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Woolley Arguments.

Discussion in 'Economics, Business, and Taxes' started by Woolleybugger, Jul 23, 2012.

  1. Woolleybugger

    Woolleybugger Mayor

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    As both Degs and I maintain constantly, Professor Keen and his merry band of accolytes are the only rational people in the world proposing solutions and analysis for what ails us today economically. I wish that economics was not a partisan psuedo-science but it is unfortunately. On the one side we have the Keynesians who follow the advice of that great man and accept both monetary and fiscal policy as tools for economic success. On the other side we have your monetarists, supply siders, Austrians and Randians who abhor fiscal policy and refuse to even consider it as a means of managing an economy. Herein lies the central cause of our economic troubles, the lies and untruths promoted by economists whose sole purpose is to promote themselves at the expense of the rest of us. Once again, I will plug Keens website,www.debtwatch.com as the only source of inspired economic thinking and debate available to pragmatic and rational readers.

    As I read the latest piece on the site from Phillip Pilkington, I had to laugh when the authors use of colloquial English inadvertently referenced my nic in describing what has been argued by the most dangerous men on the planet, economists. Here is the link to the article and the use of my moniker to cast the blame where it should lie.

    "The Radcliffe Commission was in no way radical. It was set up to defend monetary policy against its detractors and allow it to better function to counter the highly successful Keynesian spending and taxation policies of the war years. It was chaired by Lord Radcliffe, a man of conservative disposition who was no fan of Keynesian taxation policies. However, in its very greyness the Radcliffe Commission remained a great leap forward for truth and common sense. This was because the commission was chaired by mostly sensible public servants and lawyers. There were few economists involved that could sabotage the commission, engage in obscurantism and generally muddy the issues.

    It is worth noting here that this is, in fact, what many economists spend a great deal of their working lives doing. This often surprises people who have not read policy and research papers issued by central banks and think tanks. Of course, not all economists do this. But there are usually more than a few sitting around cooking up this sort of intellectual sewage which they use to bung up policy channels, confuse the general public and give incompetent and corrupt politicians excuses for their ineptitude. The idea, so far as I can see, is to debunk what should be common sense policy measures through highly theoretical (and often woolly) arguments. The economists then claim that most people are not qualified to understand these arguments and that those who are qualified to understand them and still say that they are garbage are incompetent and should be ejected from the debate."

    http://www.debtdeflation.com/blogs/...etarism-part-iii-critique-of-economic-reason/

    I certainly hope that some of you rabid anti-fiscal policy readers will give this author a chance to educate you. I hope that someone in power calls Professor Keen and asks him to join his Council of Economic Advisors. And I hope that somewhere in the deep bowels of the Senate or Wall Street, someone that gives a damn about our nation and the world just long enough to stop acting like selfish brats will actually start talking sense to the world. If we do not heed the advice given and learn once again from the lessons taught after the Great Depression then this three act play will continue to destroy wealth and dreams in an endless cycle of endless freedom, fake wealth and market destruction. This is what has happened because we decided to follow the advice of a little bald man from Chicago. All the rest of us are just two bit players in a one character play whose intent is to destroy and rebuild without ever firing a shot.
     
  2. degsme

    degsme Council Member

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    Just this morning I finished reading an interview with the heir to Sarkozy's conservative French political throne. It was rather odd. Odd in how similar to American conservatives it was and yet how in its distinction it shed new insight on what the core issue for conservatives in general is.

    1) they think people are lazy. Basically if not FORCED to work, if not given punitive incentives, people will not work. Well that's only kinda true. The best counters being The Zuck, Bill Gates, Steve Ballmer or any prestigious athlete.

    2) they have a curious mix of cultural nationalism while at the same time calling for the dissolution of national boundaries in all ways that basically matter: The control of economic sovereignty. They call for globalization on a rampant scale. No longer is the government responsible to its citizens to institute rules that govern their lives and working conditions, instead they are expected to conform to the rules and working conditions of the worst governments in the world.

    Yet somehow magically preventing immigration and granting State's Rights somehow conveys a unique cultural identity.

    Its a bifurcation that is stunning in its lack of cohesion
     
  3. Days

    Days Governor

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    We need to take back the nation's money... without returning to the old money.

    The only way to do that is for the nation to partake in the current money... aka, print its own currency direct, instead of borrowing it via bond sales.

    that's the 3rd option that I have been screaming for half a decade now.

    is there an echo in these posts?
     
  4. Woolleybugger

    Woolleybugger Mayor

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    If you mean that the independence of the Fed from the Treasury should be reviewed, I think its worth exploring but the trap it lies for us may be worse than the current situation. I continue to lay the blame on the economics departments of our major universities and think tanks. Go to the source. This is what Keen rails against constantly in an Emperor's clothes warning.
     
  5. Days

    Days Governor

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    The Fed is and always was independent of the Treasury. Nothing to review, either you are good with it or you seize the Fed. What I'm saying is by-pass using the Fed... instead of printing Fed Notes in our mints and then selling bonds to the Fed to borrow their money, simply print our own money in our mints. Its the exact same money creation except why give it to the Fed?
     
  6. Woolleybugger

    Woolleybugger Mayor

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    But I think this would in effect marginalize the Fed to the point where they are no longer in control of the money supply would it not? If you allow the Treasury Department to print money at will you will have a political body determining monetary policy which is why they made the Fed independent. I am not for allowing any executive officer of a government the power to print money at will. I see massive risk in this type of policy myself.
     
  7. Days

    Days Governor

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    It's called being a sovereign nation. Who do you think created the currency for 150 years, before we gave it away to Wall Street bankers? Do you honestly believe giving the nation's money to a group of private bankers is smarter? You must understand what the bankers do with it... they utterly exploit it 100% for themselves, of course, what would you expect? The nation needs to take back its money, this is just a smarter way to do that.
     
  8. Woolleybugger

    Woolleybugger Mayor

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    Actually, we were always managed by the bankers. There is a great book out there you should pick up that explains how the world worked from the early 1900s until the late 30s, its called "Lords of Finance". It covers the four men who ran the worlds national banks of the UK, USA, Germany and France. Its a real eye opener. The reason the Fed was created was to gain some control over the banks sole monopoly over the money supply. If you read Keen you will find that he says over and over again that banks create money without any regulatory oversight constantly. This massive expansion of the money supply by private individuals working solely as profit centers is the key to understanding how our economies work. Keen is adamant about this little known fact of banking which is that they expand the money supply without any regard to assets at all. In fact, one of his claims is that they look for assets AFTER they leverage themselves via private and personal lending binges. The key is to regulate the money supply tightly and control banking and asset speculation. Check this interview out by him, I think you will understand my point clearly once you hear this man explain his MMT ideas.

    http://www2.lse.ac.uk/publicEvents/events/2012/04/20120403t1830vOT.aspx
     
  9. degsme

    degsme Council Member

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    Um because the Fed is authorized by The Federal Government which is the ONLY entity Constitutionally empowered to coin and print money that has the Full Faith and Credit of the USA behind it. The notion of "print our own money" simply fails to understand how money even works.
     
  10. Days

    Days Governor

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    Try it again, degs, that one didn't register with me.

    We do print our own money in the mints, its just that we changed the currency, in essence, we gave it away to the FED. Its still our currency being printed, but we give it to the FED... the FED has to pay the mints for printing costs because they are receiving the product... the notes.

    If i read your post correctly, you are trying to say that the govt doesn't print money in the mints? Uhm, yes, they do. That's what mints do, that's why the govt built the mints, and the mints belong to the govt.
     
  11. Days

    Days Governor

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    I already know that stuff, Wooley.

    The key to regulating the money supply is first to understand the money supply. Fiat currency is a totally different animal from hard currency. There have been roughly 800 fiat systems down through history. It isn't a new concept. The fiat is the authority that creates and controls the fiat currency. Every bank that put out coupons was building its own little fiat currency, I understand, and the creation of the FED created a giant trust/monopoly that dominates the market with their fiat currency, but the rest of the banks are still creating currency and inflating the money supply.

    So it is a dynamic system with lots of players, but what happened with the entire world was simple; the bankers figured out how to usurp the authority of the states and gain total control over state currency. That is called "one world government" by those who understand how it works. It doesn't bode well for the world citizen, it just transfers all the world's wealth into the hands of a very few global rulers, who remain quite hidden from view. All of this was accomplished long ago. When you mess with the currency, you challenge that empire... an empire of central banks that span the globe. But if you ever want to regain a government of the people, by the people, for the people, you have to start by taking back the currency.

    Handing the government currency over to super banks to supposedly gain control over the currency ... that was quite the scam ... and now that all our mints only print Federal Reserve Notes, we have no control whatsoever over the currency. What little control we did have, we gave away.
     
  12. Woolleybugger

    Woolleybugger Mayor

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    I still cannot accept that one form of banker is any better than the next unless the model itself is completely revamped either through strict regulatory regimes or through a transformation of what it means to be successful and happy. Switching power from the Fed to a government will lead to the exact same outcomes as those in power shift from operating within one arena, the Fed, to another arena, government. Underlying both forms of money creation is the same fundamental human biology and cultural identities which compels each of us to consume more than we produce in a very inefficient and needless manner. All money is debt if it exceeds the total output in true wealth creation for any given economy. Whether you devalue the currency by printing it or by lending it, the same outcomes eventually occur if your ability to create new wealth is not tied to natural capital exploitation. By natural capital I mean our planet, our resources, our forests, lands, waters and so on. As it stands today, the USA consumes far more than we create and the driver for this is irrational expectations by each and every one of us regarding what constitutes a good life and how we define success. As long as we expect the future to be 10% or 12% more prosperous than today growing exponentially into the future like some runaway equation, we will end up borrowing capital from our planet to spend today what should be saved for tomorrow. This never ending urge to have more, spend more, own more and display more is a biological artifact that will end up destroying us if we continue to value ourselves through money rather than through some other measure. The nation cannot keep borrowing personally to feed our insane urge to live beyond our means. The government can do so because sovereign debt is like monopoly money, it is endless and is only constrained by how absurd we want to make the game appear. If your dad was the banker in a game of monopoly and had the power to keep loaning you money forever, the game will start out with some reasonable basis or value system but will become quite corrupted very soon by the addition of free, cheap and unlimited new money supplied by your dad. The game would become a joke where a house on Park Place is worth 100 trillion dollars. There has to be some underlying nexus between what you make from scratch (wealth creation by exploiting or transforming natural assets) and the general welfare of the participants as tempered by reasonable expectations of success and a forced means of wealth redistribution if the game becomes dominated by a single player or a cabal.

    I am fascinated by a man who is leading the debate about biology, energy and economics being intertwined. His name is Nate Hagens. This guy is on the right track.

    http://www.youtube.com/watch?v=n4x_CUumdKs&list=LLUzlIGKqlcqoNUVc3g6ZsHA&feature=mh_lolz
     
  13. Woolleybugger

    Woolleybugger Mayor

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    Days...the total value of money in the system has no relation or bearing to the number of notes printed. Money exists in the ether, it is purely based upon the flow of electrons between accounts and the storage of these states in a computer somewhere. The idea that money is a tangible asset is wrong. Money is no longer tied to any physical form, it is now a matter of fantasy backed by a banking system that deals in manipulation of those fantasies for personal gain. This is essential to understanding the impotence of a government to control the modern economy today. The Treasury could print 10 trillion notes tomorrow but those notes would then expand immediately into 100, 200, 500 trillion dollars of new money the second anyone deposited them in a bank.
     
  14. Days

    Days Governor

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    Gertrude Coogan (Northern Trust Bank, chicago) wrote a book in 1935 on a scientific money supply (I am going to run down these links of yours, I woke up early today, went back to sleep for the afternoon, my mind is in La-La-land).

    Let me insert these comments at this point...

    First of all, the fiat for the American money supply is the US Treasury. Hamilton argued that we could abridge the Treasury with national banks, Jefferson thought better of it, meanwhile state banks were always thriving, but the fiat has always been and still remains the US Treasury. The FED derives its fiat to create currency from the Treasury, the fiat was never taken from the Treasury, it was extended to the FED. So the fiat that the FED operates on, is the US Treasury. Instead of granting a charter to the FED, it was created in continuation, but the Federal Reserve Act did contain a buy-out option for the government, in case they wanted to revoke the fiat from the FED. Congress can still invoke that option... which is what Ron Paul thinks is way overdue. I think we all agree something is way overdue. But until we discard our sovereignty, like the member nations of the euro did, it is still the Treasury's currency, albeit, the Treasury is not printing any United States Notes, the ability to do so has never been absent, only the will to do so. I don't have to spell out to you that I'm talking about a lot more than just the printed notes, we can print those 70 million checks every month on the fiat of the Treasury, they don't have to be banked at the FED, the FED is just cashing them on the same fiat of the Treasury... folded into their banking operations.

    Now, as for the nitty-gritty of a science based currency, the idea there is simple... create currency hand in hand with human production and the real economy. Do away with this monopoly money creation that just churns out trillions for the select few mammoths that formed the FED. Anyone who believes that FED stockholder banks are repaying FED loans is in serious denial of how our system works. The FED backed the creation of 7.7 trillion in new capital under just one spigot that they opened for the financial crisis in 2008... don't hold your breath waiting to hear about how that money is getting paid back to the FED. In fact, don't expect to ever get a govt audit of the FED because only an idiot believes those loans are getting repaid. All that is happening is the movement of enough capital to ensure the smooth operations of a bank,,, aka, only about one tenth of what is created is being returned ... to maintain the asset reserves of the central bank. translation: 90% of the currency created by the Federal Reserve system ends up being free capital for the Federal Reserve Banks that receive those loans. Now, since a fiat money system represents wealth by the partition of the money supply; the Federal Reserve system transfers 90% of the nation's wealth into the Federal Reserve Banks... regardless of who created the wealth.

    So yeah, handing the currency to a money trust was very much granting the hen houses to the foxes.

    There are better ways to fix this than just start printing money from the Treasury. But they need legislation to pass in the bought and paid for Congress. Do you really believe our Congress is going to do that? The only solution that can be brought to pass on the stroke of the president's pen/executive order is to ease the Treasury back into creating United States Notes and their electronic equivalent.
     
  15. Days

    Days Governor

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    I was just answering his post. I understand fractional banking, I was a mortgage banker for nine years in the state of Illinois. Heh, I just covered this in my post to you in our thread above... do you want to break it into two discussions? We could discuss the nation's currency above while targeting the banking market on this thread. That's the normal approach, but the solution requires us to put the two back together for the purposes of fixing the currency. Ultimately, the government has to take over control of the currency, the banks are never going to spread the wealth, they are built to consolidate the wealth... in their vaults. The economy is an engine that runs on currency for fuel. The banks are suffocating the economy, not by keeping the currency out of circulation but by possessing all the currency. No one can afford to do business except the banks themselves... the economy is limited to their targeted operations. So the economy is caged, it is no longer a free market, it is totally chained to the banks' discretion and desires. In order to fix this, we need to repair the creation of the currency; either we need to go to a scientific currency, or some degree of a scientific currency through creation at the Treasury and active government programs (I've become the biggest communist ever, communism hasn't even caught up with me, yet) OR we need to reintroduce hard currency for local markets. In my mind, we need both and we need them done yesterday.
     
  16. Woolleybugger

    Woolleybugger Mayor

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    Then I am lecturing the expert without having his expertise. If I trusted the right wing, I might agree. The problem is, I no longer trust the left wing either unfortunately. Let's face it, banking in the modern era is like the mafia only legitimate.
     
  17. Woolleybugger

    Woolleybugger Mayor

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    I wish I had your faith in the executive. My problem is my faith in the Fed is even lower given the actions of Greenspan and now Bernanke. Hell, I don't know the answers here. I just keep coming back to human faults as the source of all our problems. Not sure how trading one fox for another solves this puzzle but since you are a banker, I will consider your views more seriously than some hack like Lukey.
     
  18. Days

    Days Governor

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    Banking in the modern era includes the mafia, they are now an integral part of the system. The black market is also an integral part of the whole market. These things grew up because they were the only means by which the wealth could be distributed... the banks operate an air tight system, so it took other criminals to figure out a way to gain access to the monopolized currency. This is what we built when we signed on to a central bank taking over creation of the currency. Meanwhile, the state, the industrial sector, and the commercial sector are being strangled. In order to get the masses to go along with this total disaster, they are kept utterly ignorant of what money is and how it works... especially their own money.
     
  19. Days

    Days Governor

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    Having the Treasury print money is not the least bit scary, if we realize that it is already happening, the process in place is doing exactly that, all the money that the Treasury would create directly is already being created by the current system... the usual response I get is that Treasury issue would inflate the money supply - actually it would deflate the money supply because the current system creates a bond which becomes an asset reserve, which then gets loaned out ten times over. The devil is in the details; if the Treasury by-passes the FED and creates single party issue (United States Notes and their electronic equivalent, God rest Salmon P Chase's soul) it would stop feeding the bank credit form of our currency and restart the direct capital form of our currency ... that the nation was built upon and went back to for preservation. If we fueled the GSE banks with this form of currency, we could issue zero interest home loans to residential mortgages which would take back housing from Wall Street banks and return it to the people. This is what Sheila Blair, head of the FDIC called for in 2008, and I'm still waiting for a 2008 or 2012 candidate to answer that call. Imagine how quickly Americans would rebuild home equity with zero interest loans. Values would turn around and the housing crisis would turn into a housing foundation for a firm economy... you know, like it used to be before we gave our currency to the banks.

    The problem with today's economists is they study the money supply without discerning possession. If I build a business with my own capital, it has far more staying power than when I build a business with bank loans. The bank credit form of our currency evaporates almost as fast as it hits main street. Direct capital from the Treasury is fiat currency but it has more staying power than Federal Reserve loans. When business is leveraged, the loan payments eat all the profits, that type of economy is sick to start with... and that's what we have today. We have to change the currency. If the Treasury issues capital to industrial and commercial sectors for business start up (not just tax breaks) our commercial and industrial sectors could finally start turning a profit again. The banks scream this would be horrible, this would be communism! Actually this would be real capitalism, not the leveraged capitalism of Wall Street firms like Bain Capital.
     
  20. degsme

    degsme Council Member

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    Again, the reason for having the Fed in the loop is that in a modern economy you want control of both M1 THROUGH M3. With only the Treasury engaged in printing money you lose control of M2 and M3. And thats disasterous.

    Nothing prevents the GSEs from doing so EXCEPT THEIR CHARTERS. And those can be changed. The Fed is not the barrier to this.

    Based on what DATA? This is a specious claim. its as though there is no such thing as opportunity cost. Sorry there is.

    simply not true.

    Also not true. A business that borrows 10% of its net Profit is still leveraged. But its payments hardly eat ALL of its profits.

    Sorry you are making things up again.
     

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