American Banks Dumping Dollars for the Yen

[hanimmal]

Nice to have you in the conversation whatever one.

however.. What you fail to realize here is that your country doesnt have a printing press of its own.. the printing of the money is in hands of the FED.. not a governmental institution.. Its a private cartel groups of banks..

We call it a quasi government entity. But they are not able to actually print the currency, that is done through the treasury, well office of engraving I think is the actual department.

Well the government has to "buy" its own money from the fed in exchange for the treasury bonds.. So every time they have to increase the money supply (to bail out the inflation the fiat money system creates) they have to exchange bonds (promises to pay back this loan + interest..) This increases public debt constant..
And guess what is paying of public debt..? Income tax.. That is illegal to exist in the first place.. (proven) And if you realize that in a FIAT monetairy system you need constant increase in money supply the government hasnt got a choice but to take on more loan money from the fed.. thus increasing the public debt..

The federal reserve cannot buy new treasuries from the government, they can only work with the treasuries that have been previously sold to the private market. So the government is paying the same amount of interest regardless if it goes to the private entity that bought the security, or to the fed who has purchased them in the past from the private market to increase currency supply. The nice thing with the fed having them though is the fat check they give over to the treasury every year that essentially makes the tax a moot point.

The only taxes we pay on those bonds really is the ones not owned by the fed.

And do not forget how politicians are.. Would they increase taxation in order to decrease the national debt (increase in tax = not very popular = not many votes next election) or rather bail their own out by simply loaning more money from the feds that actually has to be paid back eventually.. thus gaining the money to support the promises they made during election without bigger taxation, more ensuring them a spot in office next run??

Which is why I think it's funny that people see the federal reserve not being under control of the politicians as some sort of scandal. And by Feds do you mean federal reserve?

Second biggest issue that this system of "money control" creates, is that when you are in control of the money supply of a nation, you can decide for yourself if you want to keep "the press" rolling.. the moment you say "no more money" the system depending on this increase also reacts.. the opposite works as well.. you say ok well create triple the amount of money for this period.. well that means (due to supply and demand) that money will devalue according to increase of supply..

Right which again is why it's better to not have politicians in control, if your party is wanting to gain control, all you would need to do is fight for whatever monetary policy works best and boom down goes the economy and you can then scare the masses who don't understand economics to vote in your party.
But you should also see that the institutions that have the most to lose with too much inflation is the banks because all their long term loans would be getting paid back with essentially less and less money. Businesses and people have the most to lose from deflation since the lending would decrease because your money is going to increase in value so they would need to be able to show very high profits to get those loans because a dollar today is worth less than one tomorrow.

This is why the balance has been struck at around 3% inflation being the goal. It's enough to be sure people are going to want to invest their savings so that businesses and people can have the money to buy their needs and wants, but not too high to devalue the long term loans of banks beyond the rates they lent at.

And knowing that the maximum amount of money creation is regulated by outstanding loans (every outstanding loan can be used as 8/9 reserve if not mistaken to create money for new loans.. check document modern money mechanics for actual data.. i knw im close) well technicaly they can increase the supply almost infinite.. What this means in turn is that depressions in economic can be created for the likes of these people who are in control of the supply..

We do ten percent demand deposits held as the reserve requirement here, so yeah you were really close, they changed from 12% in the early nineties recession under bush I.

But that is not the case.

The amount that they can lend out from the original demand deposit is at most 90% of the first deposit. And if those people take that full loan amount that is tied to their future earnings, and foolishly place the entire amount in a second bank deposit they would be able to make up to 90% loan off of the deposit total which is 90% of the original deposit, ect.

So each time the possible amount is diminishing, not growing. And if you work out the mathematical limit it is around a ten fold increase if people are willing to tie up their future earnings for that loan.

Yes the economy did rebound prior to WWII and you should check history books on how they "solved" the issue.. And this was mainly how hitler gained his power, and also perverted the big german mass into the nazis..

I believe we were talking about hyperinflation and the destruction of America and I was saying that America will not go into hyperinflation anytime soon, and that even if they did countries can come out of it relatively quick. Germany was an example, and I believe I originally quantified it with even if it did bring the nutcase hitler into power.

 

[hanimmal]

Alright NoD I'll bite why do they/who call him helicopter Ben.

And I don't think that if the government put the price control on normal bread saying that it cannot be above five dollars it would change anything about the quantity supplied of bread.

And I'm not a fan of government price controls either. Mostly it's political garbage to allow them to say they are doing good. Luckily most the idiots in charge have gotten their heads out of their asses in the 60-80s with the command economy crap. And no that is not what obama is doing at all to anyone that thinks he is.

 

[WhateverOne]

Thank you for expanding my small view of money mechanics
"
"Which is why I think it's funny that people see the federal reserve not being under control of the politicians as some sort of scandal. And by Feds do you mean federal reserve?"

yea i do mean federal reserve.. But then if the country itself (and thus politicians) cannot get control of the money supply then who else will?
i understand the concerns.. But if a country has to borrow its own money, we might as well hand it over to the politicians.. Its enslavement one way or another..

 

[hanimmal]

I'm not sure what you mean by borrowing our own money. But if you mean the treasuries, it's better to look at the entire system of money we have. Currency only makes up about three percent I believe. Most of our wealth is tied up In long term investments. Like properties, businesses, commodities, ect.

By borrowing from itself I'm guessing you mean private entities buying the treasuries from the government in the first place.
There is a huge amount of wealth invested in our own country, something around 200 trillion. When people make an investment of their wealth, they expect a return.

With projects like railway for example. The government gets the loans by exchanging the persons currency for the treasury security that pays them interest. There has been studies about the increase in the economy with effective rail systems so the government expects say an increase of GDP contributions of about ten percent due to the efficiencies the rail brings. They are more than happy and we benefit as a society to pay the private investor a couple percent back because the gains outweigh the losses.

It's a shame though that we put idiots in charge that worry more about getting voted then long term solutions and managing the spending to get the best possible proven outcomes.

I am not sure why people look at these things as slavery. If I take out a loan for a new car, I know that I'm going to have to forfeit the future earnings to repay it over time. I know that they are going to expect a profit and am willing to pay it for the car or i would not have taken the loan out. But nobody is dictating what job I have to work, nor what I do with my car, or really anything other than agreeing to repay it.

 

[abe23]

I'm not sure what you mean by borrowing our own money. But if you mean the treasuries, it's better to look at the entire system of money we have. Currency only makes up about three percent I believe. Most of our wealth is tied up In long term investments. Like properties, businesses, commodities, ect.

By borrowing from itself I'm guessing you mean private entities buying the treasuries from the government in the first place.
There is a huge amount of wealth invested in our own country, something around 200 trillion. When people make an investment of their wealth, they expect a return.

With projects like railway for example. The government gets the loans by exchanging the persons currency for the treasury security that pays them interest. There has been studies about the increase in the economy with effective rail systems so the government expects say an increase of GDP contributions of about ten percent due to the efficiencies the rail brings. They are more than happy and we benefit as a society to pay the private investor a couple percent back because the gains outweigh the losses.

It's a shame though that we put idiots in charge that worry more about getting voted then long term solutions and managing the spending to get the best possible proven outcomes.

I am not sure why people look at these things as slavery. If I take out a loan for a new car, I know that I'm going to have to forfeit the future earnings to repay it over time. I know that they are going to expect a profit and am willing to pay it for the car or i would not have taken the loan out. But nobody is dictating what job I have to work, nor what I do with my car, or really anything other than agreeing to repay it.

Nice work, hanimal....

Question: Do you think fiscal and monetary policies are going to be enough to get us out of this slump....? It seems like we maxed out those credit cards a couple of years ago.

I liked the announcement today about $50 bn for infrastructure projects because it hits two birds with one stone, but that kind of stuff is a tough sell with the current political climate.

 

[WhateverOne]

I'm not sure what you mean by borrowing our own money. But if you mean the treasuries, it's better to look at the entire system of money we have. Currency only makes up about three percent I believe. Most of our wealth is tied up In long term investments. Like properties, businesses, commodities, ect.

By borrowing your own money i mean that all the currency that comes available in US or 99% of other worlds countries came into existence because of loans.. the monney supply is expanded this way.. (remember modern money mechanics.. 8/9..) So when i deposit 10k of dollars into a bank, the bank can use this to create loans.. those loans are extra money created out of nothing .. With this extra amount of money created out of nothing available, this money will eventually come back to one of the banks itself.. (lets say a constructor loans the new money, uses this to buy buildings, the building or land seller puts it on his bank account.. a million possible scenarios..) So the money eventually comes back to the bank.. then again it can be used as a reserve and thus creating new money again.. So far this aint bad as long as the money supply doesnt overgrow the economic growth of that country (so it doesnt inflate the currency).. But with the application of interest whole this scenario changes.. Cause every time the new money is created it comes with interest attached to it.. And every time the money returns even more money and more interest can be added.. Then were is the money to pay pack the interest on all of the outstanding loans? this is the main reason the money supply has to be constantly (and increasingly) expanded trough this money creation technique.. or else no one would have the assets to pay of the interest.. this also means inflation (devaluation of a currency) is build in this system.. Also economical crises attached to this system.. And the ones pulling at the short side will always be the working class..

By borrowing from itself I'm guessing you mean private entities buying the treasuries from the government in the first place.
There is a huge amount of wealth invested in our own country, something around 200 trillion. When people make an investment of their wealth, they expect a return.

No not exactly, i meant the above stated..

It's a shame though that we put idiots in charge that worry more about getting voted then long term solutions and managing the spending to get the best possible proven outcomes.

Problem is you guys dont put those idiots in place.. I dont believe in a system were propaganda for elections is sponsored by personal/corporate funding..
Its a bit like an oil company putting a team of scientists at work to prove burning of fossil fuels dont contribute to climat change..
you can never be a scientist if you have to have a particular outcome on a question asked..
and btw these idiots (elected idiots) are created by the way society and our monetary system works.. Same for most of the crime.. etc etc
It is not a mather of replacing the idiots by idealists.. That has happened in the past with the founding fathers.. Somewhere along the line power will corrupt again..
It is to redesign the system so that this cannot happen in the first place..
(something the founding fathers tried to their best of capabilities..and yet still they failed)

I am not sure why people look at these things as slavery. If I take out a loan for a new car, I know that I'm going to have to forfeit the future earnings to repay it over time. I know that they are going to expect a profit and am willing to pay it for the car or i would not have taken the loan out. But nobody is dictating what job I have to work, nor what I do with my car, or really anything other than agreeing to repay it.

it is slavery cause if you cannot repay your loan they will confiscate everything you have.. And with the reply i made above (money expanding cycle) i am further clearing my point.. if you look at the devaluation of the dollar in particular you see a (could be slightly off) 21 times devaluation from the 1900s this means 1 dollar now gets you 21 times less than in 1900.. And this devaluation is increasing.. So eventually you will have to get 2 jobs to clear of your loan.. whats next 3?? It is enslavement at a very subtle lvl...

 

[NoDrama]

Alright NoD I'll bite why do they/who call him helicopter Ben.

from wiki:
Bernanke gave a speech about deflation. In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money. Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. He said "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." (He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.) Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter printing press." In a footnote to his speech, Bernanke noted that "people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation."

And I don't think that if the government put the price control on normal bread saying that it cannot be above five dollars it would change anything about the quantity supplied of bread.

Ok so your a baker, and it costs you $100 to make a single loaf of bread, how long will it take to go completely out of business if every loaf of bread you make costs you $95? Do you understand how price controls work now? How long do you think a Bakery can sustain 95% loss on every item they make?

There would be a huge black market for bread and it would cost in excess of $100 a loaf. You would not see bread for sale in stores, what idiot suicidal bakery would sell to them at a HUGE loss?

 

[hanimmal]

By borrowing your own money i mean that all the currency that comes available in US or 99% of other worlds countries came into existence because of loans.. the monney supply is expanded this way.. (remember modern money mechanics.. 8/9..) So when i deposit 10k of dollars into a bank, the bank can use this to create loans.. those loans are extra money created out of nothing .. With this extra amount of money created out of nothing available, this money will eventually come back to one of the banks itself.. (lets say a constructor loans the new money, uses this to buy buildings, the building or land seller puts it on his bank account.. a million possible scenarios..) So the money eventually comes back to the bank.. then again it can be used as a reserve and thus creating new money again.. So far this aint bad as long as the money supply doesnt overgrow the economic growth of that country (so it doesnt inflate the currency).. But with the application of interest whole this scenario changes.. Cause every time the new money is created it comes with interest attached to it.. And every time the money returns even more money and more interest can be added.. Then were is the money to pay pack the interest on all of the outstanding loans? this is the main reason the money supply has to be constantly (and increasingly) expanded trough this money creation technique.. or else no one would have the assets to pay of the interest.. this also means inflation (devaluation of a currency) is build in this system.. Also economical crises attached to this system.. And the ones pulling at the short side will always be the working class..

What is missed is a couple very important things to consider.

1. Banks can only lend out up to 90% of the original deposit made. And if they lend out too much (like right at the 90% mark) and the depositor withdraws their money that bank is now bankrupted. That is why most banks keep a certain amount of excess reserves (which every bit of it keeps the money growth down) to be able to cover all the daily transactions that take place.

2. When someone takes out a loan, they do so to use that money, not to keep it in a deposit account because the interest they are paying for the money is more than the percent returned to them in interest. And as soon as they use that money the part of growth that banks provide is essentially stopped until whoever recieved the money from the transaction deposits that money. So it really has a limit on the control of money supply for banks.

3. This money growth is directly tied to future earnings. You would not (aside from the credit boom over this last debacle right) get a line of credit unless you could show that you had a way to pay it back. So the growth that you provide to the economy over the next years (terms of the loan) through working you are saying that the product you received is worth it.


In a nutshell we are the largest part of the money making equation, all the deposits we put into the bank is what kickstarts the expansion (which is why bank runs creates detraction in the economy), we are the ones that decide if the terms of the loan are worth it for us to give up the future earnings. Nobody can force us to borrow or lend, the fed can only entice us with lower rates by purchasing the treasury bonds banks own and putting more currency (that does not grow if it is not invested) into their vaults which leads them to reduce rates and increase lending so that they dont pay a inflation penalty. Or if we are growing too fast and creating too much inflation, they can sell those treasuries they own and reduce the currency in the system meaning a reduction in lending and a increasing in the interest rates due to the increase in competition for every dollar they can lend.

Problem is you guys dont put those idiots in place.. I dont believe in a system were propaganda for elections is sponsored by personal/corporate funding..
Its a bit like an oil company putting a team of scientists at work to prove burning of fossil fuels dont contribute to climat change..
you can never be a scientist if you have to have a particular outcome on a question asked..
and btw these idiots (elected idiots) are created by the way society and our monetary system works.. Same for most of the crime.. etc etc
It is not a mather of replacing the idiots by idealists.. That has happened in the past with the founding fathers.. Somewhere along the line power will corrupt again..
It is to redesign the system so that this cannot happen in the first place..
(something the founding fathers tried to their best of capabilities..and yet still they failed)

I just think it is more about human nature, we keep moving forward, anything we do give it a couple hundred years and it will be obsolete. Half the laws at least I would say need to really be looked at as to what the intentions were and see if they still make sense to do them that way. But this is the problem, the politicians are all lawyers, they may know the laws like the back of their hand, but the sciences that really answer those questions best are far beyond their comprehension.

it is slavery cause if you cannot repay your loan they will confiscate everything you have.. And with the reply i made above (money expanding cycle) i am further clearing my point.. if you look at the devaluation of the dollar in particular you see a (could be slightly off) 21 times devaluation from the 1900s this means 1 dollar now gets you 21 times less than in 1900.. And this devaluation is increasing.. So eventually you will have to get 2 jobs to clear of your loan.. whats next 3?? It is enslavement at a very subtle lvl...

No problem that you are slightly off, lets figure it at a dollar today is worth 10x less than a dollar then. At the same time workers earn about 10x more than they did then too. People dont look often enough at the amount of goods they can purchase per hour of labor (or yearly salary) as they tend to look at more the change in the nominal amount.



To NoD:

Ok so your a baker, and it costs you $100 to make a single loaf of bread, how long will it take to go completely out of business if every loaf of bread you make costs you $95? Do you understand how price controls work now? How long do you think a Bakery can sustain 95% loss on every item they make?

There would be a huge black market for bread and it would cost in excess of $100 a loaf. You would not see bread for sale in stores, what idiot suicidal bakery would sell to them at a HUGE loss?

Come on man, I appreciate your example, and know what it is you are talking about. You even know my total disdain for politicians, but there is such a small chance that something like this will happen in the US.

You are right, if the government placed a limit on the selling price of bread below the costs of it there would be a huge bread shortage, there would be a decrease in the demand on the black market because of the increased price and stores would not supply it due to losing of money. But just like minimum wages that were just increased, the amount they would set the prices at if they did decide to do so would be arbitrary either way below the actual selling price if they are doing a price floor or way above if they are doing a price ceiling. The experiments of the 60-80's taught us economists a lot about all these things as the governments of the world experimented in almost every conceivable way.



Ok and you know I have some love for wiki, so lets take a look:

Bernanke gave a speech about deflation.In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money.

True, the Treasury is a part of the government which contains the mint, so they do control the physical means of creating currency (I am guessing he said currency without looking at the actual speech, because we both know there is a difference).

Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money.

Is this what he had said? Because it looks like more what the writer of this put in themselves. This starts to get blurry for me though I will admit, the legality of how and when the government can actually increase the currency in the system, but I think that takes an act of congress. The federal reserve can I believe trade the old destroyed or decaying bills for new ones, but again this is not the same as avoiding deflation by printing more money.

The Federal reserve to avoid deflation will simply buy the treasuries the banks own to increase their cash on hand which at the same time moves the interest rates lower as banks want to lend out that money, which if everything goes well will mean more people can get loans and that is more money circulating in the economy.

He said "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." (He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.) Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter printing press." In a footnote to his speech, Bernanke noted that "people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation."

This is kind of interesting though. But without reading the entire speech for sure, I am guessing a lot of things were taken out of context.

 

[hanimmal]

Nice work, hanimal....

Question: Do you think fiscal and monetary policies are going to be enough to get us out of this slump....? It seems like we maxed out those credit cards a couple of years ago.

I dont think that it was enough because of the huge hole we were in, but by stopping the collapse of almost the entire banking system and all the businesses that the car companies use for production and sales we have a far stronger floor than we would have to rebuild on. So if we actually have a flat lining the fall will not be as far as it was going to be. The CC and 1st, 2nd, and 3rd mortgages, ect is what I really feel caused the crunch as people stopped having credit they could no longer purchase goods so you had a huge decline in consumption (about 80% of GDP).

Then as people started to not be able to pay back the loans that they never would have been able to anyway (yeah you can afford a $1,000 interest only loan, but tack on the actual $1,000 principle amount they were sunk), and default rates went up, you had the high end investors in the shadow banking industry essentially doing a bank run. Because the FDIC stops securing deposits at 100k (then) they had zero reason to keep their hundreds of millions (each person) in banks and instead went with the higher yielding (and less (essentially none at all) regulated) shadow banks. As those high end depositors started to remove their hundreds of millions each the credit markets that the high end businesses came to a halt, and businesses no longer could borrow for payroll, rents, ect.

Bailing out AIG was a great first start, and Obama coming out and saying that they would not allow banks to fail pretty much steadied the market at the lows in april 09.

The stimulus package was a big boost to get the ball rolling again, but just was too small of an amount a lot of economists had said to really push start the economy. It was like the scene when Rambo burned his bullet wound, great for stopping the blood, but some stitches would have been much more helpful.

I liked the announcement today about $50 bn for infrastructure projects because it hits two birds with one stone, but that kind of stuff is a tough sell with the current political climate.

Man I hope this goes through, and really if it doesn't then whomever stops it should lose their jobs.

If what I heard this morning is right it sounds like this is a three part deal. You have one which is tax breaks for every single business expansion project, so basically any business that puts money towards things like new buildings, equipment, computers, ect is all 100% tax deductable. Huge because if this works like it should you have businesses wanting to use their built up capital reserves and spending it on things that would directly increase the amount of people working, which increases consumption, ect.

The infrastructure projects are similar, because not only do you have the increase in jobs and consumption, you also get increased efficiencies if done right.

I have not heard much on the third part of it yet, but if these things go through nobody should be able to complain about them and it should be the thing to bring us fully out of this mess while actually bringing a return of investment long term with the expansion of businesses and infrastructures. Pretty exciting.

 

[jeff f]

I dont think that it was enough because of the huge hole we were in, but by stopping the collapse of almost the entire banking system and all the businesses that the car companies use for production and sales we have a far stronger floor than we would have to rebuild on. So if we actually have a flat lining the fall will not be as far as it was going to be. The CC and 1st, 2nd, and 3rd mortgages, ect is what I really feel caused the crunch as people stopped having credit they could no longer purchase goods so you had a huge decline in consumption (about 80% of GDP).

Then as people started to not be able to pay back the loans that they never would have been able to anyway (yeah you can afford a $1,000 interest only loan, but tack on the actual $1,000 principle amount they were sunk), and default rates went up, you had the high end investors in the shadow banking industry essentially doing a bank run. Because the FDIC stops securing deposits at 100k (then) they had zero reason to keep their hundreds of millions (each person) in banks and instead went with the higher yielding (and less (essentially none at all) regulated) shadow banks. As those high end depositors started to remove their hundreds of millions each the credit markets that the high end businesses came to a halt, and businesses no longer could borrow for payroll, rents, ect.

Bailing out AIG was a great first start, and Obama coming out and saying that they would not allow banks to fail pretty much steadied the market at the lows in april 09.

The stimulus package was a big boost to get the ball rolling again, but just was too small of an amount a lot of economists had said to really push start the economy. It was like the scene when Rambo burned his bullet wound, great for stopping the blood, but some stitches would have been much more helpful.


Man I hope this goes through, and really if it doesn't then whomever stops it should lose their jobs.

If what I heard this morning is right it sounds like this is a three part deal. You have one which is tax breaks for every single business expansion project, so basically any business that puts money towards things like new buildings, equipment, computers, ect is all 100% tax deductable. Huge because if this works like it should you have businesses wanting to use their built up capital reserves and spending it on things that would directly increase the amount of people working, which increases consumption, ect.

The infrastructure projects are similar, because not only do you have the increase in jobs and consumption, you also get increased efficiencies if done right.

I have not heard much on the third part of it yet, but if these things go through nobody should be able to complain about them and it should be the thing to bring us fully out of this mess while actually bringing a return of investment long term with the expansion of businesses and infrastructures. Pretty exciting.

so 900 billion wasnt enough money but another 50 billion will be? i am amazed at your stated "disdain" for politicians but you trust them for spending this much money. makes little sense to me.

lets break this down to something real because nobody can comprehend kazzillions. if i borrow money (the banks, fanny, freddie) to loan to my brother and he defaults because i ask for no colateral (housing market) does borrowing more money and loaning it to my sister make sense to you? can i get out of my problems by borrowing more and lending more?

a company can borrow or spend as much money as they want. but if they get no additional orders for product, they are still broke. the only way to pay for it is in additional orders. orders arent coming because obama, the fed, new regulation has everyone with money scared shitless.

you are gonna have a hard time convincing anyone that further borrowing is the answer.

also the balance of wages is so out of whack because of govt expansion. govt workers make around a $110k and private sector workers make around $60k. doesnt take an economist to realize this isnt sustainable for very long.

http://www.heritage.org/research/reports/2010/07/comparing-pay-in-the-federal-government-and-the-private-sector

 

[NoDrama]

50 billion for infrastructure spending is a tiny drop in the bucket that is a $14 trillion GDP. 50 billion isn't going to help you or me, it will go to pay off government cronies is all.


[video=youtube;pZsY1rFr_yw]http://www.youtube.com/watch?v=pZsY1rFr_yw&feature=player_embedded[/video]

Watch the graph, watch the numbers that were once huge become so small that the graphing doesn't even show up any more.

 

[hanimmal]

so 900 billion wasnt enough money but another 50 billion will be? i am amazed at your stated "disdain" for politicians but you trust them for spending this much money. makes little sense to me.

So we should be like a bratty little kid that because he is not going to the restaraunt that they want to throws a temper tantrum and sits in the car not eating? The bailout, and stimulus was not enough as many predicted, but it was still far better than nothing.

And you are correct, as much as I like the beginning of what it is Obama is trying to push, it by no means that it is going to be as good as it is now, but if it is putting more money into the hands of businesses and citizens to get some spending going, and putting it towards expanding our productivity levels with rail, expanding businesses, new technologies businesses need to stay competitive, it will be better than I could have expected.

Hell even the 'pork' projects that will inevetibily enter into the bill will be helpful for the communities that they go into.

lets break this down to something real because nobody can comprehend kazzillions. if i borrow money (the banks, fanny, freddie) to loan to my brother and he defaults because i ask for no colateral (housing market) does borrowing more money and loaning it to my sister make sense to you? can i get out of my problems by borrowing more and lending more?

a company can borrow or spend as much money as they want. but if they get no additional orders for product, they are still broke. the only way to pay for it is in additional orders. orders arent coming because obama, the fed, new regulation has everyone with money scared shitless.

you are gonna have a hard time convincing anyone that further borrowing is the answer.

Check into where this crisis actually began, the 'shadowbanks' is where you should start. They are the non banking entities that started the 105% loans, N.I.N.J.A. loans (no interest no jobs), ect the ones that we all used to get late night infomercials all those credit cards offers ect. When those companies realized how much they could make and started to sell everything to wallstreet in the asset backed securities, it took off like a rocket.

Im willing to bet if you look at all the mortgage defaults for the 'Mac banks you will see many of them with secondary home loans (improvement and 2nd mortgages) and a bunch of credit card debt, to the point they could not pay all their bills and fell further and further behind.

The banks and the macs came into these markets later and that was when the mess really took off.

The only real thing that can be blamed on the macs is the loopholes that these non bank entities (not regulated by the federal reserve, but still acting as banking institutions) came from the laws loosened for the mac banks.

also the balance of wages is so out of whack because of govt expansion. govt workers make around a $110k and private sector workers make around $60k. doesnt take an economist to realize this isnt sustainable for very long.

http://www.heritage.org/research/rep...private-sector

The fun of these types of 'research is how more and more I am learning about how they fudge these numbers to make outright false conclusions. So I click on the one and go to the actual paper that this article is written from:



So right off the bat you see that the 'unskilled' workers (no college degree) make much less in the government, but when you get to a bachelors degree and higher it is there that it increases. This difference would be easy to understand when considering the type of degrees that the government hires. All degrees are not the same, basically you can look at the discrepency between jobs that require math and those that do not to see where they begin.

So at the very least, by education we can say that the non degreed workers do better in the private sector. And I am arguing that the type of degree and the money you would get from the private sector would be a very important thing in determining if this is the case for the college jobs.

A portion of federal workers’ higher cash pay comes from their higher skills. Private-sector workers with the same characteristics as the average federal employee earn 19.6 percent more than average private-sector hourly pay.

Did not have far to go to find this is the case.

It really comes down to the types of jobs those government workers take, in the government it seems like they are very overpaid, but if you look at what the jobs they get in the private sector you see they could make more if they went that way. But usually government work is more stable, so they decided on stability by giving up the extra money.

 

[hanimmal]

NoD I love what you bring me man, you always make me have to work to come up with the answer back of your posts.

Good video, you see it shows that the 2.5 billion lent to the banks in the 1919, and it is showing the dramatic increases in borrowings after 1980.

So first to get some perspective, we should look at the actual amount a dollar in 1919 would be compared to one today:

[SIZE=+1]What cost $2500000000 in 1919 would cost $30736104175.17 in 2009. [/SIZE][SIZE=+1] Also, if you were to buy exactly the same products in 2009 and 1919,
they would cost you $2500000000 and $176266794.85 respectively. [/SIZE]
[SIZE=+1] Do you want to do another calculation? [/SIZE]

So that 2.5 billion would equate to approximately $30billion today.

Next lets examine the actual increase in our economy from then to today, post car explosion, suburbs, airplanes, computers and everything else right?

GDP in 1919: http://www.huppi.com/kangaroo/GDPreal.htm ,
Year GDP
1919 $70,271

Gross Domestic Product (Millions of 1929 Dollars)

Year GDP
1919 $70,271

[SIZE=+1]What cost $70271000000 in 1919 would cost $863942710597.22 in 2009.
[/SIZE][SIZE=+1] Also, if you were to buy exactly the same products in 2009 and 1919,
they would cost you $70271000000 and $4954577576.42 respectively. [/SIZE]
[SIZE=+1] Do you want to do another calculation? [/SIZE]

So in todays dollars it is about $863 billion today, where as our GDP is around $14 trillion dollars, so in reality our economy
is about 16 times larger than it was in 1919. I actually thought that it would be more, but numbers dont lie.

So if we multiply the $30billion (the 1919 federal loans to banks amount) by 16 we get: $480 billion.

Depression of 1920–21 Jan 1920 –
July 1921 1 year
6 months 10 months −38.1% −32.7% The 1921 recession began a mere 10 months after the post-World War I recession, as the economy continued working through the shift to a peacetime economy. The recession was short but extremely painful. The year 1920 was the single most deflationary year in American History; production, however, did not fall as much as might be expected from the deflation. GNP may have declined between 2.5 and 7 percent, even as wholesale prices declined by 36.8%.[25] The economy had a strong recovery following the recession.[26]

So even though they lent out the equivelent of $480 billion it was not enough to stop the deflation that had occurred, so it
makes sense for the Fed to put out more money in loans in an attempt to stop it.

And youtube fails again! jk, kind of, the problem with following the nominal amounts over time is that they skew numbers by not
reflecting the actual inflation that has occurred between now and then. This is why in accounting you are not supposed to
examine the dollar amounts from different time frames, because there is real differences in them.

 

[NoDrama]

From 1913 to 1971 there was no inflation.

 

[hanimmal]

Wow glad I put all that time into this just to have that stellar response. Want to expand on this no inflation idea you have going?

 

[WhateverOne]

From 1913 to 1971 there was no inflation.

lol , go out to play.. kids shouldnt be on a marijuana forum anyway.. :s

 

[hanimmal]

Originally Posted by NoDrama
From 1913 to 1971 there was no inflation.
lol , go out to play.. kids shouldnt be on a marijuana forum anyway.. :s

Nah NoD has some pretty good stuff he comes out with. I'm pretty sure this is about the gold standard being tied to the dollar. If so I am going to have to look up stats on how much gold we dug up during that time and the change in prices. Because essentially as you add currency (gold in this case) it's basically the same as the mint creating more cash. If I have time, classes start back up tomorrow and I have a hellish schedule.

 

[Mr.KushMan]

That is completely non-sensical. Digging up gold is like printing money? I mean metaphysics aside, that is just asinine.

I am not an expert of how it effects the economy. But from what I understand new money takes power from other money meaning the more money that exists of a particular currency the more you need of that currency to buy real world items, like diluting a drug suspended solution( you need more solution to get high), makes sense as there is more money in the fake economy. As more gold is dug up and becomes more available to economic trade the cost of gold goes down, then as more people see this cheap cost and take advantage supply tightens and costs rise.

We have reached peak gold, are on the downstroke of the peak oil trend, money supply is at an all time high, and currencies aren't backed by any assets. Canada's dollar is even back mostly by US treasury bonds. As supply tightens, costs will go up precipitating the need for more money, pushing up wages, the need for more money, then creating a massive downward spiral in the value of domestic dollars.

I am not advocating the gold standard, I wasn't alive during its use, but I think its obvious something is extremely wrong with the current situation. I think the anecdotal proof is enough to show we shouldn't carry on this meaningless pursuit of acquiring all we can for the people at the top of the power ladder, whoever they are. Romans couldn't handle it, they possessed an unhealthy addiction to slavery and war, what makes you think we can get out without injury?

IMHO everything about private ownership is morally wrong. I am not trying to lure people into a paradigm of pure communalism, but I just don't see the reason to believe it. All it does is give one the ability to leverage more out of the other people. We could all live infinitely comfortably if we all agreed to two or three children, all agreed to work toward a goal we each felt fulfilled doing, and helped all others to the best of our ability. Free commerce, free trade, free society.

Sure it would be highly structured, and almost socialist in operation, but if we all hold all others and ourselves accountable then we have no reason to ruin lives. I mean all trade routes, efficient work schedules and effective distribution centers developed and implemented. Follow me here, laws are created (laws being an admittance the social structure has failed), law then brings to power a LEGAL TENDER(something that is backed by absolutely nothing), money, or abundance, create poverty, poverty is the mother of crime, crime is regulated by law. I have to say, one of the best business plans ever created!

Peace

 

[jeff f]

So we should be like a bratty little kid that because he is not going to the restaraunt that they want to throws a temper tantrum and sits in the car not eating? The bailout, and stimulus was not enough as many predicted, but it was still far better than nothing.

And you are correct, as much as I like the beginning of what it is Obama is trying to push, it by no means that it is going to be as good as it is now, but if it is putting more money into the hands of businesses and citizens to get some spending going, and putting it towards expanding our productivity levels with rail, expanding businesses, new technologies businesses need to stay competitive, it will be better than I could have expected.

Hell even the 'pork' projects that will inevetibily enter into the bill will be helpful for the communities that they go into.



Check into where this crisis actually began, the 'shadowbanks' is where you should start. They are the non banking entities that started the 105% loans, N.I.N.J.A. loans (no interest no jobs), ect the ones that we all used to get late night infomercials all those credit cards offers ect. When those companies realized how much they could make and started to sell everything to wallstreet in the asset backed securities, it took off like a rocket.

Im willing to bet if you look at all the mortgage defaults for the 'Mac banks you will see many of them with secondary home loans (improvement and 2nd mortgages) and a bunch of credit card debt, to the point they could not pay all their bills and fell further and further behind.

The banks and the macs came into these markets later and that was when the mess really took off.

The only real thing that can be blamed on the macs is the loopholes that these non bank entities (not regulated by the federal reserve, but still acting as banking institutions) came from the laws loosened for the mac banks.



The fun of these types of 'research is how more and more I am learning about how they fudge these numbers to make outright false conclusions. So I click on the one and go to the actual paper that this article is written from:

View attachment 1142218

So right off the bat you see that the 'unskilled' workers (no college degree) make much less in the government, but when you get to a bachelors degree and higher it is there that it increases. This difference would be easy to understand when considering the type of degrees that the government hires. All degrees are not the same, basically you can look at the discrepency between jobs that require math and those that do not to see where they begin.

So at the very least, by education we can say that the non degreed workers do better in the private sector. And I am arguing that the type of degree and the money you would get from the private sector would be a very important thing in determining if this is the case for the college jobs.



Did not have far to go to find this is the case.

It really comes down to the types of jobs those government workers take, in the government it seems like they are very overpaid, but if you look at what the jobs they get in the private sector you see they could make more if they went that way. But usually government work is more stable, so they decided on stability by giving up the extra money.

your interpretation of the graph is hilarious. there are very few govt non degree workers. when there are non degree workers in govt jobs, the govt(taxpayer) pays for the education and they move up govt jobs to get about 40 % more salary. also, eunteprenues are often undereducated. so if a guy gets out of high school and starts a successful business he is being compared to a govt worker who is getting paid a union wage to do a union job. while going to college on your dime.

you often compare apples to goats....

 

[NoDrama]

Nah NoD has some pretty good stuff he comes out with. I'm pretty sure this is about the gold standard being tied to the dollar. If so I am going to have to look up stats on how much gold we dug up during that time and the change in prices. Because essentially as you add currency (gold in this case) it's basically the same as the mint creating more cash. If I have time, classes start back up tomorrow and I have a hellish schedule.

Ahhh Yes Han, you know me well. The price of gold in 1913 was about $20 per ounce avoirdupois ( Extra credit if you know what that means) in 1932 gold was about $20 per ounce. Now in 1933 Roosevelt Revalued gold to $35 per ounce, but that is not inflation so I don't count it. In Fact, not counting Roosevelts theft, Gold was the same price from 1833 all the way until 1970. In 1971 Nixon took us completely off the gold standard and that is when the TRUE inflation began. Now you may ask yourself, "Sure, but what about previous to 1833?" well we weren't on a Gold standard then, we were on a bimetallic (Gold and Silver)standard. The mining of large deposits like in California around 1850(49'ers), caused price levels to be very unstable in the short run, but did not cause widespread inflation.

lol , go out to play.. kids shouldnt be on a marijuana forum anyway.. :s

Nationale Bank van België Has been Belgium's Central Bank since 1850. Unless your 160 years old you wouldn't know what a gold standard was like. WW1 broke the back of gold as so many countries had to resort to inflationary finance.

We have reached peak gold,

There is no such thing as "peak Gold" Kush. About 99.9% of all the gold ever mined is still here today, its only used for a very very few things. Money is #1, Jewelry is #2, and non corroding plating for electrical contacts is #3. There are a few other uses but that covers the vast majority. Since it is valued so highly it is reclaimed and recycled. And digging up gold was nearly the same as printing money, you had to take the gold to a refiner and then to the mint , but the govt would mint the coin for you for no fee. So with a bit of work, digging up gold was just like printing money would be today, except that gold is really hard to dig up, in fact it takes 120 tons of ore to get one ounce of gold. Counterfeiting paper is MUCH MUCH easier than digging up gold. Oh and adding digital bits to digital accounts is way easier than counterfeiting.

As JP Morgan once said " Gold is money, and nothing else".