Impossible! The deficit is falling as well as unemployment Obama wrecking economy

[tokeprep]

On interest rates being a control mechanism.........why aren't they really high as they have been in the past during similar circumstances?? The Fed set interest rates high to deal with downturns in the past, what's so special now?

They haven't been high during past similar circumstances, unless you only mean relatively (2% federal funds rate versus 0%). It's 0% today because nothing else was working to achieve the effects they wanted.

On the Fed handing all profits over the the Treasury.....

They are funded on interest from their portfolio of.........securities.....they supposedly hand over all that is left after they cover their expenses.

Their expenses aren't very substantial. The treasury gets the vast majority of the money generated.

 

[tokeprep]

Pretending that value can be made into money at a whim is called counterfeiting. Objects/labor CANNOT be money in the USA, law has decreed that ONLY Federal Reserve Notes are legal tender. Thinking that the Bank will accept something of value from you in lieu of interest is ABSURD!!

I guess you just misunderstood, because that was exactly my point. You're trying to argue that all money in the Federal Reserve System is based on debt. My point was that the central bank can circulate currency reflecting existing value by monetizing debt. The treasury can pay obligations in fiat currency that must be accepted in place of or alongside the gold currency, because it's legal tender. This money was never lent out for interest and need not even be repaid--it's just created. Alternatively, if you have paper notes denominated in dollars that are redeemable for gold, the government can transform them into fiat currency by refusing the conversion. The notes still exist and still reflect the exactly the same value they did before (immediately after they're transformed into fiat currency), and they form a substantial deposit base for banks. None of those notes are based on debt either.

This has nothing to do with the bank accepting "something of value from you in lieu of interest."

The government doesn't HAVE to spend a penny on the military. IT MUST Spend the medicare/ss/medicaid money, it has no choice.

They actually don't have to spend a penny on any of those programs. All they'd need to do is amend the statute, and then the obligation disappears. I don't see how this is any different from Congress having to pass an appropriation to spend money on the military.

What is the "Optimal" debt load for the USA?

The USA is not a corporation.

I certainly don't know the answer, but out current debt level obviously isn't problematic (not yet).

 

[tokeprep]

When you have the power to create any amount of currency at the push of a key, profits in dollar sense are immaterial.

If I could turn lead into gold with nothing more than a few cents worth of chemicals, how would I ensure gold didn't become worthless?

When the people making monetary policy decisions aren't bankers and aren't paid based on the Fed's profits, they certainly are irrelevant. I'm constantly asking the question: why would the Board of Governors care? Why would the federal reserve banks care? They have no financial stake in the system's profits.

 

[tokeprep]

And interest is being charged on $1,000. not the original $100. $1,000 in existence, $20 in interest due. $1,000 in existence, $1,020 due to be paid to the banks.

The university from which you got your degree must not have had any accounting requirements.

The question was about the interest payment due on the initial loan.

Once again, it makes no sense to presume that you begin with zero value in existence. If there were $10,000 in gold-backed paper notes before the conversion to fiat currency, there are $10,000 in fiat currency notes afterward (if you just stop redeeming the notes). These aren't loaned out by anyone. Your $1,020 is certainly payable.

 

[twostrokenut]

Okay a naïve question. Interest was originally devised as a way of offsetting the risk of lending, e.g. defaults and total loss. In that instance, money goes away. Ideally, interest is a zero-sum proposition; it's assessed to offset the risk, leaving overall even money. Is it still a case of generating value where there was none? cn

When was it devised and what were they using for money at the time? I think the same thing, interest was not frowned upon as usury once ppl accepted the risk of loss involved in lending. Ideally I think though assumes that men with create and manage unlimited sums of money will never follow through with temptations to take advantage of skimming off of those large sums for personal benefit without getting caught.............But Ideally, yes; it is my limited understanding it would generate value where no motivation to do so previously existed.

 

[tokeprep]

Then the risk free rate of .03% must mean that there is very very little risk in the system.

It does not, it represents the fact that the banks aren't really lending money at all, not when they can earn 10 times the risk free rate with another risk free rate of .25% interest on fed reserve account deposit overages. Only Banks can do this, you or I cannot earn this money since we are not a bank which is part of the Fed Reserve system.

What do you mean "they can earn 10 times the risk free rate with....25% interest on fed reserve account deposit overages"?

Since the Fed purchases nearly all of the Treasuries bonds, and since the fed has no limit to the amount of money it may create, the Government in essence has no limit to the amount they can borrow.

The Fed's QE program wouldn't have purchased all of the government's borrowing a few years ago. It's only true now because the amount of government borrowing has been substantially reduced, with the deficit now expected to be less than $700 billion. Theoretically the government can borrow an unlimited amount of money; practically, they're actually borrowing a lot less, and since there's huge demand for treasuries regardless of the Fed's purchases, the Fed's actions have no impact on the government's borrowing ability.

Of course interest is infinitely compounded, people tend to forget that. The power of the exponent I am sure you will agree is quite large.

Capital will be destroyed very quickly by such low rates, only when the ability to save your hard earned dollar and not take a loss on it will value return to the country.

Interest is just a share of value created. It's not endlessly increasing. If I borrow $100 at 5% to plant crops that will be worth $200, I have a $95 profit, $5 interest payment, and $100 return of principal to the bank. The bank got $5, but I got $95.

If you were correct about interest endlessly increasing and destroying value, why do we we still have so much value?

 

[tokeprep]

Banks don't create money, are you fucking retarded?

Since I just described ways the central bank can create money--expressly using the word "created" twice--you must be retarded.

They borrow it from a Central Bank who "make it" on a computer at an extremely low interest rate, they then loan this money out.

How do you think money makes it down the line from Central Bank to people's/business' pockets?

Money faeries drop it in the meadows?

You're assuming that every dollar in existence began life as a loan from the central bank to a bank. As I just explained, there was value in existence before fiat currency came to be; the central bank and the government can circulate currency without ever having to lend it to anyone. When your gold certificate is no longer convertible into gold but instead only convertible into Federal Reserve Notes, you get currency for value from the treasury without it ever being borrowed (since the treasury can sell a bond to the Fed without ever having to repay it). This existing value is a deposit base for the banking system.

The central bank doesn't have to lend money out to create it. All they need to do is credit the bank's reserve account, which enables the bank to withdraw new bank notes that it can then lend out. There is no interest being paid to the central bank on these reserves--the money is removed by subtracting funds from the reserve account, forcing the bank to return bank notes.

The circulation of money does not inevitably reflect the creation of debt. All the currency in existence did not originate as a loan from someone to someone else.

 

[tokeprep]

I derped, they obviously don't make it at a low interest rate, they make it and loan it to the commercial bank at a really low interest rate.

Least I know how it works tho

At least you think you do.

 

[Harrekin]

You're the one who can't grasp the concept of the monetization of debt.

You blithering fucktard.

 

[tokeprep]

You're the one who can't grasp the concept of the monetization of debt.

You blithering fucktard.

If the treasury borrows 100 from the central bank, it doesn't pay anything. The interest payments go back to the treasury; the principal balance goes back to the treasury. The treasury never actually has to repay anything. Thus there really is no loan.

 

[twostrokenut]

What's printed on the notes doesn't matter. People probably have no idea what the words are, let alone knowing what they actually mean. The statute that permits the creation of notes defines them in a certain way, so that's how they're defined.

If it doesn't matter then why print it on the note??? Why have a lawful two party signature and the word "note" and the bank it is drawn on adorning the front accordingly with statutes of commerce??

The Constitution defines what money is, statutes define what paper instruments that represent money are, and how they will behave should you choose to use them.​

The definition of a note in other Statutory Law defines how a note is to appear and what components it must have....the statute that permits those notes defines those notes in a certain way, but they still must comply with what a note is lol

We elected and kept electing the people who created the Fed and eliminated the gold standard; we don't take seriously anyone who proposes otherwise. These facts suggest that the people who had lived under the old regimes were perfectly content under the new ones.

Lol regime...interesting word choice.......so we all elected those people in "The Creature from Jekyll Island" and voted for Nixon?? "We" certainly did not. Taken seriously lol.
Indeed G. Edward Griffin has not been sued for Libel or Slander for the content of that book by The Federal Reserve. The reason the old regime did not really notice is because, like you said earlier in the thread....a dollar was a dollar was a dollar to them......

You don't have to gamble to save money and not lose value to inflation. According to most of the people here, you need only buy gold and silver and not only will you be inflation proof, you'll see huge returns. Anyone who believes that will yield stability and profit has the option, no other gambling required.

The sad thing is all your ass had to do is keep repeating that dollars are not losing value to inflation and eventually it will be true just because it was repeated so much..............even though it is completely false.......I literally just heard Mr. Obama say "our democracy" just now on ABC news.........as if everyone is not aware that a Constitutional Republic is our form of government and Mr. Obama is a Constitutional Scholar..........

The only way you don't have to gamble to save money is to be "above average" so you can compensate your 1% savings account to whatever inflation is currently eating directly from it and what you predict inflation's appetite will become.....So how did Warren Harding and the Fed cure 11.7% unemployment and an economic recession back then???

 

[twostrokenut]

They haven't been high during past similar circumstances, unless you only mean relatively (2% federal funds rate versus 0%). It's 0% today because nothing else was working to achieve the effects they wanted.

They were always raised in recessions and depressions in the past, even during the Great Depression the Fed kept them high to avoid going off the gold standard like Britain did.......the "effects" they wanted then was to correct the problem by rewarding savings and pulling money from the supply....the "effect" today is merely to avoid default.

Their expenses aren't very substantial. The treasury gets the vast majority of the money generated.

Are you aware they are a private company? Their expenses are what they want them to be.

 

[tokeprep]

If it doesn't matter then why print it on the note??? Why have a lawful two party signature and the word "note" and the bank it is drawn on adorning the front accordingly with statutes of commerce??

The Constitution defines what money is, statutes define what paper instruments that represent money are, and how they will behave should you choose to use them.​

The definition of a note in other Statutory Law defines how a note is to appear and what components it must have....the statute that permits those notes defines those notes in a certain way, but they still must comply with what a note is lol

Statutory requirement? Historical significance? Arbitrary choice? If it doesn't functionally matter, the answer is really irrelevant. If no one has a clue what the language means, it must not be very important to them.

Lol regime...interesting word choice.......so we all elected those people in "The Creature from Jekyll Island" and voted for Nixon?? "We" certainly did not. Taken seriously lol. Indeed G. Edward Griffin has not been sued for Libel or Slander for the content of that book by The Federal Reserve. The reason the old regime did not really notice is because, like you said earlier in the thread....a dollar was a dollar was a dollar to them......

We elected the Congress and the president who signed the bill, certainly. We also elected Nixon.

You think the fact that the Federal Reserve hasn't sued him lends some credence to his claims? What basis would they have for suit?!

The sad thing is all your ass had to do is keep repeating that dollars are not losing value to inflation and eventually it will be true just because it was repeated so much..............even though it is completely false.......I literally just heard Mr. Obama say "our democracy" just now on ABC news.........as if everyone is not aware that a Constitutional Republic is our form of government and Mr. Obama is a Constitutional Scholar..........

I couldn't possibly have repeated that because I never said it in the first place.

The only way you don't have to gamble to save money is to be "above average" so you can compensate your 1% savings account to whatever inflation is currently eating directly from it and what you predict inflation's appetite will become.....So how did Warren Harding and the Fed cure 11.7% unemployment and an economic recession back then???

Using precious metals is gambling too. In the 1800s, what happened when they discovered massive silver deposits? What if another huge deposit of something were discovered? What if they start mining metals off of asteroids? What if people invent new means of recycling or recovering very minute amounts of metals that aggregate to a lot? The fact that you're betting against all of this happening doesn't mean that you aren't betting.

If you have to look back so far to find your example, and the period is soon after the Federal Reserve was initially created, don't you think they might have learned something in the 90 years since that they've applied in their modern methods?

 

[twostrokenut]

If the treasury borrows 100 from the central bank, it doesn't pay anything. The interest payments go back to the treasury; the principal balance goes back to the treasury. The treasury never actually has to repay anything. Thus there really is no loan.

Then what''s the point?? Does this not seem like going around your elbow to get to your ass? The treasury sells a bond to the bank....the bank can collect on the bond.

 

[tokeprep]

They were always raised in recessions and depressions in the past, even during the Great Depression the Fed kept them high to avoid going off the gold standard like Britain did.......the "effects" they wanted then was to correct the problem by rewarding savings and pulling money from the supply....the "effect" today is merely to avoid default.

Are you aware they are a private company? Their expenses are what they want them to be.

Another example from the more distant past? I seem to recall the Great Depression dragging along for a very long time--maybe they concluded from data that the policy didn't work very well?

You can see exactly what their expenses are, but you absolutely refuse to believe the numbers. They don't spend very much, considering what they do.

 

[tokeprep]

Then what''s the point?? Does this not seem like going around your elbow to get to your ass? The treasury sells a bond to the bank....the bank can collect on the bond.

The central bank's collection on the bond is irrelevant. If our government issues a 100 bond to the central bank, it has 100 to spend. If the central bank holds the bond until maturity and the treasury repays the 100, that 100 is profit of the Fed, which is transferred to the treasury. The treasury now has 100 without any offsetting obligation. The federal government can effectively create an unlimited amount of money with no corresponding debt.

 

[cannabineer]

When was it devised and what were they using for money at the time? I think the same thing, interest was not frowned upon as usury once ppl accepted the risk of loss involved in lending. Ideally I think though assumes that men with create and manage unlimited sums of money will never follow through with temptations to take advantage of skimming off of those large sums for personal benefit without getting caught.............But Ideally, yes; it is my limited understanding it would generate value where no motivation to do so previously existed.

Iirc they used coins, promissory notes and letters of credit/draft. cn

 

[twostrokenut]

Statutory requirement? Historical significance? Arbitrary choice? If it doesn't functionally matter, the answer is really irrelevant. If no one has a clue what the language means, it must not be very important to them.

Looked up "functionally matter" in Black's Law Dictionary and didn't find a thing. The terms note, payee....contract....bond...all were there. The fact most people haven't a clue is what facilitates this foolishness to continue to compound.....and allow silly things like "multipliers" to be created in a vain attempt to convince the masses everything balances out.

We elected the Congress and the president who signed the bill, certainly. We also elected Nixon.

You think the fact that the Federal Reserve hasn't sued him lends some credence to his claims? What basis would they have for suit?!

The Federal Reserve Act was passed on Christmas holiday, most Congress members were home.......there is no basis for a suit is my point....must mean the book is accurate and factually correct. I know if someone wrote a book about me full of "quackery" I would certainly correct the situation with a Libel or Slander lawsuit.

keep repeating that dollars are not losing value

I couldn't possibly have repeated that because I never said it in the first place.

sooooo by this....

Inflation is irrelevant because wages have kept pace with it

This statement is not an attempt to show how the Federal Reserve Note(dollar) retained its "real purchasing power" vs the silver dollar I said was the one not floating??? As if to lose value is not literally the exact opposite of retaining value.

Using precious metals is gambling too. In the 1800s, what happened when they discovered massive silver deposits? What if another huge deposit of something were discovered? What if they start mining metals off of asteroids? What if people invent new means of recycling or recovering very minute amounts of metals that aggregate to a lot? The fact that you're betting against all of this happening doesn't mean that you aren't betting.

If you have to look back so far to find your example, and the period is soon after the Federal Reserve was initially created, don't you think they might have learned something in the 90 years since that they've applied in their modern methods?

I never said investing in silver or gold wasn't a gamble, certainly was no risk before 1964.. and lots of people knew this...had "insider information" as to the future market and upcoming legislation...or just a gut feeling if you were a janitor or clerk......and that's why they were removed from circulation as the metal was needed to pay bills...they (Treasury) literally could not and cannot afford to produce the coin anymore.....just like the copper penny and even the penny we have today only containing a thin copper shell around cheap zinc cost more than 1cent to produce ...some morons are still holding silver certificates to this day thinking they can cash them in for metal because they are ignorant of Legal Tender laws...............but they're not morons just because they're not lawyers......they are not supposed to have to worry about shit like having a contract in their hand (silver certificate, herein called ss; federal reserve note, herein called frn) that isn't worth the paper its printed on because the government reneged in legalese they cannot understand with a bank who's ass they are kissing to take care of their special interests.........

People should not be punished simply because they are not lawyers. If you think "ignorance of the law" is no excuse they I can make a case that a tax funded entitlement should exist to send every citizen to law school, all expenses paid....

Certainly no gamble compared to fiat notes people still accept in exchange....how long you reckon that will last? Of course massive new deposits of silver or gold or titanium deposits or new mining methods would affect price but when do you think a massive amount will be found again based on our current technologies of sonar and such compared to 1800's??? Hell it can be done with a satellite I am told.... besides that you really think the "save the environment" crowd is going to allow new methods?? They won't even allow fracking for natural gas........

Mining asteroids that's a big, huge what if, but I bet no fiat government funded from selling bonds to any central bank has enough authority to "raise the debt ceiling" enough to cover the cost of that; Certainly no private company that operates on debt and futures could afford it....I doubt a Mint such as Sunshine or Mining Operation will accomplish that anytime soon either.....Even Red Bull can hardly afford space.........and if you suggest Red Bull would not exist without the Central Bank facilitating the sustenance or ''value'' people use to support Red Bull then that's just silly.....because Red Bull doesn't pay lawyers to make Legal Tender laws, Red Bull is the one who would accept your value as payment.....not the bank as in your previous example of simply pulling more notes out of the air to convert your value to pay the interest.....maybe that is why space exploration is becoming more and more privatized as we speak....and NASA is really not in the space business anymore.

I'm not saying I'm not betting just betting on something more stable with thousands of years worth of value stability vs something that has no current stability, has done nothing but declined in value since it's inception and is only 100 years old in it's current form....Learned lessons in 90 years with modern methods indeed lol apparently my examples didn't go back far enough....... In its current form (Federal Reserve Note), fiat currency is doing the exact same thing it did in every other form it had in the past.......inflate and become worthless. Unless these modern methods include pulling gold out of thin air or finding a lot of leprechauns or some shit like that then their fate will be no different. Hell it may be like Argentina soon and we could all be fooling the foreigners with fake bills in our taxi's and money exchange booths...

 

[tokeprep]

Looked up "functionally matter" in Black's Law Dictionary and didn't find a thing. The terms note, payee....contract....bond...all were there. The fact most people haven't a clue is what facilitates this foolishness to continue to compound.....and allow silly things like "multipliers" to be created in a vain attempt to convince the masses everything balances out.

Don't forget what your claim was: "I am thinking because notes are debt instruments, a promise to pay. It's existence represents a debt, does it not? It only seemed there was no debt in the introduction." You were saying it must represent a debt because it's legally an obligation of the government. But since Federal Reserve Notes can be circulated without creating debt, that assertion is false. That's why I said the legal fiction is irrelevant. Functionally, the note represents value and people are willing to trade for it.

The Federal Reserve Act was passed on Christmas holiday, most Congress members were home.......there is no basis for a suit is my point....must mean the book is accurate and factually correct. I know if someone wrote a book about me full of "quackery" I would certainly correct the situation with a Libel or Slander lawsuit.

Have you been listening to Ed Griffin without confirmation? House: 298 yes, 60 no, 76 not voting; Senate: 43 yes, 25 no, 27 not voting. If every absent member in the House had been there, no effect; to kill the bill in the Senate, 23 of 27 not voting would have needed to vote against it.

Your understanding of slander and libel is terrifying. When someone is a public figure, you can say anything you want about them, true and false. To even have a chance of winning, they have to prove that the author knew he was lying when he made the statements. So long as Griffin was sincere (and I believe he is--the cancer stuff just makes clear that he's a nutjob), he has absolute protection. If you can't prove that someone knew they were lying about a public figure, it's never defamation.

sooooo by this....

This statement is not an attempt to show how the Federal Reserve Note(dollar) retained its "real purchasing power" vs the silver dollar I said was the one not floating??? As if to lose value is not literally the exact opposite of retaining value.

This is what you said: "The sad thing is all your ass had to do is keep repeating that dollars are not losing value to inflation..." This is the statement you quoted: "Inflation is irrelevant because wages have kept pace with it." I didn't say that individual dollars weren't losing value to inflation, I said the purchasing power lost to inflation had been exceeded by growth in wages. This doesn't mean that it inflation doesn't exist, only that it had no real impact on purchasing power, since people have more dollars to spend.

I don't know how I can possibly make it more clear. If steak costs 23 cents a pound in 1913 and the average wage was $750, you cannot say inflation destroyed any purchasing power if in 2013 steak is $5.50 a pound and the average wage is $27,000. The fact that the worker has more dollars to spend overcomes the loss of purchasing power by any individual dollar.

I never said silver buying coins wasn't a gamble, only compared to fiat notes people still accept in exchange....how long you reckon that will last? Of course massive depositspreviously unknown would affect price but when do you think a massive amount will be found again based on our current technologies of sonar and such compared to 1800's??? Hell it can be done with a satellite I am told.... Mining asteroids that's a big what if but I bet no fiat government will accomplish that anytime soon because it takes mula.....maybe that is why space exploration is becoming more and more privatized as we speak....and NASA is really not in the space business anymore.

I'm not saying I'm not betting just betting on something more stable with thousands of years worth of value stability vs something that has no current stability, has done nothing but declined in value since it's inception and is only 100 years old in it's current form....Learned lessons in 90 years with modern methods indeed lol apparently my examples didn't go back far enough....... In its current form (Federal Reserve Note), fiat currency is doing the exact same thing it did in every other form it had in the past.......inflate and become worthless. Unless these modern methods include pulling gold out of thin air or finding a lot of leprechauns or some shit like that then their fate will be no different. Hell it may be like Argentina soon and we could all be fooling the foreigners with fake bills in our taxi's and money exchange booths...

The higher the price, the more incentive people have to search. Look at what $100 oil did for oil exploration! A group of billionaires recently founded an asteroid mining venture that's trying to develop the technology to do it. I wouldn't expect any success with that for a couple of decades, at least, but I definitely think it's the future, especially if metals continued to appreciate astronomically.

Dollars only declined in value if you left them under your mattress or in some other worthless place. As has already been covered, there are a variety of ways inflation could have not only been beaten but defeated so that a person's real wealth and purchasing power actually increase.

The one commodity everyone has to trade, their own labor, is worth more in real purchasing power than it ever has been before. Obviously they aren't worthless.

 

[twostrokenut]

Another example from the more distant past? I seem to recall the Great Depression dragging along for a very long time--maybe they concluded from data that the policy didn't work very well?

You can see exactly what their expenses are, but you absolutely refuse to believe the numbers. They don't spend very much, considering what they do.

Point is for the first 150 years the Federal Government did not get involved during recessions...including the newely formed Fed....and they all corrected themselves.... Here's another one.....the Fed left interest rates like 6-7 during recession under Harding....unemployment went from 11.7% his first year to 6.7 next year and 2.4 the next....and the recession fixed itself....new concepts like holding interest rates low and introducing such weirdness as quantitative easing to cover up for lack of capital are strange things to do given a proven track record of what actually works like high savings incentives.....