country.

How long can you continue to eat someone else's dinner? How long will they continue to pay for your kids to go to school, for your second car? Your credit card balance?

This is back to the same sort of problem socialism has. It doesn't add up. You cannot consume and not produce. Without capital, you can never own anything. At one point, you will own nothing.

Not if you understand what capital is. We're not adding capital. We're adding inflation. Capital is wealth. Inflation is more money. Huge difference.

What you probably meant is,

It's rational to remove inflation in an inflationary crisis.

It's like we're speaking two different languages. You have opinions and ideas which, I have no idea where you get them from, and I am trying to talk about straight forward facts and economic thinking.

You do understand that America is bankrupt right? That our future unfunded entitlement obligations are more than we can pay?

The game is up pal. You can try to defend the system and status quo with all sorts of fantastic explanations, but at the end of the day, basic common sense will apply. We're broke.

 

It's time to rein in the Fed
In yet another example of the central bank's failed bailout-after-bailout strategy, it's now on the hook for Bear Stearns' losses. We need to clarify the Fed governors' mandate -- or even send them packing.
http://articles.moneycentral.msn.co...hronicles/ItsTimeToReinInTheFed.aspx?page=all

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