My problem with out current banking system and other financial institutions is the lack of regulation and completely out of control compensations. When one of the first thing they do with bail-out money is pay out bonuses something is wrong with the entire industry.
Great for you, once you get a formal education in finance and economics, while working in the sector and knowing what you're talking about *AND* you aren't so closed minded to anything but your youtube/internet education, perhaps we can have a fruitful conversation
Great, you saw a non-peer reviewed, biased, piece online followed by a youtube video.
I am only blunt because rubes like you pop up everywhere thinking an education borne of bandwidth is something to be proud about and sufficient to actually know what is probable in the real world.
Greenspan spoke out against regulation when proposed in Congress.
He has (had?) an Any-Rand regulation-is-bad view and was influentional against it.
To his partial credit, he has admitted 'his ideology was [partly] wrong', to the point that he was 'shocked' at what happened and did not think it could.
Just like why we can't live in a completely free and open society, not only does it cause chaos, but it also massively increase frictions in transactions, both in time, cost, and causing available investments to go elsewhere as a result.
There is a reason why most countries have *ONE* currency backed by the state.
It's like arguing to have private police forces, firefighters, or militaries. It's a fucking ridiculous notion that only a feebleminded theoretical bound libertopian would imagine.
Thank fucking god you guys are only 3% of the population. Wallow in your theoretical vacuum stupidity for all I care, because it's where you'll be stuck for the remainder of your life.
If I say yes, will you go to a private school and fund your education on your own, no loans or anything? Will you turn off the internet for good? Because all of those things, and more, are because "state intervention". Pay for your own fucking education you socialist, while you're at it, invent and control your own internet.
It isn't the contraction of monetary supply that is causing the appreciation of the dollar. Like usual your theoretical bullshit hidebounds you to a limited viewpoint. You haven't quite realized that the dollar's value isn't set solely by the government and that it does exist outside the vacuum that you create for it. Market valuations of relative appraisal have been set in motion. While others were bearish on the dollar due to the expansion of credit, they were only so because they saw us delinked from the world and that our problems wouldn't expand to the entire globe.
That stupid thinking was theory also, now as it is proven wrong and other CBs take actions to prevent their own problems the world becomes more rational and prices in reality.
Perhaps you should do the same?
Just as I suspected, theoretical bullshit. Enjoy the economics courses, I found them useless in the actual application of reality, the only time that application met reality was when people realize that the theory of strict supply/demand only works inside the vacuum created by the student. Once human irrationality is applied the theory goes out the window.
This is why finance has always failed to understand its affects on people and why, finally, behavioral finance is emerging even more.
Economics and finance aren't physics where laws can be explained through formulas. There is no strict way in dealing with the reality of finance or economics, because human behavior isn't governed in such a way.
But hey, enjoy the theoretical work, apply it in college, and enjoy the fake world of both education and finance, because once you get in the real world nobody will give a shit about austrian economics.
There have been times in human history when there was a great deal of competition for currency. It led to a great deal of inefficiency. It wasn't until the idea of the modern state came about that powers in Europe tried to create a one currency system. This actually spurred economic growth and encourages advancement from a barter system. The issue is one of confidence and information. It was a great deal of work to keep track of multiple exchange rates for currencies circulating in one city. And most average citizens aren't going to try to keep track of all of these rates on a daily basis.
Also, while we complain about the Treasury just printing money, how can I be sure the creators of the new currencies aren't doing the same? Eventually, the most well managed currency will be the winner, but then we're just back to where we started: a one currency system where the owner can devalue the currency.
There were instabilities, market crashes, and currency concerns before the Fed. The idea of the Fed is not necessarily the issue, the problems arise when the Fed is poorly run. This is something we certainly might say about the Fed in the past ten years. However, it was hardly alone. The Fed may have helped create the gun with cheap money, but it was investment bankers, brokers, risk analysts, politicians, and the average citizen buying a home they couldn't afford that pulled the trigger.
We still have a barter system. Money is just another good and falls under the same laws of supply and demand as any other good. The only difference between money and any other good is that money is the most commonly traded good. The free market engineered the concept of money. Government didn't innovate anything about money. They just monopolized it.
Its not the citizens that have to keep track of exchange rates, its business owners. And something tells me that they wouldn't mind accepting other forms of money if they had to. Remember, cities don't HAVE to keep up to date with exchange rates, but they'd sure as hell be more efficient if they did. And citizens would sure benefit from stable currencies with strong values so I'm sure they would try to read the newspaper and keep up with the news to see how their storage of wealth is doing.
Its in the currency producers best interest to keep their currency as stable as possible. But just like any other business, if one fails or gets lazy then someone else can step in and fill the market void with a cheaper and better product (in this case, manage a currency more efficiently). The only difference is that a monopoly becomes inefficient over time because they have no incentive to improve their services. And they'll try to exclude competition with the help of the government.
The government has always interfered with banking. The very first national bank of America immediately began inflating as soon as it was established. The second bank lead to the panic of 1819. link
Sure, but would they have bought all these homes if credit wasn't abundant? It starts with easy credit, then loose banking standards, then individuals getting easy loans from those loose standards. There is plenty of blame to go around, but if we attack the source of the problem wouldn't we not have to worry about individuals getting easy loans? Because they wouldn't exist.
The very definition of a barter system is a system that trades goods and services without the use of money.
Yes, in basic terms the worker trades labor for money and then this money can be traded for goods. Because the supply of money changes, it can gain and lose value. Regardless of who must track exchange rates, labor and time is expended thereby creating inefficiencies. Any individual would also need to track exchange rates so they understand how much their money is worth in another town. Currently, I would have to do this if I was going to Europe but with a plethora of currencies, I would have to do this traveling to and from work everyday.
Normally, this wouldn't be a huge concern as currencies' values are relatively slow to move. If you create many currencies, the volatility of any individual currency should, in theory, increase. When I trade dollars for Euros, or the opposite, my individual trade has little effect on the aggregate supply/demand for either. However, if I was able to do this to a currency 1/10000000000 as circulated, I might have an appreciable effect.
Citizens can benefit from a currency with a strong value. Simple example, consumers in the US benefit from the Chinese maintaining a dirty float pegging their currency to the dollar. However, I postulate a strong American dollar might actually make the coming recession more severe. Manufacturing in the US is already getting killed and it doesn't help if foreigners can't buy our products due to their weak currency. I'd be interested to see if those shops in NYC still accept Euros given the recent correction.
It is in bankers' interests to make solid loans. It is in the Fed's best interest to prevent the creation of bubbles. It is in the US's best interest to reduce our deficit. However, long term best interests are almost always dominated by short term profits and gain. While the monopoly currency (as a single currency is the most efficient operation) can eventually be challenged, if mismanaged, this transition costs time and labor. Again, mass replacement of a currency is a dirty affair. When most people think of labor or production in a free market, they simply assume zero cost for factor mobility, this is not the case. Yes, a corrupt currency may get replaced but at a massive cost.
Simplistic explanation. More information here. One might blame the lack of oversight and unified currency on this crisis. Also, your view is Americo-centric. You forget the struggles that occurred in Europe to unify their currencies and the trade struggles that were involved before this happened. There is a reason trade leagues and early modern states were trying to adopt single currencies.
Would there be as many gun crimes if guns weren't abundant? Would obesity be a concern if there weren't so many accessible fatty foods? I understand your desire to blame central banking for this miss, and they are at least partially at fault, but the ultimate blame rests on excess greed.
You also assume that currency competition would eliminate faulty lending practices. I don't understand why this is necessarily so. In this disaster, easy credit given by some banks quickly encouraged others to join in the game to compete. How would having multiple currencies correct this problem? From the link above:
Loose lending principles by banks without uniform currency.
I understand your frustration with the central banking system, but I don't think introducing more currency is the answer. In all probability, it won't prevent disasters like the one we're experiencing and only introduces a great deal of inefficiency. If you want change, then what you really need to do is to change the way the Fed operates.
Where did all this $ come from for the banks to lend? Who made it so cheap? The Fed DOUBLED the money supply post 9/11, lowered rates, and introduced that currency into the market through the mortgage industry.
Hmmm, currency supply doubled and in the same exact time our currency lost half it's value, what a coincidence.....
- Sep 4, 2003
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Your reply seems to indicate arrogance, and a lack of respect, that your way of education is the only way. And your so called education hasn't done anything to improve your level of maturity either, calling people names on a forum, grow up.
What makes you think the educational system you learned from is not biased and one sided?
You don't believe that people in extreme positions of power and wealth won't do anything to maintain it?
I really want you to think about what I'm about to say! OJ Simpson walked away from murder with his wealth, now consider his outcome of escaping justice, and then compare that to the richest and most powerful people in the world. If OJ can get away with it, then what about the world's elite, and then what they'll do to cover their story, and what lengths they'll go to keep it safe too?
What do you think real education and intelligence is?
I hope you know a simple little fact in life about education. Just because someone has a piece of paper that says they are educated in some field, doesn't mean they know everything, it's only a degree, or license to really begin learning in life.
There are a lot of stupid people walking around in this world with their education and degrees, don't tell me you haven't met any?
The fact that you say I'm closed minded when, one, you don't even know me shows your lack of intelligence and how closed minded you really are. I have a very open mind, I am open to all possibilities. Now let me say that again, 'I'm Open To All Possibilities'. The question is, are you?
I'm willing to admit there might not be anything going on here at all, but one thing I do know that you seem unwilling to admit, the possibility of a problem, because if you'd of been honestly researching this from the other side of the desk with an open mind, you'd of seen there is quite a bit of evidence to suggest otherwise.
There is also what you'd call in lay terms a rat that smells, Oh and in those lay terms, you don't think a lot of people in America aren't put on trial when something doesn't look right besides the usual needed evidence? Many people do get hung out to dry, just over circumstantial evidence.
Don't act like everyone sitting on AnadTech must be a fool, uneducated, and 15 years old, I'm no rubes ass, and I'm certainly not your boy. I have a hell of a lot more between my ears...
Also have you ever learned about education from outside the American walls? Have you ever lived in other countries to get another view point? Have you ever seen the other side of the story from the world's viewpoint? I guess the world is lying then over their educational system, and America is the only one telling the truth?
Learn to have some respect for people, don't act like such a Smart A.
Have an attitude in life when you know it all, and the truth is no one should, because no one knows everything.
Let me change the subject here just a bit, if you're smart enough and old enough to grasp this. Here's some real education for you, education of life! Some day if you're dying with family at your side, you're not going to be crying out over your financial education and degrees and wondering all about it, the only thing on your mind is going to be the people you love and care about. Now if you can't grasp what I'm saying here, then you really know nothing about real education, and importance in life! So stuff your formal education in finance and economics, because in the end, it's not going to mean spit! Chew on that for a while if your smart enough, and I hope you are.
That's great. If anything, I agree that education, in and of itself, isn't the whole story. That's why I laugh at economics degrees and theoretical education with a lack of practical real-world experience.
Which is interesting, since I have worked in the investment process for 6 years, first at a Fortune 50 company then at another, both in Treasury Securitization rolls. I have been with an investment bank for almost 2 years, doing securitization origination. Prior to my first sec'n job I earned my MBA, then during the first two jobs I earned my CFA charter, passing all 3 exams on the first try (something which only a very small minority do).
The bank I work at is a large international bank. I have exposure to both the UK CB and the ECB, as well as several European regulatory authorities. I have to know capital exposures, funding strategies, and micro/macro economic interactions with the previous two.
The companies I finance are large multinational corporations and I must understand how their treasury functions work.
So, it's not like I am talking from a weak practical perspective.
Credentials are useful to a point in establishing you have some information, but you are probably not better credentialed than Alan Greenspan, and last week he said 'his ideology was wrong' and that he was shocked by what had happened and had not thought it could happen.
On debates of systemic issues, it's possible to be too close to see the forest for the trees.
You need to be careful not to extend credentials to 'right because you have credentials'.
You are in a position to say informed things, and to debunk many wrong things, but not simply to say what's right on big issues that experts differ on.
If the question were whether democracy was a good idea in the late 1700's, would the best people to ask necessarily be the people who worked deeply in politics at the time?
What were John Locke's or Thomas Paine's 'qualiifications' working in politics to say what they did, were they wrong if they did not work in politics?
If the issue were public policy on the use of nuclear weapons, are the only people credentialed to answer the physicists who can design them? They certainly had views - but Einstein, Teller and Oppenheimer had some pretty radically different views on the issue, Even if they all had the same opinion, would that make them right on the policy, rather than on the functioning of the weapons?
It's one thing to thorougly understand 'the system', and another to be right about possible changes to that system in the interests of society.
I'm not saying you don't know what you're talking about, but I'll bet all the experienced people with their fancy degrees and nice suits at the government, Lehman Brothers, and everywhere else thought they knew what they were talking about as well
Now, onto the Federal Reserve:
Steve Forbes calls for massive downsizing of the Federal Reserve:
http://www.forbes.com/forbes/2008/1110/018_3.html
Greenspan Admits The Federal Reserve Is Above The Law & Answers To No One:
http://www.youtube.com/watch?v...e8TH7w&feature=related
Alan Greenspan in 2007: Need to Return to Gold Standard:
http://digg.com/business_finan...eturn_to_Gold_Standard
Hope everyone has some time on their hands:
Money as debt:
http://video.google.com/videop...d=-9050474362583451279
G. Edward Griffin, author of "The Creature from Jekyll Island", explains the Federal Reserve:
http://video.google.com/videop...DA&q=g.+edward+griffin
Zeitgeist Addendum takes on the Fed in the first half of the movie:
http://video.google.com/videop...g&q=zeitgeist+addendum
Forgot these:
Jim Rogers, CEO of Rogers Holdings calls for an end to the Fed:
http://www.youtube.com/watch?v=AwIncF3yrpQ
Peter Schiff, President of EuroPacific Capital, on the Fed's role in the crisis:
http://www.youtube.com/watch?v=Je0jARsDbjw
I love this quote Schiff wrote in June before the crisis even occurred:
http://jglobal.blogspot.com/20...n-federal-reserve.html
"What few economic leaders have acknowledged is that the Federal Reserve itself is responsible for the real estate and credit bubbles, which are the source of our current troubles. By keeping interest rates too low for too long, the Fed ignited a speculative fever and engendered a disregard for risk management that pushed asset prices above rational levels. Should we blame the private sector for taking advantage of all the cheap credit, or the Federal Reserve for supplying it? If a kindergarten teacher passes out handfuls of Pixie Sticks, and then leaves her classroom unattended for several hours, should we blame the five year olds for the hysteria that ensues?"
Jim Rogers, CEO of Rogers Holdings calls for an end to the Fed:
http://www.youtube.com/watch?v=AwIncF3yrpQ
Peter Schiff, President of EuroPacific Capital, on the Fed's role in the crisis:
http://www.youtube.com/watch?v=Je0jARsDbjw
I love this quote Schiff wrote in June before the crisis even occurred:
http://jglobal.blogspot.com/20...n-federal-reserve.html
"What few economic leaders have acknowledged is that the Federal Reserve itself is responsible for the real estate and credit bubbles, which are the source of our current troubles. By keeping interest rates too low for too long, the Fed ignited a speculative fever and engendered a disregard for risk management that pushed asset prices above rational levels. Should we blame the private sector for taking advantage of all the cheap credit, or the Federal Reserve for supplying it? If a kindergarten teacher passes out handfuls of Pixie Sticks, and then leaves her classroom unattended for several hours, should we blame the five year olds for the hysteria that ensues?"
bamacre
Lifer
- Jul 1, 2004
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Craig234,
I would think by now you would have at least figured out that "laissez faire" economics wasn't what caused this current financial crisis. You can keep saying it, over and over, but it doesn't make it true.
The fact is, Craig, that government intervention is what caused this crisis. Sure, some deregulation was part of the problem, but deregulation of what exactly? Certainly not a system that was "free market" oriented.
http://en.wikipedia.org/wiki/G...t_sponsored_enterprise
Greenspan isn't being honest nor complete about the causes of this problem, either. His keeping the interest rates artificially low for so long played a significant part of creating this mess.
I would think by now you would have at least figured out that "laissez faire" economics wasn't what caused this current financial crisis. You can keep saying it, over and over, but it doesn't make it true.
The fact is, Craig, that government intervention is what caused this crisis. Sure, some deregulation was part of the problem, but deregulation of what exactly? Certainly not a system that was "free market" oriented.
http://en.wikipedia.org/wiki/G...t_sponsored_enterprise
Greenspan isn't being honest nor complete about the causes of this problem, either. His keeping the interest rates artificially low for so long played a significant part of creating this mess.
tell that to the courts-
Question: Have the Courts had to decide whether the Federal Reserve Banks are privately owned or not?
Answer: Yes, in several cases. Here is one of them on point which went up to the 9th Circuit Court of Appeals: LEWIS v. UNITED STATES
John L. LEWIS, Plaintiff/Appellant v. UNITED STATES of America, Defendant/Appellee. No. 80-5905. United States Court of Appeals, Ninth Circuit. Submitted March 2, 1982; Decided April 19, 1982; As Amended June 24, 1982
"Plaintiff, who was injured by vehicle owned and operated by a federal reserve bank, brought action alleging jurisdiction under the Federal Tort Claims Act. The United States District Court for the Central District of California, David W. Williams, Jr., dismissed holding that federal reserve bank was not a federal agency within meaning of Act and that the court therefore lacked subject-matter jurisdiction. Appeal was taken. The Court of Appeals, Poole, Circuit Judge, held that federal reserve banks are not federal instrumentalities for purposes of the Act, but are independent, privately owned and locally controlled corporations.
Affirmed.
. . .Examining the organization and function of the Federal Reserve Banks and applying the relevant factors, we conclude that the Reserve Banks . . . are independent, privately owned and locally controlled corporations.
Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two-thirds of each Bank's nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors. 12 U.S.C. § 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. § 341, and appoint officers to implement and supervise daily Bank activities. These activities include collecting and clearing checks, making advances to private and commercial entities, holding reserves for members banks, discounting the notes of members banks, and buying and selling securities on the open market. See 12 U.S.C. §§ 341-361.
. . . The Banks are listed as neither "wholly owned" government corporations under 31 U.S.C. § 846 nor as "mixed ownership" corporations under 31 U.S.C. § 856, . . .
Additionally, Reserve Banks, as privately owned entities, receive no appropriated funds
In order to be right about possible changes to system in the interests of the society, you have to have thorough understanding of the system. I am sick and tired of youtube generation who think just because some nutjob has a clip on youtube he/she must be right. and criticize, try to change the system without any understanding, or worse, totally false understanding of the system.
Fed is a private company? Anyone with any kind of understanding of how Fed system work knows that statement is absolutely ridiculous. And now we have a bunch of fvcking monday night qb's criticizing what fed did back in 2003 knowing what we know now.
Seriously, you people need to read up real educational material on how Fed works. And you people need to know this, only people work in Fed, not prophets, not god. They will make mistake like any other organization, but 9 out of 10 time they will get it right. And there are check and balances, and Fed's goal is to stabilize the US economy, not to freaking benefit some some secret European owners. So stop being paranoid or listen to some freak clip on the Internet, do some homework and educate yourself.
maybe if you know the difference between the federal reserve system and the the federal reserve bank and how the federal reserve banks are designed to function, you would know you are talking about something completely different.
- Sep 4, 2003
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Ron Paul is the first American politician to stand up to this and speak out against the Federal Reserve. Finally someone in Washington with integrity, and courage!
For those that still think Ron Paul is stupid, watch these videos, the man is far from stupid.
http://www.youtube.com/results...ache&search_type=&aq=f
Guess what people, the American media is starting to wake up to Ron Paul, because he is the only one that has pointed the way to the problem we are in now, that everyone can see, and realize he was the man that understood this.
Here's a real good one with Congressman Ron Paul before the Congress laying out the Federal Reserve.
http://www.youtube.com/watch?v=A4kxTkhwR_Q
P.S. I don't give a Rat's A these are on YouTube, these happen to be National TV Media! Watch those Videos and learn something!
For those that still think Ron Paul is stupid, watch these videos, the man is far from stupid.
http://www.youtube.com/results...ache&search_type=&aq=f
Guess what people, the American media is starting to wake up to Ron Paul, because he is the only one that has pointed the way to the problem we are in now, that everyone can see, and realize he was the man that understood this.
Here's a real good one with Congressman Ron Paul before the Congress laying out the Federal Reserve.
http://www.youtube.com/watch?v=A4kxTkhwR_Q
P.S. I don't give a Rat's A these are on YouTube, these happen to be National TV Media! Watch those Videos and learn something!
tell me exactly what u are talking about....
from what i understand: the federal reserve system is our "central bank".
http://en.wikipedia.org/wiki/Federal_Reserve
The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central banking system of the United States. Created in 1913 by the enactment of the Federal Reserve Act, it is a quasi-public (government entity with private components) banking system[1] composed of (1) the presidentially appointed Board of Governors of the Federal Reserve System in Washington, D.C.; (2) the Federal Open Market Committee; (3) twelve regional Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the U.S. Treasury, each with its own nine-member board of directors; (4) numerous private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks; and (5) various advisory councils. As of February 1, 2006, Ben Bernanke serves as the Chairman of the Board of Governors of the Federal Reserve System.
The Federal Reserve System as a whole:
The nation's central bank
A regional structure with 12 districts
Subject to general Congressional authority and oversight
Operates on its own earnings
the court case i referenced was a branch office of the Federal Reserve Bank of San Francisco that has branch offices in Los Angeles, Portland, Salt Lake City, and Seattle. It also has a cash processing center in Phoenix
The "ideology" greenspan claimed to be incorrect was letting the market do what it wanted to, his hands off approach to regulation and concern, as well as not increasing rates fast enough. He didn't reproach the whole system, merely his approach to it.
I never said my credentials made me infallalbe. However, it does make me very educated in the matter.
The changes suggested by those here are ridiculous and would ruin the US economy, irreparabley.
Ahhh yes, the "people like you fucked up, so we shouldn't believe you" argument. Please, the guilt by association argument is just fucking pathetic, what are you? A politician?
Then you go on to many out of context youtube videos. Greenspan has said many times that people like him are somewhat nostalgic for the gold system, he said it in his own book. However, he realizes that it just isn't possible.
Creature From Jekyll Island has been thoroughly debunked many times, same with Zeitgeist. That you even dare post them highlights your own intellectual instability.
Yes we are in trouble financially. Then the fed lowers the Prime lending rate to say 1%. So how does this encourage people not to buy houses they can not afford, or big business not to make loans that they can not pay? If anything it will deflate the value of the dollar!
I the mean time the stock market loves it. Any time the stock market is up you can expect to be ripped off.
I the mean time the stock market loves it. Any time the stock market is up you can expect to be ripped off.
Schiff has stated such tripe many times, calling for recessions and busts along the way. He's been wrong far more than he's been right.
The Fed didn't supply "cheap credit". Hedge funds did, as well as banks, who were allowed to lever up far more than before.
To blame it all on the Fed is to miss the plethora of regulatory changes, or non-changes, that allowed the situation to happen.
I don't think I have ever seen anybody argue that each Reserve Bank is private in many forms. However, the owners of the reserve banks are the member banks in those districts. Isn't the best policy of a strong system is to make all banks within the system, party to the system?
That isn't to say they aren't beholden to Congress, since they are.
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