Don't know if this will work. Would post CRB and GSCI if I could find a site using gif.
Posted on 11/16/2005 9:38:57 AM PST by Sonny M
Last month, President Bush nominated Dr. Ben S. Bernanke, currently chairman of the President's Council of Economic Advisors, as chairman of Federal Reserve Board to replace the retiring Alan Greenspan. Alan Greenspan's replacement comes at a time of heightened fears of inflation resulting from the recent spike in oil prices.
First, let's decide what is and what is not inflation. One price or several prices rising is not inflation. When there's a general increase in prices, or alternatively, a reduction in the purchasing power of money, there's inflation. But just as in the case of diseases, describing a symptom doesn't necessarily give us a clue to a cause. Nobel Laureate and professor Milton Friedman says, "[I]nflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output." Increases in money supply are what constitute inflation, and a general rise in prices is the symptom.
Let's look at that with a simple example. Pretend several of us gather to play a standard Monopoly game that contains $15,140 worth of money. The player who owns Boardwalk or any other property is free to sell it for any price he wishes. Given the money supply in the game, a general price level will emerge for all trades. If some property prices rise, others will fall, thereby maintaining that level.
Suppose unbeknownst to other players, I counterfeit $5,000 and introduce it into the game. Initially, that gives me tremendous purchasing power, whereby I can bid up property prices. After my $5,000 has circulated through the game, there will be a general rise in the prices -- something that would have been impossible before I slipped money into the game. My example is a highly simplistic example of a real economy, but it permits us to make some basic assessments of inflation.
First, let's not let politicians deceive us, and escape culpability, by defining inflation as rising prices, which would allow them to make the pretense that inflation is caused by greedy businessmen, rapacious unions or Arab sheiks. Increases in money supply are what constitute inflation, and the general rise in the price level is the result. Who's in charge of the money supply? It's the government operating through the Federal Reserve.
There's another inflation result that bears acknowledgment. Printing new money to introduce into the game makes me a thief. I've obtained objects of value for nothing in return. My actions also lower the purchasing power of every dollar in the game. I've often suggested that if a person is ever charged with counterfeiting, he should tell the judge he was engaging in monetary policy.
When inflation is unanticipated, as it so often is, there's a redistribution of wealth from creditors to debtors. If you lend me $100, and over the term of the loan the Federal Reserve increases the money supply in a way that causes inflation, I pay you back with dollars with reduced purchasing power. Since inflation redistributes (steals) wealth from creditors to debtors, it helps us identify inflation's primary beneficiary. That identification is easy if you ask: Who is the nation's largest debtor? If you said, "It's the U.S. government," go to the head of the class.
So what about the president's nomination of Ben S. Bernanke as Alan Greenspan's replacement? I know little or nothing about the man. What I do know is that it's not wise for one person, or group of persons, to have so much power over our economy. Here's my recommendation for reducing that power: Repeal legal tender laws and eliminate all taxes on gold, silver and platinum transactions. That way, Americans could write contracts in precious metals and thereby reduce the ability of government to steal from us.
So, when the Fed prints money it's added to the national debt? What do you think the Fed does with its ill-gotten interest income?
And it was not generating profits for the stockholders of the Federal Reserve, which is why banking executives didn't like this executive order.
How much profit does the Fed pay to the stockholders every year?
CORNERED RATS AND THE PPT
Nelson Hultberg
There is a new wrinkle to consider regarding the government's Plunge Protection Team (PPT), which the investing public needs to be made aware of. First, however, some groundwork on the PPT, its origins, and its assumed purposes. Then I will present a theory about the PPT that should further validate its existence and clue us in to what it has planned for the future.
Conventional Wall Street media and Washington establishment types are quick to denigrate those of us who theorize about the establishment of a secretive PPT organization to manipulate the markets. But it is a matter of public record that the Working Group on Financial Markets (WGFM), which we allege to be the parent to the PPT, was formed under the Reagan administration. It was done by Executive Order on March 18, 1988.
This guy seems to think it's a secret.
So, no word on how repurchase agreements help support the stock market?
LOL! So sayeth the guru. What a ridiculous statement. I think you'll find a large list of monetary economists (that means they agree with the above article since you obviously don't understand it) have written an open statement in support of the fair tax.
:)
Right, as in his new idea that the 2004 elections were rigged by Diebold?
Or is he right in referance to his John Birch society stuff?
When he isn't making stuff up, he steals his ideas (aka B.S. conspiracy theories) from the John Birsh society (and now Bev Harris).
At one time he was spitting out nonsense about some wackjob theory about Ike being a commie sympathizer.
He is either a nut job (or more likely) a con artist who knows that certain types of people are drawn to conspiracy theories and he can make a easy buck off of them.
Its the story of his life, take a few facts, tie them with something that appeals to the paranoid, package with some old stuff and then put it in a book and sell.
I do find his conspiracy theories involving the medical profession to not only be wrong, but offensive and sick.
The only time he is on the money is when he is exploiting it from someone he has just conned out of their cash.
How he sleeps at night, is a true mystery.
The Working Group is no secret. In the absence of M3 reporting, detecting its methods will be more difficult in the future. I can think of no other reason to stop reporting M3. Perhaps you can. If so, you are welcome to act on your hunches, as am I. Happy investing.
You can agree that this has happened or not. I don't care what you believe. Go do your own research and act accordingly.
I understand the article. That's why I'm ridiculing its ridiculous premise.
Long term repos, called term repos, would allow a market manipulator to buy securities today and sell them back at a specified date in the future.
Yes, a repo allows one party to temporarily buy securities from another party. These private transactions do nothing to demand.
If the "Plunge Protection Team" (LOL) buys 1,000,000 shares of IBM from Goldman Sachs that does not soak up one share of stock offered for sale on the exchange floor. Kind of hard to cause a short squeeze when you don't actually buy shares or cause the price to rise.
I get it. Temporarily buying shares does not soak up shares and does nothing to demand. Carry on.
Don't know if this will work. Would post CRB and GSCI if I could find a site using gif.
Commodity Research Bureau, time series is closely related to inflation as an increase in producer prices (producer price indexes are more cool but lengthy):
That's a good graph of the hidden tax known as benign inflation. The CRB shows the cyclical nature of the dollar and is much more sensitive to inflationary and deflationary pressures. The deflator is much more smoothed out. Inflation gives people a false sense of wealth creation in particular with home ownership. By the time maintenance, insurance, interest payments, and a devalued currency is factored in, people don't make much on a home sale even in this real estate bubble. Back when people paid capital gains on all their home sale gains it was almost impossible to make money. At best it is a forced savings plan and a hedge against inflation.
Given how much of a debtor nation we are, I think that will come to be considered a feature. The most painless way out of a debt crisis for the debtor is to inflate their debt away.
2 things.
1)Creditors don't like it, and will be more weary in the future of loaning money to someone who will inflate themselves out of debt.
2)Alot of Americans also buy bonds, and depend on them, its a poor and cruel government that screws the citizens of its country by reneging on their faith in buying its bonds.
The United States Note did not begin its life as debt but as debt's opposite, the wealth represented by the 371.25 grains of silver backing it. This is proved by the fact that the United States Note, or the silver backing it, never had to be paid back with or without interest to any corporate entity. Who would you pay it back to? The silver came out of the Earth. The Earth is not asking for the silver back with Interest. So the Note can circulate debt free representing the silver (also symbolically but in a way that is sound and lawful) performing the function of money.
Since Federal Reserve Notes, unlike silver certificates, are not titles and not warehouse receipts to silver, they themselves are like licenses to buy and sell stuff. You cannot buy them and own them. Someone must borrow them, at interest. After that, they seem to be money just like United States Notes, except where you could theoretically demand the silver and surrender the Note, you cannot do this with the Federal Reserve Note. The total amount of US Note money in circulation would be restricted by the amount of silver backing it. There is no such restriction on the amount of FRN money. Worse, the only limit on the amount of FRN is how indebted the nation wants to be.
What does the Fed do with the ill-gotten interest income? How much profit does the Fed pay to the stockholders every year? I get the point of your question. The term ill-gotten betrays some bemusement on your part, that you might have a crank on the line who will ultimately make some remark about greedy joooish bankers on Wall Street, and then this can all be put to rest.
I'll let you have the satisfaction of doing your own research and finding out the amount of interest and the way it is distributed.
Personally, for me, the principles are at issue, for example, why would you borrow money and pay interest if you don't have to? I save and when I need something, I buy it. By deferring my gratification, I have more money to spend on other things. We used to do this as a nation but not any more. Now we mortgage our future by borrowing all our official money from a bank. Why would we do this? The Constitution provides for our financial needs. It worked for over 100 years. But somehow since 1913 it is soooo important to have a central bank? I'm not convinced. Remember how Andrew Jackson fought the predecessors to the modern Federal Reserve. He knew they'd be nothing but trouble.
Further, I don't think the profits, the ill-gotten gains, are nearly as important to the powers running the bank as the control. They are less businessmen looking for a profit than socialists looking to implement their vision for humanity, banking is merely their instrument. Look at how we have changed, once good public schools are now sewers, we have a large growing angry underclass fed by social programs, unwed teen mothers all over the place, broken homes, lack of civility in the population, we don't defend our own borders but can defend Iraq's, the gun grabbers want to void the second amendment, and we can't even defend our own homes now from private interests since Kelo v. New London; our own USSC sold us out. We are losing liberty fast. I could go on but don't you get the point?
Control has been progressively wrenched from the people who used to understand self-government and lived it, and has been transferred to an intrusive nanny government that controls more aspects of our lives than it was ever originally designed to. And I believe the tool of this transfer over to socialism is the money itself. It allows the governing class to buy itself an advantage over the producing class, and expand its power. This statement is certainly backed up by the plank in the communist manifesto that the fastest way to overturn a social order is to debase the currency. Well FRNs are the definition of a debased currency, and Silver coins backing US Notes are the definition of a sound currency.
And thank you for your interesting questions.
Naturally, the published values for both "money supply" and GDP are estimates.
Sorry to have to tell you this but the government does not borrow money directly from the Federal Reserve.
This is proved by the fact that the United States Note, or the silver backing it, never had to be paid back with or without interest to any corporate entity.
How do you figure that a Federal Reserve note has to be paid back with interest? Do you get a monthly bill charging you for the cash in your wallet? How do you figure a Federal Reserve note is debt ?
I get the point of your question. The term ill-gotten betrays some bemusement on your part, that you might have a crank on the line who will ultimately make some remark about greedy joooish bankers on Wall Street, and then this can all be put to rest.
You have me pegged, just as I have you pegged.
I'll let you have the satisfaction of doing your own research and finding out the amount of interest and the way it is distributed.
Ahh, the old look it up yourself response. Well, the answer is the earnings of the Fed, after Fed expenses, are returned to the Treasury. What this means is the gains the Fed earns by unfairly charging the US interest is returned to the US. So much for the conspiracy to rip us off.
Personally, for me, the principles are at issue, for example, why would you borrow money and pay interest if you don't have to?
See above.
Look at how we have changed, once good public schools are now sewers, we have a large growing angry underclass fed by social programs, unwed teen mothers all over the place, broken homes, lack of civility in the population, we don't defend our own borders but can defend Iraq's, the gun grabbers want to void the second amendment, and we can't even defend our own homes now from private interests since Kelo v. New London; our own USSC sold us out. We are losing liberty fast. I could go on but don't you get the point?
Wow, that Alan Greenspan sure is wicked!!
And thank you for your interesting questions.
No problem.
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