Audit the Fed? What would that accomplish?

The Central Scrutinizer said:
So the Fed should audit the Fed. Interesting.

(I'm pretty sure*** they do this already)



(***By "pretty sure" I mean 100% certain)
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?? I was responding to this:
Interesting. So lets say my home is worth $100,000 in 2000. By 2010, it is worth $200,000. What do you propose the Fed do? Fine me? Force me to sell it and give them half the money? Force me to take on a roommate, so that my "half" is now back to being worth only $100,000? What? Let's have some answers.
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You asked what the Fed should do. The Fed should take action to prevent further expansion of the bubble. It simply chose not to.
 
Free Thinkr said:
You asked what the Fed should do. The Fed should take action to prevent further expansion of the bubble. It simply chose not to.
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How? Do you approve of my law that would require substantially higher collateral for financing any asset purchase of N% increase over M months?

Let's not have any more of these blithe pronouncements. What should X do when Y happens? Define your terms or at least provide an example.

By the way, none of these solutions have much to do with the central bank. They are legislative in nature.
 
Free Thinkr said:
The point is that when a particular policy is causing all or most real estate to rapidly increase in price, that policy needs to be checked.
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The Central Scrutinizer said:
Checked by who?
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Free Thinkr said:
Those setting the policy, obviously.
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The Central Scrutinizer said:
So the Fed should audit the Fed. Interesting.

(I'm pretty sure*** they do this already)



(***By "pretty sure" I mean 100% certain)
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Free Thinkr said:
?? I was responding to this:

You asked what the Fed should do. The Fed should take action to prevent further expansion of the bubble. It simply chose not to.
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So you withdraw your comment that the Fed should audit the Fed?
 
Free Thinkr said:
Presumably, yes. Why wouldn't you check a policy you knew was distorting market pricing (unless of course, you had some specific reason for doing so, like, say, mitigating an externality).
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First you need to know there is such a policy in place, something the Fed wouldn't know about since it isn't an investigative agency able to subpoena documents and such.

Secondly you would need to prove the policy is distorting market pricing which is a lot harder than it sounds. Remember bubbles are easy to identify only after the fact.

Lastly you need to prove that the distortion of market prices is something that needs to be addressed. Loads of things distort market prices everyday.
 
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So much woo so little time.
I don't know what this “woo” is or what relevance this has to this discussion.
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This has proven to be a recipe for economic collapse for countries that have attempted it.
What exactly do you call it when the the nation has 25% unemployment, and people loose all of their gold assets, their homes , their farms, their savings, and businesses? Thats not an economic collapse?Here is a list of some of the disastrous events after the passage of the Fed act of 1913, during these economic upheaval people lost jobs, homes, businesses, farms, gold assets. In the 1930s under the guise of straightening the economy, gold was confiscated from the people and sent in train loads to Fort Knox and eventually sold off to Europeans at a discounted rate. The remaining gold is being held by the Federal Reserve Bank as partial collateral for the national debt.
The Federal Reserve came into play in 1914
1921 crash
1929 – 1939 The great depression, 25% unemployment, Americans lost most of their gold assets.
1953 – recession
1957 – 1960 recession
1969 recession
1973 – 1975 Recession
1981 – 1982 recession
1987 Black Monday Crash
1990 recession
2001 recession
2001 – 20?? - recession and bailouts

Those with foreknowledge of the impending economic collapse pull out, buy gold, short the market. During bad economic times money does not simply disappear, but exchanges hand between those with privilege information and everyone else. Just as the newspapers reminded everyone after the passage of the Federal Reserve Act that “now depressions can be scientifically prevented” similarly depressions can be scientifically caused.
Also you are proposing a debt system for government that is completely artificial simply to control inflation? Another words pay interest to whom ever holds the securities simply because government has not the capacity to curb inflation? What more there is every evidence that this is not working as the 1913 dollar is now worth a few cents. We not only have inflation we have a debt. This is a debt that is taking a toll on public projects, taxes, and workers. I use to buy this small pies from Walmart for 58 cents within a weeks time the price of these pies has rising to 75 cents each. Inflation has not only devalued my paycheck, I now has to give more taxes to the various agencies because of this debt system.
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With 100% reserve requirement there would be no such thing as a bank.
“When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.”
Frederick Bastiat, The Law
Exactly! Now you are getting smart. Without a parasitic entity certain things will logically follow in our society. Each day when I go to the supermarket the milk price will be the same as months ago, my paycheck is going to buy the same thing as it did when I first started working. A raise will really mean a raise. All the modern machinery and advances will actually reduce the price of goods. The systematic economic mayhem will end. Private banks will no longer be empowered to create money while everybody else has to work for it. There will no longer be calculated ups and downs in the economy. There will be the end of credit booms that end up in terrible bust. The centuries of endless “Tulip-manias” where people loose their jobs, their homes, their businesses and the savings will finally stop. No longer will an unstable and parasitic business affect other businesses that actually produce something and give to society. With a stable economy industries that actually produce goods and services will be able to grow and finance their own growths. With more jobs there will be less crimes. With the end of mortgage television we will actually hear news that are significant to our lives instead of constant bombardment of who is cheating in Hollywood. Perhaps, then public will be more aware of their representatives in Washington and lobbying will be minimize. For the first time in a hundred year we will actually have something close to a republic.

“Bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough money to buy it back again...
Take this greater power away from them and great fortunes like mine will disappear, They out to disappear for then this would be a better world.”
Sir Joseph Stamp – Director Bank of England 1928 – 1941 (Reputed to be the 2nd richest man in England at the time)


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That would indeed be a good idea, though not for the reasons you believe.


“If the American people ever figure out how international bankers work, there will be a revolution by tomorrow morning.”
Henry Ford

The one and only reason that this present economic system works is because of the public's lack education. No one in their right mind will want to see the value of their paycheck dwindle every week. Similarly, no one will want their representatives getting bought-off by private banking interest.
I suspect that the people fully aware of what is going will want real monetary reform. They would want full transparency and accountability of the nations money supply.

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The only way a bank could do this would be to stop doing business sit on their cash. This is not a viable way of making money and outside of a deflationary economy it’s the very last thing they would ever want to do.

“Nothing but to widespread suffering will produce any effect on Congress... Our only safety is in pursuing a steady course of firm restriction – and I have no doubt that such a course will ultimately lead to restoration of the currency and the re-charter of the bank.”
Nicholas Biddle commenting on limiting credit to collapse the economy and affect politics
It is not the very last thing that they want to do...it is what they do, historically speaking. And yes banks make far more by being very selective with loan applications or freeing up credit. The large banks that knew of the impending economic downturn pull out of certain markets or they short stocks. In this way they gain control of key corporations. In a depress economy certain competitive small banks either go bankrupt or are bought-out by large commercial banks. With fewer small banks there is a monopolization of reserves.
Here is a list of some of the disastrous events after the passage of the Fed act of 1913, during these economic upheaval people lost jobs, homes, businesses, farms, gold assets. In the 1930s under the guise of straightening the economy, gold was confiscated from the people and sent in train loads to Fort Knox and eventually sold off to Europeans at a discounted rate. The remaining gold is being held by the Federal Reserve Bank as partial collateral for the national debt.
Federal Reserve 1914
1921 crash
1929 – 1939 The great depression – Americans lost most of their gold assets.
1953 – recession
1957 – 1960 recession
1969 recession
1973 – 1975 Recession
1981 – 1982 recession
1987 Black Monday Crash
1990 recession
2001 recession
2001 – 20?? - recession and bailouts
During bad economic times money does not simply disappear, but exchanges hand between those with privilege information and everyone else. Just as the newspapers reminded everyone after the passage of the Federal Reserve Act that “now depressions can be scientifically prevented” similarly depressions can be scientifically caused.
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Even if they tried, they would be betting against the Fed, who can create as much money as they want to bet with.
“Before the passage of this act the New York Bankers could only dominate the reserves of New York, now we are able to dominate the bank reserves of the entire country.” Senator Aldrich, one of the architects of the fed
The Fed work for the interest of the banks. Do you think that those bankers that huddle to jekyll island to design the Federal Reserve Act did so because they wanted to help the public? The reality is that they wante to maximize profits for the banks at the expense of the general public. All you have to do is to study the great depression. The Fed helped expand and then contract the money supply causing economic chaos in these united states. During the great depression the people subsequently lost their gold, homes, farms, businesses.

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Economies where the government directly controls money supply are inevitably poor and third world.

“The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots... I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America, and use it systematically to corrupt modern civilization. They will not hesitate to plunge the whole of Christendom into wars and chaos in order that the earth should become their inheritance.”
Otto Von Bismark

Large rich nations become large rich nations because of their industrial prowess not because private banks control the money supply. It is the Colt, the Ford, the Wrights, the Edison, the Steve Jobs that elevated the United States to a first world economy. Corporations whose profits finance their own expansion are financially more stable and could best overcome the constant recessions and depressions thrown their way by the private control of the money supply.
Additionally the money management model that “rich” countries use is the result of banker's efforts. Three centuries the money trust crime families have manipulated politicians to implement the central bank scheme – fractional reserve system. This did not come in as a matter of public debate but as a result of paid politicians carrying the Bankers' agenda. These nations you speak of are mere democracies / republics only on paper. In practicality they are just oligarchies.

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Every large rich nation uses an arms length agency to control it’s money supply. The lesson here should be obvious.

“Mr Speaker my message to the American people : Don't let congress seal this wall street deal! These criminals have so much political power they can shut down the normal legislative process of the highest law making body in this land. All the committees that should be scanning every word of what is being negotiated are benched and that means that the American people are benched too. We are constitutionally sworn to defend and protect the republic against all enemies foreign and domestic.”
Representative Marcia Kaptur after what appears to be a calculated market collapse.

Finally: you are inflicted with the cute little-angel-with-halo-and-wings syndrome. Money is the lifeblood of any nation. Any nation who uses an arms length agency to control it's money supply, particularly those nations where most of the public have no clue about the mechanics of money creation, have lost effective political control of their money. These nations are at the whim of the large commercial banks that control them politically and financially. Laws are passed which give these banks greater and greater power at the expense of the working public. At this point the republic is lost.
You believe that there are actually some little angels with halos and cute little wings watching out for the public good. I tend to be more realistic that people are concern about profits, about the welfare of their immediate family, and ultimately when they have enough money about power. They become intoxicated with power. When the members of the house financial committee receives a total of 300 million dollars in campaign contributions from lobbyist the working people have effectively lost control of their political representatives.
The only way that money could be managed is full accountability, full transparency, and all actions to balance the money supply should be done publicly and under the glittering lights of a free media. The feasibility of having metals of intrinsic value as money is debatable because the IMF could corner the gold market. But certainly combining fiat currency, with private management of the money supply is clearly the worst, particularly when we have super computers that can aid congress in balancing the currency.

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The treasury does print all US dollars. It then sells them to the Fed which in turn sells them to banks.
Correct.
The reality of the matter is that 97% of the money exist digitally. The physical money that the fed receives is paid by a bookkeeping entry in the Fed's balance sheet.

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No. Money used to purchases federal securities offer no inside knowledge or advantage. Even target inflation rates are well known.

“To cause high prices, all the Federal Reserve Board will do will be to lower the re-discount rate..., producing an expansion of credit and rising stock market; then when ...business men are adjusted to these conditions, it can check … prosperity in mid-career by arbitrarily raising the rate of interest. It can cause the pendulum of a rising and falling market to swing gentle back and forth by slight changes in the discount rate, or cause violent fluctuations by a greater rate variation, and in either case it will possess inside information as to the financial conditions and advance knowledge of the coming change, either up or down.
This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any government that ever existed.”
Rep. Charles Lindbergh (R-MN)

Exactly how do you know this? Are you an FOMC meeting attendee? Are you able to read minds? You certainly do not know if there are any self-serving decisions taken? Nor can you assure the public that there are no creative maneuvers that can scam the public of money. Also, there appears to be politically driven low interest rates? If there are such decisions taken who is there to watch over the FOMC? Moreover the effect of feds loan of half a trillion dollar to foreign central banks (the so-called central bank liquidity swaps) is not known to congress much less to you. Finally, why is the Federal Reserve so hysterical about being audited?

The Fed targets 2% inflation.
Hmm... I am looking at the fed's own website and I see the Adjusted Monetary Base and on 2008 I see about 341% per annum base money inflation...but...
The Fed's 2% is irrelevant. Fractional Reserve Banking creates most of the money in circulation. You are debating me on a subject which evidently know little about. This remark proves it. This is basic knowledge about money expansion writing in most 101 economic books. So long as the banks keep extending credit there is going to be an expansion in the money supply. Since the 10% reserve requirement is only for money from checkbook deposits, loans based on long term deposits have no reserve requirements.
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The Central Scrutinizer said:
Could you reformat your response into a legible format? I'm sure it's the usual nonsense, but I can't even tell.
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More evidence of another bubble:

Orders for factory goods, sales of new and existing homes and consumer spending probably climbed in April, indicating the U.S. recovery was strengthening before the European debt crisis rattled global financial markets, economists said reports this week may show.

(Source: http://www.bloomberg.com/apps/news?pid=20601068&sid=aAEgKSfj5dUg )

And this part is obviously evidence of some sort of nefarious scheme:

Government stimulus funding for energy efficiency and infrastructure projects is also spurring orders.

Is there such a thing as an infrastructure project bubble?
 
se7ensnakes said:
"This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any government that ever existed.”
Rep. Charles Lindbergh (R-MN)
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This caught my eye. Quoting cranky old progressives who've been dead for almost a century doesn't strengthen your case. Who's next? Eustace Mullins?
 
se7ensnakes said:
“The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots... I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America, and use it systematically to corrupt modern civilization. They will not hesitate to plunge the whole of Christendom into wars and chaos in order that the earth should become their inheritance.”
Otto Von Bismark
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Also...if you're going to invent attributable quotations you should spell the alleged writer's name correctly: Bismarck with a "ck" at the end.

Bismarck was not really concerned with the US and was busy with enough war and chaos of his own to worry about what Lincoln meant for Christendom--an obsolete term even by his time.
 
stilicho said:
Also...if you're going to invent attributable quotations you should spell the alleged writer's name correctly: Bismarck with a "ck" at the end.
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No, no, you don't understand. This isn't Bismarck, the Iron Chancellor. This is Otto von Bismark, the inventor of the self-licking paper clip. He made a fortune selling office supplies to the Confederate War Department during the Civil War, but then lost it all when the South realized that no one living south of Virginia could read or write -- a tradition that continues to this day.

Unfortunately, Bismark had tied up all of his fortune in a foreign bank that left all his money in the back of a Mississippi paddle-wheeler, and so was left penniless and financially dependent upon the most successful auto manufacturer of his time -- the inventor of the Lincoln, who supported him until his death at the hands of John "Phone" Booth.
 
The Central Scrutinizer said:
Can counterfeit money buy real properties? Interesting question. :confused:
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Counterfeit money spends just like real money as long as the buyer doesn't detect it or is confident of being able to spend it. For a government the problem with counterfeit money is that it makes each individual unit of the money supply less valuable.

Of course the money supply generated by the banking system and the mint by definition is not counterfeit. However, like counterfeit money, overproduction of currency also makes each individual unit of the money supply less valuable. Were the rate of inflation to rise significantly, many more people would likely start making comparisons between the money they're being paid in and counterfeit money.

I'm fairly convinced that inflation at a low rate is a good idea for the economic health of the country. But yes, both counterfeit and debased currency can buy real properties.
 
Mister Agenda said:
I'm fairly convinced that inflation at a low rate is a good idea for the economic health of the country. But yes, both counterfeit and debased currency can buy real properties.
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Not to mention that debasement of currency and coin clipping was common before what we'd call modern times.

It's been really exciting, lately, to see that a centralised currency among disparate political entities is causing predictably severe problems in Europe right now. I don't often wager but I don't think the euro can survive five more of these tremors. We have Greece now, followed by Spain, and shortly Portugal and Ireland. If France followed those four, I'd have to wonder how much influence Brussels could have on this monetary marvel.
 
No your wrong , the FED has been charging one percent of all monies printed since 1913 and their payments have been in gold, since they themselves realize the true value of the dollar. A trusted source from capitol hill confirmed this a couple of months ago, so in three years it will be 100% , you figure it out from there.
 
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