patrick.net

Patrick says

yeah, I think annual GDP is around $32 trillion , so that $6 trillion added in money supply 2020-2022 is significant

the federal reserve should just let these bonds and mortgages on their books be paid off for the next few years and not replace them with new purchases of federal government bonds and also mortgages

i hope they don't need quantitative easing again for at least the next 5 years while the fed reduces its balance sheet

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back in January 2023 it was reported out of $8 trillion balance sheet of the Fed, about $2.6 trillion was mortgage backed securities

$2.6 trillion with an average mortgage of about $500,000 means that is 5.2 million homes with individual mortgages

I think there are a total of 144 million housing units (includes apartments) in the USA

https://www.reuters.com/markets/us/fed-needs-mortgage-backed-securities-exit-plan-earlier-than-later-george-says-2023-01-23

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The Federal Reserve should not exist.

The Federal Reserve continuously prints more paper money, stealing from everyone via inflation.

We should all just use silver by weight with each other, plus promises of silver clearly marked as "ONLY A PROMISE, MAY DEFAULT".

https://patrick.net/post/1378593/2023-02-20-we-should-all-just-use-silver-by

https://rudy.substack.com/p/i-grew-up-middle-class-thats-where#details

Patrick says

Gas taxes have nothing to do with the Fed.

Collapse in US oil drilling has nothing to do with the Fed.

Lack in increasing net oil refining capacity since the 70s has nothing to do with the Fed.

The fucktarded $60/barrel cap price that artificially raise prices on Ukey Nazi Fluffer America and Europe had nothing to do with the Fed.

PumpingRedheads says

Collapse in US oil drilling has nothing to do with the Fed.

true, as one trend to follow is rig count which is now 17% below February 2020 levels

https://ycharts.com/indicators/total_world_rotary_rigs

and down 23% for US rigs

https://ycharts.com/indicators/us_rotary_rigs

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PumpingRedheads says

Gas taxes have nothing to do with the Fed.

Yeah, you might want to look into the history of taxes before exempting central banking from their creation...

NuttBoxer says

Yeah, you might want to look into the history of taxes before exempting central banking from their creation...

Yeah. One has nothing to do with the other. Period.

Thanks for sharing your opinion. As I mentioned you might want to research. I don't care what you think, I care what you know.

https://annecantstandit.substack.com/p/fiat-money-fait-accompli

https://annecantstandit.substack.com/p/fiat-money-fait-accompli

NuttBoxer says

Thanks for sharing your opinion. As I mentioned you might want to research. I don't care what you think, I care what you know.

No, you don't. I stated fact.

Central Banks have nothing to do with taxation.

FACT.

Governments have taxed money from people long before central banks were even invented and they do so even where central banks don't exist today, like in Bulgaria.

Not to mention central banks don't levy taxes, period.

There is a relation though.

We are forced to pay our taxes with the paper issued by our central bank. That's the basis of the dollar's value.

Bulgaria does seem to have a central bank:

https://bnb.bg/?toLang=_EN

Patrick says

We are forced to pay our taxes with the paper issued by our central bank. That's the basis of the dollar's value.

So?

We once had to pay in gold and silver. That doesn't mean either had to do with why we had taxes.

Do guns kill people or do people kill people?

Central Banks like bullets don't have agency to enact/raise taxes. That is what legislatures do.

Patrick says

Bulgaria does seem to have a central bank:

https://bnb.bg/?toLang=_EN

No. They don't.

They have a currency board. They might have what they call a central bank, but that is just a regular bank. It does not create money.

The EU is forcing them to ditch the currency board in 2025, tho. They won't allow full euro adoption w/o it. Perhaps that 'central bank' is what is being set up for that transition.

PumpingRedheads says

No, you don't. I stated fact.

Central Banks have nothing to do with taxation.

FACT.

Governments have taxed money from people long before central banks were even invented and they do so even where central banks don't exist today, like in Bulgaria.

Not to mention central banks don't levy taxes, period.

You don't understand taxation through inflation, aren't aware the IRS and the direct tax on income didn't exist prior to 1913(see the order of the Amendments), and have never looked at the rate of taxation in relation to central banking. More importantly though you don't seem to understand the difference between cause and effect.

Enjoy your opinions, the lazy man's facts...

NuttBoxer says

You don't understand taxation through inflation,

That is debasement, not taxation.

I know how to use a fucking dictionary.

NuttBoxer says

aren't aware the IRS and the direct tax on income didn't exist prior to 1913

Which HAS NOTHING TO DO WITH THE CREATION OF THE FED other than they both happened at the same time.

NuttBoxer says

More importantly though you don't seem to understand the difference between cause and effect.

Yes I do. Namely when that applies and when it does not.

US government debased the money supply during the Civil War by printing greenbacks. No central bank involved! They also levied an income tax unconstitutionally during that time but SCOTUS ignored it until after the war. Again, no central bank was involved or needed.

So cut the urban-legend-crap you use to pretend you know what you are talking about. Cut the misapplied intersection logic your are using more to convince yourself that your historical ignorance is correct and any FACTa that get in the way are not.

Does the Fed make it easier for Congress to spend, spend, spend and then tax, tax, tax later?

Sure.

But it doesn't do the taxing, Congress does. Debasement isn't taxation although it is fraud/theft.

Words matter.

Buy a fucking dictionary, please.

PumpingRedheads says

That is debasement, not taxation.

I know how to use a fucking dictionary.

Nope. Because you are a slave to central bank think(whether you realize it or not), you've only looked at half the equation. Because the Federal Reserve note is a fiat currency, the people debasing it are not losing assets as they know exactly when the debasements will occur, and can scoop them up for pennies on the dollar, AND they control the printing, so they make sure they increase their holdings to account for the dilution. This is easier to understand if you use the real word instead of taxes theft.

PumpingRedheads says

Which HAS NOTHING TO DO WITH THE CREATION OF THE FED other than they both happened at the same time.

To believe in coincidence at this level is beyond naive. I guess Maui just self-immolated right?

PumpingRedheads says

US government debased the money supply during the Civil War by printing greenbacks. No central bank involved! They also levied an income tax unconstitutionally during that time but SCOTUS ignored it until after the war. Again, no central bank was involved or needed.

You've ignored the most important part of the word central bank. Since you like definitions look that up, and see if what the Federal(CENTRAL) government did meets the most important criteria... Control, and dillution. Read some Rothbard, Mises, or if you've got the time Griffin. You are sorely mis-informed on this topic in that you spend all your time digging through the weeds, missing the big picture. Hey! That's another reason for the existence of central banks! Getting people mired in minutia and so many lies they don't see they gun pressed into the small of their back every payday...

Bit of a rant at the end, but Griffin specifically addresses the fallacy of no centralized manipulation of the currency between the time of Jackson and our latest Monster from Jekyll Island.

personal

https://boriquagato.substack.com/p/the-cantil-lying-effect

i have spoken in the past about the cantillon effect. it’s one of those wonderful explanatory ideas that is at once obscure in that very few people know what it is but outlandishly obvious and essentially undeniable once you hear it. ...

ultimately, it’s very, very simple:

those who print new money benefit most from it.

those who get this new money from them fastest benefit nearly as much.

those who get it last are the ones most harmed.

that’s it.

the reason is obvious: when you spend newly created money, you get to buy at the prices from yesterday. you are the new demand and the new spending. you are what starts to cause inflation. but you don’t face it like others will. you’re the one driving up the prices for the next guy. he pays for your profligacy.

and this not only causes all manner up upward pointing wealth redistribution based on proximity to the money spigot, it destroys the fundamental aspects of price and markets that make them free and useful allocators of scarce resources. ...




... taken far enough, you get stories like “workers demanding to be paid 3 times a day and running out on lunch breaks to buy any physical goods they can lay hands upon to try to protect the value of their earnings.”

you get the double whammy of more money supply AND higher velocity of money. inflation goes hyper.

this is weimar, zimbabwe, venezeula, argentina.

and so perhaps it is fitting that newly elected argentine president milei, who has such strong austrian economic grounding, should rise as a sort of populist standard bearer to make this clear.

despite his frequent “hot” outbursts and seeming over-simplification and emotive expression, milei is actually quite a smart and thoughtful guy. he understands this stuff. and he’s explaining it in a way that non-economists can understand.

perhaps this is the argentine “great communicator” for our age. whatever the case, he’s precisely correct here and does a wonderful job of laying this out for a general audience.

now ask yourself the real question: why is it seemingly impossible for the US to produce a presidential candidate with any remotely plausible chance of victory that even seems to understand this idea much less possesses the ability (or perhaps the willingness) to communicate it? ...

the evolution of justification is always the same:

deny
minimize/claim this was the plan
claim this is a good thing
blame it on you once it was obviously bad

... but it also makes those close to the money printer incredibly rich and this is why politicians and their corporate cronies (especially the big money center banks) love this. for them, it’s christmas every day. for the rank and file worker, it’s desiccated holiday trees for $275 and presents they can’t afford.

this is a truly epic scam and one which, once taken past a point, is near impossible to derail or even slow. ...

and until we break the ability to do so by, for example, ending central banks as milei proposes, an idea that’s not nearly as radical as it sounds and that makes more and more sense the more one looks at it or even extends it to ideas like “it’s time to take provision and control of currencies away from governments who clearly cannot be trusted with them” we’re going to make no progress here.

if you think the person in the oval office or the party running congress makes a whit of difference here, i fear you’re fooling yourself.

this has become structural.

a system this powerful, profitable, entrenched, and beholden cannot be fixed. it’s not malfunctioning. it’s working just as was intended.

it just does not work for you.

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Federal Reserve keeps the Fed Funds rate at 5.5% which is the highest its been in about 23 years: https://www.pbs.org/newshour/economy/federal-reserve-keeps-key-interest-rate-unchanged-and-foresees-3-rate-cuts-next-year

Speaking of inflation and economy, a friend of mine applied this past Monday for a $17 per hour cooking job at Panda Express at Panama City Beach's Pier Park.

He said there were 8 other people applying for the same job. Granted, it is off-season (mid November to early March).

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S&P 500 was flat from opening to 2 pm (Eastern), when the Federal Reserve made its rate annoucement.

Now at 3 pm (Eastern) the S&P 500 is up 1.2%.

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Patrick says

WTF with these ugly non-flying cars?

Patrick says

I just watched Asteroid City. Retrofuturist with WHITE PEOPLE in the cast.

I posted two recent articles about the Fed Funds rate.

I wonder if the current Federal Reserve Board wants to synchronized the Federal Reserve Funds Rate to a range of 1.5% to 2% above annual inflation when annual inflation is less volatile.

I remember reading that the 10 Yr Treasury should steady around 3% when annual inflation is tamed at 2%, and that the 30 yr mortgage rate is usually about 1.5% above the 10 Yr Treasury ( ref: https://www.mortgagenewsdaily.com/mortgage-rates/30yr-treasuries )

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https://www.usatoday.com/story/money/2023/12/17/lower-interest-rates-affect-savings-investments-debts/71932702007/

But the campaign of rate increases is probably over, Federal Reserve Chair Jerome Powell signaled on Wednesday. What’s more, Fed officials predict they will lower the benchmark federal funds rate by three-quarters of a percentage point next year, bringing it down from a 22-year high of 5.25% to 5.5% to a range of 4.5% to 4.75%. The current annual inflation rate measured by CPI is at 3.1%.

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https://www.forbes.com/sites/forbesfinancecouncil/2023/12/11/for-decades-fed-funds-remained-higher-than-the-inflation-rate/?sh=239f59a7c3e1

Between November 1980 and November 2002, the Fed funds rate consistently exceeded the U.S. inflation rate. The average fed funds rate over those years was approximately 6.87%, while the average U.S. inflation rate was around 3.70%.

Since the Fed Funds rate and interest rates are at least not increasing, bond mutual funds should fare better in 2024. This holds true for those investing in balanced mutual funds like 60/40 funds (i.e., 60% stocks / 40% bonds).

Banks that own US Treasury assets will see an improvement in their balance sheet also. Bank stocks have been beaten down in 2023.

Look at how hard of a drop for Vanguard's Total Bond Market Fund when the Fed Funds rate increased from 0.25% to 5.5% in 2022 and 2023.



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https://babylonbee.com/cleanArticle/ron-paul-asks-santa-clause-to-end-the-fed-for-the-47th-straight-year

https://sukwan.substack.com/p/midweek-memes-ac4