Why Bankers Created the Fed 100 Years Ago

The Market Oracle, UK ^ | 23 December, 2013 | Christopher_Westley

[Errant]

The Democratic Party gained prominence in the first half of the nineteenth century as being the party that opposed the Second Bank of the United States. In the process, it tapped into an anti-state sentiment that proved so strong that we wouldn't see another like it until the next century.

Its adversaries were Whig politicians who defended the bank and its ability to grow the government and their own personal fortunes at the same time. They were, in fact, quite open about these arrangements. It was considered standard-operating procedure for Whig representatives to receive monetary compensation for their support of the Bank when leaving Congress. The Whig Daniel Webster even expected annual payments while in Congress. Once he complained to the Bank of the United States President Nicholas Biddle, “I believe my retainer has not been renewed or refreshed as usual. If it be wished that my relation to the Bank should be continued, it may be well to send me my usual retainer.”

[Errant]

I don’t know anything about it.

Too bad, I thought for a moment you could get us a copy that we may examine the arrangements for our own future use when we all become billionaires or trillionairses, or is it zillionaires? Anyway, like the folks in Zimbabwe after their central bank made them so much money!

[Toddsterpatriot]

Don't you remember? That's government data you're going by?

Depth of Recessions

The severity of a recession is determined in part by its length; perhaps even more important is the magnitude of the decline in economic activity. The 2007-09 recession was the deepest recession in the postwar period; at their lowest points employment fell by 6.3 percent and output fell by 5.1 percent.

http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/

Tiny ticks do make a huge profit for anyone on the right side of those trades; tens of billions in profits!

And the giant firms on the other sides of those trades would lose tens of billions.

Thanks again for helping me to make it...

No problem. Neither were the terms Air Force, Social Security or Medicare.

I need Ben's source of paper, so I can be buying up all sorts of real properties and stuff with it too...

You could buy a less silly source...

Maybe like some people, he's just looking out for his best buds forever?

Yes, by passing more regulations and extorting fines.

[Errant]

minneapolisfed.org

Well now, you can't go doubting those folks... No sir, Bob..

Out of curiosity though, lets just see what shadowstats.com says it was:

And the giant firms on the other sides of those trades would lose tens of billions.

What's a few billion here and there among friends? Scratch my back today, I'll scratch yours tomorrow. What's really important is maintaining that even keel and our next summit meeting.

Neither were the terms Air Force, Social Security or Medicare. How 'bout the term Central Bank (i.e., The Founders who created a Central Bank in 1791...)?

You could buy a less silly source...

Funny, So could you.

Maybe like some people, he's just looking out for his best buds forever?

Yes, by passing more regulations and extorting fines.

Use 'em and lose 'em - It seems to be the elite way of getting things done these days...

[Toddsterpatriot]

Well now, you can't go doubting those folks... No sir, Bob..

I know, data, yuck.

Out of curiosity though, lets just see what shadowstats.com says it was:

I prefer his fake inflation numbers.

Neither were the terms Air Force, Social Security or Medicare.

How 'bout the term Central Bank (i.e., The Founders who created a Central Bank in 1791...)?

No, the Founders didn't put the term in the Constitution, even though they created one. I guess they didn't know it was unconstitutional.

[Errant]

No, the Founders didn't put the term in the Constitution, even though they created one. I guess they didn't know it was unconstitutional.

Just goes to show you how soon we forget! lol I have to add that it had one or two important distinctions between itself and today's Fed:

There were other, nonnegotiable conditions for the establishment of the Bank of the United States. Among these were[citation needed]:

That the Bank was to be a private company.
That the Bank would have a twenty-year charter running from 1791 to 1811, after which time it would be up to the Congress to approve or deny renewal of the bank and its charter; however, during that time no other federal bank would be authorized; states, for their part, would be free to charter however many intrastate banks they wished.

That the Bank, to avoid any appearance of impropriety [Where have I heard that word used - did I say that?], would:

1.be forbidden to buy government bonds.
2.have a mandatory rotation of directors.
3.neither issue notes nor incur debts beyond its actual capitalization.

That foreigners, whether overseas or residing in the United States, would be allowed to be Bank of the United States stockholders, but would not be allowed to vote.

That the Secretary of the Treasury would be free to remove government deposits, inspect the books, and require statements regarding the bank's condition as frequently as once a week.

https://en.wikipedia.org/wiki/First_Bank_of_the_United_States

Who said the founders were perfect, but for sure they did a much much better job of keeping their temporary central bank in check than we have!

[Partisan Gunslinger]

They've undershot that target you claim, for quite a while now.

I guess you don't buy meat, fuel, cable, etc. Hamburger was recently $1 a pound, now $3. Gas was $1.90 a gallon, now $3.20. Cable was $19 a month, now $80. Bacon is now $5.00 a pound. That's another fraud, they track electronics to determine inflation. I buy a TV every 15 years, I buy meat and gas every week.

Which ones? How?

I've told you ten times, the followers of Warburg. You're playing stupid because you you know you've lost this argument.

You don't know the difference between monetary policy and a tax. That doesn't surprise me.

LOL You can't win on points so now you want to argue Semantics.

[Partisan Gunslinger]

Can I stay there this weekend?

[Partisan Gunslinger]

Yes.

Why didn't the Fed avert the Great Depression? I thought that was the reason for implementing it.

[Partisan Gunslinger]

I know, and we were under the gold standard.

You say the Fed is an alternative to the gold standard and you say that downturns were deeper pre 1913, and then things were OK because now we had the Fed. But the Great Depression was after 1913. So what's the deal? Was 1913 the start of the Fed era or not? What was the purpose of the Fed if they couldn't avert the most severe downturn ever?

[Partisan Gunslinger]

Incoming means private mail. How long have you been here?

[Partisan Gunslinger]

Oops, sorry, I thought you were the cheerleader. lol Yeah, they do have some splaining to do!

[Partisan Gunslinger]

No question, that was a bad one. So were the earlier ones, before the Fed, under the gold standard.

You're contradicting yourself again. lol

[Toddsterpatriot]

I've told you ten times, the followers of Warburg.

The followers of Warburg are ripping you off? LOL!

You can't win on points so now you want to argue Semantics.

The difference between tax policy and monetary policy is semantics? LOL!

Get a dictionary and come back. I'll keep pointing out your errors.

[Toddsterpatriot]

Can I stay there this weekend?

You bet, we'll leave the light on.

[Toddsterpatriot]

Why didn't the Fed avert the Great Depression?

They tightened monetary policy, instead of loosening. Bernanke didn't make that mistake in 2008.

[Toddsterpatriot]

Explaining to you that downturns before the Fed were serious is contradicting myself? Please, explain how.

[Errant]

Recent news somewhat related to our discussions:

Metals Market Manipulation - What Big Banks Are Hiding from You Now

Gold And Silver Smashed To 2013 Lows

And Now Gold Is Soaring

I suggest "they" are losing control. When ( not if ) they do, there will be hell to pay.

For some particular reason, 80 on the dollar index seems to be some magic line TPTB will not allow the dollar to fall below. It seems to be their last line of defense. The longer we're near it, the more volatile things become.

[Errant]

When Risk Is Separated From Gain, The System Is Doomed

[Errant]

Is America About To Reach A Breaking Point?

[Errant]

They tightened monetary policy, instead of loosening. Bernanke didn't make that mistake in 2008.

His (da Fed's) actions haven't exactly been a model for success either:

And have you seen the overlays of today's market with the market prior to the Crash of '29? It's eerily similar. Around the 12th of January will be an interesting topic of discussion on many of the financial news shows in coming days.