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Old 25th August 2017, 10:41 AM   #201
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Originally Posted by Francesca R View Post
Hey. Fine thanks. I am not visiting these parts much lately.
The people who think the politics sub-forum is where critical thought goes to die haven't spent much time here.
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Old 25th August 2017, 11:26 AM   #202
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Originally Posted by psionl0 View Post
Carried over from the worker owned and managed economies thread.

If the central bank is owned by the government then there is no practical difference between selling the central bank a bond for cash or printing the cash itself. Both methods increase the government's liability and both methods increase the amount of cash in circulation.

Remember what Edison said: "Both are promises to pay ..."
There is a practical difference in the sense that since the Treasury can (unconstitutionally) create money, we don't need a central bank, thereby saving the costs of a central bank. Remember, central banks allegedly remit their profits, that is, revenues less expenses, back to the Treasury. That means there are associated costs with having the central bank. Why do we need it at all?

More importantly, the Treasury sells bonds not only to the central bank, but to *private* bond buyers. This is what Edison was referring to in his "shovel full of dirt" comment, obviously. Why should the Treasury be allowed to borrow money, when it can (unconstitutionally) create money?

Remember, I don't support either the Treasury creating money ex nihilo, or the Federal reserve. I'm simply making the argument that if you're in favor of the unlimited form of taxation/theft that is entailed by money creation, it makes sense to simply allow the US Treasury to create the money rather than delegate it to an unaccountable central bank that is unnecessary, at the very least.

Thomas Edison's argument was logically correct, even while being ultimately wrong (no one should have the power to create money, at all, under any circumstances).
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Old 25th August 2017, 02:25 PM   #203
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Originally Posted by Tippit View Post
Why should the Treasury be allowed to borrow money, when it can (unconstitutionally) create money?
This particular quote from Edison comes from a letter he penned to the New York Times in December, 1921 when the gold standard ruled. He was protesting the idea that the government had to sell bonds to finance the Muscle Shoals nitrate and water power projects (http://prosperityuk.com/2000/09/thom...bt-free-money/). He argued that the government could just as easily print the money to finance the project as borrow it. It would take more than a decade before this "radical" idea would take hold and the printing press replaced the gold standard. (Ironically, governments today still borrow to make up their revenue shortfalls).

As far as the Fed is concerned, I have already pointed out that it could be replaced by a computer algorithm - free from corruption and overpaid fat cats.
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Old 26th August 2017, 12:42 AM   #204
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Originally Posted by psionl0 View Post
This particular quote from Edison comes from a letter he penned to the New York Times in December, 1921 when the gold standard ruled. He was protesting the idea that the government had to sell bonds to finance the Muscle Shoals nitrate and water power projects (http://prosperityuk.com/2000/09/thom...bt-free-money/). He argued that the government could just as easily print the money to finance the project as borrow it. It would take more than a decade before this "radical" idea would take hold and the printing press replaced the gold standard. (Ironically, governments today still borrow to make up their revenue shortfalls).
I understand the context in which Edison made the comment. William Jennings Bryan had a similar sentiment when he made the "Cross of Gold" speech, advocating the monetization of silver. Unfortunately the bankers went from a situation where they could possibly lose (sound money) to a situation where they can't possibly lose (fiat money). I don't think it's ironic that governments still borrow money, it's a lucrative way for elites to collect rent from the public without an obvious burden on the price system. The amount of taxation/theft divided between conventional forms and money creation must be carefully balanced so as not to awaken the sheep.

Quote:

As far as the Fed is concerned, I have already pointed out that it could be replaced by a computer algorithm - free from corruption and overpaid fat cats.
You seem to be more than sympathetic to the Fed, from your posting history. But you should check out the Monetary Reform Act. It aims to do just that. Milton Friedman advocated it.
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Old 26th August 2017, 12:51 AM   #205
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Originally Posted by psionl0 View Post
As far as the Fed is concerned, I have already pointed out that it could be replaced by a computer algorithm - free from corruption and overpaid fat cats.
I rarely agree with you, but I do here.

You might as well tell people to let a computer elect the new POTUS- people are entranced by words, logic is troublesome.
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Old 27th August 2017, 05:17 AM   #206
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Originally Posted by Tippit View Post
The amount of taxation/theft divided between conventional forms and money creation must be carefully balanced so as not to awaken the sheep.
I'd say it's more about protecting the profits of the money traders (banks). If the value of the USD falls too much in relation to other currencies then it doesn't bode well for those institutions that hold USD denominated bonds.

Originally Posted by Tippit View Post
You seem to be more than sympathetic to the Fed, from your posting history.
I am a little skeptical that the Fed is better or worse than any other central bank and about the scale of its corruption. We still need some form of central banking even if it is not the Fed.

Originally Posted by Tippit View Post
But you should check out the Monetary Reform Act. It aims to do just that. Milton Friedman advocated it.

Quote:
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WFT???
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Old 5th September 2017, 01:23 PM   #207
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Originally Posted by psionl0 View Post
I'd say it's more about protecting the profits of the money traders (banks). If the value of the USD falls too much in relation to other currencies then it doesn't bode well for those institutions that hold USD denominated bonds.
Does it, though? The monetization of bonds represents the destruction of USD for the subsidy of bonds. Bondholders benefit directly from the Fed debasing the dollar and bidding up the price of bonds, artificially. Savers of USD and those earning wages denominated in USD? Not so much.

I don't think bondholders are too dismayed with the current situation, as central banks all over the world are monetizing US government bonds, as well as their own bonds, as well as apparently everything else (did you know that the Swiss National Bank is allegedly the largest shareholder of Facebook?)

Quote:

I am a little skeptical that the Fed is better or worse than any other central bank and about the scale of its corruption. We still need some form of central banking even if it is not the Fed.
Clearly, you are not skeptical enough, and I thought we had just established that the Fed could be scrapped in exchange for some formula? The Fed is obviously more corrupt than every other central bank both in terms of its actions and its scale - because it emits the global reserve currency.

I was reading some of the blog posts of David Andolfatto (http://andolfatto.blogspot.com/ and a commenter reminded me of an Alan Grayson video in which he talks about the Fed's off-balance sheet activities, which is relevant to what we were talking about earlier. This video is a must-see:

Alan Grayson (High Quality Version): Is Anyone Minding the Store at the Federal Reserve?

Still not convinced that this is the greatest scam in human history? I don't know what it would take at this point.
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Old 5th September 2017, 01:32 PM   #208
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And then there is this matter, which also references the $9 trillion in off-balance sheet Fed activity:

Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks' Balance Sheets?

from https://www.forbes.com/sites/lawrenc.../#9158a4d42dca

Quote:
Drug lords, terrorists and shadow-government operators (but I repeat myself) use third party intermediaries to cool off and sanitize hot, dirty, and therefore useless money into pristine-clean and productive money that can be used in legitimate commerce. It’s called money laundering.
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Old 5th September 2017, 06:14 PM   #209
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Originally Posted by Tippit View Post
Does it, though? The monetization of bonds represents the destruction of USD for the subsidy of bonds. Bondholders benefit directly from the Fed debasing the dollar and bidding up the price of bonds, artificially. Savers of USD and those earning wages denominated in USD? Not so much.

I don't think bondholders are too dismayed with the current situation, as central banks all over the world are monetizing US government bonds, as well as their own bonds, as well as apparently everything else (did you know that the Swiss National Bank is allegedly the largest shareholder of Facebook?)
The upper limit on the value of a $1 bond is .. er $1 otherwise it would have a negative yield. Thanks to money printing and record low interest rates, bonds are already at close to zero yield so there is not much room to go up. (There are apparently some advantages to holding bonds in large denomination so in some countries a long term bond actually does have a negative yield but this is still rare).

If a bank used Euros to buy US bonds then the value of the bonds would be tied directly to the value of the USD/EUR exchange rate.

Originally Posted by Tippit View Post
Clearly, you are not skeptical enough, and I thought we had just established that the Fed could be scrapped in exchange for some formula? The Fed is obviously more corrupt than every other central bank both in terms of its actions and its scale - because it emits the global reserve currency.
Yes the Fed can be replaced by a formula. It is your assertion that the Fed is creating vast amounts of currency for its cronies "off the books" that I have trouble getting my head around.
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Old 5th September 2017, 10:10 PM   #210
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Originally Posted by psionl0 View Post
The upper limit on the value of a $1 bond is .. er $1 otherwise it would have a negative yield. Thanks to money printing and record low interest rates, bonds are already at close to zero yield so there is not much room to go up. (There are apparently some advantages to holding bonds in large denomination so in some countries a long term bond actually does have a negative yield but this is still rare).
Yes, German and Japanese bond investors pay for the privilege of loaning their money to those governments. There is no limit to how high a bond price can be bid up. The power to issue infinite money is the power to set a floor on any price, anywhere, any time.

Quote:

Yes the Fed can be replaced by a formula. It is your assertion that the Fed is creating vast amounts of currency for its cronies "off the books" that I have trouble getting my head around.
Did you watch the video? Even presuming the story ends with the alleged $4.5 trillion balance sheet at the Fed, the fact that the banks who sold those bad MBS to the Fed for 100 cents on the dollar were still participating in a scam. It hardly matters whether it's on or off the balance sheet. It's just a question of scope, and exactly how big the manipulation/theft is.
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Old 5th September 2017, 11:55 PM   #211
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Fractional Reserve Banking as Economic Parasitism
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Old 6th September 2017, 12:09 AM   #212
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Originally Posted by Tippit View Post
Is there anything in that 62 pages or finely typed PDF that I would take issue with?
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Old 7th September 2017, 08:13 AM   #213
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It's arithmetically lunatic
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Old 7th September 2017, 05:43 PM   #214
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Originally Posted by Henri McPhee View Post
It's arithmetically lunatic
How do we know that you read a single word of that PDF and didn't make this claim simply because of who posted the link?
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Old 7th September 2017, 06:06 PM   #215
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Originally Posted by Henri McPhee View Post
It's arithmetically lunatic
If anyone has personal experience with lunacy, it's you.
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Old 12th September 2017, 12:42 AM   #216
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Quote:
"The new breed of econophysicists are very open-minded in their metaphors, borrowing seemingly almost indiscriminately..."

"In electronics the standard RC resistor-capacitor circuit has similar exponential dynamics, analyzed in typical introductory references. This is a circuit with a battery with voltage V, R-ohm resistor, and C-farad capacitor all in simple series..."

"The essential problem of any life-threatening cancer is that the host body’s immune system does not effectively recognise or respond to the cancer’s challenge and advance. This failure of our social immune system to recognise and respond to the cancerous form of capitalism is understandable..."

"A parasite lives in a delicate competition with its host for the host’s own flesh and blood. Any energy that the host uses itself could go instead to the growing parasite."

Fractional Reserve Banking is an electronic circuit... er, I mean a life-threatening cancer! Or perhaps it's a parasite living in delicate competition for the host’s own flesh!!! No wait, I got it now. It's actually a....
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Old 12th September 2017, 11:32 AM   #217
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Originally Posted by Roger Ramjets View Post
Fractional Reserve Banking is an electronic circuit... er, I mean a life-threatening cancer! Or perhaps it's a parasite living in delicate competition for the host’s own flesh!!! No wait, I got it now. It's actually a....
What are you quote mining there?
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Old 12th September 2017, 04:33 PM   #218
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Originally Posted by psionl0 View Post
What are you quote mining there?
So you didn't read it either?
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Old 12th September 2017, 06:13 PM   #219
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Originally Posted by Roger Ramjets View Post
So you didn't read it either?
Read what?
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Old 17th September 2017, 09:15 AM   #220
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Lend money safely.
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