Ron Paul firing bullets at fed chairman Ben Bernanke

[HeXploiT]

I tell you it is still an absolute pleasure to hear the man speak.

Paul is getting more time these days as his words have come to life over the past year.

Take note that Bernanke uses the term "legacy" assets as apposed to toxic assets. This was actually formally implemented by the Obama administration and it will quickly completely replace the word toxic thereby confusing the average American who has little inderstanding of economics and glossing over the poison in the veins of the system.
Sort of like "sweep & clear" as apposed to search & destroy".

God bless Ron Paul. I look forward to his 2012 run that I might once again be able to spread the word.

 

[Farang]

so he was the guy they arrested on capitol hill?

 

[HeXploiT]

Originally posted by: Farang
so he was the guy they arrested on capitol hill?

You know that really wouldn't surprise me...

 

[soccerballtux]

It's important that the Fed be immune to politics...most politicians don't want to get their hands dirty either, because then they don't have anyone to blame when the economy goes poorly.

Great call on telling the Fed they don't need to be pricing these "legacy" (nifty little word swap there) assets. What our economy needs is revaluation and deflation. I wish he would work a little more on speech rhetoric-- slow down a bit and don't sound so squeeky...he's got stellar points if he'd just work on the delivery he'd be golden.

I understand the Fed's argument for providing a market for these legacy assets, however. The revaluation of these would be a huge writedown for banks and a lot of lost capital with which to make loans. What I don't like is the growing disparity between the price of housing, and the median wage in America; which these actions exacerbate.

I'm on the line as to whether we should revalue and have a hard, hopefully fast recession, or not revalue and suffer the consequences (can anyone speak for what these consequences are? Is it just the lost operating capital for the banks? Recessions are a necessary part of a healthy economy-- shake off the inefficiency and move on. Perhaps the Fed doesn't want a constriction of credit).

It is possible they are beginning to pursue a policy of inflation. I think this may be wise; to help the middle class pay down some debt. Remember, with inflation, the debtors always win. It's a politically clean way to move wealth from the top to the bottom without making any direct robberies (taxes). We'd only reap the benefit of inflation if people are scared enough about the economy to start saving and paying off debt, though. Who knows what this would take.

 

[First]

Paul doesn't understand money or economics so his insistence isn't surprising. Look at his former economic advisor, Peter Schiff, whose clients got pummeled by 30%-70% last year despite claiming he "predicted" the recession. Obviously he didn't predict it enough to actually make any money, and like Paul completely whiffed on the hyperinflation claim they said would take effect by now. Dollar actually got stronger, gold has still gone nowhere near his $2000/ounce prediction. Etc. etc. etc.

 

[HeXploiT]

Originally posted by: soccerballtux

Great call on telling the Fed they don't need to be pricing these "legacy" (nifty little word swap there) assets. What our economy needs is revaluation and deflation. I wish he would work a little more on speech rhetoric-- slow down a bit and don't sound so squeeky...he's got stellar points if he'd just work on the delivery he'd be golden.

On the contrary...I wish the citizens of America would focus more on content and less on good looks and fine sounding speeches.

 

[First]

And watching the end of that video, I get a kick out of Paul still seriously sure that housing prices are being propped up when he's literally told housing prices aren't being purposefully propped up since the Fed and gov't are merely trying to un-seize credit, not artificially hold prices up by law. That would be strictly price fixing and there's quite obviously none of that. What they're fixing is long term interest by lowering cutting certain benchmark rates , which has been successful for 100 years, just done at a much more aggressive pace right now.

 

[bamacre]

Originally posted by: soccerballtux
It is possible they are beginning to pursue a policy of inflation.

Gee, you think?

I think this may be wise; to help the middle class pay down some debt. Remember, with inflation, the debtors always win. It's a politically clean way to move wealth from the top to the bottom without making any direct robberies (taxes).

And it's still immoral, and contradictory to a free society. It punishes people who have saved, and rewards those who have borrowed.

 

[soccerballtux]

Originally posted by: Evan
Paul doesn't understand money or economics so his insistence isn't surprising. Look at his former economic advisor, Peter Schiff, whose clients got pummeled by 30%-70% last year despite claiming he "predicted" the recession. Obviously he didn't predict it enough to actually make any money, and like Paul completely whiffed on the hyperinflation claim they said would take effect by now. Dollar actually got stronger, gold has still gone nowhere near his $2000/ounce prediction. Etc. etc. etc.

I think Peter's timing was off. I think there is a large gap between this recession, and the inflation. A lot more things must transpire before we can engage in inflation. The mass of baby boomers retiring, only started just recently (past few months) at 10,000 new / day drawing on SS and Medicare. There will be 10k new / day to 2020.

What happens as this worsens is anybody's guess. Higher taxes are inevitable; I think first we'll just fund it with debt. Other countries will figure out there's no way we can pay this back, so then we're going to start taxing at a much higher rate (maybe double what we're at now? I'm pulling this out of nowhere, I've just heard "double" is about what the real cost is for the government to provide the services it is providing now, IE it's how much we'd have to pay if the gov't didn't run a deficit); and it becomes more difficult to sell T-bonds and finance our debt. The only option then would be to print money-- Federal Reserve takes the T-bonds, credits the government's accounts, and we go through some mild to medium inflation. I hesitate to use the term "stagflation" because of the fearmongering stigma that goes with those that use it. There could likely be soft to medium inflation, but with heavy taxes on the middle class, a repressed economy. So, mild stagflation.

I can't forecast inflation though; when production capacity expands with the money supply inflation is held at bay-- only when supply is limited and money is freely available does inflation take root. Thanks to China, most of our supply is not limited. We're not in any danger of running out of food over here. We've got lots of money sinks (entertainment, software) that have virtually unlimited supply. Clothes, cars, land, and houses are about the only things that could inflate in value. Land/houses will deflate naturally as the baby boomers die, offsetting some of this.

Thinking through all this in a service-based economy (supply is much more elastic) is much more difficult.

 

[bamacre]

Originally posted by: Evan
And watching the end of that video, I get a kick out of Paul still seriously sure that housing prices are being propped up when he's literally told housing prices aren't being purposefully propped up since the Fed and gov't are merely trying to un-seize credit, not artificially hold prices up by law. That would be strictly price fixing and there's quite obviously none of that. What they're fixing is long term interest by lowering cutting certain benchmark rates , which has been successful for 100 years, just done at a much more aggressive pace right now.

And we all get a kick out of you still defending a system that brought this mess in the first place. And we also get a kick out of you for having a religious-like faith that debt is wealth, that we can solve the problems of too much borrowing and spending by borrowing even more and spending even more. That a healthy economy is one of a vast amount of people in debt rather than with wealth. That money does grow on trees, you just need to add ink. Yeah, we all get a kick out of that.

 

[soccerballtux]

Originally posted by: HeXploiT

Originally posted by: soccerballtux

Great call on telling the Fed they don't need to be pricing these "legacy" (nifty little word swap there) assets. What our economy needs is revaluation and deflation. I wish he would work a little more on speech rhetoric-- slow down a bit and don't sound so squeeky...he's got stellar points if he'd just work on the delivery he'd be golden.

On the contrary...I wish the citizens of America would focus more on content and less on good looks and fine sounding speeches.

Oh I agree, however that's not going to happen. I said what I said because I think more people would listen to him then.

Ben Bernanke was very right on his points though-- the widely accepted truth is that the Fed failed to act quickly enough and with enough vigor during the Great Depression.
I say very because it's anybody's guess whether removing some of these toxic assets from the market would be good. Sure, it smooths out the supply curve, but at what price? What if all these houses _really_ do need to come down in value, by a LOT? What's the tradeoff in holding them off the market for an extended period of time?

 

[soccerballtux]

Originally posted by: bamacre

Originally posted by: soccerballtux
It is possible they are beginning to pursue a policy of inflation.

Gee, you think?

I think this may be wise; to help the middle class pay down some debt. Remember, with inflation, the debtors always win. It's a politically clean way to move wealth from the top to the bottom without making any direct robberies (taxes).

And it's still immoral, and contradictory to a free society. It punishes people who have saved, and rewards those who have borrowed.

Yeah. However, that free society has lead to injustices against the middle class as well; and I'm making the argument that's it better for the top half if we all get reset to some extent. Corrects some of those injustices. 2 Wrongs, unfortunately, would probably right it. Not before the debtor-middle class learns they need to be saving more, though. That's a lesson it seems we're all doomed to have to learn again, and again.

The upper middle can protect themselves with inflation-adverse investments, by the way. The lower middle class can benefit by using the inflation to pay off their debt and start saving. My fear is that we're making this too easy; that the debtor-middle will not take advantage of this, but will say "aha, more money, let me spend it now! Gogo American dream!" Hence why I emphasize extending this recession a bit. Otherwise, the country wouldn't benefit any from the inflation.

 

[bamacre]

Originally posted by: soccerballtux

Originally posted by: bamacre

Originally posted by: soccerballtux
It is possible they are beginning to pursue a policy of inflation.

Gee, you think?

I think this may be wise; to help the middle class pay down some debt. Remember, with inflation, the debtors always win. It's a politically clean way to move wealth from the top to the bottom without making any direct robberies (taxes).

And it's still immoral, and contradictory to a free society. It punishes people who have saved, and rewards those who have borrowed.

Yeah. However, that free society has lead to injustices against the middle class, as well; and I'm making the argument that's it better for the top half if we all get reset to some extent.

Sounds like more of curing the symptoms rather than the disease to me. As Paul would say.

They can protect themselves with inflation-adverse investments, too.

I don't like that excuse. I don't like that people are forced to invest in order to save themselves from inflation.

 

[halik]

Originally posted by: Evan
Paul doesn't understand money or economics so his insistence isn't surprising. Look at his former economic advisor, Peter Schiff, whose clients got pummeled by 30%-70% last year despite claiming he "predicted" the recession. Obviously he didn't predict it enough to actually make any money, and like Paul completely whiffed on the hyperinflation claim they said would take effect by now. Dollar actually got stronger, gold has still gone nowhere near his $2000/ounce prediction. Etc. etc. etc.

QFT

Having Paul talk about the economy is like having Greenspan delivering newborns...

 

[soccerballtux]

Originally posted by: bamacre

Originally posted by: soccerballtux

Originally posted by: bamacre

Originally posted by: soccerballtux
It is possible they are beginning to pursue a policy of inflation.

Gee, you think?

I think this may be wise; to help the middle class pay down some debt. Remember, with inflation, the debtors always win. It's a politically clean way to move wealth from the top to the bottom without making any direct robberies (taxes).

And it's still immoral, and contradictory to a free society. It punishes people who have saved, and rewards those who have borrowed.

Yeah. However, that free society has lead to injustices against the middle class, as well; and I'm making the argument that's it better for the top half if we all get reset to some extent.

Sounds like more of curing the symptoms rather than the disease to me. As Paul would say.

They can protect themselves with inflation-adverse investments, too.

I don't like that excuse. I don't like that people are forced to invest in order to save themselves from inflation.

Stocks, by definition, are inflation adverse. IE, they rise with the inflation. Only the people with cold hard cash would lose. This is partly why Social Security is so dangerous-- it promises to be something that it simply cannot be-- the inflation will negate the value of the SS checks. Better to just cut them entirely and be done with it, that way none of the middle class will have to pay for what they're never going to get.

I imagine the inflation would take hold in certain areas more than others-- with elastic supply, inflation cannot take hold. So the key would be to find the services provided that have a relatively inelastic supply, and get into those: with all the baby boomers getting old and needing care, I bet health services will balloon in cost.

 

[First]

Originally posted by: soccerballtux

Originally posted by: Evan
Paul doesn't understand money or economics so his insistence isn't surprising. Look at his former economic advisor, Peter Schiff, whose clients got pummeled by 30%-70% last year despite claiming he "predicted" the recession. Obviously he didn't predict it enough to actually make any money, and like Paul completely whiffed on the hyperinflation claim they said would take effect by now. Dollar actually got stronger, gold has still gone nowhere near his $2000/ounce prediction. Etc. etc. etc.

I think Peter's timing was off. I think there is a large gap between this recession, and the inflation. A lot more things must transpire before we can engage in inflation. The mass of baby boomers retiring, only started just recently (past few months) at 10,000 new / day drawing on SS and Medicare. There will be 10k new / day to 2020.

What happens as this worsens is anybody's guess. Higher taxes are inevitable; I think first we'll just fund it with debt. Other countries will figure out there's no way we can pay this back, so then we're going to start taxing at a much higher rate (maybe double what we're at now? I'm pulling this out of nowhere, I've just heard "double" is about what the real cost is for the government to provide the services it is providing now, IE it's how much we'd have to pay if the gov't didn't run a deficit); and it becomes more difficult to sell T-bonds and finance our debt. The only option then would be to print money-- Federal Reserve takes the T-bonds, credits the government's accounts, and we go through some mild to medium inflation. I hesitate to use the term "stagflation" because of the fearmongering stigma that goes with those that use it. There could likely be soft to medium inflation, but with heavy taxes on the middle class, a repressed economy. So, mild stagflation.

I can't forecast inflation though; when production capacity expands with the money supply inflation is held at bay-- only when supply is limited and money is freely available does inflation take root. Thanks to China, most of our supply is not limited. We're not in any danger of running out of food over here. We've got lots of money sinks (entertainment, software) that have virtually unlimited supply. Clothes, cars, land, and houses are about the only things that could inflate in value. Land/houses will deflate naturally as the baby boomers die, offsetting some of this.

Thinking through all this in a service-based economy (supply is much more elastic) is much more difficult.

Right, the mild to medium inflation, if anything, is probably the significantly superior alternative to deflation (which we've seen some of in consumer prices in 08), a process where even if your purchasing power stays the same, historically a decline in wages tends to depress consumer confidence, and thereby consumer spending, domestic investment, causes businesses to cut overhead (i.e. jobs), and then you're in a full blown recession. Mild inflation (say, 2% annually) seems to be a much more sane alternative and is why the Treasury errs on the side of printing too much than too little.

In terms of T-bills, I don't forsee any problem with China considering they won't dump treasuries on the open market, the benefits are far far outweighed by the downside. A gradual sell-off of U.S. T-bills by China is fine, I still haven't heard any explanation for why that would be bad. The Fed can sell bonds to other countries to raise money, no problem. Hell, Microsoft could probably fund a niche portion of the U.S. economy all on their own considering their pristine credit. In fact, they issued bonds for the first time last year if I'm not mistaken.

 

[First]

Originally posted by: bamacre

Originally posted by: Evan
And watching the end of that video, I get a kick out of Paul still seriously sure that housing prices are being propped up when he's literally told housing prices aren't being purposefully propped up since the Fed and gov't are merely trying to un-seize credit, not artificially hold prices up by law. That would be strictly price fixing and there's quite obviously none of that. What they're fixing is long term interest by lowering cutting certain benchmark rates , which has been successful for 100 years, just done at a much more aggressive pace right now.

And we all get a kick out of you still defending a system that brought this mess in the first place. And we also get a kick out of you for having a religious-like faith that debt is wealth, that we can solve the problems of too much borrowing and spending by borrowing even more and spending even more. That a healthy economy is one of a vast amount of people in debt rather than with wealth. That money does grow on trees, you just need to add ink. Yeah, we all get a kick out of that.

I find it amusing you get a kick out of something you don't understand and are consistently wrong about. Meh.

 

[ericlp]

Well, after I watched the entire video. I didn't see any ground shaking or debate between any of them... I have enjoyed Ron's speeches before, but this one was to me just eh same ol politics as usual. I didn't detect voices being shaky or anything I haven't heard regurgitated before.

But, I think he does have some valid points. He almost sounded like whiny bitch.

 

[Lemon law]

Ron Paul, a political coalition of one.

Do the math, 1/435=0.230% of the US House of Representatives.

Here we are, at the start of the Obama administration, the GOP still has slightly North of 40% of the House, yet they are politically irrelevant, because the house has no filibuster provisions.

And now someone on this thread wants to assert Ron Paul has any political relevance with a tiny fraction of that vote. Tell us again how much legislation Ron Paul will be able to pass?

 

[LegendKiller]

Paul isn't firing bullets. He's firing blanks.

 

[GroundedSailor]

Why does Ron Paul even make news anymore? His ideas are so whacked out. Whats even more amazing is the number of people who believe he's making perfect sense.

 

[Jaskalas]

Originally posted by: bamacre

Originally posted by: Evan
And watching the end of that video, I get a kick out of Paul still seriously sure that housing prices are being propped up when he's literally told housing prices aren't being purposefully propped up since the Fed and gov't are merely trying to un-seize credit, not artificially hold prices up by law. That would be strictly price fixing and there's quite obviously none of that. What they're fixing is long term interest by lowering cutting certain benchmark rates , which has been successful for 100 years, just done at a much more aggressive pace right now.

And we all get a kick out of you still defending a system that brought this mess in the first place. And we also get a kick out of you for having a religious-like faith that debt is wealth, that we can solve the problems of too much borrowing and spending by borrowing even more and spending even more. That a healthy economy is one of a vast amount of people in debt rather than with wealth. That money does grow on trees, you just need to add ink. Yeah, we all get a kick out of that.

Well spoken bamacre.

 

[BansheeX]

Originally posted by: soccerballtuxThe upper middle can protect themselves with inflation-adverse investments, by the way. The lower middle class can benefit by using the inflation to pay off their debt and start saving. My fear is that we're making this too easy; that the debtor-middle will not take advantage of this, but will say "aha, more money, let me spend it now! Gogo American dream!" Hence why I emphasize extending this recession a bit. Otherwise, the country wouldn't benefit any from the inflation.

No doubt any saver worth their salt is already in gold by now, they are immune to dollar debasement (as far as their savings, not wages are concerned). More to your point, inflation might wipe out debt, but it also causes the cost of living to rise. People's wages don't go up throughout the year while prices of material products do. It's not a fun situation. If you want to see how well it works, just look at Zimbabwe, Weimar, the Continental. The real reason the Fed is working to inflate while maintaining bond demand is to wipe out bank debt and restore government tax revenue (who doesn't want to face reality and make cuts alongside the private sector). The actual market price of the collateral banks would be stuck with is well below the loans they made. If they can inflate the value to nominally match what they loaned, they're okay at our (and our creditors') expense. The homes are actually perfectly liquid assets, just not at the prices banks want to sell them for. So yes, this is a roundabout way of fixing prices and Evan and LK (who is a banker himself) are dead wrong as usual and looking to mock RP and Schiff publicly any chance they get.

This is an attempt to purge the losses onto another party. If that party wakes up to it, though, they could end up with a run on the dollar and very angry, angry population.

 

[LegendKiller]

Originally posted by: BansheeX

Originally posted by: soccerballtuxThe upper middle can protect themselves with inflation-adverse investments, by the way. The lower middle class can benefit by using the inflation to pay off their debt and start saving. My fear is that we're making this too easy; that the debtor-middle will not take advantage of this, but will say "aha, more money, let me spend it now! Gogo American dream!" Hence why I emphasize extending this recession a bit. Otherwise, the country wouldn't benefit any from the inflation.

No doubt any saver worth their salt is already in gold by now, they are immune to dollar debasement. More to your point, inflation might wipe out debt, but it also causes the cost of living to rise. People's wages don't go up throughout the year while prices do. It's not a fun situation. If you want to see how well it works, just look at Zimbabwe, Weimar, the Continental. The real reason the Fed is working to inflate while maintaining bond demand is to wipe out bank debt and restore government tax revenue (who doesn't want to face reality and make cuts alongside the private sector). The actual market price of the collateral banks would be stuck with is well below the loans they made. If they can inflate the value to nominally match what they loaned, they're okay at our (and our creditors') expense. The homes are actually perfectly liquid assets, just not at the prices banks want to sell them for. So yes, this is a roundabout way of fixing prices and Evan and LK (who is a banker himself) are dead wrong as usual and looking to mock RP and Schiff publicly any chance they get.

This is utter bullshit. The Fed isn't attempting to "inflate" but to fill the gap between private lending and required lending. Essentially, those who would normally lend directly to consumers are now lending to the government. It's a right-pocket-left-pocket issue. The contraction of credit IS leading to deflation, so their expansion is only counteracting deflation, not adding to inflation.

Any "saver" worth their salt will realize that gold's price is being driven by ETF investment, not actual demand for gold. Since the ETFs are nothing more than an investment bubble writ large, you're going to see a collapse in the market eventually.

Schiff is a fucking joke. He failed his investors, he is wrong in his theories (decoupling, dollar collapse...), and he can't even admit it. Jim Rogers is the same. I hope that fucker won't be let back in this country as Asia burns down around him in China's inevitable economic and possible social/poliotical collapse. He wanted to spurn this country, let him raise his two little kids in a 3rd world country, fuck em.

 

[piasabird]

I dont think it is that the Fed needs to be immune to politics, but that the Fed Chairman was ripe with politics and based his political bias on whether a specific entity was bailed our or not. There is no accounting of what money was spent where, and there is no report the American Public can read.

I think that it is time for an Audit.

I work at a community college and we have an external audit every year.