Posted on 12/09/2010 10:57:02 AM PST by speciallybland
Delicious and diabolical!
I understand the Fed can increase the par numbers at the drop of a hat without any real oversite and the dollar gets weaker leaving Americans poorer and they get no say whatsoever about it.
If you want to call such "GOOD" be my guest but I think we both know "GOOD" is about the last thing it is...
What do you think "fractional reserve banking" means and why is it bad?
two problems with your attempted gloss over of the built in loss on owning American Dollars...
1. Trying to separate out CASH from REAL assets in attempt to show less of a monetary loss is not only mildly amusing it would give any CPA worth his salt a severe case of the giggles being that any asset that is valued in Dollars suffers the same loss (and I notice you conveniently left out the devastating effects of compounding being such also works when you compound a loss over time.)
2. I would like to know if you would invest 100K dollars in a financial opportunity that would suffer a compounding loss of 1% or more per year for the next 20 or more years?
Really? Does the stock I own drop in value?
The issue of FRB in itself is not bad, giving that unrestricted power to a handful of unelected people is the "BAD" part.
Fractional Reserve Banking increases the amount of dollars in the system without actually printing money, (A.K.A. inflation).
So a handful of people can up the PAR numbers (amount of money a bank can lend in relation to the real assets they have on hand) and no one can really do anything about it. And the underhanded games that can be played by the banking elite and the FED is virtually unlimited and as such there is no real oversight.
Is the stock valued in dollars? If so then yes.
Example if you have a stock that is worth 100 dollars and inflation increases 1% would it not have 1% less in purchasing power just the same as a 1 dollar bill?
You think the Fed is the only institution that can do FRB?
Fractional Reserve Banking increases the amount of dollars in the system without actually printing money
So what is it?
So a handful of people can up the PAR numbers
PAR numbers?
(amount of money a bank can lend in relation to the real assets they have on hand)
Do you mean reserve requirements?
Doesn't inflation increase the value of the stuff the company makes?
Example if you have a stock that is worth 100 dollars and inflation increases 1% would it not have 1% less in purchasing power just the same as a 1 dollar bill?
My $100 bill can't increase prices on the products it sells, so no.
FRB is the practice of banking that allows a bank to lend out nearly all of its liquid assets. Which is OK IF that would be the extent of the ordeal...
However when you add in the fudging allowed on PAR numbers (PAR is the valuation of financial assets)
For instance bank stocks used to valued at .01 dollars per share for the purposes of determining lending ability. While Corporate bonds were valued at 1000 each.
BUT the FED is allowing some banks to fudge those par numbers, allowing them to literally MAKE money with a few accounting tricks.
Its not good. Am I saying we should scrap our present system? No. I am saying our present system is much like the situation P.J. O'Rourke described when he talked about giving money and power to Government, was like giving liquor and car keys to teenage boys.
Giving that sort of unrestricted money making (expansion) capabilities to a handful of unelected people is madness. Especially since they do so in the shadows.
This is going to be fun. The Bernank has lied, propped up crooked financial institutions and given our money away overseas. He is truly a threat to our American sovereignty and liberty.
Ron Paul is at the least a man of true conviction who is not bought out. This will be quite interesting - the only really honest guy in politics that I’ve ever seen.
I pray for his safety because he could upset the whole scam of that is central banking.
Note: The Fed increases the money supply via selling T-Bills and attaches an interest rate to the increase in money. Do you realize the treasury could simply print the money without any interest attached - meaning no debt or interest payments? If Treasury just printed the money we would have inflation but no debt. Do you understand the scam the Fed represents? Do you understand what a slick crime this is?
If a bank has $100 in stock, they can loan out $100?
While Corporate bonds were valued at 1000 each.
If a bond is worth $1000, it's valued at $1000. What does that have to do with banking or lending?
Giving that sort of unrestricted money making (expansion) capabilities to a handful of unelected people is madness.
Which people? Bankers? Depositors? Lenders?
If you are going to SELL it? Yes... If you are going to consume it? No...
(BTW a point lost on many)
So, if it takes 40 dollars to FILL my gas tank each week and next year it takes $40.40 each week then I've lost 40 cents on the value of my transportation asset (the ability to travel 1 tank full of gas when all factors for said trip are considered same like MPG and driving conditions etc.)
Given our money away overseas? How?
The stocks I own are in companies that sell stuff. So they won't decrease in value even though they're valued in dollars?
So, if it takes 40 dollars to FILL my gas tank each week and next year it takes $40.40 each week then I've lost 40 cents on the value of my transportation asset
You bet. The oil company shares I own should keep their value because they can sell the oil for more, right?
The Fed buys T-Bills.
and attaches an interest rate to the increase in money.
So what?
Do you realize the treasury could simply print the money without any interest attached
Lincoln did that and it led to massive inflation.
Do you understand the scam the Fed represents?
How much interest do you feel the Treasury pays to the Fed each year?
From this article on FOX - Dec 2nd (I’m picking some paragraphs).
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“Federal Reserve Under Fire for Lending Big to Foreign Banks During Financial Crisis”
“As President Obama’s deficit commission nears a vote on a plan to slash U.S. government spending, the Federal Reserve is under fire after it revealed it gave a big chunk of its multi-trillion dollar Wall Street bailout to companies not based on Wall Street — or even in the United States. ‘
....the central bank lent billions to foreign banks that operate in the U.S., including Germany’s Deutsche Bank Securities, which got $290 billion in mortgage securities; London-based Barclay’s, which received a $47.9 billion loan; France’s BNP Paribas Securities, Switzerland’s UBS Securities LLC and Daiwa Securities America, a subsidiary of one of Japan’s largest brokerage houses.”
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Personally I’m not fond of propping up the financial institutions of socialist governments - it allows socialism to act successful, and then be thrown in our faces as a ‘working’ economic model.
The loans were paid back. Our money was not given away.
No see that is what PAR means as far as FRB is concerned there are different "SET" valuations (for the purposes of lending power) for different sorts of insturments. Corporate bonds are valued at 1000 per while Municpals are valued at 5000 per and Federal are valued at 10,000 per. (Such is based on the stability of the asset)
Stocks WERE valued at .01 per share (as far as lending ability goes) but now, who knows...
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