Posted tagged ‘Federal Reserve System’

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Federal Reserve Policy Makers Have An Incestuous Intellectual Relationship With Each Other.

January 21, 2013
The Federal Reserve: The Biggest Scam In History

The Federal Reserve: The Biggest Scam In History (Photo credit: CityGypsy11)

This article, “A Bold Dissenter At The Fed, Hoping His Doubts Are Wrong”, by Binyamin Applebaum in The NY Times, is an example of , what Thomas Sowell calls, “credentialed ignorance”. He is being rather nice because I would call it an example of intellectual inbreeding. These Federal Reserve policy makers have earned their economic credentials from some of the “best” Universities, and we should stand in awe of them. Unfortunately I don’t give my respect to people with “status” that easily. I think respect is something that is earned, and just because they have a particular position or status in the political or intellectual world, doesn’t mean they should get my respect. What I have observed is that these people live in a continual feed back loop. They all think (more…)

Categories: Econ. 201, Government and Politics, Hall of Fame
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Murray Rothbard: When Keynesianism Collapsed! Economists Are Still Trying To Preform CPR On This Corpse.

January 16, 2013

One of the great communicators of complex economic principles is Austrian Economist Murray Rothbard. You won’t find a better step by step explanation of economics than his book Man Economy and State.

I got this video from EconomicPolicyJournal.com.

For more analysis read this article titled, “The Many Collapses of Keynesianism”, by Lew Rockwell at Mises.org.

If you are wondering where inflation is today read this article titled, “Where Is The Inflation” by Mark Thornton at Mises.org.

Inflation doesn’t appear magically for no reason, and then the Federal Reserve rides in on its white horse and saves us from this beast. Inflation is caused by expanding the supply of money. The beast of inflation is caused by the savior on the white horse (more…)

Categories: Econ. 201
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At What Point Will It Be Impossible To Fund The Federal Government’s Debt .

December 13, 2012
Payday Loans Neon Sign

Payday Loans Neon Sign (Photo credit: rinkjustice)

These three articles show the future of our Government debt bomb. “Presenting The Fund-Tastic Four”, at zerohedge.com, “Fed Seen As Pumping Up Assets to $4 Trillion In New Buying”, at Bloomberg Businessweek, and “Only In California: School Owes $1 Billion On A $100 Million ‘PayDay’ Loan”, also at zerohedge.com. Use these as a crystal ball to see the direction of the Government’s future ability to fund itself.

The funding of Government, the Governments attempts to stimulate the economy through spending, and the Federal Reserve’s attempt to steer the economy by counterfeiting and injecting the printed money into the economy through their “open market operations”, has brought us to a level of debt that (more…)

Categories: Econ. 201, Government and Politics
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Currency Debasement Unleashes More Then Just The Economic Forces Of Correction.

October 20, 2012
The execution of Robespierre and his supporter...

The execution of Robespierre and his supporters on 28 July 1794 (Photo credit: Wikipedia)

This article at Zero Hedge, “From Currency Debasement To Social Collapse“, talks about processes that are put into play when the currency is debased. The inevitable destruction of the present capital structure, leading to a loss of wealth, is one process that more of us are starting to understand because we have been operating inside of this counterfeiting reality since the mid 90’s. The tech bubble and the housing bubble  destroyed capital which was misallocated during these bubbles. The present financial and asset bubble will destroy more misallocated capital when the Fed has to pull out the expansionary rug from underneath it.

It’s uncomfortable to allow a passing thought about social collapse to enter our mind. To actually look at some present and historical examples of debasement and collapse (more…)

Categories: Econ. 201, Government and Politics
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Federal Reserve Money Injections Since 2000 Haven’t Worked as Advertised.

September 27, 2012
Plot of the US Federal Reserve Open Market Pur...

Plot of the US Federal Reserve Open Market Purchases of Repo Mortgage Backed Securities (MBS), 2000–2007; based on US government data from http://www.newyorkfed.org/markets/omo/dmm/historical/tomo/search.cfm (Photo credit: Wikipedia).

In an article by Phoenix Capital Research on ZeroHedge.com, it lists all the money injections by the Federal Reserve and the Government from 2008 through 2012. One way the Fed pushes money into the economy is by purchasing Mortgage Backed Securities from the entities that hold them, namely banks. The mortgage is now on the balance sheet of the Fed, and the money is now held, as reserve currency (numbers electronically created), on account at the Fed. The bank can now loan ten dollars for every one dollar held as reserves. The reason they can do this is because we operate under a ten percent fractional reserve banking system which means, (more…)

Categories: Econ. 201, Government and Politics
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