The Empire State Rebellion

[LegendKiller]

Absolutely correct.

The Fed sees their guilt in failing to re-inflate the money supply after the crash occurred. They did not accept guilt for inflating the money supply before the crash occurred.



Want to guess who said this...?

"The gold standard appeared to be highly successful from about 1870 to the beginning of World War I in 1914. During the so-called classical gold standard period, international trade and capital flows expanded markedly, and central banks experienced relatively few problems ensuring that their currencies retained their legal value."

I'd have to look at the actual data but I don't think the money supply was inflated by the Fed's doing, except for us trying to help bootstrap the British back onto the gold backed currency.

The last quote ignores the runs on the banks during that period not driven as much by FRB but more by state and federal debt.

 

[LegendKiller]

Anonymous is just pissed that their "huge change" from the BOA emails was a huge failure.

 

[nonlnear]

Good post. But the problem with a "well-managed" fiat currency, is that they are often not "well-managed." IMHO, you're offering too much authority and power not only to gov't but to the financial system, tied to the central bank, as well.

Good management is best created through competition. My preference for a well-managed fiat currency is one that coexists with full reserve precious metal currencies (which might be publicly or privately managed). Taxes are levied in the fiat currency, creating demand (likely with a majority of the economy using said fiat currency), but excessive devaluation and [perceived] mismanagement would be more effectively limited because the market is not captive.

 

[bamacre]

It's hard to argue with the fact that through our currency we've become the world's largest economy and, relatively speaking, most stable country. Sure, we have some problems, but they aren't unsurmountable and certainly not fatal.

We went from being the world's biggest creditor nation under a gold standard, to being the world's biggest debtor nation under a fiat system. We became the largest economy in the world under a gold standard.

When you have a money based on debt rather than wealth, it shouldn't be shocking to find yourself surrounded by debt rather than wealth. There have been exceptions throughout history, sure, but there have been more disasters. No one has ever had to drag a wheelbarrow full of gold/silver to buy a loaf of bread, no one has ever had to burn gold/silver for heat. This cannot be said for fiat currency.

The last quote ignores the runs on the banks during that period not driven as much by FRB but more by state and federal debt.

Bank runs were not the result of bad monetary policy, but the result of bad banks.

I'd rather people run to banks to get their money rather than banks running to people to get the peoples' money.

 

[bamacre]

This is worth maybe $250...

This is worth maybe $1500...

 

[LegendKiller]

We went from being the world's biggest creditor nation under a gold standard, to being the world's biggest debtor nation under a fiat system. We became the largest economy in the world under a gold standard.

When you have a money based on debt rather than wealth, it shouldn't be shocking to find yourself surrounded by debt rather than wealth. There have been exceptions throughout history, sure, but there have been more disasters. No one has ever had to drag a wheelbarrow full of gold/silver to buy a loaf of bread, no one has ever had to burn gold/silver for heat. This cannot be said for fiat currency.



Bank runs were not the result of bad monetary policy, but the result of bad banks.

We were hardly the biggest creditor nation for any reason but we had the only standing major economy and the wealth that resulted from that.

You cannot consider only the debt side but also must consider the asset side. While we have a lot of debt, we also have far more assets than any other economy.

 

[matt0611]

This is worth maybe $250...

This is worth maybe $1500...

Wasn't $20 = 1 oz of gold?

 

[bamacre]

We were hardly the biggest creditor nation for any reason but we had the only standing major economy and the wealth that resulted from that.

You cannot consider only the debt side but also must consider the asset side. While we have a lot of debt, we also have far more assets than any other economy.

Your arguments are almost never invalid, and I respect your posts. We could argue over this forever, as others have, but it's just better if we agree to disagree, save ourselves a lot of time, know what I mean? :biggrin:

 

[bamacre]

Wasn't $20 = 1 oz of gold?

.9675 oz actually, a little copper (iirc) mixed in for durability.

 

[Pr0d1gy]

"a relentless campaign of non-violent, peaceful, civil disobedience"

Which always works well until the pigs start shooting the unarmed crowd, which is usually how it ends.

 

[ConstipatedVigilante]

No, if they had raised the reserve ratio to 100%, none of the bank runs would've happened and debt would've been quickly liquidated.


It wasn't a bubble if the rates were increasing.

"Bank runs" aren't the problem with investment banks. The problem was that they realized their assets were worth nothing.

 

[LegendKiller]

"Bank runs" aren't the problem with investment banks. The problem was that they realized their assets were worth nothing.

What an immature and uneducated point of view. The problem had nothing to do with their assets being worth "nothing", it had more to do with current valuations driven by mark-to-market accounting and the PV of future cashflows at distressed interest rate spreads for fixed income products as well as SOME of their assets being worth far less than anticipated. Given the allowance for them to be higher levered than historical perspectives resulted in diluted equity bases that could be stressed even under more "average" scenarios for the least liquid (and most distressed) assets.