Thank you pookie18
Would it help to point out that “printing money” is a metaphor?
QE=devaluation
Rubbish article. From the comments section:
The distinction between “printing” and “creating” money is unimportant. It doesn’t matter whether the money is printed on paper or issued electronically. The bottom line is that the money supply still increases, and in the long run that activity ends up destroying the value of each unit of currency. I couldn’t help but notice that you deliberately overlooked that fact in your article.
You wrote, “Federal Reserve did not purchase direct government debt- but rather purchased mortgage backed securities and other asset-based securities, NOT government bonds.” Actually, we don’t know that for a fact. We do know that they purchased mortgage-backed securities, otherwise known as “toxic assets” because if valued at their true value they would be worth far less than their face value. We also know that they purchased these securities by creating money out of thin air. But that doesn’t mean that the Fed hasn’t been purchasing direct government debt. To the contrary, the government has been running out of buyers for its debt. All the biggest buyers, including China, Japan, and Russia, have dramatically curtailed their purchases, and they will likely continue to do so.
Of course, the Fed is an opaque organization, so there is no way to know exactly what they’re doing. That’s one key reason why Cong. Ron Paul has called for a full, public audit of the Fed, and not the sham audit the government currently conducts.
Despite the fact that the Wall Street Reform and Consumer Protection Act of 2010 included only a watered-down version of Audit the Fed, we got a quick glimpse of Fed activities from the revelations that came out of that law. Yet, even that quick glimpse tells us that the Fed bailed out the leading European banks as well as banks in other countries via the discount window. This money was also created out of thin air, yet the Fed told us nothing about it before they were forced to do so. So how can you be sure that the Fed isn’t buying government debt? The honest answer is: you can’t.
You wrote, “Third, it’s actually irrelevant to discuss printed paper money, since it represents a tiny portion of our money supply. The vast majority of our money supply is electronic- not paper money.” You know perfectly well that the term “paper money” is euphemistically used to describe the entire money supply. Some of us refer to this as the “fiat” money supply, but we unjustly get shot down for using that term, too. So what term is acceptable to you, Mr. Luko? After all, if not for the fact that our money is based on paper, we would not be at a place where electronic money could be increased ad infinitem at the whim of the Fed.
You wrote, “Fourth- our money is not worthless, it represents value- either assets or labor, so it’s not worthless.” Then why does it keep losing value? Why is today’s dollar worth less than 4 cents compared to the 1913 dollar? If that’s not worthlessness, what is? Does it have to reach zero before you’ll admit it’s worthless? If so, you have a craven view of “worth”.
You wrote, “Based currency (money based on gold) has already been tried, and proven to be very unsuccessful.” No, that’s not true. Rather, the gold standard was undermined by the government in collusion with the banks by permitting more paper/electronic/fiat money to be created than was actually held in reserves. This inflation of the money supply is what led to all the troubles you described in that paragraph. Blaming gold for these developments is like blaming store owners for the fact that there are thieves that rob those stores.
You wrote, “Sixth- inflation- a dynamic and growing economy needs ‘some’ inflation.” This is a long held truism that has not a shred of evidence to support it, and I cannot help but notice that you continued that tradition by refusing to provide any evidence to support your wild claim. You simply stated that your truism is true, as if stating it proves it. Inflation, specifically monetary inflation, is nothing more than the stealing from the poor and the middle class by the rich, via destruction of the currency.
Lastly, I want to address your statement, “The Federal Reserve and fiat currency system has produced the highest standard of living for the highest percentage of Americans in its history- as well as reducing the percentage of people living under the poverty rate in America.”
This falsehood has been the rallying cry for decades, but it simply isn’t true. The quintessential point is the famous gap with the rich getting richer while the poor get poorer. This isn’t just a fancy political claim. It also happens to be true. Just because dollar amounts increase doesn’t mean that the poor are better off. To the contrary, the dollars buy far less than they used to.
The truth is that the poor should no longer be poor. Poverty should be eradicated by now, and it would have been if not for the fiat money system. The rat race should be over, but it doesn’t end because the middle class finds that their goals are always just out of reach, like a carrot dangling on a stick. Again, this is due to the fiat monetary system where the value of the unit of money keeps decreasing over time. This tendency for the dollar to always lose value over time is the greatest theft in the history of mankind.
More later.
True, but so what? If the Fed creates new money, it devalues the existing dollars, whether electronic or paper.
Large investment banks purchase the US Govt debt directly. The Fed purchases government treasuries from the large investment banks (at a loss to the government) withing a few days from their purchase. This is essentially the Fed purchasing the US Govt treasuries.
The Fed has been purchasing these treasuries to keep their interest rates down, which allows the federal government to grow too rapidly. If you subsidize any loan, the price of the security will go up. Just look at housing and college educations.
From Benjie’s and Tiny Timmy Geithner’s fax machine directly into the wood chipper. How lame can they get? We have no idea how stupid these shills really are.
Thank you pookie18
Utter rot. America is living on it’s credit card because it is unable to pay for what it consumes. some how that little detail escapes the author’s notice but so much else did too, like the inability to make the payments on the debt.
And how has the Federal Reserve accomplished that? Why by ever stealing from the future, until the chickens come home to roost, as like now. In a century, we, and our progeny, are now snared in the chains of an unsustainable debt bomb created by the Federal Reserve and the phony money system developed to plunder a big piece of the productive activity in the country.
But so far, so good, eh?
Also, take this sentence from the article: Printing money can only be conducted by the Treasury Department which comes under the direction of the President of the United States, NOT the Federal Reserve. -- the federal government -- including the Treasury -- does not print fiat currency at all. What the Federal Government does is print up bonds; gives them to the private Federal Reserve Bank, and the Federal Reserve then chugs out fiat currency.
This clown criticizes the gold standard? A money standard that has given us balanced budgets and even a surplus? Thanks to fiat currency and the Marxist in the Whitehouse, we are on the verge of an economic tsunami. A Great Depression, coupled with massive Weimar Republic or Zimbabwe inflation.
That is the reason Glenn Beck urges people not only to buy gold, but canned foodstuff and maybe even freeze dried materials. We could be in for some very bad times.
As a final remark, if under a gold standard there is a panic, the government should leave things alone and the economy recovers. Government meddling helped turn the crash of 1929 into the Great Depression. When there was a big stock Market crash in the late eighties, then Pres. Ronald Reagan was smarter and commented very little on the crash and America suffered little damage from it. Pres. Reagan understood the economy as President Franklin Delano Roosevelt did not!
“The Federal Reserve and fiat currency system has produced the highest standard of living for the highest percentage of Americans in its history- as well as reducing the percentage of people living under the poverty rate in America. That is “proof” in the pudding.”
May you eat a large plate of dog turds before dying in a fire.
Hmmm...one wonders why an entity with the constitutional power to coin dollars would want to borrow in excess of twelve trillion dollars.
If you had the power to coin money would you borrow money from a separate entity at interest?