Investing In Inflation

The House had passed the bill on the 22nd of Dec with a number absent but not enough to have blocked House passage. However the Senate did not have a majority of support for it. On Christmas Eve, as I understand it, a surprise vote was held with members of the Senate absent for the holidays (more than enough to block the passage) Had the other Senators been present the consensus is that it would not have passed the Senate.The numbers absent etc were on another site. I believe there were 43 Senators which would be a minority present, voting aye. It appears that roughly half of the naysayers were absent for the holidays.The link on my previous message answers your Constitutional question. I would remove the word, support, and insert the word, enrich, in Wiki's first paragraph here.I believe the Fed gets 94% if I understand correctly. Do you have any idea how much that 6% that the bankers get after their meager expenses of creating the money? After expenses it's still astronomical. Their interest rate manipulative power works to expand and contract the money supply etc. Anyhow, read the link in my last message and you get an idea of how they rob the folks.Information about the income and expenses of the Federal Reserve Board can be found in the Board of Governor's Annual Report. The UTube link in my last message has it in it.

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BUZSAW B 4 U 2 C Y BUZ SAW.
The immeasurable present eternally extends the infinite past and infinitely consumes the eternal future.

Well, I already explained to you that the Federal Reserve doesn't make any profit on the money it makes. If you can't understand that, I'm not going to beat my head against the wall repeating it. If you disagree, please present some evidence, something other than tinfoil hat ravings.

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I guarantee that you will be enlightened by a reading of this page if you're not aware of how the Fed Reserve which is private bankers gets rich. This is what enriched the Rockefellers, the Rothchilds and the Warburgs etc at the expense of the folks.

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Sorry, I'm not enlightened. I've read this kind of crapola before. I know it's nonsense. In the future, if you wish to "enlighten" me by cutting and pasting tinfoil hat logorrhea, I suggest you at least choose one that cites to sources. I'm confident that you will ignore this suggestion, but at least I've tried.

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Article 1, Section 8 of the US Constitution specifically says that Congress is the only body that can "coin money and regulate the value thereof." The US Constitution has never been amended to allow anyone other than Congress to coin and regulate currency.

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Nope. Sorry, wrong.Let's look at Art I, Sec 8. It says, in part: This is the part of the Constitution that tinfoil hats rely on in arguing that the Fed is unconstitutional If they would only bother to read the entire Section, they'd get to the part that says that Congress has the power Congress, in passing the Federal Reserve Act, concluded that creation of the Federal Reserve system was "necessary and proper for carrying into execution" the power to "coin money, [and] regulate the value thereof."It's not unconstitutional.Still having problems with critical thinking skills, eh Buzzy?

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Those who would sacrifice an essential liberty for a temporary security will lose both, and deserve neither. -- Benjamin FranklinWe see monsters where science shows us windmills. -- Phat

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On Christmas Eve, as I understand it, a surprise vote was held with members of the Senate absent for the holidays (more than enough to block the passage) Had the other Senators been present the consensus is that it would not have passed the Senate.

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Let's take this bit by bit, shall we?What's your source for your claim that it was a "surprise" vote? Please, something other than a tinfoil hat blog.What's your source for your claim that it would not have passed the Senate if the other Senators had been present? Again, something other than a tinfoil hat blog.

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The numbers absent etc were on another site. I believe there were 43 Senators which would be a minority present, voting aye. It appears that roughly half of the naysayers were absent for the holidays.

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Well, I provided the numbers in the post you're responding to. Maybe that's why they sound familiar. What's your source for your claim that "half of the naysayers were absent for the holidays?" Again, no tinfoil hat blogs.

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I would remove the word, support, and insert the word, enrich, in Wiki's first paragraph here.

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How wonderful for you. Do you have any actual facts, with actual support, to dispute Wiki, or is this just a "nuh uh!" retort?

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I believe the Fed gets 94% if I understand correctly. Do you have any idea how much that 6% that the bankers get after their meager expenses of creating the money? After expenses it's still astronomical

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Any actual figures to back up your claim, with supporting evidence?

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Information about the income and expenses of the Federal Reserve Board can be found in the Board of Governor's Annual Report.

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Fantastic! Why don't you go there and find some evidence to support what you're saying?

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The UTube link in my last message has it in it.

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Sorry. At the moment I'm not interested in killing a few brain cells listening to some drooling, semi-functional idiot, even for 10 minutes. Does he actually give a source for the quote that someone can look up, or does he simply mention the quote in passing, while polishing his tinfoil hat?

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Those who would sacrifice an essential liberty for a temporary security will lose both, and deserve neither. -- Benjamin FranklinWe see monsters where science shows us windmills. -- Phat

I used to study the commodities markets and read an interesting book by a local from Colorado. It was called The Coming Gold Discipline.In it, he warned that one sign that the ecomomy was in trouble was when the government had to pump money into the credit markets to keep them afloat. I really didnt understand the book all that well, but the author was not your typical goldbug...he was intelligent in other ways, and not zany or overly religious. I DOrecall him saying that the government was essentially in checkmate because real interest rates would soon be negative, and also that once folks realized that there was no way out, they would (he predicted) flock to the Comex as a temporary safe haven for their money. He predicted that if all of the money in the multi trillion dollar credit markets sought haven in gold, the price would jump from under a thousand dollars an ounce to well over ten thousand dollars an ounce. (Which would reflect the actual damage that our dishonest financial systems had brought us)On a related note, I was working in the grocery store the other day, engaging in small talk with customers, and gold somehow came up. One customer mentioned that his brother was searching to buy some of the metal and that it is now scarce. There is none to be found by any dealer! On a related note, I remember the author saying that the central banks often hold the price of gold down precisely because they don't want people to see it as any sort of an investment opportunity...since its value would betray the real state of the economy.At one point in time, I owned 30 ounces of gold, ten ounces of platinum, and a couple of hundred ounces of silver...which I wish I never would have sold. Oh well.....live and learn!

Subbie, it's time for you to stop hurling personal insults at your counterpart and do some supportive evidence yourself. I've produced some facts which you're denying. It's up to you to refute some of those facts with some support of your own position in some of these areas. You're the one challenging them. I see we're a percentage point off on the profit the banks get from the nearly free money they create from paper and the printing press. Do you realize how much that amounts to? Cite your source that my percentage figure is wrong and yours is right.You didn't directly refute my assertion that the Constitution relegated Congress the power to create money. Your stuff did not refute that fact.

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BUZSAW B 4 U 2 C Y BUZ SAW.
The immeasurable present eternally extends the infinite past and infinitely consumes the eternal future.

I know very little about US constitutional history but a couple of general points:1) Central banks (whether US Fed, European Central, British national, or any other national central bank) are in place to stabilise economies, control the money supply to avoid runaway inflation and act as a last resort supply of funds to private banks in times of crisis (such as now). In themselves central banks make no profits and pay any excess funds into the governing body of the nation (or nations) to which they are accountable. Any central bank surplus is therefore either money which does not have to be raised through taxation or extra money for public expenditure.2) The current crisis is a direct result of the short term greed of unregulated private investment banks practising the sort of pure unchecked freemarket capitalism that is so ideologically inherent to the current US administtation. Practises which have resulted in investment bankers and their advocates/investment partners in the Bush administration making billions of dollars in untaxed income whilst simultaneaously plunging the US economy into unprecedented levels of debt.Are you really saying that the current crisis is the result of some sort of socialist secret plan slowly taking place under the very noses of the 8 year Republican administration?Is it not true that the last democrat administration left the finances of the US in relatively good order as compared to the current administration?

Stabilizing economy: A strict 100% gold standard, i.e. 100% Gold for 100% paper certificate is the least problematic, safe and non-partisan method of economy stabilization, in that it does not enrich the holders of the money and gold deposits beyond a reasonable and fair encumbrance for their role as holders of wealth. How does the gold supply expand? By mining new supplies and by limiting gold bullion ownership to the government as was the case during the era of the gold standard.Control of the money supply: This is the major problem with the privately owned central banks. These few elitist private entities enjoy the privilege of control of the money supply, i.e. the national economy to advance their own private wealth and power.Avoidance of runaway inflation: No way can a strict gold standard where every $$ of certificate issued is backed by an equal amount of deposited gold or silver inflate the economy.Supply of funds in time of crisis: A government void of debt and rich in prosperity will have, on hand in deposit, reserves of gold and silver sufficiently beyond what would be required in time of crisis, in that primarily it would not be paying off billions to private bankers to enrich their personal coffers via allowing them to print paper bills and charge interest to the folks at the expense of the folks under governance for the creation of the money supply in circulation. Who are you trying to kid, Straggler? Can you document that to be the case? I'm all ears/eyes. Do you realize how many billions five or six percentage of the new money created by inflation in the last decade has been applied to enrichment of the Central bankers?
Are you aware of the unique position the bankers of the Federal Reserve are in to do insider trades and positional strategies to cash in on the advance knowledge they have to cash in on their own actions relative to the money supply by raising or lowering interest rates?(ABE: An Aside Shorting the markets is a necessary and proper hedge for investors, businesses, corporations and whoever, to protect themselves from catastrophic loss, to ultimately establish the real value of the markets and to engage in the free enterprise of the American capitalist way. The media is holding this silly notion up to the public in order to obscure the root cause of this crisis and undermine free enterprise; mainly the Federal Reserve System's fiat scheme of enrichment and power. Ultimately the buck stops with the Fed Res Sys. They create the monetary crisis and they profit from it. ......And don't forget, the 8 year spend-spend years of the Democratic Congress who initiate the bill and who's prominent fiscal members such as Chris Dodd and Barney Frank etc pshawed the Republican warning's of Bush, McCain etc that Fanny Mae and Freddie Mac were in trouble, needing government oversight and regulation. Yes, I am aware of that, in that the Democrat Clinton Administration coasted along for eight years on the prosperity which the Republican Reagan Administration enriched America with. Edited by Buzsaw, : Clarification

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BUZSAW B 4 U 2 C Y BUZ SAW.
The immeasurable present eternally extends the infinite past and infinitely consumes the eternal future.

Thanks for your input her, Phat and btw, though we don't often agree on POVs, please bless us with your stuff more often. I was buying and selling commodities; primarily call and put options for several years, but due to my limited cash to work it, I had to give it up. One needs quite deep pockets to make this work.What I did learn from those years was that it was not the shorts or the longs which controlled the market. It was the underlying fundamentals of supply and demand that drove the shorts and longs of the markets. In times of short supply of $$, the $$ went up. In times of short supply of oil, oil went up. In times of short gold supply, gold went up. Demand factored heavily on the availability of any given commodity.When the Fed Res lowers the interest rates, the supply of $$ rises. When the Fed raised the interest rates, the supply of $$ lowers and the $$ lowers relative to foreign currencies. If one is in the prestigious position of a Central banker, in the know, one can short or long large blocks of the commodity market and be in the advantageous position for huge profits. Not only that but there's numerous other markets, relative to the value of the $$ that special private interests, having insider knowledge, can cash in on.Ultimately, the looser is the bourgeoisie; the high taxed hard working middle class and upper class employers of the people who pay and the bankers, their favored politicians and friends who cash in on easy money.Furthermore, to keep in power, the non-producing non-working feeders at the public trough, the illegal aliens and the organizations who represent them are subsidized by the politicians so as for the politicians to keep in power by buying their votes with the taxes of the hard working and enterprising producers.

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BUZSAW B 4 U 2 C Y BUZ SAW.
The immeasurable present eternally extends the infinite past and infinitely consumes the eternal future.

I am no economist but is this not all a bit limiting?
What if it is necessary to go to war, for example? Should the ability of a nation to defend itself rest on the market value of the gold reserve it holds at any given time?
Less extreme cases can be made regarding the need to borrow in the short term in order to invest in the infrastructure of a nation such that it can be prosperous in the long term future.To put it into context I would never be able to purchase a property in which to live without borrowing. As long as I am able to pay back that loan and do not borrow more than I can afford to repay over time the investment I have made will hold me in excellent stead in the future.Likewise a developing nation that may not be able to build a transport infrastructure, for example, without borrowing but whom will never develop or be prosperous without such a transport infrastructure in place, would surely be doing the prudent long term and sensible thing by borrowing in order to invest. No? This is all very well for a nation that starts off with both a surplus of wealth and a fully functioning industrial and social infrastructure in place. But anywhere less fortunate that requires investment to be made in order to have any chance of prosperity in the future will be so hamstrung that a deadly spiral of decay will inevitably ensue. This inequality and hopelessness will in turn arguably create global mass migration issues from the countries unable to prosper to the countries that do have wealth. Extreme inequality with no hope of improvement or investment in the future is also arguably a root cause of international violence. Well central banks are not put in place by governments to make profits and central bankers are not employed to illegally benefit from insider knowledge. If this is what is happening and, as you seem to be implying, the Bush administration knew that this was happening then this would seem to be a failing of the administration to regulate, control and apply the law such that the central bank actually does it's job and meets it's intended purpose.Here in the UK the big money in banking is made (or at least it was until recently) by investment bankers. Not central bankers. Central bankers, whilst I am sure they are well remunerated, are effectively civil servants and cannot expect to benefit from the sort of practices you speak of. Unless of course they are doing so illegally. In which case the law needs to be applied by the government of the day. If the US central bank is as corrupt as you suggest it seems a rather major failing of a government that has been in power 8 years to have presided over this state of affairs. Especially given the catastrophic consequences of not dealing with such a situation. If the administration knew then they are complicit. If they did not then they are incompetent. Which do you think it is? If the Bush administration knew all this why did they not do something about it? Is the administration in power really so powerless regarding the state of the nations finances? Again either they are complicit or incompetent. Which is it? Did not Reagan leave the US in the same sort of debt that the present republican administration is about to leave the country in?It seems that you are not applying your own harsh borrowing ideals to your favourite president I’m sorry but if an administration presides over the country primarily responsible for the sort of financial meltdown the world is currently experiencing for the 8 years preceding that meltdown then it is either directly responsible or grossly incompetent in allowing the institutions that are responsible to act in such a way without taking any action.Talk of socialist plots just smacks of blame game aversion tactics or deep rooted delusional paranoia. Or both. Either way it does not inspire much confidence in the ability of the present administration, or those directly related to it, to successfully rectify the current woeful situation.Edited by Straggler, : No reason given.

Under the Federal Reserve System the central banks print up needed funds and charges we the people/government interest on the currency that Congress was suppose to create at no cost. Why shouldn't Congress just issue the amount of currency needed for the crisis? Why should bankers be enriched to do what Congress was suppose to do?The national debt would be less and balancing the budget would be more realistic. Keep it simple so we the people can understand and keep track of what's going on relative to government economics.Printing money inflates the $$, but which inflates more, borrowing to print or to simply print the amount needed. Members of Congressional oversight committees would be answerable directly to the people for spending and managing the currency.What Congress does is public. Creation of currency by Congress would not be done behind closed doors. Thus nobody is granted the priviledge of market knowledge in advance in order to enrich themselves by that prior knowledge as is the case with the Federal Reserve central bank members.Of course, ideally on a gold standard with a fixed price on gold, inflation would not be a factor but that is unrealistic since a gold standard would be impossible except on a global scale today.

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BUZSAW B 4 U 2 C Y BUZ SAW.
The immeasurable present eternally extends the infinite past and infinitely consumes the eternal future.

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Subbie, it's time for you to stop hurling personal insults at your counterpart and do some supportive evidence yourself.

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Why? All you're going to do is ignore it all, just like you have throughout this thread. Just like you ignored all the questions I asked in my last two posts.

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I've produced some facts which you're denying.

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No you haven't. You've presented tinfoil hat ravings, completely unsupported by any real evidence.

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I see we're a percentage point off on the profit the banks get from the nearly free money they create from paper and the printing press. Do you realize how much that amounts to? Cite your source that my percentage figure is wrong and yours is right.

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You apparently are unable or refuse to understand the point. Regardless of what the percentage is, it's not profit. It's operating expenses. Here the 1999 Combined Statements of Income of the Federal Reserve Banks (in millions) The closest thing to profit in this statement is the $374,000,000 paid in dividends to member banks. Now, before you get your panties in a wad over the fact that $374,000,000 is paid in dividends, keep in mind that that money is paid out to some 2500 banks. A little math will show us that this works out to an average of about $150,000 per bank.

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You didn't directly refute my assertion that the Constitution relegated Congress the power to create money. Your stuff did not refute that fact.

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Of course I didn't refute that point, it's accurate. But what I did to was show how it's irrelevant. Congress passed the Federal Reserve Act pursuant to Article I, Sec. 8, Cl 18.

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Those who would sacrifice an essential liberty for a temporary security will lose both, and deserve neither. -- Benjamin FranklinWe see monsters where science shows us windmills. -- Phat

If the money doesn't exist in the system, increasing the amount of it doesn't do anything other than devalue all the currency. Congress, even if it had the power, would not do this to sort out the issue. The Federal Bank doesn't have the power to create wealth, just decide how much money there is in the system and ensure that there is enough currency to cover it.Any bank can give a loan though, and that is what the government needs when it hasn't got any money after it has spent it all. It could loan it from a private bank, who will do so with interest, it could issue bonds - which it will have to pay out on as well, or it can loan money from a centralised not for profit bank.Why must the bank charge interest? Because it cannot create wealth, and in the future, when the government tries to balance its books, the value of the dollar will be different (and this is a good thing). If the government borrows $500billion today, it cannot balance the books by assuming that in ten years the $500billion they have paid back actually covers it.If the government don't balance their books, then they just created money out of thin air, and thus that will devalue the dollar. It is simple. You cannot create wealth with a printing press or entry into a database. If you need to borrow money, you need to pay it back. Since the money that you borrowed could have been put to work (invested), by not having it for that period the institution that lends it to you will be out of pocket if you just pay the amount back so you need to also pay it back with interest.If you create a system in which there is no interest on loans, and the loaner does not end up impoverished as a result...and the wealth has to come from somewhere - everybody who has the appropriate currency will suffer as it suddenly becomes worth much less. A working Capitalist system also inflates the dollar - and this is a good thing. The Fed is charged with trying to make sure there is enough currency available to cover this inflation. It is up to the government to decide how much money they need to borrow. If they borrow too much, then the whole economy can suffer. Yes, the government is meant to appoint regulatory bodies and oversight committees - and how they go about doing this is answerable to the people. They've sucked at doing it recently. Will you be making the party answer for it? Inflation would have to be strictly watched to make sure it only rose in accordance with the acquisition of gold. If the people create too much wealth, and the government doesn't have the funds to cover it - then there'll be trouble. I'm sure the people will understand caps on profits to make sure the economy doesn't grow faster than the government's ability to represent it using shiny metals.

That 6% is a dividend paid on non-tradeable stocks, isn't it? Basically each bank gives up some money to be put towards Federal Reserves. Since they won't be earning any interest on this money while it is held in reserve by the Fed, they are given a dividend of 6% per year based on the amount of money they have put in the reserve.A private bank should be able to make more than 6% a year for its money, so this dividend is practically a loss for the member banks.

If you are suggesting that central banks should be non-profit making institutions charged with maintaining the stability of a nations economy rather than pursuing their own selfish interests then I wholly agree.The thing is that this appears to be already the case in most instances. In the specific instance of the US central bank I am not really in a position to argue this point as my knowledge of it's working practises is very limited. So I will follow with interest what others, such as Subbie and yourself, have to say on the matter. As discussed in my previous post I think this would lead to some very undesirable international outcomes.

For one thing, China owns a big portion of the gold. Letting them come out on top is not in our best interests at this point in time.