Bill Still's Money Masters

[Toddsterpatriot]

1)except there is no constituency at all to abolish the Fed. No one would take the chance in a million years.

Oh, I guess you missed Ron's Paul's two campaigns for president. Where the heck do you think he got his popularity from, huh? Could it be his book "End the Fed"?

Only someone in the mass media (or brainwashed by it) would say there's no constituency for eliminating the Fed.

2) before the Fed we had 3000 different currencies and back room deals to save the economy with JP Morgan!!

Um, there was only one national currency, gold and silver coins. The fact that the founders neglected to outlaw FRB and banks loaned more than they had and substituted private bank notes doesn't mean they're currency. Anyone, anytime could refused to accept a bank's note for payment and demand gold or silver.

3) to have instant sound money which many do support all we need to do is change the Fed's mandate to 0% inflation.

I guess it's over your head that when money is created with interest attached, there has to be inflation, otherwise all loans would eventually be unpayable because there would be no money to pay the interest.

Or is the simple fact that $100 created as a loan requires $105 paid back with the interest beyond your comprehension? Where the hell does the interest come from?

Huh? Please tell me, O wise one.

Or is the simple fact that $100 created as a loan requires $105 paid back with the interest beyond your comprehension? Where the hell does the interest come from?

LOL! I borrowed multiples of my annual income to buy my house, where does the interest come from?
My paycheck, dummy, twice a month.

 

[joewp]

you may not have noticed they have been given new powers to do anything they want under section 13(3)

And you support these nazi-like dictators? Were your ancestors Tories too?

 

[Toddsterpatriot]

In your improved banking system, I put my $100 in a CD and "the bank now creates and loans $90 (or more) and loans it to another guy who simply purchases 90%(or more) of the fruit of your labor without having to do anything to deserve it"

How is that better than the way it works now?

Look, if you're going to skip over my posts, especially the one where I explained what system I thought would be good, you might as well find another thread.

What I described isn't fractional reserve banking, it's investment brokerage, and there's no money creation involved. It would be the same coin loaned out as invested.

Get your head out of your TV for a few minutes and think.

What I described isn't fractional reserve banking, it's investment brokerage, and there's no money creation involved.

But there is another guy who simply purchases 90%(or more) of the fruit of my labor without having to do anything to deserve it. You said it yourself.

 

[joewp]

Now you know why a super market and big utility have the same ROI even when one has assets and the other doesn't !

KROGER CO (KR:New York): Financial Statements - Businessweek
Total assets: 23,476,000,000
ED Balance Sheet | Consolidated Edison, Inc. Commo Stock - Yahoo! Finance
Total assets: 39,214,000,000

Gee, I'm confused. Which one did you say has no assets?

"Better to remain silent and be thought a fool than to speak and to remove all doubt." — ABRAHAM LINCOLN.

I can't believe I'm discussing FRB and the Fed with someone who doesn't even have a grasp of simple accounting. I have book for you to read instead of wasting time posting here. When you're done with that, please come back.
It's called Security Analysis by Graham and Dodd. Some guy who's the chairman of a failed textile company read it, and actually was mentored by Ben Graham and seems to have done well for himself. Another good one by Graham is The Intelligent Investor.

Maybe you'll learn a thing or two before you spout off inanities again like the one above. LOL, or almost anything you've posted in this thread.

By the way, don't feel too bad. Toodster is at about the same level of understanding of economics and finance as you. Which is fifth-sub-basement level. And only because they never built a sixth sub-basement.

 

[joewp]

Or is the simple fact that $100 created as a loan requires $105 paid back with the interest beyond your comprehension? Where the hell does the interest come from?

LOL! I borrowed multiples of my annual income to buy my house, where does the interest come from?
My paycheck, dummy, twice a month.

Well toddster, I have to give you credit for having bi-monthly loan. You save a lot of interest that way and pay off the loan faster. Good job.

But you didn't create that money, did you? Someone paid you from other money. Dig a little deeper and figure out where that money came from. here's a hint: Someone borrowed it. From a bank. At interest.

Or, if you think that money in your paycheck originated elsewhere, please enlighten me!
I'm not holding my breath.
I have to keep in mind you and Edward are on the same level of economic understanding. I hear they're starting to build te sixth sub-basement just for you two guys.

 

[Toddsterpatriot]

Or is the simple fact that $100 created as a loan requires $105 paid back with the interest beyond your comprehension? Where the hell does the interest come from?

LOL! I borrowed multiples of my annual income to buy my house, where does the interest come from?
My paycheck, dummy, twice a month.

Well toddster, I have to give you credit for having bi-monthly loan. You save a lot of interest that way and pay off the loan faster. Good job.

But you didn't create that money, did you? Someone paid you from other money. Dig a little deeper and figure out where that money came from. here's a hint: Someone borrowed it. From a bank. At interest.

Or, if you think that money in your paycheck originated elsewhere, please enlighten me!
I'm not holding my breath.
I have to keep in mind you and Edward are on the same level of economic understanding. I hear they're starting to build te sixth sub-basement just for you two guys.

But you didn't create that money, did you?

I created money when I took out my mortgage. So what?

 

[joewp]

In your improved banking system, I put my $100 in a CD and "the bank now creates and loans $90 (or more) and loans it to another guy who simply purchases 90%(or more) of the fruit of your labor without having to do anything to deserve it"

How is that better than the way it works now?

Look, if you're going to skip over my posts, especially the one where I explained what system I thought would be good, you might as well find another thread.

What I described isn't fractional reserve banking, it's investment brokerage, and there's no money creation involved. It would be the same coin loaned out as invested.

Get your head out of your TV for a few minutes and think.

What I described isn't fractional reserve banking, it's investment brokerage, and there's no money creation involved.

But there is another guy who simply purchases 90%(or more) of the fruit of my labor without having to do anything to deserve it. You said it yourself.

The big difference is that he's actually borrowing your money, the broker is only serving to put you two together, and since you're able to shop around for the best cut of the interest, you have the major claim on his future labor. And the main thing here is, there's no central bank dictating the interest rate, it's market driven. Unlike today when the Fed artificially raises or lowers rates to suit its own purposes.

And don't kid yourself. In that scenario, borrowing and lending would be a tiny portion of money transactions. Most people would save up for things instead of borrowing, because interest rates would be much higher than they are today.

 

[Toddsterpatriot]

Now you know why a super market and big utility have the same ROI even when one has assets and the other doesn't !

KROGER CO (KR:New York): Financial Statements - Businessweek
Total assets: 23,476,000,000
ED Balance Sheet | Consolidated Edison, Inc. Commo Stock - Yahoo! Finance
Total assets: 39,214,000,000

Gee, I'm confused. Which one did you say has no assets?

"Better to remain silent and be thought a fool than to speak and to remove all doubt." — ABRAHAM LINCOLN.

I can't believe I'm discussing FRB and the Fed with someone who doesn't even have a grasp of simple accounting. I have book for you to read instead of wasting time posting here. When you're done with that, please come back.
It's called Security Analysis by Graham and Dodd. Some guy who's the chairman of a failed textile company read it, and actually was mentored by Ben Graham and seems to have done well for himself. Another good one by Graham is The Intelligent Investor.

Maybe you'll learn a thing or two before you spout off inanities again like the one above. LOL, or almost anything you've posted in this thread.

By the way, don't feel too bad. Toodster is at about the same level of understanding of economics and finance as you. Which is fifth-sub-basement level. And only because they never built a sixth sub-basement.

Still defending this BS?

Page 27, "When a borrower cannot repay and there are no assets which can be taken to compensate, the bank must write off that loan as a loss. However, since most of the money originally was created out of nothing and cost the bank nothing except bookkeeping overhead, there is little of tangible value that is actually lost.

LOL!

 

[joewp]

I created money when I took out my mortgage. So what?

Yep, that comment is on the same level as claiming supermarkets and/or utilities don't have assets.

You didn't create the money, the bank did and is charging you interest for it.

If you did create the money, you would be in jail, cause that's called counterfeiting.

Another reason to abolish the Fed and FRB. They're allowed to counterfeit money and we're not. IMHO, nobody should be allowed to counterfeit money.

 

[Toddsterpatriot]

Look, if you're going to skip over my posts, especially the one where I explained what system I thought would be good, you might as well find another thread.

What I described isn't fractional reserve banking, it's investment brokerage, and there's no money creation involved. It would be the same coin loaned out as invested.

Get your head out of your TV for a few minutes and think.

What I described isn't fractional reserve banking, it's investment brokerage, and there's no money creation involved.

But there is another guy who simply purchases 90%(or more) of the fruit of my labor without having to do anything to deserve it. You said it yourself.

The big difference is that he's actually borrowing your money, the broker is only serving to put you two together, and since you're able to shop around for the best cut of the interest, you have the major claim on his future labor. And the main thing here is, there's no central bank dictating the interest rate, it's market driven. Unlike today when the Fed artificially raises or lowers rates to suit its own purposes.

And don't kid yourself. In that scenario, borrowing and lending would be a tiny portion of money transactions. Most people would save up for things instead of borrowing, because interest rates would be much higher than they are today.

Excellent! Much higher savings levels, much less borrowing and much higher interest rates.
A sure fire way for the little guy to benefit.

 

[Toddsterpatriot]

I created money when I took out my mortgage. So what?

Yep, that comment is on the same level as claiming supermarkets and/or utilities don't have assets.

You didn't create the money, the bank did and is charging you interest for it.

If you did create the money, you would be in jail, cause that's called counterfeiting.

Another reason to abolish the Fed and FRB. They're allowed to counterfeit money and we're not. IMHO, nobody should be allowed to counterfeit money.

You didn't create the money, the bank did

They couldn't do it without me.

and is charging you interest for it.

I have to pay interest? You mean I'm not "another guy who simply purchases 90%(or more) of the fruit of your labor without having to do anything to deserve it"?

If you did create the money, you would be in jail

And here I thought you understood the money multiplier.......

Another reason to abolish the Fed and FRB. They're allowed to counterfeit money

Well, if you're allowed, it really isn't counterfeiting, is it?

 

[joewp]

Still defending this BS?

Page 27, "When a borrower cannot repay and there are no assets which can be taken to compensate, the bank must write off that loan as a loss. However, since most of the money originally was created out of nothing and cost the bank nothing except bookkeeping overhead, there is little of tangible value that is actually lost.

LOL!

Of course, my post had nothing to do with that subject, but yeah, I'm defending it. All it is is a bookkeeping entry. There is no inherent value to FRNs, even the Fed admits it.
Once again, from Modern Money Mechanics:

In the United States neither paper currency nor deposits have value as commodities.
Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do
have some intrinsic value as metal, but generally far less than their face value.

But I'm quite open-minded. Show me something that says he's wrong, please. And not just your obviously uninformed opinion, because you're out of your league. You showed that when you didn't jump all over Ed there when he claimed utilities don't have assets.

My dog! The man said a publicly traded company doesn't have assets! Only a complete idiot would say that. That would mean not only is there no shareholder's equity in the company, but the company would be completely bankrupt and out of business.

And you, the 'genius', didn't even call him on that stupidity? Shame on you.
I'll bet Ed never even saw a balance sheet, and you probably never even heard of the concept.

Oh well, instead of getting informed, rational discussion that I might actually learn something from, all I'm getting is a couple of guys who think utilities don't have assets. Sheesh, where can you get good discussion these days?

 

[joewp]

I see why you have trouble with this subject. Your knowledge of history is deficient. They didn't just "not boost the money supply", they actively contracted it by 1/3rd.

Wrong.

FDR was inaugurated on March 4, 1933, and two days later he declared a “bank holiday,” allowing banks legally to refuse withdrawals by depositors; it lasted ten days. With his famous phrase, “The only thing we have to fear is fear itself,” he intended to dissuade depositors from running on their banks, but by then it was far too late. In 1929 there were a total of 25,000 banks in the United States. As the bank holiday ended, only 12,000 banks were operating (though another 3,000 were to reopen eventually). The effect on the money supply was equally dramatic. From 1929 to 1933 it fell by 27 percent—for every $3 in circulation in 1929 (whether in currency or deposits), only $2 was left in 1933. Such a drastic fall in the money supply inevitably led to a massive decrease in aggregate demand. People’s savings were wiped out so their natural response was to save more to compensate, leading to plummeting consumption spending. Naturally, total economic output also fell dramatically: GDP was 29 percent lower in 1933 than in 1929. And the unemployment rate hit its historic high of 25 percent in 1933.

Friedman and Schwartz argued that all this was due to the Fed’s failure to carry out its assigned role as the lender of last resort. Rather than providing liquidity through loans, the Fed just watched as banks dropped like flies, seemingly oblivious to the effect this would have on the money supply. The Fed could have offset the decrease created by bank failures by engaging in bond purchases, but it did not. As Milton and Rose Friedman wrote in Free to Choose:

The [Federal Reserve] System could have provided a far better solution by engaging in large-scale open market purchases of government bonds. That would have provided banks with additional cash to meet the demands of their depositors. That would have ended—or at least sharply reduced—the stream of bank failures and have prevented the public’s attempted conversion of deposits into currency from reducing the quantity of money. Unfortunately, the Fed’s actions were hesitant and small. In the main, it stood idly by and let the crisis take its course—a pattern of behavior that was to be repeated again and again during the next two years.

That's funny. You don't even know how to post a link. But it doesn't matter. Your anonymous source left out an important fact that Benanke said in the speech I have linked. Ben quoting Friedman and Schwatrz: "On October 9 [1931], the Reserve Bank of New York raised its rediscount rate to 2-1/2 per cent, and on October 16, to 3-1/2 per cent--the sharpest rise within so brief a period in the whole history of the System, before or since (p. 317)."

So my characterization of the Fed actively reducing the money supply stands, and your unnamed source is impeached.

Not even a good try, sorry.

 

[joewp]

You didn't create the money, the bank did

They couldn't do it without me.

Yep! Every con job needs a mark.

and is charging you interest for it.

I have to pay interest? You mean I'm not "another guy who simply purchases 90%(or more) of the fruit of your labor without having to do anything to deserve it"?

Actually, you are both.

If you did create the money, you would be in jail

And here I thought you understood the money multiplier.......

I do. You don't.

Another reason to abolish the Fed and FRB. They're allowed to counterfeit money

Well, if you're allowed, it really isn't counterfeiting, is it?

Nope, it still is. Even though a cop is technically allowed to shoot you dead, it's still homicide. Even if it's legal.

There's an old saying: Just because it's legal doesn't make it right.

 

[EdwardBaiamonte]

I guess it's over your head that when money is created with interest attached, there has to be inflation, otherwise all loans would eventually be unpayable because there would be no money to pay the interest.

Or is the simple fact that $100 created as a loan requires $105 paid back with the interest beyond your comprehension? Where the hell does the interest come from?

Huh? Please tell me, O wise one.

dear,

1) it should be obvious to you that we've had long periods of deflation
to demonstrate that inflation is not necessary

2) if I borrow 10,000 to buy a car the interest comes from my job

3) if I borrow 10,000 to start a business the interest comes from my customers

4) since the supply of money is constant the money that goes to my new business can't go to the old businesses I have displaced so there is, in effect, new money in the system for me with which I can pay my loan interest, plus, many of the old businesses will default on their loans with the money instead going to me for my loan and other expenses.

Over your head???

 

[EdwardBaiamonte]

you may not have noticed they have been given new powers to do anything they want under section 13(3)

And you support these nazi-like dictators? Were your ancestors Tories too?

dear, you said the Fed didn't have the power??? Now you admit you were wrong and switch the subject to whether I suppoort the powers.

Slow????????

 

[EdwardBaiamonte]

before the Fed we had 3000 different currencies and back room deals to save the economy with JP Morgan!!

Um, there was only one national currency, gold and silver coins.

too stupid!! Paper was the most common currency and there were 3000 different kinds from 1000's of different banks!! THe Europeans only had 10 and they switched to the Euro. Get it now?

The fact that the founders neglected to outlaw FRB and banks loaned more than they had and substituted private bank notes doesn't mean they're currency.

according to the definition of the word currency it does. Sorry!!

This use is synonymous with banknotes, or (sometimes) with banknotes plus coins, meaning the physical tokens used for money by a government.[1][2]
A much more general use of the word currency is anything that is used in any circumstances, as a medium of exchange. In this use, "currency" is a synonym for the concept of money.[3]

 

[EdwardBaiamonte]

Another reason to abolish the Fed and FRB. They're allowed to counterfeit money

if you don't like inflation all we need to do is make it illegal. We don't need to abolish the Fed and absurdly go back to 3000 different curriencies and JP Morgan's back room deals to prevent Depressions. Bernanke is breath of fresh air compared to those days.

 

[Toddsterpatriot]

Still defending this BS?

Page 27, "When a borrower cannot repay and there are no assets which can be taken to compensate, the bank must write off that loan as a loss. However, since most of the money originally was created out of nothing and cost the bank nothing except bookkeeping overhead, there is little of tangible value that is actually lost.

LOL!

Of course, my post had nothing to do with that subject, but yeah, I'm defending it. All it is is a bookkeeping entry. There is no inherent value to FRNs, even the Fed admits it.
Once again, from Modern Money Mechanics:

In the United States neither paper currency nor deposits have value as commodities.
Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do
have some intrinsic value as metal, but generally far less than their face value.

But I'm quite open-minded. Show me something that says he's wrong, please. And not just your obviously uninformed opinion, because you're out of your league. You showed that when you didn't jump all over Ed there when he claimed utilities don't have assets.

My dog! The man said a publicly traded company doesn't have assets! Only a complete idiot would say that. That would mean not only is there no shareholder's equity in the company, but the company would be completely bankrupt and out of business.

And you, the 'genius', didn't even call him on that stupidity? Shame on you.
I'll bet Ed never even saw a balance sheet, and you probably never even heard of the concept.

Oh well, instead of getting informed, rational discussion that I might actually learn something from, all I'm getting is a couple of guys who think utilities don't have assets. Sheesh, where can you get good discussion these days?

Of course, my post had nothing to do with that subject, but yeah, I'm defending it. All it is is a bookkeeping entry.

I can't believe you're defending that idiocy.
Banks wrote off tens of billions in bad loans, why did the government force them to borrow money (TARP) and raise additional capital by selling stock?
You could have told them the banks didn't lose anything of tangible value. LOL!

And not just your obviously uninformed opinion, because you're out of your league.

You poor girl.

 

[Toddsterpatriot]

I see why you have trouble with this subject. Your knowledge of history is deficient. They didn't just "not boost the money supply", they actively contracted it by 1/3rd.

Wrong.

FDR was inaugurated on March 4, 1933, and two days later he declared a “bank holiday,” allowing banks legally to refuse withdrawals by depositors; it lasted ten days. With his famous phrase, “The only thing we have to fear is fear itself,” he intended to dissuade depositors from running on their banks, but by then it was far too late. In 1929 there were a total of 25,000 banks in the United States. As the bank holiday ended, only 12,000 banks were operating (though another 3,000 were to reopen eventually). The effect on the money supply was equally dramatic. From 1929 to 1933 it fell by 27 percent—for every $3 in circulation in 1929 (whether in currency or deposits), only $2 was left in 1933. Such a drastic fall in the money supply inevitably led to a massive decrease in aggregate demand. People’s savings were wiped out so their natural response was to save more to compensate, leading to plummeting consumption spending. Naturally, total economic output also fell dramatically: GDP was 29 percent lower in 1933 than in 1929. And the unemployment rate hit its historic high of 25 percent in 1933.

Friedman and Schwartz argued that all this was due to the Fed’s failure to carry out its assigned role as the lender of last resort. Rather than providing liquidity through loans, the Fed just watched as banks dropped like flies, seemingly oblivious to the effect this would have on the money supply. The Fed could have offset the decrease created by bank failures by engaging in bond purchases, but it did not. As Milton and Rose Friedman wrote in Free to Choose:

The [Federal Reserve] System could have provided a far better solution by engaging in large-scale open market purchases of government bonds. That would have provided banks with additional cash to meet the demands of their depositors. That would have ended—or at least sharply reduced—the stream of bank failures and have prevented the public’s attempted conversion of deposits into currency from reducing the quantity of money. Unfortunately, the Fed’s actions were hesitant and small. In the main, it stood idly by and let the crisis take its course—a pattern of behavior that was to be repeated again and again during the next two years.

That's funny. You don't even know how to post a link. But it doesn't matter. Your anonymous source left out an important fact that Benanke said in the speech I have linked. Ben quoting Friedman and Schwatrz: "On October 9 [1931], the Reserve Bank of New York raised its rediscount rate to 2-1/2 per cent, and on October 16, to 3-1/2 per cent--the sharpest rise within so brief a period in the whole history of the System, before or since (p. 317)."

So my characterization of the Fed actively reducing the money supply stands, and your unnamed source is impeached.

Not even a good try, sorry.

Forget how to read?

"Friedman and Schwartz argued that all this was due to the Fed’s failure to carry out its assigned role as the lender of last resort. Rather than providing liquidity through loans, the Fed just watched as banks dropped like flies, seemingly oblivious to the effect this would have on the money supply. The Fed could have offset the decrease created by bank failures by engaging in bond purchases, but it did not. As Milton and Rose Friedman wrote in Free to Choose:

The [Federal Reserve] System could have provided a far better solution by engaging in large-scale open market purchases of government bonds. That would have provided banks with additional cash to meet the demands of their depositors. That would have ended—or at least sharply reduced—the stream of bank failures and have prevented the public’s attempted conversion of deposits into currency from reducing the quantity of money"

You see, the drop was caused by bank failures. The Fed did not counteract the drop.

Let me know if any of the other words are too big for you, I'll be glad to help you try to understand.