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Thread: End the Fed?

  1. #9
    rattler's Avatar
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    Quote Originally Posted by i<3carnivores View Post
    I just wanted to share this from a friend. Probably not entirely relevant, but meh.
    Why do I always see "Freedom Isn't Free" stickers often coupled with some kind of anti-tax stickers? Aren't taxes the cost of freedom? Or do they think the only acceptable currency for freedom is the lives of American soldiers?
    your making a leap in the thought....the problem is that most are sick of getting hit by taxes decided by ppl in DC that get to vote in their own benefits package and raises.....you ask anyone of those ppl about taxes in general i bet they have no problem paying more taxes for their local school, or to help out their community hospital.....the complaint comes from taxes levied by the bureaucrats, most of these ppl like the fact they get to decide by majority vote on most the local taxes.....the community gets to decide whether they think their school or hospital has been doing the right thing and if they have give them more money...
    cervid serial killer
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    I didn't get stimulated but he kept his promise on change, that's about all I got left!
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  2. #10
    dashman's Avatar
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    Good question. There will always be tax, maybe they don't agree with how much not sure.

    I think many people are like me. They know something is not right but nobody on the boob tube or in the media will put a finger on it. We switch back and forth between Republican and Democratic candidates hoping one will just fix the problems. When in fact they both seem to be contributing to it. At least when it comes to financial policy.

    Whether you want to ask the Fed to print a little money or alot, what does it matter. Why are we asking the Fed, a private company, to borrow our money. They create it out of thin air and then charge us interest for using it.

    We do not elect them and they are not appointed by anyone we elect. They operate with complete freedom to help or hinder us. And it seems all they have been doing since inception is hinder. We have had one Depression and numerous recessions under the Fed. I don't think we have had any prior to that. Reminds me of going to a casino. No matter what we do with our votes. The house has the advantage.

    At least that is what it seems like to me. Again not an expert here. Just a person trying to understand more of the problems. I am not one to rely on lying politicians or media that seems to have an agenda (both sides of the spectrum). I only hope more and more people will do the research themselves so we as a country can begin to identify and dismantle what is really taking us to the poor farm.

    To me it isn't liberal social programs or conservative tax breaks to the wealthy. It is the fact that some company is stealing our money right from under us.

  3. #11
    SeaQuestDSV's Avatar
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    Sorry, but that is one of the most sensationalist articles I've ever read. It's bias is evidently clear from the get go. Mind if I break it down a little?

    "Theoretically, one day that U.S. government could simply decide to print as many U.S. dollars as it wants and pay off all government debts. But under the current system that is not allowed. "


    And with good reason. Ever hear of hyper inflation? Each new dollar in the system means every other dollar is worth less. Or as wikipedia puts it:

    The main cause of hyperinflation is a massive and rapid increase in the amount of money that is not supported by a corresponding growth in the output of goods and services.

    Examples of countries printing money to pay off debt:

    Pre-WWII Germany (Helloooooo Hitler!)
    China (before pegging their Yaun off the dollar... which is another topic all together)
    Zimbabwe
    Yugoslavia


    And many more economies we should never emulate.

    So, when the U.S. government needs to borrow more money (which happens a lot these days) it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.


    And it doesn't really pull this money out of thin air. It's usually comes from the issuing of T-Bills or some other federal security. That's where the term "national debt" comes from. I can't find the numbers right now, but about 75% of the national debt is US owned, with only about a quarter of it being foreign. Essentially, we are borrowing from ourselves and paying ourselves back. This can be extremely beneficial to an economy as long as it's used to help create economic growth. Anyone can buy T-Bills and it can be an extremely safe (although low yielding) investment.

    "Getting rich" off government debt is ludicrous. Returns are usually at 1 or 2 percent. People with money and know how to invest don't waste their time with these except for security. Some people even use to think of it as a savings account you could earn interest on... but regulations have changed so that even savings accounts are allowed to pay interest. But thats another matter as well.

    4 – The Federal Reserve devalues our currency. Since the Federal Reserve was created in 1913, the U.S. dollar has lost 96 percent of its purchasing power. The truth is that just a two percent inflation rate will wipe out half of your purchasing power within a single generation.

    Of course it does. Devaluing our currency can be beneficial in certain contexts. Want American manufactures to be able to compete with other countries? Make it cheaper for other countries to buy American goods by devaluing the dollar. This strategy seems to be working pretty well for China right now.

    The Federal Reserve also controls the national money supply. They can pump trillions into the economy or pull trillions out without being accountable to anyone. This can have disastrous consequences. For example, after the U.S. stock market crash of 1929, the Federal Reserve continued to contract the money supply. Many analysts believe that this was one of the key things that precipitated the Great Depression.

    The reason this recession didn't turn into a depression like many people "predicted" it would is because our economy is managed by the Fed. The Fed had hardly any power during the Great Depression, and in fact most of its current powers are the result of the Great Depression and an aversion to ever allowing anything like that to happen again.

    Sorry if I seemed scatter brained or picked on random points, but I know a bit about finance and economics and when there are articles where the author has little grasp on the real situation it really bother me. Mostly because it opened with the author saying the US could print money to pay off its debt.

    If you want to learn a lot more look back through the various banking acts that congress has passed over time. Each one tells a lot about the current state of the economy and why it was passed. You'll also see a pattern of increased regulation (bad times) and de-regulation (good times).
    Last edited by SeaQuestDSV; 08-06-2010 at 07:33 PM.

  4. #12
    rattler's Avatar
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    Quote Originally Posted by SeaQuestDSV View Post
    Sorry, but that is one of the most sensationalist articles I've ever read. It's bias is evidently clear from the get go. Mind if I break it down a little?

    "Theoretically, one day that U.S. government could simply decide to print as many U.S. dollars as it wants and pay off all government debts. But under the current system that is not allowed. "


    And with good reason. Ever hear of hyper inflation? Each new dollar in the system means every other dollar is worth less. Or as wikipedia puts it:

    The main cause of hyperinflation is a massive and rapid increase in the amount of money that is not supported by a corresponding growth in the output of goods and services.

    Examples of countries printing money to pay off debt:

    Pre-WWII Germany (Helloooooo Hitler!)
    China (before pegging their Yaun off the dollar... which is another topic all together)
    Zimbabwe
    Yugoslavia
    to true.....forget which one you were using a wheel barrel full of paper money to buy a loaf of bread
    cervid serial killer
    Know guns, know peace, know safety. No guns, no peace, no safety
    I didn't get stimulated but he kept his promise on change, that's about all I got left!
    http://www.wolfpointherald.com/--http://www.safety-brite.net/

  5. #13
    I hate bugs. Carnivorous plants get me. jpappy789's Avatar
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    I got to the first point, noticed the writer has never heard the word inflation, and stopped reading. That's Econ 101 there.
    -Josh
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  6. #14
    dashman's Avatar
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    SeaQuest: I am not ignoring your post. I haven't fully read it all the way through. You bring up some good points from what I have read. That's why I posted. I know there are alot of bright individuals on this forum and wanted to hear your opinions.

    jpappy789,
    There is mention of hyper inflation towards the latter part of the article. The fact that that is possible really has no bearing on who should control our money. That can happen no matter who prints it if not managed properly.

    Why can’t the U.S. government just print up all the money that it needs?

    Well, the way that our Congress spends money that would probably create horrific hyperinflation, but that is the subject for another article.
    My question is: Are we better off after the Fed took over? When I look at history I see a gradual decline. Y = Mx + b tells me the slope seemed to change sometime around when the Fed took over.

  7. #15
    dashman's Avatar
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    Hmmm. Thought this was interesting. The Federal Reserve Bank posted record profits in 2009. Beating it's previous record set during the Great Depression. And this is just what they are telling us, which they don't have to. They don't answer to anyone. We cannot audit them. This is reason enough for me to want to audit them and determine if we should allow them to continue to profit off of thier policies that has caused nothing but massive deficits since thier inception.

    http://www.huffingtonpost.com/2010/0..._n_419835.html

  8. #16
    SeaQuestDSV's Avatar
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    I'd agree wholeheartedly in having some form of audit for the Fed. Why not have them adhere to SEC reporting guidelines like public companies have to? There's a lot going on there the American people have a right to know.

    But as for our massive deficit I'd much rather blame the spend happy congressmen and presidents, lol.

    And after reading the article it notes they made the profit from the holding and sale of their securities (T-Bills and the like). The Fed buys T-Bills back in order to increase the money supply. This has a number of effects, one of which is lowering the interest rates. More money in the system means there is more money to loan, which was done to actually get the economy going again and allowing banks to lend money. It was extremely hard for potential home owners and business to get a loan at the height of the recession because nobody was lending.

    When the Fed says it's lowering interest rates it injects money into the system by the buying back of their securities until rates reach their target level. And when they want rates to go up they sell their securities to take money out of the system.

    This also can have a dramatic effect on the exchange rate of the US Dollar vs. other countries currencies.

    So while they are making a decent profit, it's just a byproduct of getting the economy back on track for growth. And the profit went right back into the treasury, probably for congress to piss away in about 10 minutes
    Last edited by SeaQuestDSV; 08-10-2010 at 08:22 PM.

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