Debt out of thin air not evil but necessary? Is it fair?

[Martinghoul]

Quote from xelite777:
Well glad you like Lucrum.

Here is another eye-opening video.

It even shows you that EVERY financial "crisis" (including the Great Depression) is deliberately created by a handful of men.

This must-see 5-part video has been viewed almost 6 million times, click on the Youtube Full Screen button (buttom of the screen, right corner) for better viewing :

http://www.youtube.com/watch?v=_dmPchuXIXQ

This video made me laugh... I will never stop marvelling at the Internet.

Quote from xelite777:
'"Father, forgive them; for they know not what they do."
Luke 23:34

This quote can just as easily be directed at the creators of the random silly videos posted out there on YouTube. They don't need forgiveness, but they sure know not what they do or say.

 

[Lucrum]

Quote from Martinghoul:

This video made me laugh... I will never stop marvelling at the Internet.

After you get your laughter under control. Maybe you could explain which parts are so funny to us that are economics challenged.



(not intended to be adversarial)

 

[Martinghoul]

Quote from Lucrum:
After you get your laughter under control. Maybe you could explain which parts are so funny to us that are economics challenged.

(not intended to be adversarial)

No problem and I don't assume anyone here is economics challenged.

The video is funny, because from, from the very outset, it uses premises that are simply demonstrably false. For example, the statement that the central bank controls "money supply or inflation" is wrong, because a) it confounds money supply and inflation, which are two distinct phenomena; and b) it suggests that the central bank "controls" inflation. Furthermore, the idea that the central bank "loans" the currency to the economy "at interest" is sorta absurd. And, if it were somehow true, it's even more absurd to suggest that the only way this interest can be paid is through the creation of more currency. I could go on, but let me generalize a little bit.

Firstly, I am always quite curious to see how these types of videos never refer or apply any of the basic macroeconomic principles. Secondly, I am also quite curious that there's never any detail provided to back any of the assertions made. Things are just stated as obvious truths (which, obviously, suits the non-interactive medium, such as a YouTube video). Thirdly, I am also very curious to note that people in these videos don't ever seem to offer any alternatives.

At any rate, it's really neither here nor there. Horses for courses and all that...

 

[toolazy]

I can see the basic idea behind the fed and its franchises.

And agree that these videos may be what people want to hear and not necessary the truth.

And that in these extraordinary times, extraordinary measures are required, like giving away money just like that to selected few.

And this is why structural problems getting bigger, ie misinvestment.

Looks like speeding train without driver to me.

 

[zdreg]

Quote from Martinghoul:

Inflation engine? It's quite obvious that Hamilton's efforts to create a central bank had a goal of combating inflation. As to the central bank being a "handmaiden of the executive and legislative branch", I presume he couldn't really imagine anything different. The concept of "central bank independence" is a very recent phenomenon.

"Inflation engine? It's quite obvious that Hamilton's efforts to create a central bank had a goal of combating inflation. "
he was dead wrong.

 

[Martinghoul]

Quote from zdreg:
"Inflation engine? It's quite obvious that Hamilton's efforts to create a central bank had a goal of combating inflation. "
he was dead wrong.

Well, I dunno...

Wouldn't you agree that Hamilton's central bank idea worked somewhat better than what preceded it (i.e. the lack of coordination on monetary matters between Congress and individual states' governments)? Weren't Hamilton's ideas important and influential enough to be included in the Article 1 of the Constitution?

On the basis of the above, I would conclude that Hamilton was relatively right, rather than dead wrong.

 

[zdreg]

history suggests otherwise. look at price changes in19th century vs. 20th century.
bottom line the fed is an inflation engine.

 

[Martinghoul]

Quote from zdreg:
history suggests otherwise. look at price changes in19th century vs. 20th century.
bottom line the fed is an inflation engine.

I think it would be best if we agree to disagree on this one.

 

[Lucrum]

Quote from Martinghoul:

No problem and I don't assume anyone here is economics challenged.

Admittedly it's not my strongest subject

The video is funny, because from, from the very outset, it uses premises that are simply demonstrably false. For example, the statement that the central bank controls "money supply or inflation" is wrong, because a) it confounds money supply and inflation, which are two distinct phenomena; and b) it suggests that the central bank "controls" inflation. Furthermore, the idea that the central bank "loans" the currency to the economy "at interest" is sorta absurd. And, if it were somehow true, it's even more absurd to suggest that the only way this interest can be paid is through the creation of more currency. I could go on, but let me generalize a little bit...

The federal reserve does loan money to member banks does it not? And they do charge interest, do they not?
The central bank gets this money backed by nothing but promises from the US mint, no?

 

[Swan Noir]

One could read this thread and think the only economic calamity a society needs to avoid is inflation. I'm reminded of the ecomist who was asked just how bad a depression could get if it all went wrong. His answer was: Do you remember reading about the Dark Ages?