Falcon91Wolvrn03 said:

That's quite the exaggeration.  I can tell you my own company is borrowing through the roof right now for cap ex.

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hostileuniverse said:

KauaiOrca said:

It absolutely crushed savers that rely on interest rate based dividend income, that's for sure.  Double edged sword with interest rates.

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Exactly this^^^
For a party that always yaps about helping the middle class, they sure have been fucking us over with these interest rates. I would suggest that's part of the plan though, it's common knowledge the democrat party needs a permanent underclass to stay in power...

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"Absolutely crushed" may be an exaggeration, as interest rates never went negative, and these people didn't take losses like so many others.

Also, is 5% interest when there's 5% inflation better than 0% interest with 0% inflation?  I think they're pretty much the same. 

Falcon91Wolvrn03 said:

amp244 said:

So do you think that the Federal Reserve act was a way to break away from banker control of the government exercised through the issuance of credit? Yes or no question.

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Absolutely!

If Government wanted to borrow money before the Fed, say to help a weak economy, or to wage a war, it had to borrow at market rates.  If it needed a lot of money, it had to sell a lot of bonds, and interest rates had to be high enough to sell it all to the market, hurting the taxpayer.

By creating its own bank that serves the US Government, Government effectively gave itself the ability to fund itself as needed, and to set its own interest rates.  It has far more freedom to borrow when times are tough (or when times aren't so tough, as we've seen since Reagan).  The Fed can even create money out of thin air to buy Government bonds when Government really needs money (this also creates a lot of demand for such bonds, reducing interest rates to the taxpayer).  Obviously, to prevent hyperinflation, the Fed will sell the bonds and retire that money from the system, or it can increase inflation to slow inflation.

So again, "yes"!

And that's just the benefit of obtaining credit.  It also helped stabilize the boom bust cycles that were so damaging to the US economy, and stabilized interest rates so people could better plan for their future.

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But congress has always had the right to create and circulate its own currency! All of this money that they are borrowing from the Fed at interest could have all been created Debt free. The exact same benefits you say the Fed allows, were easily obtainable in house, debt free! Yes the Fed gives its profits back to the Treasury, but lets not forget about those 6% dividends (typical sp 500 dividends are from 2-4%). All of this stabilization you speak of could have been done in house and would have been had that clumsy Lincoln not have foolishly gotten the back of his head blown off.

The Federal Reserve is just another way for private bankers to control the government through the issuance of credit, and even worse, the monopoly of its currency. By masquerading as a "quasi-government entity" and calling it the "Federal" Reserve, it gives you the impression that it is part of the government, when in fact it receives no funding appropriated by congress and its decisions do not have to be approved by anyone in the Executive or Legislative branches. All they have to do is attempt to satisfy their subjective mission statement.

Lets look at their duties as described in said mission statement and assess how good of a job they have been doing:

1.) Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
Hmm. Employment not at all in good shape, prices stable alright - stably rising, interest-rates lower than ever.


I can see how someone could make the argument that prices have been more stable from year to year since the Fed, although that certainly wasn't the case for the first 40 years or so. You may find it interesting that $1 in 1800 was worth roughly the same as $1 in 1945. How did we manage the back end of the industrial revolution and WWI without our beloved inflation? Also note that ever since we went off the gold standard in 1933 the value of the dollar has been destroyed. As we have all seen in the most recent increases to the money supply, the new dollars disproportionately go to the rich, meaning the working class's purchasing power has greatly diminished. According to the U.S. Census Bureau there are now more people on some form of government relief (TANF, Food Stamps, Medicaid) than there are full-time year round workers. I'm by no means a Republican, but I can't ignore that fact. But hey, if you like big government, ballooning welfare, income inequality, destruction of currency, and diminishing purchasing power, than I suppose the Fed is doing a great job!


2.) Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
Sure could have used some of that supervision 8 years ago. Im glad they are there to "ensure the safety and soundness" of our capital.

3.) Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
Sure could have used that risk assessment 8 years ago when banks were leveraged to the gills with risky derivatives. Remember, you've got to play on the outside, and double down when you lose. As long as there is no limit, you'll always win!

4.) Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
I guess 1 out of 4 ain't bad.

amp244 said:

Falcon91Wolvrn03 said:

amp244 said:

So do you think that the Federal Reserve act was a way to break away from banker control of the government exercised through the issuance of credit? Yes or no question.

---

Absolutely!

If Government wanted to borrow money before the Fed, say to help a weak economy, or to wage a war, it had to borrow at market rates.  If it needed a lot of money, it had to sell a lot of bonds, and interest rates had to be high enough to sell it all to the market, hurting the taxpayer.

By creating its own bank that serves the US Government, Government effectively gave itself the ability to fund itself as needed, and to set its own interest rates.  It has far more freedom to borrow when times are tough (or when times aren't so tough, as we've seen since Reagan).  The Fed can even create money out of thin air to buy Government bonds when Government really needs money (this also creates a lot of demand for such bonds, reducing interest rates to the taxpayer).  Obviously, to prevent hyperinflation, the Fed will sell the bonds and retire that money from the system, or it can increase inflation to slow inflation.

So again, "yes"!

And that's just the benefit of obtaining credit.  It also helped stabilize the boom bust cycles that were so damaging to the US economy, and stabilized interest rates so people could better plan for their future.

---

But congress has always had the right to create and circulate its own currency! All of this money that they are borrowing from the Fed at interest could have all been created Debt free. The exact same benefits you say the Fed allows, were easily obtainable in house, debt free! Yes the Fed gives its profits back to the Treasury, but lets not forget about those 6% dividends (typical sp 500 dividends are from 2-4%). All of this stabilization you speak of could have been done in house and would have been had that clumsy Lincoln not have foolishly gotten the back of his head blown off.

The Federal Reserve is just another way for private bankers to control the government through the issuance of credit, and even worse, the monopoly of its currency. By masquerading as a "quasi-government entity" and calling it the "Federal" Reserve, it gives you the impression that it is part of the government, when in fact it receives no funding appropriated by congress and its decisions do not have to be approved by anyone in the Executive or Legislative branches. All they have to do is attempt to satisfy their subjective mission statement.

Lets look at their duties as described in said mission statement and assess how good of a job they have been doing:

1.) Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
Hmm. Employment not at all in good shape, prices stable alright - stably rising, interest-rates lower than ever.


I can see how someone could make the argument that prices have been more stable from year to year since the Fed, although that certainly wasn't the case for the first 40 years or so. You may find it interesting that $1 in 1800 was worth roughly the same as $1 in 1945. How did we manage the back end of the industrial revolution and WWI without our beloved inflation? Also note that ever since we went off the gold standard in 1933 the value of the dollar has been destroyed. As we have all seen in the most recent increases to the money supply, the new dollars disproportionately go to the rich, meaning the working class's purchasing power has greatly diminished. According to the U.S. Census Bureau there are now more people on some form of government relief (TANF, Food Stamps, Medicaid) than there are full-time year round workers. I'm by no means a Republican, but I can't ignore that fact. But hey, if you like big government, ballooning welfare, income inequality, destruction of currency, and diminishing purchasing power, than I suppose the Fed is doing a great job!


2.) Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
Sure could have used some of that supervision 8 years ago. Im glad they are there to "ensure the safety and soundness" of our capital.

3.) Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
Sure could have used that risk assessment 8 years ago when banks were leveraged to the gills with risky derivatives. Remember, you've got to play on the outside, and double down when you lose. As long as there is no limit, you'll always win!

4.) Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
I guess 1 out of 4 ain't bad.

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Falcon91Wolvrn03 said:

KauaiOrca said:

But, the interest rate lock down did help quite a few people avoid foreclosure.  All in all, though, I think QE has been a pretty solid failure.

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You seriously don't think a few extra trillion dollars helped the economy?  You don't think businesses are doing surprisingly well right now?

I'll certainly agree Main St isn't doing as good as Wall St, but that's not because the economy is awful, it's because Congress isn't helping Main St.

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qman said:

Why do you think the 5 year trades at 1.5% and the 10 year trades at 2.1% today?  Because there's no inflation or velocity of money taking place, it's still dropping.

That's not the sign of a growing economy, that's the sign of a economy that's barely moving.

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amp244 said:

Yes the businesses are doing surprisingly well because they are being bolstered by Keynesian pseudo-demand. None of this is a natural market reaction. You can't just keep employing tactics to circumvent correction periods forever. Eventually the world will stop taking your dollar. Otherwise we could all stop working and have the FED just print us money.

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Falcon91Wolvrn03 said:

qman said:

Why do you think the 5 year trades at 1.5% and the 10 year trades at 2.1% today?  Because there's no inflation or velocity of money taking place, it's still dropping.

That's not the sign of a growing economy, that's the sign of a economy that's barely moving.

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GDP growth is the best measure of a growing economy.  United States GDP growth averages about 3.2 percent per year, and now it's in the high 2's, so while not ideal just yet, it's not terrible either.

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qman said:

Falcon91Wolvrn03 said:

qman said:

Why do you think the 5 year trades at 1.5% and the 10 year trades at 2.1% today?  Because there's no inflation or velocity of money taking place, it's still dropping.

That's not the sign of a growing economy, that's the sign of a economy that's barely moving.

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GDP growth is the best measure of a growing economy.  United States GDP growth averages about 3.2 percent per year, and now it's in the high 2's, so while not ideal just yet, it's not terrible either.

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Really, GDP is the best measurement?  If a company like Apple manufactures Iphones in Indonesia and then sells that phone all over the globe, should that be considered good for the US economy?

Main Street does not feel this great 2% GDP growth at all.

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KauaiOrca said:

Amp - Do you really think our Congress, as screwed up and dysfunctional as it is, so sensitive to the political cycle, would make good decisions and monetary policy on its own?

I'm not saying they can't do it, I just think monetary policy would become  hyper politicized which would be a BIG mistake!

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amp244 said:

KauaiOrca said:

Amp - Do you really think our Congress, as screwed up and dysfunctional as it is, so sensitive to the political cycle, would make good decisions and monetary policy on its own?

I'm not saying they can't do it, I just think monetary policy would become  hyper politicized which would be a BIG mistake!

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If Wall Street was driven out of politics and the Democratic Republic was restored to Constitutional adherence, then yes. If politicians represented the common man and not Wall Street, yes. If people were educated and politicians made an effort to inform the public of not only what they were doing, but why they were doing it, I don't see why monetary policy should not be a political issue.

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amp244 said:

KauaiOrca said:

Amp - Do you really think our Congress, as screwed up and dysfunctional as it is, so sensitive to the political cycle, would make good decisions and monetary policy on its own?

I'm not saying they can't do it, I just think monetary policy would become  hyper politicized which would be a BIG mistake!

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If Wall Street was driven out of politics and the Democratic Republic was restored to Constitutional adherence, then yes. If politicians represented the common man and not Wall Street, yes. If people were educated and politicians made an effort to inform the public of not only what they were doing, but why they were doing it, I don't see why monetary policy should not be a political issue.

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Bigbadwooof said:

I really think we need to step back from worshipping the constitution. It certainly is a legislative masterpiece, but nothing is beyond critique, and when we shove it up in a pedestal we collectively ban dissent. Just throwing that out there.

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KauaiOrca said:

amp244 said:

Yes the businesses are doing surprisingly well because they are being bolstered by Keynesian pseudo-demand. None of this is a natural market reaction. You can't just keep employing tactics to circumvent correction periods forever. Eventually the world will stop taking your dollar. Otherwise we could all stop working and have the FED just print us money.

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Pretty much the whole world is doing this, though so it's a level playing field.  IF the US was the only country inflating it's markets, that would be a different story but Japan and Europe are at least as aggressive as we are.

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KauaiOrca said:

amp244 said:

KauaiOrca said:

Amp - Do you really think our Congress, as screwed up and dysfunctional as it is, so sensitive to the political cycle, would make good decisions and monetary policy on its own?

I'm not saying they can't do it, I just think monetary policy would become  hyper politicized which would be a BIG mistake!

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If Wall Street was driven out of politics and the Democratic Republic was restored to Constitutional adherence, then yes. If politicians represented the common man and not Wall Street, yes. If people were educated and politicians made an effort to inform the public of not only what they were doing, but why they were doing it, I don't see why monetary policy should not be a political issue.

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I think you'd agree that's one WHOPPER of an "IF" ... to put it mildly.

Wall Street owns our political process now, If Wall Street means all of Corporate America ... People are getting  more dumbed down and politics is a game of deception.

Things are going in the opposite direction of what you're describing.  I guess that's the problem with a lot of the "Fed's the Problem" speak.  We are so far away, as a nation, from where we need to be to have honest government that the FED, right now, is the best thing going about our monetary system.

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Bigbadwooof said:

If all of those things were true, the Fed wouldn't be a problem at all. Everything would be solved if the public was educated and informed, and mkney didnt influence politics.

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Quote:

I really think we need to step back from worshipping the constitution. It certainly is a legislative masterpiece, but nothing is beyond critique, and when we shove it up in a pedestal we collectively ban dissent. Just throwing that out there.

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Bigbadwooof said:

I really think we need to step back from worshipping the constitution. It certainly is a legislative masterpiece, but nothing is beyond critique, and when we shove it up in a pedestal we collectively ban dissent. Just throwing that out there.

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hostileuniverse said:

I don't think we've seriously followed it in at least a hundred years, we been chipping away at the limits of govt for a loooooong time

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