The Fed, fractional-reserve lending and source of inflation

Quote from Josh009:

:eek:
I think the middle class would cease to exist.
See you all in the poorhouse!
More...


the federal reserve system is working against ordinary americans. isn't this already well in progress?

as long as the middle class aren't literally liquidated along with their assets by the current system, in congress they would have the direct power to elect new representation in their money creation process.
 
Quote from Avid_Consumer:

congress should control the money supply. not a perfect solution, but at least it takes it out of the hands of a private corporation and into the hands of the democracy

Jackson tried it, Lincoln tried it, Kennedy tried it.
More...

this observation goes over the head of 75% of the readers here.
 
Quote from ratboy88:

this observation goes over the head of 75% of the readers here.
More...

True true.

Kennedy was only months if not weeks away too and then SURPRISE.

BTW, a common misconception that it is the government that prints dollars. It's actually the banks through fractional reserve lending. US government strongly contributes through the money raised in government debt, which always finds itself back into bank deposits.
 
jackson did rid us of the central bank. wilson was tricked into the return of fed.:mad: fed became even stonger with their 29 market crash and depression that followed.
 
Quote from Avid_Consumer:

congress should control the money supply. not a perfect solution,

Jackson tried it, Lincoln tried it, Kennedy tried it.
More...

The same nationalized BoE got its ass kicked by George Soros. You telling me nationalizing central banks works?
You have a nationalized central bank, and its influenced by the whims of politicans that don't see further than 2006 Rep or Dem.
Choose the lesser evil ;).
And besides, nationalized central banks and you'll get more of the money spent on stuff like War on Terror or War on Drugs or War on Poverty or War on ... Nationalized banks often have their money directed towards fulfilling state economic goals.(France, ROK, Russia and on and on)
 
Quote from FireWalker:

"I believe that banking institutions are more dangerous to our liberties than standing armies."
Thomas Jefferson

"Give me control over a nation's currency and I care not who makes its laws."
Baron M.A. Rothschild


How the government creates money:
-Treasury prints a bond
-If it isn't sold on the open market to an investor, the Fed buys the bond by creating new money
-Treasury deposits the new money in bank and spends it
-That new money came from nothing. It cost nothing and there is no risk to the Fed for lending it. If the government defaults on the loan, the Fed loses what? A book keeping entry.

How the Fed creates money:
-Fed decides to buy an existing bond
-Fed creates money to buy the bond
-Seller deposits new money in bank and spends it

How banks create money:
-Bank has no available reserves, but wants to lend (or invest)
-Bank borrows money from Fed at the Fed funds rate
-Fed creates new money and earns interest on the loan

How banks create money 2 (Fractional Reserve Banking):
-Only a certain % of assets are required to be held in the vaults
-Banks can leverage their reserves by lending them out
-When you borrow $30,000 for a new car, that money is created out of thin air. It is created by your act of borrowing.
http://en.wikipedia.org/wiki/Fractional_reserve_banking


In all cases, interest is paid on the loan.
In all cases, the money didn't exist and is borrowed into existence.
Who creates money:
- The Fed
- The Government
- The banks
- The public by the act of borrowing


All this money creation puts more dollar bills in the system.
If you're playing Monopoly and the banker continually puts more dollar into the game, what will that do to the price of Marvin's Place? What does that do to the value of each bill?

Since money is only created when new debt is created, then where does the money come from to pay the interest on the debt? By taking it from someone else who has borrowed it into existence. So this system must create constant monetary inflation until such point that noone will borrow any more money. Meanwhile everyone frantically runs around looking for ways to leverage or finance to create more money so they can meet their interest obligations. It's a reverse Ponzi scheme.

- At the heart of this sits the Fed, collecting interest. A private organization. (A constitutionally forbidden organization)
- Government condones this because the system allows them to print money at will (and keeps it hidden through the complexity of the banking system)
- The public ends up paying the bill by working harder and harder to keep ahead of the constant devaluation in their dollars.
(The Fed and the Government could care less if the dollars devalue because they'll just print some more.)

So what's all that talk about the Fed "fighting inflation"? Since they are the root of inflation, what they are really fighting is "perceived inflation". Hence the misdirections and confusion tactics: CPI contortions, evil corporations, core rate, energy costs, blah blah blah.

This is warfare, fraud, and mafia tactics all rolled into one. All condoned and perfectly "legal".


Here's a film:
Monopoly Men
http://video.google.com/videoplay?docid=-7065177340464808778
More...

Decent post, but the question is, do we really want the wild swings that come from governement controlled money supply? I agree with almost everything you said, but I'm not as against the FED as you are.

We have a fiduciary monetary system. The idea isn't to stop inflation, we just need to keep it reasonable. Hence the idea of "sustained" growth. In a fiduciary monetary system inflation isn't a problem. Hyperinflation is a problem. The average consumer doesn't really notice inflation much, but they do get hurt by hyperinflation. We should count our blessings that the FED doesn't simply print money at will to create it. I don't know about you guys but 3-7% annual inflation sounds a lot better than 400%.
 
I consider myself to be a Jeffersonian Democrat. However, this great philosopher scientist, engineer KNEW SQUAT ABOUT MONEY. On the other hand, the piss ant of a man, Alexander Hamilton, KNEW MONEY! As far as this Rothschild guy I couldn't tell ya nothing about him other than he said that quote. Despite what any of them say the FED is critical to a modern economy as a clearinghouse, a regulatory body, AND macroeconomic monetary policy control. In a fiat system there has to be AN authority. The Fed and it's monetary policy are no more the source of inflation than are Congress, The President, the Treasury, and limited resouces in general.
 
You must log in or register to reply here.
Back
Top