The Federal Reserve's Explicit Goal: Devalue The Dollar 33%


By Thedaytoday   Follow   Fri, 25 Jan 2013, 10:50am   13,841 views   532 comments
Watch (0)   Share   Quote   Permalink   Like (4)   Dislike (2)  

The Federal Reserve's Explicit Goal: Devalue The Dollar 33%

The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.

An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar.

But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.

The Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits. In effect, the Fed has announced a course of action that will steal — there is no better word for it — nearly 10 percent of the value of American’s hard earned savings over the next 4 years.

Why target an annual 2 percent decline in the dollar’s value instead of price stability? Here is the Fed’s answer:

“The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public’s ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling–a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.”

In other words, a gradual destruction of the dollar’s value is the best the FOMC can do.

Here’s why:

First, the Fed believes that manipulation of interest rates and the value of the dollar can reduce unemployment rates.

http://www.forbes.com/sites/charleskadlec/2012/02/06/the-federal-reserves-explicit-goal-devalue-the-dollar-33/

« First     « Previous     Viewing Comments 93-132 of 532     Next »     Last »     See most liked comments

  1. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    93   4:16am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (2)  

    Reality says

    If you really have a mountain of savings, even at 0.25%, there has to be unearned income.

    Yes, negative unearned income. If the saved money has erosion in purchasing power one should be able to claim a loss like the gamblers with stocks get to, not get taxed on interest as income.

  2. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    94   4:21am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    Reality says

    The federal reserve notes are just chips at the casino

    Nobody would play with and for chips is they didnt reliably indicate an index of wealth.

    People who have to protect the future due to having families and responsibility are risk averse, and would like to save up to elimiate the pressures of rents, and to try and anticipate unforseen issues.

    If you cant see how killing people's savings through inflation hurts the average Joe then I dont know what to tell you. The idea is to get people to play at the casino, and if they use need government assistance.

    Who is promoting save up, be self reliant, get and stay out of debt and eliminate all debts before "investng." Why invest if you have a negative net worth? its like using a credit card at the casino to gamble. Its a joke.

    Some of these neg--net-worth people lease BMWs to look rich, its really quite laughable.

    And they are borrowing this existence beyond their means and they kick the can down the road, the next generation will pick up the tab.

    Lol. Lets see.

  3. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    95   4:22am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    Reality says

    The goods basket chosen for measuring price indices is far more subjective to the data collector's whim and far more complicated than money supply

    Commodities price index. And they do things like re-base the currency year used. The government does things like change out steak for ground beef. Its usually a lot worse than indicated. Regular people with responsibility and budget know the cost of living is going up faster than pay.

  4. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    96   4:24am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    uomo_senza_nome says

    Most gains go to the top 1%.

    More like the 0.01%.

    The upper middle class is trying to get into that club. Even the upper classes. Its quite exclusive though. They do however admit new members here and there to keep the dream of being an oligarch alive.

  5. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    97   4:24am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    dismantled by the Republican horde.

    Who dismantled glass-steagall?

  6. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    98   4:25am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    I want regulated capitalism

    You wont regulate yourself. I doubt from how unpleasant you come off towards your political "enemies" here that you would ever be generous unless your state-god mandated it. And if you could, you would seek exemption because you see yourself as a societal architect and thus more equal than others.

  7. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    99   4:27am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    I am an architect, a builder, and a worker. Literally.

    I would never be subjected to you based on your insane ramblings. I know you see yoruself as a demi-god in the church of governmentology, but you are a profiteering landlord who uses cheapest possible chinese paint and toilet fixtures to shut up complaining tenants. You dont care. You are plugging a leak. If you could you would do it with a wet rag if you culd get away with it, 3 stooges style.

  8. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    100   4:29am Sat 2 Feb 2013   Share   Quote   Permalink   Like (1)   Dislike (1)  

    Reality says

    Why aren't you aiming this type of diatribe at the local supermarket or grocer?

    I belong to several food co-ops and buy through local markets. The prison-planet-government is doing everything in its Monsanto-power to make sure your ONLY get your food from the local supermarket.

    You best be checking who you Monsanto-Elect, even in "lib" california, before you complan to me oof the damage you are doing to the food supply.

  9. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    101   4:32am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    tatupu70 says

    Do you have the impression that liberals aren't into money or markets??

    1960s version? More into freeedom, liberty, the open road, some free love and some drugs if need be. Throw in some SDS leftism. Never got the sense they like big government, monsanto, police state, rules and laws everywhere, etc.

    The 2012 version? All they care about is money, but need to appear like they dont. They will vote for monsanto and a police state to protect their interests but try to appear as free wheelin.

    I would say classical liberalism is dead, and the maoist version has taken over.

  10. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    102   4:43am Sat 2 Feb 2013   Share   Quote   Permalink   Like (1)   Dislike (1)  

    mell says

    You all worship Paul Krugman's penis and have erotic dreams about Turbo Timmy, Helicopter Ben and the rest of the banking cabal, left and right. I have no problem with that reality, just admit it and don't pretend to be fighting for the "small guy", alright? ;)

    Yep. They cant admit that though. It forces them to be honest with themselves.

  11. iwog


    Follow
    Befriend (46)
    375 threads
    19,906 comments
    47 male
    Lafayette, CA
    Premium

    103   6:34am Sat 2 Feb 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    Mick Russom says

    I would never be subjected to you based on your insane ramblings. I know you see yoruself as a demi-god in the church of governmentology, but you are a profiteering landlord who uses cheapest possible chinese paint and toilet fixtures to shut up complaining tenants. You dont care. You are plugging a leak. If you could you would do it with a wet rag if you culd get away with it, 3 stooges style.

    No insane ramblings here folks.

    I understand why you think the way you do. Pretty much everything you trust and have faith in is a fiction. How much longer are you going to enrich your landlord?

  12. iwog


    Follow
    Befriend (46)
    375 threads
    19,906 comments
    47 male
    Lafayette, CA
    Premium

    104   7:08am Sat 2 Feb 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    Mick Russom says

    If you cant see how killing people's savings through inflation hurts the average Joe then I dont know what to tell you.

    The average Joe doesn't have any savings. 50% of Americans couldn't put their hands on $2000 in an emergency.

    http://money.cnn.com/2011/05/24/news/economy/americans_lack_emergency_funds/index.htm

    You're an interesting case. You'd make an excellent paid shill for the Republican party if the people reading your posts were too lazy to look up simple facts.

  13. lostand confused


    Follow
    Befriend (9)
    479 threads
    2,996 comments

    105   7:13am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Mick Russom says

    1960s version? More into freeedom, liberty, the open road, some free love and
    some drugs if need be. Throw in some SDS leftism. Never got the sense they like
    big government, monsanto, police state, rules and laws everywhere, etc.


    The 2012 version? All they care about is money, but need to appear like they
    dont. They will vote for monsanto and a police state to protect their interests
    but try to appear as free wheelin.


    I would say classical liberalism is dead, and the maoist version has taken
    over.

    So are you saying having money and making smart investment decisions is maoist?

  14. Bigsby


    Follow
    Befriend
    1 threads
    4,507 comments
    Monterey, CA

    106   7:19am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    lostand confused says

    So are you saying having money and making smart investment decisions is maoist?

    He appears to think the 'Communist' Party of China is still considered Maoist.

  15. iwog


    Follow
    Befriend (46)
    375 threads
    19,906 comments
    47 male
    Lafayette, CA
    Premium

    107   7:29am Sat 2 Feb 2013   Share   Quote   Permalink   Like (1)   Dislike   Protected  

    Mick Russom says

    However, given that Truman did things to undo various policy

    Not one single thing on your long list is an example of Truman undoing policy. Most are examples of programs ending while FDR is still president. Nothing you said speaks to reforms of the tax code and government regulation which were left essentially intact until 1981.

  16. Reality


    Follow
    Befriend
    15 threads
    4,004 comments

    108   7:52am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Mick Russom says

    My experience is this: the landlords will let tenants stew in filth and only renovate on turnover to raise the rents and then let the new tenant rot.

    Rents can both rise and fall. Over the past two decades, I have rented (as a tenant) anything from a $300/mo tiny room to $2500/mo 5BR single family house. I got into the single-family house that the landlord had just spent $100k on renovating and asked for $2700/mo; I got it at a negotiated price of $2100/mo. After I moved in, I learned from the previous tenant that they had been paying $2200/mo. So the landlord essentially wasted $100k expanding a 1400sqft house to 2200sqft and finishing the cathedral ceiling with recess lights. In the subsequent 6+ years, the rent gradually rose to $2500, at which point I decided to buy my own house, and the then the landlord finally got his $2700 target price from the next tenant. During the same span of 6.5years, gold price went from just over $400 to well over $1600. In other words, effective rent went from 5 ozt to 1.5 ozt.

    p>This becomes far more of an issue when the landlord is a managment company.

    Well, the management company employees don't work for free. If the management company had been government, like so many eastern bloc country had when they outlawed private "landlords," the management expense would be even higher. IMHO, private entreprenuerial housing service providers in competition with each other produce the most cost effective way of providing housing service to people who are not yet ready to take the plunge and own their own homes. There are numerous reasons why people prefer not to own their own homes, including cost expectations, job mobility and even lack of time to take care of house because focusing on the primary job might be more profitable than taking care of even one's own home.

    I also think that handing out money capitalized by public means so that landlords can leverage that to provide "housing as a service" lol to make themselves rich and making housing further out of the reach of the middle class is counter productive.

    I don't think they lend money to "landlords" any more than lend money to any other existing business (including builders that provide competition on the supply side). There are no special loans for "landlords." In fact, they hand out far more money to the "competition" on the demand side: helping people buying their first homes involves far more government subsidy, to a far greater extent than government subsidy to small businesses and family "first business" that provide comparable competition to existing employees.

  17. Reality


    Follow
    Befriend
    15 threads
    4,004 comments

    109   7:55am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Mick Russom says

    Yes, negative unearned income. If the saved money has erosion in purchasing power one should be able to claim a loss like the gamblers with stocks get to, not get taxed on interest as income.

    Stock owners can't claim loss due to currency depreciation either. Nobody can under existing law. In fact, if one were to trade the dollar to another currency that depreciates less over time then trade back, the nominal gain would still be taxed. That is IMHO, the real reason why they depreciate the currency: to collect more taxes.

  18. Reality


    Follow
    Befriend
    15 threads
    4,004 comments

    110   8:01am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Mick Russom says

    People who have to protect the future due to having families and responsibility are risk averse, and would like to save up to elimiate the pressures of rents, and to try and anticipate unforseen issues. If you cant see how killing people's savings through inflation hurts the average Joe then I dont know what to tell you.

    Don't get me wrong: I'm not at all being unsympathetic. I used to be and still am a big time saver. For what it's worth, my cars are 10-15 years old, and I'm wearing a 10+years old leather jacket indoors as I type this post because I keep heat setting down. It's worth reminding that parking one's savings in the cash currency itself is essentially saying one has more faith in the government than in the private sector's productivity. There is a price to pay for keeping oneself 100% liquid: opportunity cost.

    If fractional reserve banking were indeed outlawed, the full-reserve bank too would charge you a storage fee instead of paying you interest regardless what form of money you use.

  19. Reality


    Follow
    Befriend
    15 threads
    4,004 comments

    111   9:22am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Mick Russom says

    Reality says

    Why aren't you aiming this type of diatribe at the local supermarket or grocer?

    I belong to several food co-ops and buy through local markets. The prison-planet-government is doing everything in its Monsanto-power to make sure your ONLY get your food from the local supermarket.

    You best be checking who you Monsanto-Elect, even in "lib" california, before you complan to me oof the damage you are doing to the food supply.

    I grow some of my own food too. It's tons of work. LOL. It's not possible to grow all of one's own food, for most people. My point was that, any retailer would have mark-up. It is the convenience that you are paying for. It is the division of labor that makes their goods/service more affordable to you even after the mark-up than if you had to put say clothing together from threads (never mind from cotton seeds!).

    There are more competitors providing housing service than the retailing of almost any other goods/service in almost any given town. If one is not happy with a particular service provider, one can easily find another in the same town.

  20. Reality


    Follow
    Befriend
    15 threads
    4,004 comments

    112   9:33am Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    othing you said speaks to reforms of the tax code and government regulation which were left essentially intact until 1981.

    There were two economic-political cycles involved in that time span. FDR's partisan public works program, union support, high taxation, price cap, etc. were rolled back in the late 40's to 50's, culminating in JFK's tax cuts in the 60's. The economic prosperity resulting from all that enabled a new generation of social engineers to emerge in the late 60's to burn down the reserve in the 70's. Remember Nixon's "We are all Keynesians now" quip? Although Jimmy Carter started to put brakes on the out-of-control government growth and monetary growth by appointing Paul Volcker, somehow popular mythology gives the credit to Reagan.

  21. mell


    Follow
    Befriend (7)
    274 threads
    3,503 comments
    San Francisco, CA

    113   3:44pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    The average Joe doesn't have any savings. 50% of Americans couldn't put their hands on $2000 in an emergency.

    Yeah, because they are addicted to cheap credit and buying crap and because interest rates are kept artificially close to zero, Time to stop the looting and start the prosecuting.

  22. tatupu70


    Follow
    Befriend (3)
    23 threads
    8,100 comments

    114   4:12pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    mell says

    Yeah, because they are addicted to cheap credit and buying crap and because interest rates are kept artificially close to zero, Time to stop the looting and start the prosecuting.

    No, actually it's because all the money is going to the top 1% and the bottom 50% are living paycheck to paycheck out of necessity.

  23. mell


    Follow
    Befriend (7)
    274 threads
    3,503 comments
    San Francisco, CA

    115   4:30pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    mell says

    Yeah, because they are addicted to cheap credit and buying crap and because interest rates are kept artificially close to zero, Time to stop the looting and start the prosecuting.

    No, actually it's because all the money is going to the top 1% and the bottom 50% are living paycheck to paycheck out of necessity.

    Same thing, chicken and egg. Stop the printing, let prices fall so there is leftover and let interest rates rise to tse leftover will be put into savings.

  24. Robert Sproul


    Follow
    Befriend
    64 threads
    826 comments

    116   5:23pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Mick Russom says

    Who dismantled glass-steagall?

    Nothing is more revealing than the answer to this question.
    None of the egregeous frauds committed by the largest banks could have occurred if they had not bribed their way off the leash.
    All of the damage since can be laid at the feet of Bill Clinton.

  25. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    117   11:10pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    Not one single thing on your long list is an example of Truman undoing policy.

    Sorry, FDR is a total superhero who did no wrong. Thanks for correcting my flawed thinking.

  26. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    118   11:10pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    lostand confused says

    So are you saying having money and making smart investment decisions is maoist?

    No, its simple self interest. Stop trying to masquerade it as anything more.

  27. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    119   11:11pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    How much longer are you going to enrich your landlord

    No more than 2 years. Then Im out.

  28. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    120   11:13pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    You'd make an excellent paid shill for the Republican party

    bbbb b b b b but im not gop. soorry to shatter the label.

  29. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    121   11:14pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    Reality says

    That is IMHO, the real reason why they depreciate the currency: to collect more taxes.

    NAILED IT. Inflation is a regressive tax.

  30. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    122   11:15pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Reality says

    For what it's worth, my cars are 10-15 years old, and I'm wearing a 10+years old leather jacket indoors as I type this post because I keep heat setting down

    Same here. I save for my kids future.

  31. Mick Russom


    Follow
    Befriend (2)
    7 threads
    582 comments
    Belmont, CA

    123   11:28pm Sat 2 Feb 2013   Share   Quote   Permalink   Like   Dislike (1)  

    iwog says

    No insane ramblings here folks.

    No, its a reality that you created and you are being called out on. Faced with the mirror evasion is a must.

  32. tatupu70


    Follow
    Befriend (3)
    23 threads
    8,100 comments

    124   5:08am Sun 3 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    mell says

    Same thing, chicken and egg. Stop the printing, let prices fall so there is leftover and let interest rates rise to tse leftover will be put into savings.

    Maybe that's what would happen in your fantasy world, but here in the real world, prices might fall as more and more people lost their jobs. Not sure how that is a good thing. There would be no leftover because more and more people have nothing.

  33. Reality


    Follow
    Befriend
    15 threads
    4,004 comments

    125   8:11am Sun 3 Feb 2013   Share   Quote   Permalink   Like (1)   Dislike  

    tatupu70 says

    Maybe that's what would happen in your fantasy world, but here in the real world, prices might fall as more and more people lost their jobs. Not sure how that is a good thing. There would be no leftover because more and more people have nothing.

    Linking price level (inflation) to jobs (employment/unemployment) is essentially re-stating the Phillips Curve theory, which has long been discredited. Prices falling is usually the result of productivity increase, for example the computer prices have always been falling for the last half century, but the industry has not been experiencing massive job losses for all those decades.

    In real life, nothing really gets "leftover" but as prices fall enable people to maintain existing standards of living at lower cost, that in turn makes capital available for investment so that productivity can increase and start the next round of bringing forth new products and services as well as price cuts on existing goods and services. That's how free exchanges amongst individual human beings enhances standards of living.

    The central bank inflation process, claiming to target "price stability" for an arbitrary goods/service basket, essentially tries to steal the bulk if not all the free market productivity increase for its real master the big banks: via debt service on conjured up money.

    Newly create money does not reach everyone in the society all at once. Those who get it first gain at the expense at those who get it later because the former spends the money against the old price structure whereas the latter has to pay up for the new price levels as the inflation caused by the new money has already propagated through. Because the central bank hands out money primarily to the government and the big inefficient banks first, the result is shifting society resources from the more efficient and more productive small business and individual sector to the bureaucratic government and big-business sector. We already know that small and new businesses are the primary generator of jobs (those not efficient at it simply give up the human resources to others that can do better; that's the key, unprofitable ones don't stay in business wasting resources). Big old businesses and government are net job destroyers in the long run (they consume more than they produce). The central bank intervention forcibly shifting resources from the net-plus sectors to the net-minus sectors is where the overall job losses and poverty come from.

  34. iwog


    Follow
    Befriend (46)
    375 threads
    19,906 comments
    47 male
    Lafayette, CA
    Premium

    126   8:23am Sun 3 Feb 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    Robert Sproul says

    Mick Russom says

    Who dismantled glass-steagall?

    Nothing is more revealing than the answer to this question.

    None of the egregeous frauds committed by the largest banks could have occurred if they had not bribed their way off the leash.

    All of the damage since can be laid at the feet of Bill Clinton.

    Bill Clinton screwed up and signed a piece of Republican deregulation in the final weeks of his term. Whatever free market mistakes you blame on Clinton, a Republican would have done 10 times more damage.

    Seriously, you think you would have protected glass-steagall by voting for a Republican??

  35. tatupu70


    Follow
    Befriend (3)
    23 threads
    8,100 comments

    127   8:27am Sun 3 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Reality says

    Linking price level (inflation) to jobs (employment/unemployment) is essentially re-stating the Phillips Curve theory, which has long been discredited. Prices falling is usually the result of productivity increase, for example the computer prices have always been falling for the last half century, but the industry has not been experiencing massive job losses for all those decades.

    Except that your example specifically made reference to reducing the money supply--not increased productivity.

  36. Robert Sproul


    Follow
    Befriend
    64 threads
    826 comments

    128   8:50am Sun 3 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    Seriously, you think you would have protected glass-steagall by voting for a Republican??

    No, I don't.
    But, unlike you, I recognize the reality that neither party represents the interests of the citizenry or the general economy. You can't vote against the interests of Goldman Sacks et al.

    "They frankly own the place" Senator Dick Durbin (D-Ill)

  37. Reality


    Follow
    Befriend
    15 threads
    4,004 comments

    129   8:56am Sun 3 Feb 2013   Share   Quote   Permalink   Like (2)   Dislike  

    tatupu70 says

    Reality says

    Linking price level (inflation) to jobs (employment/unemployment) is essentially re-stating the Phillips Curve theory, which has long been discredited. Prices falling is usually the result of productivity increase, for example the computer prices have always been falling for the last half century, but the industry has not been experiencing massive job losses for all those decades.

    Except that your example specifically made reference to reducing the money supply--not increased productivity.

    You might have confused me with someone else. The example I gave was regarding the computer industry, which is a classic example of productivity increase driving down price.

    In any case, stop handing out newly printed money to inefficient government central planning agencies would automatically increase productivity. When the FED expands money supply, it does not go to everyone in the society all at once. It is the political cronies that get the new money first. That in itself produces inefficiency. If the money supply expansion stops, the central planning is reduced, and the productivity would increase as the resources are not taken from the productive private enterprise to feed the cronies flashing newly printed money.

  38. Reality


    Follow
    Befriend
    15 threads
    4,004 comments

    130   9:02am Sun 3 Feb 2013   Share   Quote   Permalink   Like (3)   Dislike  

    iwog says

    Bill Clinton screwed up and signed a piece of Republican deregulation in the final weeks of his term. Whatever free market mistakes you blame on Clinton, a Republican would have done 10 times more damage.

    Doubtful. The repeal of Glass-Steagall was tailored for the merger of Citi and Travelers. Robert Rubin was heavily involved, eventually becoming one of the co-CEO's of the merged entity. Rubin was a card-carrying Democrat. Stop thinking the two parties in contrasting terms.

    BTW, the repeal of Glass-Steagall was not a "free market mistake." The repeal strengthens the special privileges of big banks under the fiat money system. There's nothing free market about the privileges.

  39. tatupu70


    Follow
    Befriend (3)
    23 threads
    8,100 comments

    131   12:50pm Sun 3 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Reality says

    You might have confused me with someone else. The example I gave was regarding the computer industry, which is a classic example of productivity increase driving down price.

    True--but the text you quoted was replying to another post (which was copied). Before you replied to me, you should have understood the context.

    Reality says

    In any case, stop handing out newly printed money to inefficient government central planning agencies would automatically increase productivity. When the FED expands money supply, it does not go to everyone in the society all at once. It is the political cronies that get the new money first. That in itself produces inefficiency.

    The part about politicial cronies is debatable, but regardless--the answer is to stop cronyism, not shrink the money supply.

  40. mell


    Follow
    Befriend (7)
    274 threads
    3,503 comments
    San Francisco, CA

    132   1:07pm Sun 3 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    Reality says

    Linking price level (inflation) to jobs (employment/unemployment) is essentially re-stating the Phillips Curve theory, which has long been discredited. Prices falling is usually the result of productivity increase, for example the computer prices have always been falling for the last half century, but the industry has not been experiencing massive job losses for all those decades.

    Except that your example specifically made reference to reducing the money supply--not increased productivity.

    No it didn't. Nobody is advocating destroying money - just stopping the printing. Sure, jobs will always initially be lost when supply tightens, but in the long they will be gained back while the economy stand on healthy footing (very little to no inflation). There is not much evidence that the massive printing and credit injection created a significant amount of jobs in the US over the past years, 8% is still horrid. And if you look at Germany post-war, it had some of the best economic growth during the 50s while some of those years showed deflation.

« First     « Previous comments     Next comments »     Last »

Thedaytoday is moderator of this thread.

Email

Username

Watch comments by email
Home   Tips and Tricks   Questions or suggestions? Mail p@patrick.net   Thank you for your kind donations

Page took 195 milliseconds to create.