patrick.net

Honest Abe says

but the TRUE rate of inflation is more like 7% or 9%

So, how do YOU calculate inflation? How about you show some numbers backing up your claim that the government understates it? Not just generalizations about health care or higher education. But real calculations based on data...

tatupu70 says

Wages have most definitely kept up with inflation. That’s a fact

Wages catch up with general inflation during job booms, yes.

The 21st century may be different than the 20th, thanks to NAFTA, tech trade with India, and offshoring nearly everything else to China.

The tech recession was ended by a lot of paper-pushing in the FIRE sector. That didn't directly create any wealth but it did allow a doubling of the money supply as China pumped up their USD reserves via trade with debt-powered American consumers.

"The methodological 'shifts' (aka deception) in government reporting have DEPRESSED REPORTED INFLATION, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living." The truth is, we're being lied to.

http://www.shadowstats.com/alternate_data/inflation-charts

Here are some common purchases, and the % increase in inflation since 1950:
Stamps - 1266% inflation
Gas - 1870% inflation
House - 1,400% inflation
Dental crown - 2,750% inflation

http://dailypaul.com/node7747

Inflation is a threat to the stability of both our economy and our society. You can argue all you want . Perhaps you're just not aware of the economic turmoil in America...and around the world. Explaining it away will not cause it to go away.

The pain of correction is equal to the deception which preceded it. Kinda like "for each action, there is an equal and opposite reaction".

Honest Abe says

The Federal Reserve Bank is NOT federal, it has NO reserves and is NOT even a bank. It is a private, for profit business…which pays NO taxes, and is accountable to NO ONE.

The amount of misunderstanding in that statement is impressive. The Federal Reserve System was established by Congress and exists as a creature of Congress -- the reason Missouri has two districts was to reward the Missouri delegation, which consisted of 2 senators and 15 representatives, including the Speaker of the House. The Fed is quasi-public and its profits are credited to the Treasury. It is of course fully accountable to Congress.

Honest Abe says

nflation is a threat to the stability of both our economy and our society.

No it's not. Not when half this country doesn't have two nickels to rub together.

Honest Abe says

Kinda like “for each action, there is an equal and opposite reaction”.

Economies do not run as clocks.

Honest Abe says

Here are some common purchases, and the % increase in inflation since 1950:
Stamps - 1266% inflation
Gas - 1870% inflation
House - 1,400% inflation
Dental crown - 2,750% inflation

Stamps?? That's what you come up with?? I'm asking for how you come up with an inflation%--not individual items. Obviously the price of some things rise faster than inflation, and some rise more slowly. I don't care about a few items...

"The best way to destroy the capitalist system is to debauch the currency by a continuing process of inflation, governments can confisate secretly and unobserved, an important part of the wealth of it citizens". Adolph Hitler tried to economically destroy the British economy during WW 2, by printing mass amounts of British paper currency - although he was not able to pull it off.

Let me see if I can connect the dots. #1- print LOTS of money #2- the value of the currency declines #3- inflation occurs #4- prices increase #5- citizens are financially harmed #6- economic system now at risk. OK, I get it, it's not that hard to understand.

The Federal Reserve Bank is a consortium of 12 private banks which are not part of the U.S. Government. These private banks purchase paper notes from the U.S. Mint for printing cost or simply enter digital money into their computer, then lend back the money, at interest, to the people through member banks. The profits go into the share holders of the banks pockets, the citizens recieve no benefit. The Fed is not accountable and has never been audited in the history of its existance. Ron Paul is attempting to get legislation passed, simply to audit the Fed.

http://www.libertyforlife.com/banking/federal_reserve_bank.html

Well excuse me !!! And no one has bothered to answer the question whether is was legal for a dairy farmer to dilute his milk with water. Wouldn't it follow that if that practice was unacceptable (illegal) for the dairy farmer, it would be just as unacceptable for our government to dilute our currency? Or is that practice okay for you easily misled folks?

That's what I thought. More partisan rubbish. You're very good at writing essays with no facts or data, but not so good at actually backing your words with supporting evidence.

Abe, you're so wrong about the Fed it's comical.

The Fed creates money through crediting the Treasury USD which it then spends into the economy (the Fed gets new Treasury notes and bills from this transaction). It can create more money by crediting sellers of existing US Treasuries with new money.

I won't bother with your other wrong assertions or I will waste even more time here.

Anyhoo, as of now:

http://www.federalreserve.gov/Releases/H41/Current/

The Fed has monetized an immense amount of debt -- $2T in Treasuries and another $1T in MBS.

Money is not a consumer good like milk, Abe. Your understanding of economics is pitifully limited. Your:

#5- citizens are financially harmed above is the contentious assertion. The real harm was done 2004-2006 when the PtB decided to let the system go open-loop without the proper oversight. This was a matter of monetary policy than allowing the lending machinery to temporarily go for short-term profit instead of sustainability.

Inflation, deflation. Both have their winners and losers. In the 19th century it was US farmers -- farming is a very debt-intensive enterprise -- getting screwed by the gold standard, cf. Willing Jennings Bryan's "Cross of Gold" speech.

I have posted links, just like the others, therefore your remark has no value. Troy, you forgot the part where The Fed loans the money, at interest, to the government.

And none of you will address the fact that it is a crime for a dairy farmer to water down his milk...and that there are laws against counterfeiting - woops, or did I miss something?

I think it boils down to this, I believe every member and segment of society has a responsibility to follow the law - whereas you guys apparently think that some members or segments of society can break all the laws some of the time, and some of the laws all of the time, but they are pretty careful not to break all the laws all the time. And you are quick to defend those animals in our society who act like they are more equal than others. A double standard is a reciept for discontent.

I believe all of you are very intelligent yet lack common sense. You know...like cause and effect. History actually can repeat itself. If you do the same things, you'll get the same results. You miss the fact that no fiat currency in the history of the world has ever survived. Or that paper currency always reverts to it's intrinsic value. Yes, stuff CAN happen here. Laws can have negative, unintended consequences...things like that are what you seem to forget or miss or maybe you just don't care, or worst of all, maybe you support the chaos,

How about some more bridges to nowhere, or airports without passengers? Hungry? How about some tasty government "PORK" Hahaha. I personally think the taste of government pork is bitter, but you guys seem to like it. YUK.

BTW, in a recent survey about 60% of Americans thought government was too big and was restricting too many freedoms. The other 40% were probably government workers and those feeding at the government trough, The State's tit...MOMMY. And there you have it.

Troy says

The real harm was done 2004-2006 when the PtB decided to let the system go open-loop without the proper oversight. This was a matter of monetary policy than allowing the lending machinery to temporarily go for short-term profit instead of sustainability.
Inflation, deflation. Both have their winners and losers. In the 19th century it was US farmers — farming is a very debt-intensive enterprise — getting screwed by the gold standard, cf. Willing Jennings Bryan’s “Cross of Gold” speech.

The PtB are the people who stood to benefit from a massive housing bubble and the subsequent collapse. Goldman Sachs and the other elites. Notice how these guys are the same guys who are appointed to BE the regulators? Notice how the FED helped them all out by keeping interest rates low in the midst of the mania and even denied REPEATEDLY that there was a manic bubble in progress.

Please don't say we need more regulators, it doesn't matter how many regulations and regulators you have if they work for the people who need to be regulated. The fact of the matter is there are plenty of regulations that were broken and not enforced. For example, isn't it fraud to sell a piece of junk product and then bet/take out insurance on its failure? That is what Goldman did over and over again. See Matt Taibi's recent piece on Goldman. End the Fed, and that is just the beginning.

http://patrick.net/?p=28685

Honest Abe says

Troy, you forgot the part where The Fed loans the money, at interest, to the government.

It does no such thing. Interest paid on the Fed's government debt holdings are credited back to the Treasury.

This is not to say that the totality of the FRB system isn't a collection of cushy NGO sinecures for the banking elite of this country. They get their skim as any Party committee did in the former Soviet Union.

I personally think the taste of government pork is bitter, but you guys seem to like it. YUK.

Pork is a small part of the steaming turd that is the present Federal outlay. If I were King you would not be able to recognize the budget I would construct.

Well, it would look something like Canada or Singapore's I guess, but far from the present reality. The problem is, WE THE PEOPLE are ultimately responsible for this mess. If terrorists took out all 535 of our representatives tomorrow, WE THE PEOPLE would not return anybody any better.

And eliminating government isn't any solution to this, either. That would just free the PtB to really go after us hammer and tongs.

I don't have any solution (other than moving), but I certainly admire the problem.

Honest Abe says

I think it boils down to this, I believe every member and segment of society has a responsibility to follow the law - whereas you guys apparently think that some members or segments of society can break all the laws some of the time, and some of the laws all of the time, but they are pretty careful not to break all the laws all the time. And you are quick to defend those animals in our society who act like they are more equal than others. A double standard is a reciept for discontent.

What laws were broken??

Honest Abe says

You miss the fact that no fiat currency in the history of the world has ever survived.

Last I checked--the entire world was on fiat currency. So, in my book fiat currency is the ONLY type of currency to "survive". Unless you have a different definition of "survive"...

Honest Abe says

BTW, in a recent survey about 60% of Americans thought government was too big and was restricting too many freedoms.

Yes, everyone thinks government is too big (me included) until it cuts a program that they use...

Troy, all descriptions I have stated about The Fed are pretty much the opposite of yours. Perhaps I'm wrong about The Fed. Could you direct me to some articles (other than from the Fed itself) that would reflect your point of view.

Tatupu...what laws are broken? Okay, how about diluting the milk and counterfeiting, for strarters. And yes you are correct the entire world is on a fiat currency. And thats the problem. EVERY country has monopoly money...and it's a race to the bottom to devalue it. Surely you must be aware of the financial problems of countries all around the world...right?

Do you remember U.S. history right after the civil war? Well every state printed its own currnecy. And since it wasn 't backed by anything of value it was basically worthless. Oh, I know - the people in the state where it was printed accepted it for commerce, but after a while other states STOPPED accepting it. That is what appears to be happening again, but NOW on a world wide scale. History can repeat itself...and if you repeat the same process you'll get the same result. (see my post above for other timeless gems of wisdom -hehe).

Again - surely you've heard the talk from the petro producing countries as well as Russina and China wanting a different currency than the U.S. dollar. And why would that be ???? Come on, out with it!

Did you ever hear the statement "The U.S. dollar is as good as gold"? And what was the dollar backed by, when that was the understanding of the dollar... around the world? Come on, admit it.

No economy can be stable without a stable, sound currency.

Many painful, difficult decisions need to be made to balance the budget and it will be an enormous task. The politicians don't want to because the conditions THEY HAVE CREATED are like a hungry, mean, snapping, snarling pit bull. They would rather ignore it than confront it. How about begining by eliminating DUPILICATE agencies or departments. Next we could eliminate unconstitutional entities...like Fannie Mae, Freddy Mac which are sucking billions from tax payers and shoving them down a black hole. Eliminate the Dept of Education, each state can run its own.

I gotta quit now and go to work. I look forward to your response(s). Abe

Honest Abe says

Okay, how about diluting the milk and counterfeiting, for strarters

Whoa--my milk is being diluted?? I haven't noticed a difference. Seriously though, your posts are just wrong. No laws were/are being broken. Fiat currency is the ONLY surviving currency. Exactly the opposite of what you posted.

The best example you have is the Confederacy?? You are really reaching.

Honest Abe says

Could you direct me to some articles (other than from the Fed itself) that would reflect your point of view.

"In addition, nearly all the interest the Federal Reserve collects on government bonds is rebated to the Treasury each year, so the government does not pay any net interest to the Fed."

http://www.publiceye.org/conspire/flaherty/flaherty8.html

"After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury."

http://federalreserve.gov/generalinfo/faq/faqfrs.htm#5

There are about 20,000 apparatchiks in the Federal Reserve, average personnel cost is $110K per head.