Calling The Federal Reserve

Wilber · November 15, 2006

Wilber:What is crap is that articles version of it.

Maybe you are right about that but the fundamental facts cannot be denied. He was a powerful & outspoken critic of globalism and died mysteriously and unusually. People do die when they speak against the money interest.

Except for the fact the Russians shot the aircraft down, I know the speculation and assumptions in that article are wrong. Trust me on that.

PolyNewbie · November 15, 2006

Anyways, take some macroeconomics courses at school or something because your really lost man.

I am certainly not the first to say what I am saying about the banks. I'm wondering how qualified you are because I have taken economics and you and I don't seem to be dissagreeing on a lot, you think its OK for private bankers to print of governemnt money and I think governments should do it.

You say that if governments did it we would end up with hyperinflation, yet letting the banks do it somehow protects us. I don't see why the government couldn't manage our supply in our interest better than the way the bankers do so in their own interest.

If you know so much then why don't you tell me how much money can be created from $100.00 in reserves and a 10 to 1 reserve ratio. I think its around $3000.00, what do you think ?

Charles Anthony · November 15, 2006

I am putting this here because it seems to fit well. The author argues that fractional reserves are unfair.

How is Money Created?

---SNIP---

1. If I loaned your company $10,000 would the net worth of your company increase by that amount? The answer is no, because while assets went up by $10,000 so did the liability. It would be fraudulent for you to report an increase in net worth of $10,000.

2. Your company could not lend out $90,000 from the initial $10,000 you borrowed from me. You simply would not have the funds and if you claimed to have them, again you would be committing fraud.

3. I would like to take a quote from another Reserve Bank publication, this time from page 8 of Philadelphia's The National Debt,

"The Federal Government, with the cooperation of the Federal Reserve, has the inherent power to create money - almost any amount of it. This power makes technical bankruptcy out of the question."

So not only are the banks committing fraudulent activity in the sense that they claiming asset value from their debt and secondly loaning out more than they have borrowed, they
are protected from any risk of bankruptcy courtesy of the public!

You and I would pay more for prices of goods and services should the Fed have to dilute the money supply further by printing sufficient money to prevent bankruptcy of a bank!

This is nothing short of outrageous.

Mike Hewitt

bradco · November 16, 2006

"I am certainly not the first to say what I am saying about the banks. I'm wondering how qualified you are because I have taken economics and you and I don't seem to be dissagreeing on a lot, you think its OK for private bankers to print of governemnt money and I think governments should do it."

I dominated macroeconomics

"You say that if governments did it we would end up with hyperinflation, yet letting the banks do it somehow protects us."

difference between printing money and creating money.

"I don't see why the government couldn't manage our supply in our interest better than the way the bankers do so in their own interest."

one is motivated by votes the other by profit....which would be more efficient?

"If you know so much then why don't you tell me how much money can be created from $100.00 in reserves and a 10 to 1 reserve ratio. I think its around $3000.00, what do you think?"

lol I was never good at math...but hey....initial deposit of $100/.1 (assuming no cash drains) would equal $1000 so thats a $900 increase in the money supply....how do you get $3000?

Charles Anthony · November 16, 2006

You say that if governments did it we would end up with hyperinflation, yet letting the banks do it somehow protects us.
difference between printing money and creating money.

There is no difference between "printing" and "creating" money. You are misusing the term "printing" money like the cartoon animation of a printing press reproducing large perforated green sheets.

The government (through the central bank) and private banks (through fractional reserves) create money.

The mint prints money for the sole purposes of meeting everybody's demand for pocket change and cash.

Period.

If the mint shuts down, the government and banks would still be able to create money -- we would just be forced to use plastic and computers to keep track of transactions.

I don't see why the government couldn't manage our supply in our interest better than the way the bankers do so in their own interest.
one is motivated by votes the other by profit....which would be more efficient?

Efficient?

The ability of banks to create money depends on their ability to only hold fractional reserves -- which, in turn, is supported by the tax-payers.

When tax-payers subsidize business, what is your criteria for efficiency?

bradco · November 16, 2006

"The ability of banks to create money depends on their ability to only hold fractional reserves -- which, in turn, is supported by the tax-payers."

Its hardly a subsidy. Dont like it then dont put your money in the bank. The whole reason the bank accepts your money is so they can make a profit on it. In exchange for this they keep your money nice and safe compared with it being stuffed under your mattress. They have found a great way to increase their profits.....so what?? Isnt it the job of private businesses to make profits???

bradco · November 16, 2006

www.mises.org/journals/scholar/salin.pdf

found this to be a pretty good read on the subject

PolyNewbie · November 17, 2006

PolyNewbie:"If you know so much then why don't you tell me how much money can be created from $100.00 in reserves and a 10 to 1 reserve ratio. I think its around $3000.00, what do you think?"

Bradco:lol I was never good at math...but hey....initial deposit of $100/.1 (assuming no cash drains) would equal $1000 so thats a $900 increase in the money supply....how do you get $3000?

It explained in The Creature From Jekyll Island as the "Rothschild Formula". It is also explained in the video "Money as Debt", which is absolutely excellent and is 47 minutes long. You can watch the first 15 minutes of it on the Canadian Action Party website.

If you watch that 15 min video and its not on that I will explain it here.

PolyNewbie · November 17, 2006

Charles Anthony:Efficient?

The ability of banks to create money depends on their ability to only hold fractional reserves -- which, in turn, is supported by the tax-payers.

When tax-payers subsidize business, what is your criteria for efficiency?

In terms of generating profit - business efficiency. Someone lends you 100 as a deposit and that being turned into well over 1000 simply by creating the money. That is 1000 % profit with virtually no work done or value added.

Jerry J. Fortin · November 17, 2006

C.H.Douglas once debated Kynes and was hounded for the rest of his life for it. At the time Kynes was rather high in the economic theory category. My point is that there are in fact alternative economic models and theories.

PolyNewbie · November 20, 2006

Under our current system the financiers of any project make more money than anyone else and they create the money from nothing. Nothing could be more unfair and counter productive than that.

The whole system is designed to be counter productive to prevent the USA from challenging world government.

geoffrey · November 20, 2006

It's not creating the money from nothing, ugh, you simply don't get it. I'm really struggling with your premise.

Without fractional reserve banking we wouldn't have the wealth we do today. I'm really struggling to see the issue you have with it. It's not only an effective way at increasing the wealth of everyone, but it also allows economic policy to effect possibly harmful trends in the economy.

PolyNewbie · November 20, 2006

Geoffrey:It's not creating the money from nothing, ugh, you simply don't get it.

No, it really is exactly creating money from nothing and its you that doesn't get it.

Really, the bankers do not get the money they lend you from deposits, they create it as a computer entry. Before the entry was made the money did not exist.

If you use your loan money to buy a house, the bankers will make far more money from the house than anyone else because they will receive the value of the house in payment in return for creating the money from nothing.

You cannot deny this simple fact of economics.

PolyNewbie · November 20, 2006

Geoffery:Without fractional reserve banking we wouldn't have the wealth we do today"
No, without fractional reserve banking and the banking business in private hands we would not have the debt we do and we would not have the concentratiions in wealth that we have.

We would still have all the stuff, our economy would still exist and people would still be willing to work.

White Doors · November 20, 2006

Geoffrey:It's not creating the money from nothing, ugh, you simply don't get it.

No, it really is exactly creating money from nothing and its you that doesn't get it.

Really, the bankers do not get the money they lend you from deposits, they create it as a computer entry. Before the entry was made the money did not exist.

If you use your loan money to buy a house, the bankers will make far more money from the house than anyone else because they will receive the value of the house in payment in return for creating the money from nothing.

You cannot deny this simple fact of economics.

I can deny it. My house doubled in price in 2.5 years. I paid $9000 in interest in that time on my mortgage.

I made 200k and the bank made 9k.

Who made more?

PolyNewbie · November 21, 2006

White Doors: I can deny it. My house doubled in price in 2.5 years. I paid $9000 in interest in that time on my mortgage.
I made 200k and the bank made 9k.

Who made more?

How much effort did you put into maintaining that house ?

What would have happened if you had invested the money in silver or gold instead ?

What if instead of cutting the lawn and fixing the toilet you were working instead and bought silver with the money ?

BTW: Also your house will now start losing value - the real estate market is collapsing.

White Doors · November 21, 2006

White Doors: I can deny it. My house doubled in price in 2.5 years. I paid $9000 in interest in that time on my mortgage.
I made 200k and the bank made 9k.

Who made more?

How much effort did you put into maintaining that house ?

What would have happened if you had invested the money in silver or gold instead ?

What if instead of cutting the lawn and fixing the toilet you were working instead and bought silver with the money ?

BTW: Also your house will now start losing value - the real estate market is collapsing.

Hardly any effort went into maintaining the house. Maybe 4k at most.

The bank wouldn't have lent me the money to invest in gold and silver and besides, any money made off of that would have been taxable. Money made on your primary residence is tax free.

The real-estate market is collapsing eh? haha

White Doors · November 21, 2006

And Poly, another question.. Where did that 200k come from that my house went up in value by?

Did I just 'type it into a computer'? Am I now making money from nothing???

Just what is going on here??

PolyNewbie · November 24, 2006

Where did that 200k come from that my house went up in value by?

That happened because currency supply went up. The value of your house has remained the same, the value of your currency went down. Check the prices of silver & gold to see this.

In Rome you could buy an outfit (white things they wear), a leather belt and a pair of good sandals for an ounce of gold. Today you can buy a complete suit with shoes for that price.

You think in dollars and bankers decide how many dollars are in the economy.

You are working for half what you did 10 years ago. The low priced imports and low price of genetically altered mass produced food is preventing you from seeing reality, but it will soon all come crashing down on you.

Charles Anthony · November 24, 2006

That happened because currency supply went up. The value of your house has remained the same, the value of your currency went down. Check the prices of silver & gold to see this.

Wrong!!!!!!!!!

The value is also determined by demand.

Years ago, fur coats were in style and fur coats were valuable.

Now, fur coats are out of style and fur coats are worthless.

PolyNewbie · November 25, 2006

Yes, demand also has something to do with it, and the demand for clothing is relatively constant but the supply of currency also plays a role. More currency in the system causes inflation and the poster was talking about the inflation of his house.

Charles Anthony · November 25, 2006

the poster was talking about the inflation of his house.

The housing market is equally vulnerable to demand forces as it is to supply -- along with the value of the currency.

When you are talking about inflating the money supply all prices will rise together not just houses going up or fur coats going down.

You are really getting the various aspects of economics mixed up.

According to you (and your infaltion-paranoia), the prices of fur coats would still rise with the currency deflation.

Look, it is like pollution and clean air.

Even if all of the millionaires controlled the world, it would still be to their advantage to have a stable currency as it is for us poor folk.

PolyNewbie · November 25, 2006

Charles Anthony,

Here you go telling me I'm wrong and misunderstanding things again and then you make a list of points that in no way dissagree with what I said.

A fur coat is 10 % clothing & 90 % luxury or "jewelry". I was talking about clothes. Its not like a suit or a pair of jeans.

The inflation of the money supply does not immediately raise prices and there is a lag due to the added currency infiltrating the market. Gold and silver prices are good indicators of changes in the currency supply.

Charles Anthony · November 26, 2006

Who can argue with this:

A fur coat is 10 % clothing & 90 % luxury or "jewelry".

????

bradco · November 27, 2006

Yes, demand also has something to do with it, and the demand for clothing is relatively constant but the supply of currency also plays a role. More currency in the system causes inflation and the poster was talking about the inflation of his house.

In this case it is mostly all demand. LOL and i doubt the poster was talking about inflation.....If he was I wonder where helives since a 200K increase in the value of his house is pretty amazing inflation!!