Bill Still's Money Masters

[Toddsterpatriot]

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.

Yep! Every con job needs a mark.

Yeah, it's awful, they lent me money to buy a house, awful.

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.

Definition of COUNTERFEIT


1: made in imitation of something else with intent to deceive : forged <counterfeit money>

And here's your link, bozo.

Counterfeit - Definition and More from the Free Merriam-Webster Dictionary

 

[joewp]

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

Sweetie, I said 'necessary to repay the loans'.

Please either read with more comprehension, or stop building straw men.

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

Oh? You print money on your job? Where do you work, I'm sure the Secret Service might be interested in that operation.
If you just get a paycheck, guess where that money ultimately came from...
A loan.
Or did you think it grew on trees?

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

Who either borrowed it themselves, or got it from somebody ultimately borrowing it.
Or did you think it grew on trees?

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???

Yeah right, you're making money while the entire country is in depression.
Is that in the same book where you read that utilities don't have assets?

 

[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?

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????????

I do believe that was Toddster you were replying to.
Just for you, from now on, I'll type really slowly so you can keep up.

 

[joewp]

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?

Those notes were only deemed 'good' by the people because they thought they were backed by actual gold or silver coins in the bank's vault.
Once people found out they weren't, that's when bank runs happened.

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!!

Nah, they weren't currency any more than casino chips. Usable only at places that accepted them. If you tried to take local bank notes to another state, they'd laugh at you and demand silver or gold coin, or silver or gold certificates. Most banks wouldn't accept other bank's notes. The banks were smarter than you, they knew those notes were backed with virtually nothing, because their notes were the same.

Of course, that was the period when the 'lender of last resort' was a barrel of nails topped with a thin layer of gold coins, racing between banks just ahead of the bank auditor. I'm not saying it was a golden age, but it was better than now.

 

[joewp]

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.

Oh look! Another straw man! If you notice, I said the FF's made the mistake of not outlawing FRB, I want to outlaw it, which would make 3,000 different bank notes illegal.

Please, try to pay attention.

By the way, many suspect Morgan was behind the 'Panic of 1907'. Somebody started the rumor that the banks were insolvent. Since the dudes at Jekyll Island used the panic to scare the people into their trap, it's more than logical Morgan was involved in instigating the panic.

 

[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?

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.

You're amazing. You really think the government "forced" the banks to take bailouts? Did they twist their little arms or what?

 

[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.

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.

Apparently the word 'actively' is too big for you. I don't dispute they did what your anonymous source claims. But that's passive. I claimed they actively reduced the money supply, which my quote(properly sourced from Helicopter Ben himself) confirms.

Hey Toddster, I gotta ask you a question... Do you support a balanced Federal budget and reducing the national debt?
Oh, and if Eddie is still here after his faux pas of claiming utilities don't have assets (geez. what the hell does he think that truck fixing the power lines is???) that question is for him too.

 

[joewp]

Definition of COUNTERFEIT


1: made in imitation of something else with intent to deceive : forged <counterfeit money>

And here's your link, bozo.

Counterfeit - Definition and More from the Free Merriam-Webster Dictionary

Whoop-de-effin-do! You posted a link to a dictionary! Well, it's a start.

And I would say your definition is right on. You're apparently deceived by FRB into thinking it's real money and not some accounting slight of hand.

 

[Toddsterpatriot]

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:


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.

You're amazing. You really think the government "forced" the banks to take bailouts? Did they twist their little arms or what?

Wells Fargo didn't want the money.
Why would any bank take money? You think they didn't lose anything of value. LOL!

 

[Toddsterpatriot]

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.

Apparently the word 'actively' is too big for you. I don't dispute they did what your anonymous source claims. But that's passive. I claimed they actively reduced the money supply, which my quote(properly sourced from Helicopter Ben himself) confirms.

Hey Toddster, I gotta ask you a question... Do you support a balanced Federal budget and reducing the national debt?
Oh, and if Eddie is still here after his faux pas of claiming utilities don't have assets (geez. what the hell does he think that truck fixing the power lines is???) that question is for him too.

The Fed could have offset the decrease created by bank failures by engaging in bond purchases, but it did not.

See, the bank failures happened first. Yes, they also, later, tightened when they should have loosened.
You claimed that Bernanke said the Fed caused the Depression.
They certainly made it worse and longer, but they didn't cause the bank failures, they didn't stop the failures by buying bonds.

Do you support a balanced Federal budget and reducing the national debt?


You bet. The solution is not the Treasury printing and spending "interest free money".

 

[Toddsterpatriot]

Definition of COUNTERFEIT


1: made in imitation of something else with intent to deceive : forged <counterfeit money>

And here's your link, bozo.

Counterfeit - Definition and More from the Free Merriam-Webster Dictionary

Whoop-de-effin-do! You posted a link to a dictionary! Well, it's a start.

And I would say your definition is right on. You're apparently deceived by FRB into thinking it's real money and not some accounting slight of hand.

You poor girl. The government says it's real money.
That means it isn't counterfeit. Durr.

 

[EdwardBaiamonte]

Is that in the same book where you read that utilities don't have assets?

dear, big utilities have huge fixed assets while supermarkets don't. They have only tempoary inventory yet the ROI (return on investment) is the same in each industry because capitalism balances out the return.

Does the liberal get it now??

 

[EdwardBaiamonte]

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???

Yeah right, you're making money while the entire country is in depression.

too stupid!!! there is no depression. 20 million businesses will go bankrupt each year in the creative destruction of capitalism. As money from the failed businesses that would have paid of loans flows into the new replacement businesses there is money to repay the interest on the new loans without printing new money.

Now do you understand the basics of how money works???

 

[EdwardBaiamonte]

Definition of COUNTERFEIT


1: made in imitation of something else with intent to deceive : forged <counterfeit money>

And here's your link, bozo.

Counterfeit - Definition and More from the Free Merriam-Webster Dictionary

Whoop-de-effin-do! You posted a link to a dictionary! Well, it's a start.

And I would say your definition is right on. You're apparently deceived by FRB into thinking it's real money and not some accounting slight of hand.

dear its obviously very very real if it will buy everything and the government does not print enough of it to devalue it!!

How does such a simple concept get you so confused?????

 

[joewp]

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

Sorry, I missed this post before.

You have something against saving money for what you want? You think its better to pay 4-5% for a car loan for 3-4 years, or just save up a couple of years and buy it outright?

The little guy sure does benefit. My parents lived that way and prospered. Most of their friends and relatives did it that way too.

I guess you'd rather waste 150% more money on interest instead of waiting and buying a much better house. What a weirdo!

 

[joewp]

The Fed could have offset the decrease created by bank failures by engaging in bond purchases, but it did not.

See, the bank failures happened first. Yes, they also, later, tightened when they should have loosened.
You claimed that Bernanke said the Fed caused the Depression.
They certainly made it worse and longer, but they didn't cause the bank failures, they didn't stop the failures by buying bonds.

You should actually read the stuff I link. It would stop you from making a fool of yourself.

The first episode analyzed by Friedman and Schwartz was the deliberate tightening of monetary policy that began in the spring of 1928 and continued until the stock market crash of October 1929.

They were deliberately tightening even before the stack market crash and bank failures. Reading on...

This policy tightening occurred in conditions that we would not today normally consider conducive to tighter money: As Friedman and Schwartz noted, the business-cycle trough had only just been reached at the end of 1927 (the NBER's official trough date is November 1927), commodity prices were declining, and there was not the slightest hint of inflation. Why then did the Federal Reserve tighten in early 1928? A principal reason was the Board's ongoing concern about speculation on Wall Street. The Federal Reserve had long made the distinction between "productive" and "speculative" uses of credit, and the rising stock market and the associated increases in bank loans to brokers were thus a major concern.

And since there were margin loans of up to 90% of the stock's value, when the market crashed, the banks failed.

It's so funny how everything you seem to believe is contradicted by the facts, isn't it?

Do you support a balanced Federal budget and reducing the national debt?


You bet. The solution is not the Treasury printing and spending "interest free money".

Oh? Then what's your solution? Cutting spending and raising taxes? Or are you just for cutting spending?

Gee, since you know about the money multiplier, and government debt is the basis for all the money multiplying going on, what you you think happens when the government reduces debt? Can you say "money supply contraction", also known as deflation, also known as depression, which is exactly what the Fed did from 1928 to 1932.

The evidence is there, Toddster. All you need to do is see it.

By the way, issuing US Notes to pay off the national debt, then replacing it with commodity backed money and eliminating FRB would eliminate the debt and put the country of a stable course, with no more "business cycle".

And best of all, no more leeches sucking 1-10% of the productive labor simply because they're allowed to create the money supply.

What the hell is wrong with that scenario?

 

[joewp]

Definition of COUNTERFEIT


1: made in imitation of something else with intent to deceive : forged <counterfeit money>

And here's your link, bozo.

Counterfeit - Definition and More from the Free Merriam-Webster Dictionary

Whoop-de-effin-do! You posted a link to a dictionary! Well, it's a start.

And I would say your definition is right on. You're apparently deceived by FRB into thinking it's real money and not some accounting slight of hand.

You poor girl. The government says it's real money.
That means it isn't counterfeit. Durr.

Since when do you agree with everything the government says?

 

[joewp]

Is that in the same book where you read that utilities don't have assets?

dear, big utilities have huge fixed assets while supermarkets don't. They have only tempoary inventory yet the ROI (return on investment) is the same in each industry because capitalism balances out the return.

Does the liberal get it now??

What the hell are you talking about? Don't those big stores count as permanent assets? Many supermarkets have fleets of trucks, all have shelves and fixtures, lots of them own the strip malls they inhabit, and AR and cash.

You too should read the links I post, just to educate yourself.

For your convenience...

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.

Just so you know, Kroger's NET PROPERTY PLANT AND EQUIPMENT is $14.4 billion, or 60% of their assets. Con Ed's $22.4 billion, or 56% of their assets, actually less than Kroger's.

Maybe you should look this stuff up before you 'remove all doubt', as Ol' Abe says. Maybe you should master reading financial statements before you make stupid comments to someone who's been doing it for 30 years, huh?
And to educate you on the nuances of financial analysis, return on invested capital has no relation to total assets. That ratio is called ROA, or return on assets.

See, I knew you were talking out of your nether regions the second you said that. But thanks, I got a lot of laughs from friends relating your comment to them.

But keep digging that hole, fairy princess. I'm enjoying every minute of it!

 

[joewp]

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???

Yeah right, you're making money while the entire country is in depression.

too stupid!!! there is no depression. 20 million businesses will go bankrupt each year in the creative destruction of capitalism. As money from the failed businesses that would have paid of loans flows into the new replacement businesses there is money to repay the interest on the new loans without printing new money.

Now do you understand the basics of how money works???

This coming from someone who thinks supermarkets don't have fixed assets? I'm not impressed. As a matter of fact, I'm entertained. I've always found persistent stupidity entertaining. I'm a big Three Stooges fan, ya know. So keep it up, Larry.

If you're dense enough to think supermarkets don't have massive fixed assets, who the hell would listen to you about basic money supply mechanics?

Do you even realize that chapter 7 bankruptcy is a liquidation process, in which the assets are sold off to repay the senior creditors, of which loans are second in line after government entities? And usually the creditors get most of their money back, and usually they're the banks.

Please, give me more 'argument' with holes big enough to drive a Shoprite truck through! This is fun!

 

[joewp]

dear its obviously very very real if it will buy everything and the government does not print enough of it to devalue it!!

How does such a simple concept get you so confused?????

Gee Fairy Princess, where the hell did you get the idea that the government prints the money? 95-97% of money isn't printed, it's in the form of bank debt. And the government does print the physical cash, but it's sold to the Fed at cost (a few cents per piece of paper). So the Fed even gets the seniorage. You do know what that means, right?

Oh wait... I forgot you think supermarkets don't have fixed assets. You probably don't know. Google it.