National THEFT of US citizens

[groovtubin]

Congressman Patman:

“Mr. Eccles, how did you get the money to buy those two billions of government securities?”

Eccles: “We created it.”
Patman: “Out of what?”
Eccles: “Out of the right to issue credit money.” –

Testimony of Marriner Eccles, Chairman of the Federal Reserve Board, before the House Banking and Currency Committee, 1941

[Firestorm]

If only they'd stopped at $2 billion ...

[groovtubin]

If only they'd stopped at $2 billion ...

For SURE!! power and greed must be a terrible aphrodisiac!

[VacuumVoodoo]

If only they'd stopped at $2 billion ...

For SURE!! power and greed must be a terrible aphrodisiac!

It certainly creates a terrible life threatening condition. Try peeing with permanent erection...

On current debate and the national debt chain reaction reaching the Eurozone:
"Rising debt ceiling" - sounds sort of optimistic, wouldn't "lowering debt bottom" or "pulling debt plug" be more appropriate name for this meltdown ?

[Structo]

I think many politicians must have taken creative writing in college.
How else do you explain these ideas and words they use lately.

[Firestorm]

They obviously didn't take economics...

[KT66]

The concept that the OPs quote is referring to is the creation of money by banks. This is how it works : Banks do not have to hold all of the money that is deposited, they can loan out a certain percentage of it - but it is still considered an asset, because it's an account receivable. If every depositor decides to withdraw their money, then the bank becomes insolvent. In the 19th century and early part of the 20th, there were a number of bank "panics" that resulted in many depositors losing everything. The most notable one of course was the Great depression of the 1930's. In order to insure faith in banks and prevent future panics the federal government now insures depositors and so far this has worked. The FDIC & FSLIC claims you are only guaranteed up to $100,000, but in recent bank debacles, like the 80's S & L crisis, they paid everybody regardless of the size of their deposit.

It may seem like this magical creation of money is bad in some way, but it's actually not. The money supply needs to grow along with economic growth or what happens is that you get deflation, and that is bad because wages and prices are "sticky" when it comes to lowering them - people don't like it and resist it. It's one reason why the Depression lasted so long. So, in summary, there is no stealing from anybody going on here, and there is nothing wrong with it.

It is my opinion, even though it may not seem like it, that we are living in a golden age of prosperity right now that future generations will look back at and wonder what the hell we were complaining about. The fact is, the price of oil is tied to the price of everything, and they are not making any more of it. There is future permanent inflation coming relatively soon due to this fact, but I am not worried about it. We'll figure something out - a new technology. a new way to live, and everything will be fine - as long as they are still making vacuum tubes of course !

[dcribbs1412]

There is future permanent inflation coming relatively soon due to this fact, but I am not worried about it. We'll figure something out - a new technology. a new way to live, and everything will be fine - as long as they are still making vacuum tubes of course ! Very Happy

+1 Well said

[Firestorm]

The concept that the OPs quote is referring to is the creation of money by banks. This is how it works : Banks do not have to hold all of the money that is deposited, they can loan out a certain percentage of it - but it is still considered an asset, because it's an account receivable. If every depositor decides to withdraw their money, then the bank becomes insolvent. In the 19th century and early part of the 20th, there were a number of bank "panics" that resulted in many depositors losing everything. The most notable one of course was the Great depression of the 1930's. In order to insure faith in banks and prevent future panics the federal government now insures depositors and so far this has worked. The FDIC & FSLIC claims you are only guaranteed up to $100,000, but in recent bank debacles, like the 80's S & L crisis, they paid everybody regardless of the size of their deposit.

It may seem like this magical creation of money is bad in some way, but it's actually not. The money supply needs to grow along with economic growth or what happens is that you get deflation, and that is bad because wages and prices are "sticky" when it comes to lowering them - people don't like it and resist it. It's one reason why the Depression lasted so long. So, in summary, there is no stealing from anybody going on here, and there is nothing wrong with it.

It is my opinion, even though it may not seem like it, that we are living in a golden age of prosperity right now that future generations will look back at and wonder what the hell we were complaining about. The fact is, the price of oil is tied to the price of everything, and they are not making any more of it. There is future permanent inflation coming relatively soon due to this fact, but I am not worried about it. We'll figure something out - a new technology. a new way to live, and everything will be fine - as long as they are still making vacuum tubes of course !

I think the OP's quote referred more narrowly to the role of the Federal Reserve as underwriter to the United States rather than to the demand deposit system generally. While it is true that the creation of money permits the money supply to grow along with the economy, it also permits the money supply to grow even when the economy contracts, as has been happening for some time now.

For every $1 trillion in debt instruments the United States gives to the Fed, they can create about $5 trillion. If the economy has not grown that much, this "unnatural" growth in the money supply devalues all existing debt (including the little pieces of paper in your wallet) and reduces your purchasing power as surely as if someone had hacked your bank account. And, of course, the original $1 trillion still has to be repaid (with interest) by some future generation of taxpayers who had no say in the matter.

If it's not theft, it certainly is malfeasance.

As to oil, the price of everything is tied to the price of everything; oil is part of that mix.

I agree with you about tubes tho.