Posts tagged central bank
Now Or Never
FED TO KEEP A LID ON RATES THROUGH 2014
Posted on Jan 25, 2012
rosebennet (CC-BY)
The Federal Reserve lent weight to economists’ warnings of a long and slow recovery on Wednesday when it announced plans to keep short-term interest rates near zero for at least the next three years. The idea is that low rates will encourage borrowing and investment in American businesses, helping resurrect the economy. —ARK
The New York Times:
The decision means that the Fed does not expect the economy to complete its recovery from the 2008 crisis over the next three years. By holding rates near zero, the Fed hopes to hasten that process somewhat by reducing the cost of borrowing.
“While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated,” the Fed said in a statement released after a two-day meeting of its policy-making committee. “Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed.”
How the profit system works in a free market economy: Part 2 of 2
Uploaded by LearnLiberty on Aug 15, 2011
What is the social function of profits and losses? As Prof. Daniel J. Smith of Troy University describes, they provide an incentive for people to follow the information provided by the price system. By pursing profits and avoiding losses, producers and consumers use scarce resources in effective ways. In anticipation of being rewarded with profit, people and businesses are encouraged to undertake activity that will create valuable outputs. At the same time, the potential for losses encourages them to avoid excessive risks and wasteful activity. Policies that reduce profits, such as taxation, or reduce losses, such as bailouts, disrupt this function of prices and lead to inefficient uses of resources.
'The Dream Is Collapsing'
by William Norman Grigg September 28, 2011
. . . there are many points of correspondence between [film director Christopher Nolan’s] “Inception” and the similarly elaborate exercise in collective delusion and artful deception called the “American Dream.”
* * *
An idea that is “incepted” (that term appears to be a neologism of Nolan’s coinage) into a dreaming person’s subconscious mind can continue to grow and expand in the individual’s waking state.
* * *
“What is the most resilient parasite?” Cobb [Nolan’s protagonist in the film] muses at one point. “Bacteria? A virus? An intestinal worm? An idea. Resilient – highly contagious. Once an idea has taken hold of the brain it’s almost impossible to eradicate. An idea that is fully formed – fully understood – that sticks; right in there [gesturing at his head] somewhere.” As he had learned, this can have tragic – and even fatal – consequences.
This principle is more than just a clever dramatic device. It is made vivid and palpable as the Power Elite’s “dream architecture” collapses all around us.
The “inception” responsible for the current system of institutionalized delusion was the creation of the Federal Reserve System, the Regime’s official counterfeiting arm. The Fed infected the world economy with the idea that wealth can be created ex nihilo by fiat money “dream architects.”
In the real world, currency – gold and silver – were tangible substances with specific characteristics that made them valuable and impossible to counterfeit. The pseudo-world created by the Fed, however, is one in which the laws of economics appear to be suspended, meaning that “wealth” and “value” can be conjured into existence simply by emitting more paper, or doing the equivalent in the digital realm.
Creation of a central bank was necessary in order to permit the Regime’s “extractor class” to slip the shackles of hard currency. This eventually led to FDR’s confiscation of gold in 1933, and to the Nixon administration’s final repudiation of the gold standard in 1971.
In the real world, currency – gold and silver – were tangible substances with specific characteristics that made them valuable and impossible to counterfeit. The pseudo-world created by the Fed, however, is one in which the laws of economics appear to be suspended, meaning that “wealth” and “value” can be conjured into existence simply by emitting more paper, or doing the equivalent in the digital realm.
Creation of a central bank was necessary in order to permit the Regime’s “extractor class” to slip the shackles of hard currency. This eventually led to FDR’s confiscation of gold in 1933, and to the Nixon administration’s final repudiation of the gold standard in 1971.
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The root of most evil: paper money and the power to create it out of thin air. Among other things, that is how all wars are financed.
(Source: occu-pirates, via marketorder-deactivated20120326)
Strange bedfellows: the one on the right took us off the gold standard in 1971. It’s been downhill ever since but one helluva party for the Fed.
http://en.wikipedia.org/wiki/Gold_standard
Nixon and Brezhnev, 1972
Praying to God or to Mammon?
Bernanke outlines new approach to monetary policy!
(via dypalmios5h)
after me the deluge
(via dypalmios5h)
The Fed Twists, The Market Shouts
October 03, 2011 by Congressman Ron Paul
Last week the Federal Reserve began the second incarnation of “Operation Twist”, an attempt to drive down interest rates by purchasing long-term Treasury debt and selling short-term debt. This is just the latest instance of the central bank desperately flailing around doing something merely for the sake of doing something. Fed officials still do not understand— or admit— that the Fed itself caused the financial crisis by driving interest rates too low and relentlessly expanding the money supply. Thus, this latest action will just exacerbate the problem.. . .
The only way to return to a sound economy is for the Federal Reserve to cease and desist its monetary manipulation and allow interest rates to be determined by markets, just as the price of goods, services, and labor should be determined by markets. Everything the Fed is doing by pumping money into the economy benefits only the insolvent, too-big-to-fail banks. Low interest rates encourage consumers to take on more debt, meaning more profits for the banks issuing those loans. Purchasing mortgage-backed securities, as the Fed has done, keeps housing prices inflated, helping the banks who have non-performing mortgages on their books. However, it hurts consumers who continue to be priced out of the housing market. In order to maintain a decent standard of living for the American people and to restore the vibrancy of the U.S. economy, it is time to end the Fed.
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