THE Federal Reserve Thread pt 1 (merged)

[JayHMorrison]

Funny that we are talking about interest rates on another thread. I just saw this article on Bloomberg.com about the Fed and European Central Bank and how they each deal with the threat of high energy prices: Bloomberg

A few quotes:
Oil shocks are, in a word, stagflationary: On the one hand, they can increase prices throughout the economy, hastening inflation and justifying tighter monetary policy; on the other hand, they can clamp down on consumer spending, damp growth and provide a rationale for monetary easing.
Earlier this month, Fed Chairman Alan Greenspan raised eyebrows about oil prices driving inflation concerns when he said ``the persistence of the rise in energy prices is a worrisome element in the cost picture.''
First, while some analysts point out that investments in conservation and a growing knowledge sector have made our economy less energy-dependent -- energy consumption per dollar of real gross domestic product has fallen 46 percent since 1973 -- that only tells part of the story.

Oil-Dependant
Over the same period, we have also become far more dependent on foreign sources of oil, which means profits from price increases are siphoned off by foreign producers, not recycled back into the American economy. Goldman Sachs Group Inc. estimates that net oil imports have actually risen as a percentage of GDP from 0.9 percent in 1970 to 1.2 percent in 2003, suggesting the impact of oil prices on U.S. real income is, if anything, slightly higher than in 1970.

[smiley]

It appears that the absurdness of the current financial markets are causing some mildly insane behavior among analysts.

A long read, but well worth it

http://www.kitco.com/ind/Daughty/oct202004.html

A few teasers for the lazy readers

On debt

The Fed decided those damn foreign bastards are getting wise to us, and they have apparently stopped buying our debt, as evidenced by the lack of increases in Foreign Holdings at the Fed, which is down about $4 billion last week. So not only are they not buying MORE of our debt, they are selling some that they already bought! Bummer!

So why are these foreign dirtbags, who speak with funny accents and are not even civilized enough to celebrate Halloween by dressing their kids in weird rags and begging the neighbors for candy, NOT buying more and more of our debt so that we can continue to buy things on the cheap?

On quality adjustment to the CPI

He stands there speechless. I stride confidently right up to him until my nose is almost touching his, and you can see that he is getting really nervous that this lunatic is swinging onto the stage at the end of some rope and wearing some stupid cape and is saying "Verily I say unto thee, puny earthling, show me, how the German Weimar hyperinflation would have been prevented if only they had adjusted inflation for quality! Show me how the inflationary problems besetting Latin America for decades could have been prevented if they had only adjusted their crippling inflation for quality! For that matter, show me how the inflation that fomented the French Revolution could have been prevented if they had only adjusted their inflation for quality!"


Seeing that a demonstration is in order, I gently jam my knee into his groin. "Ooof!" he says. Then, when he looks up at me with that look on his face that says "What in the hell did you do THAT for, you imbecile?" I kick him as hard as I can with my foot, also in the groin. "So, now, Mister Smarty-Pants, which one was worse? The first one was a lame effort, and it barely hurt! The second kick in the groin was with all the strength I could muster! The answer is, you must like the hard second kick much better, once you adjust for quality, you little bastard!"

With a struggle I regain control over my raging thoughts, and as I allow the SWAT team to slowly pry my fingers off the triggers, I secretly vow to start taking those yellow pills again instead of spitting them out when my attendants are not looking.

Seems like a good idea

[DriveElectric]

http://moneycentral.msn.com/content/P108996.asp

Interesting article on what the Federal Reserve was saying publicly in 1999 before the internet stock bubble and saying privately in their meetings. The minutes of the meeting are released 5 years after the fact. We are now able to see what Alan Greenspan said back then in private.

Considering the likely bubble in housing prices, it would be interesting to know what they are saying in private today.

[BabyPeanut]

Today's housing bubble is a consequence of policies designed to ameliorate the effects of the bursting of the stock-market bubble.

There was an old lady
who swallowed a fly...

anyway the article points to this site
http://www.federalreserve.gov/fomc/transcripts/

[tokyo_to_motueka]

Original Sin
by Stephen Roach

I am not a believer in conspiracy theories. But the Fed's behavior since the late 1990s is starting to change my mind. It all began with Alan Greenspan's worries over "irrational exuberance" on December 5, 1996, when a surging Dow Jones Industrial Average closed at 6437. The subsequent Fed tightening in March 1997 was aimed not only at the asset bubble itself, but at the impacts such excessive appreciation in equity markets were having on the real economy -- consumers and businesses alike. It was a classic example of the Fed playing the role of the tough guy -- the central bank that, to paraphrase the words of former Chairman William McChesney Martin, "takes away the punchbowl just when the party is getting good." Unfortunately, the tough guys weren't so tough after all. Predictably, there was a huge outcry on Capitol Hill as the Fed took aim on the US stock market. But rather than stay the course as an independent central bank should, the Fed ran for cover in the face of political criticism. Not only were its initial bubble-containment efforts put aside, but Alan Greenspan went on to champion the notion of a sea-change in the macro climate -- a once-in-a-century productivity miracle that would justify the stock market's exuberance as rational. That was the Original Sin that has since been compounded in the years that have followed.

so, what will it be that triggers the great household debt crisis? interest rates surge due to:

(a) creeping PO-fueled inflation
(b) Asian central banks stop buying US treasuries
(c) Saudi revolution
(d) israel attacks Iran
(e) sudden Ghawar decline

???????????????????????????

[Colorado-Valley]

Stephen Roach and Paul Krugman seem to be economists with a pretty good view of what's been going on.

The U.S. is going to be transformed into a low-wage, banana-republic, sharecropper, neofeudal economy. This should be something to see.

Japan might be in for the same future, though.

[tokyo_to_motueka]

Japan might be in for the same future, though.

Japan's problems are a bit different to the US':

- ridiculously high fiscal deficit
- low food self-sufficiency
- ageing population
- no domestic oil/ng resources

but its advantages include:

- high savings rate
- manufacturing not as gutted as the US (but still a lot of manufacturing has already been outsourced to China)
- compact cities with excellent mass transit systems (suburbia not as spralling)
- high fuel efficiency vehicle fleet
- LNG infrastructure in place
- not as much money wasted on military (although still 6th biggest military budget in the world)

[UIUCstudent01]

(f) All of the above, they might all just trigger each other.

In other words, this situation is powder-keg... the slightest spark might just trigger it.

[Colorado-Valley]

But Tokyo, what happens to Japan's economy if the American consumer falls into a bottomless pit, the U.S. government fails and its treasury bonds become worthless?

After all, we now all live in a globalized economy.

[tokyo_to_motueka]

But Tokyo, what happens to Japan's economy if the American consumer falls into a bottomless pit, the U.S. government fails and its treasury bonds become worthless?

After all, we now all live in a globalized economy.

you want the straight answer?

mass unemployment, followed by a lot of making friends with the rest of Asia.

[Doly]

China doesn't look very friendly right now.

[tokyo_to_motueka]

China doesn't look very friendly right now.

see [url=http://www.lewrockwell.com/rogers/rogers140.html]Japan & China – Tempest in a Teacup
[/url]

The recent events concerning China all suspiciously seem, to me, connected to America's disastrous war in Iraq. America is being defeated militarily and has already lost economically and morally. The Chinese are not stupid and are taking advantage of this situation any way that they can – while avoiding direct confrontation. Witness arms deals to India and oil deals with Iran.

The United States does not like this situation one bit. So the Bush administration is trying to use its dog in Asia, Japan, to keep China in check. And to try to take the American public's attention off of disastrous U.S. Middle Eastern policy.

But it won't work. In the end, China needs Japanese technology and its business network. Japan needs cash and a workforce and a market. When push comes to shove, I believe that Japan will side with China. At the moment, Japan needs to appease the United States. But Japan is not so foolish to risk its future on a sinking America. One day, soon, Japan and China will pull the plug on financing the United States’ red ink. Of course they will. Only a fool couldn't see that America's future is decidedly dim.

[Ferretlover]

Now imagine if the names "Citicorp" or "Wells Fargo" appeared on your currency....wouldn't you be just a little bit curious how a private bank (and cartel) got to hold all that power?

Read "The Creature from Jekyll Island" Remember when "legal money" meant something? "Legal tender"? And it didn't mean 'fiat (by decree) money', backed in nothing (except YOUR FUTURE TAXES?)? Here's a few images to get you thinking...



















Hopefully, this has been educational for you. As the last vestiges of real money slip away, into an even more manipulative form ('electronic money'...your 'debit card'...even more money will be skimmed off the top from you...and guess who owns VISA/MASTERCARD? Yup. The Banks. Or, more precisely, the major private banks that make up the Federal Reserve...

Americans need to take back the issuance of their own currency...WITHOUT INTEREST!!!!!!

In the word of Andrew Jackson, we should say: "You are a den of vipers! And, by God, I shall root you out!!"

"JACKSON AND NO BANK" Revoke the Federal Reserve Act!

[OilsNotWell]

Secrets of the Federal Reserve

"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

- Thomas Jefferson

[TrueKaiser]

*watchs the tin-hat-o'meter aka the bs meter go off the scale..*

[OilsNotWell]

Remember, that currency you carry is not money, it's debt, and it's impossible to pay off the national debt. Why? Because then ALL of the currency we hav now would have to be called in. That currency IS debt.

Furthermore, it is IMPOSSIBLE to pay back ALL that is owed, since if X currency was issued, then X + Y% interest needs to be payed back, since it was issued as DEBT with INTEREST. Where does Y% interest come from? Good question. It doesn't exist. You have compete against everyone elese to pay YOUR SHARE of Y% back, and someone's going to lose, I assure. It comes from SOMEONE'S bankruptcy, and the foreclosure of real goods. Furthermore, what fractional reserve banking means is that banks can loan out way more than they have to loan, like 90%! Quite a racket.

My educational experience was fairly extensive yet this was NEVER taught, of course, and you'll almost never see it on TV, radio, or anywhere else but in certain books, and here, on the internet.

[OilsNotWell]

watchs the tin-hat-o'meter aka the bs meter go off the scale..*

"The individual is handicapped by coming face-to-face with a conspiracy so monstrous he cannot believe it exists."
-J. Edgar Hoover

Seriously, if you would just tell me what part of what I said is untrue, instead of laying out a blanket dismissal without ever so much as a specific rebutttal. Thanks

[TrueKaiser]

read a history book.
the federal reserve bank is not a cartel, its a nessary system for a large country to work. before the fed came along each privatly owned bank made their own curency and the farther you went from the bank the less it was worth.(becuase the farther you went the less people heard about the bank you got it from). the federal reserve bank then started to print and stamp the offical u.s. curencey so people like you and me can go from new york to a small town in new mexico without even echangeing a dime between private banks to have usable money.
right now they are in charge of keeping the system flowing by printing replacement money to replace worn out bill's (one dollar bills last about a year the others last on average about 5 or more when you incress the denomination.) and coins.
if ou don't like the federal reserve bank, you can always opt out and go get some liberty dollars(backed by silver) instead of cooking up some theory that ranks up there with the 3 foot tall lizard like aliens trying to take over the world and the hollow earth junk.

[some_guy282]

The Federal Reserve IS a private for profit central bank. This topic came up a few days ago, and someone else posted a link to this documentary which I found to be very informative.

http://www.indybay.org/uploads/moneymasters1.wmv

http://www.indybay.org/uploads/moneymasters2.wmv

It's 10 years old, but still gets the point across. Nothing has changed really between then and now. It is 3 and a half hours long, and goes back thousands of years to explain the creation of money, and different type of monetary systems. Current banking systems can be traced back 300 years to the Bank of England, another privately owned bank with a deceptive name. Watch that movie before you make jokes about tin foil hats. Wealthy and powerful men have been working to become wealthier and more powerful since the dawn of time. They hit the jackpot with central banks.

[OilsNotWell]

This one's for you, True Kaiser...how appropriate...

"How fortunate for governments that the people they administer don't think."
~ Adolf Hitler

The rest you should find interesting....


"Whoever controls the volume of money in any country is absolute master of all industry and commerce."
~ James A. Garfield
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"Permit me to issue and control the money of a nation, and I care not who makes its laws."
~ Amschel Mayer Rothschild - 1838
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"A power has risen up in the government greater than the people themselves, consisting of many and various powerful interests, combined in one mass, and held together by the cohesive power of the vast surplus in banks."
~ John C. Calhoun

"I believe that banking institutions are more dangerous to our liberties than standing armies...The issuing power should be taken from the banks and restored to the Government, to whom it properly belongs."
~ Thomas Jefferson
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"If the people only understood the rank injustice of our Money and Banking system, there would be a revolution before morning."
~ Andrew Jackson
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"The privilege of creating and issuing money is not only the supreme prerogative of Government, but is the Government's greatest creative opportunity. By the adoption of these principles, the taxpayers will be saved immense sums of interest."
~ Abraham Lincoln

If our nation is ever taken over, it will be taken over from within."
~ President James Madison
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"The growth of our nation and all its activities are in the hands of a few men."
~ Woodrow Wilson
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"Liberty has never come from government. Liberty has always come from the subjects of government. The history of liberty is a history of resistance. The history of liberty is a history of limitations of government power, not the increase of it."
~ Woodrow Wilson
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"All truth passes through three stages. First, it is ridiculed, second it is violently opposed, and third, it is accepted as self-evident."
~ Arthur Schopenhauer


"Our government has kept us in a perpetual state of fear - kept us in a continuous stampede of patriotic fervor - with the cry of grave national emergency. Always there has been some terrible evil at home or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it."
~ General Douglas Macarthur, 1957

"This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it, or their revolutionary right to dismember or overthrow it."
~ Abraham Lincoln, First Inaugural
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"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."
~ Thomas Jefferson, American Declaration of Independence

"Yes, many people will die when the New World Order is established, but it will be a much better world for those who survive".
~ Henry Kissinger
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"We are on the verge of a global transformation. All we need is the right major crisis and the nations will accept the New World Order."
~ David Rockefeller
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"The drive of the Rockefellers and their allies is to create a one-world government combining supercapitalism and Communism under the same tent, all under their control.... Do I mean conspiracy? Yes I do. I am convinced there is such a plot, international in scope, generations old in planning, and incredibly evil in intent."
~ Congressman Larry P. McDonald, 1976, killed in the Korean Airlines 747 that was shot down by the Soviets
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"There exists a shadowy Government with its own Air Force, its own Navy, its own fundraising mechanism, and the ability to pursue its own ideas of national interest, free from all checks and balances, and free from the law itself."
~ Senator Daniel K. Inouye - Iran Contra Hearings
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"Welcome to the "grande baille" of the New World Order"
~ George Bush, Sr. (September 11th, 1990)

"How fortunate for governments that the people they administer don't think."
~ Adolf Hitler
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"Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death."
~ Adolf Hitler
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"The great masses of people will more easily fall victims to a big lie than to a small one. Especially if it is repeated over and over."
~ Adolph Hitler

"The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth becomes the greatest enemy of the state."
~ Dr. Joseph M. Goebbels - Hitler's propaganda minister
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"Why of course the people don't want war ... But after all it is the leaders of the country who determine the policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship ... Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger."
~ Hermann Goering, Nazi leader

"Today Americans would be outraged if U.N. troops entered Los Angeles to restore order; tomorrow they will be grateful! This is especially true if they were told there was an outside threat from beyond, whether real or promulgated, that threatened our very existence. It is then that all peoples of the world will pledge with world leaders to deliver them from this evil. The one thing every man fears is the "Unknown". When presented with this scenario, individual rights will be willingly relinquished for the guarantee of their well being granted to them by their world government."
~ Henry Kissinger Evians, France - 1991 Bilderberg Conference

"Those who wish to be ignorant and free, believe in something that never was and never shall be."
~ Thomas Jefferson
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"Those who are willing to trade freedom for security deserve neither freedom nor security."
~ Benjamin Franklin
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"None are more hopelessly enslaved than those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. They feed them on falsehoods till wrong looks like right in their eyes."
~ Johann Wolfgang von Goethe (1749-1832)

Here:

Famous Quotations Regarding Liberty and the real PTB