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Posted on 10/21/2011 10:17:02 AM PDT by rabscuttle385
To know what is wrong with the Federal Reserve, one must first understand the nature of money. Money is like any other good in our economy that emerges from the market to satisfy the needs and wants of consumers. Its particular usefulness is that it helps facilitate indirect exchange, making it easier for us to buy and sell goods because there is a common way of measuring their value. Money is not a government phenomenon, and it need not and should not be managed by government. When central banks like the Fed manage money they are engaging in price fixing, which leads not to prosperity but to disaster.
The Federal Reserve has caused every single boom and bust that has occurred in this country since the bank's creation in 1913. It pumps new money into the financial system to lower interest rates and spur the economy. Adding new money increases the supply of money, making the price of money over time—the interest rate—lower than the market would make it. These lower interest rates affect the allocation of resources, causing capital to be malinvested throughout the economy. So certain projects and ventures that appear profitable when funded at artificially low interest rates are not in fact the best use of those resources.
Eventually, the economic boom created by the Fed's actions is found to be unsustainable, and the bust ensues as this malinvested capital manifests itself in a surplus of capital goods, inventory overhangs, etc. Until these misdirected resources are put to a more productive use—the uses the free market actually desires—the economy stagnates.
(Excerpt) Read more at online.wsj.com ...
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America is near dead on the floor, and government at all levels are to blame for for destroying the economy, punitive rules, taxes, regulations, aiding and abetting an invasion of this country, as our standard of living nose dives.
For those who support FR, click here to show it!
No, government is the cause and Ron Paul is part of that government. Always trying to blame others and never admitting that government is the real problem.
The Fed is part of the government.
In fact, Americans better quickly understand, without massive changes and historic reforms to government at all levels, this country is done.
When this guy said we need 1 trillion in government cuts, he's not joking, as government at all levels are literally choking the life out America.
If bankers did not do liar loans, bundled them up as AAA MBS plus invent a whole line of leveraged products to go along with it we probably would have survived the subprime implosion (these loans had very high failure rates but were prominently marked in a mortgage portfolio). The other defective products were marked AAA (meaning very low risk) and sold to investors, pension funds and etc. Mistake the gov committed was buying up all the mortgage notes and not monitoring what the banks were doing when they did not verify the loan applicants info and inflated income. Sad part is the bankers threaten the US with economic destruction unless they get a bailout. Add insult to injury after the US gov assumed all the bad assets and gave them money, the bankers used it to financed bonuses and higher pay and got the US Treasury/SEC to redefine accounting standards to hide losses. Bankers party while the rest of the US chokes. WSJ better report all aspects of the economic meltdown. Fed Reserve and Fannie Mae/Freddie Mac is only one factor, greedy mortgage bankers and Wall Street bankers also played a prominent role too. Congress is even worst. The fed regs that were on the books in the 1980’s that was used to prosecute over 900 Savings and Loans schemers, were eliminated over 20 years since as Congress relented to the banking lobby. Today it is harder to prosecute the bankers like the Savings and Loans Crisis of the 1980’s because bank lobbyist made sure Congress took those laws off the books. Even the Enron rules were modified to allow the bankers hide their bad real estate assets and losses.
Louisiana Law Bans Cash for Second Hand Transactions
http://www.klfy.com/story/15717759/second-hand-dealer-law
Cold hard cash. It’s good everywhere you go, right? You can use it to pay for anything.But that’s not the case here in Louisiana now. It’s a law that was passed during this year’s busy legislative session.
House bill 195 basically says those who buy and sell second hand goods cannot use cash to make those transactions, and it flew so far under the radar most businesses don’t even know about it.
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Expect more of this in other states as the underground economy heats up and tax revenues dry up, and not just on second hand purchases. What are they going to do about barter?
“If bankers did not do liar loans, bundled them up as AAA MBS plus invent a whole line of leveraged products to go along with it we probably would have survived the subprime implosion. Fed Reserve and Fannie Mae/Freddie Mac is only one factor, greedy mortgage bankers and Wall Street bankers also played a prominent role too.”
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Here’s Bush pushing home loans for totally unqualified minorities, just a couple of years prior to the crash.
http://www.youtube.com/watch?v=MqR15H0gNBU
I would expand the circle of blame a bit.
Add the ratings agencies. They’re the ones who put AAA on crap paper. If that paper were unrated or had speculative rating(s), then it would have been treated properly within the financial system.
The Fed, however, is absolutely to blame for making money too easy following 2002.
Re: post #5
You are so right, imo.
Sure, the Fed creates the funny money, but it seems to me there’s a too much finger pointing at the Fed and virtually nothing directed at our - shall we say - Constitutionally challenged Gov’t.
The Federal Reserve has long been politicized; taking their direction from the Treasury who gets their marching orders from the President. The President also appoints the Chairman of the Fed.
Wrong. The Federal Reserve is like Grape Nuts. Grape Nuts are not grapes, and they are not nuts. The Federal Reserve is neither Federal, nor a Reserve. It is a privately held bank. In 1913, via the Federal Reserve Act, we turned control of our money supply over to the Federal Reserve. In exchange, we got to appoint the Chairman of this Privately-held Bank's board. ( who can be out-voted by the rest of the board).
Wrong. The Federal Reserve is like Grape Nuts. Grape Nuts are not grapes, and they are not nuts. The Federal Reserve is neither Federal, nor a Reserve. It is a privately held bank. In 1913, via the Federal Reserve Act, we turned control of our money supply over to the Federal Reserve. In exchange, we got to appoint the Chairman of this Privately-held Bank's board. ( who can be out-voted by the rest of the board).
Yep.
The fish rots from the head.
Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out! From the original minutes of the Philadelphia committee of citizens sent to meet with President Jackson, February 1834, according to Stan V. Henkels, Andrew Jackson and the Bank of the United States, 1928; online
Why aren't any of the candidates talking about this?
Agree. Now, if the ows protesters are protesting the big bad banks, why don’t they protest against the biggest bank - the federal reserve? They are a bunch of wussies until they have the balls to confront the federal reserve.
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