Originally posted by uzlessWell this is grist of the conspiracy mill that two presidents were killed because they opposed centralised banking. Lincoln wanted to print greenbacks and Kennedy issued Executive Order 11110. Read all about it. Google is your friend.
I have to admit I had no idea kennedy did this. If I understand it, and correct me if I am wrong, was Kennedy trying to issue currency backed by silver?
Originally posted by no1marauderWrong.
The fact that banks, because of the breakdown of the financial system, are at present keeping their reserves far higher than normal as compared to new loans and by doing that are worsening the recession is a pretty good refutation of your claim that the economy would function better with a higher reserve requirement. You say:
I think rai ...[text shortened]... eserve requirements is a simple solution.
What is it a "simple solution" for?
It is a question of how much reserve requirements are raised and under what conditions. I suggested 20-25%. Banks are keep reserves much higher than that. That is why the money supply is contracting. Contraction of the money supply causes depressions.
The best argument against raising rr is that contraction of the money supply. However, this can be countered by increasing the money supply. Guys like Milton Friedman suggest buying back bonds with US notes while raising reserve requirements. This would keep the money supply at acceptable levels.
I suggest stopping at 25% rr. 25% is an improvement compared to the reserve levels they are keeping right now. Right now they are over 50%
Originally posted by no1marauderOperations of the bank? That tells me nothing.
Perhaps this will help: http://www.federalreserve.gov/Pubs/frseries/frseri2.htm
The Federal Reserve consists of five banks. Banks have (or at least used to have) funds. So the Federal Reserve Bank buys the bonds. The money to buy the bonds comes from the operations of the bank. According to the site:
Finally, the Committee must rea ...[text shortened]... stability and sustainable growth in economic activity.
I hope that helps.
Unless you can give me something more specific it does not help at all.
Where does the money come from?
Originally posted by uzlessYes.
I have to admit I had no idea kennedy did this. If I understand it, and correct me if I am wrong, was Kennedy trying to issue currency backed by silver?
Kennedy was giving the Fed competition by issuing a silver backed US note.
There is more info on this link.
http://en.wikipedia.org/wiki/Silver_standard
You might want to look into colonial scrip as well. The British Empire outlawed colonial scrip and demanded tax payments in gold and silver. This caused the economic conditions that led to the revolutionary war. This is another example of suppressed history the corp. news media does not want you to know.
By printing colonial scrip, there was no interest to pay to the British.
Originally posted by uzlessGood idea uzless.
Why don't you just explain your answer more thoroughly? Use Facts. Without facts, your statements are just opinions. Your opinions may be correct, but someone confident in their answer would use facts.
Here is your chance. Show Metal why he and the quote are wrong.
EDIT: to be clear, i am neither attacking nor defending any side of this. Just looking for clarity. All I've seen is opinions on both sides
Somebody show me why I am wrong. I want to be proven wrong. I am secretly rooting for the other side.
I don't want to believe the world is going to hell in a hand basket. Help me by proving me wrong.
Originally posted by Metal BrainSeriously are you are imbecile? Are you unaware that banks are a for profit enterprise and that their operations produce profit? What part of reading is hardest for you?
Operations of the bank? That tells me nothing.
Unless you can give me something more specific it does not help at all.
Where does the money come from?
The information on the Federal Reserve page is quite specific. I suggest you read it again, slowly this time. It answers your questions in a specific manner.
Originally posted by Metal BrainLMAO! You've been complaining about banks having low reserve requirements and now you're complaining about them having high reserves? Which is the "problem" you are trying to solve? No matter what the reserve requirement is, banks will be free to keep their reserves higher than it if they so choose. You do understand what a "reserve requirement" is?
Wrong.
It is a question of how much reserve requirements are raised and under what conditions. I suggested 20-25%. Banks are keep reserves much higher than that. That is why the money supply is contracting. Contraction of the money supply causes depressions.
The best argument against raising rr is that contraction of the money supply. However, thi ...[text shortened]... provement compared to the reserve levels they are keeping right now. Right now they are over 50%
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Originally posted by PalynkaI had hoped there was a level of market activity, one where the greatest number of competitors thrived that was well understood across all sorts of market conditions regardless of the stage through a particular business cycle, that would sort of give people like the Fed a very clear idea of the sort of optimum umbrella/envelope/flow regime for which the greatest number of participants would benefit. My assumption was that they had access to data and modelling that would tell them pretty much all they needed to know, and I wondered if the state variables involved were things like the inflation rate, the CPI, the Dow, the cash rate, what? And amongst all that how important is M2?? money and why isn't it reported any more? Or is that M1?
This seems wrong, but I'm not sure I'm following. The state variables used in (modern) models are not distances from a benchmark ideal, but the actual values themselves. There is no "ideal" value that is invariant to policy.
Given the amount of economic theory around and the modelling done across the sciences and applied sciences, I would have thought that the *Money Masters* to coin a phrase would actually have a very good idea how all the levers work. If this is bad conjecture based on teleological thinking becuase of a preconceived notion of conspiracy, the alternative scenario, that of the very best and brightest minds always being a few minutes too late in terms of making the *right* decisions, does not auger well for the times we are in. In aerodynamics there is no explicit mathematical formula that can adequately describe turbulence, but by the same token, that does not prevent the most advanced forms of aircraft from being developed that can essentially taxi take off fly and land all with the pilot hardly doing a thing.
What are the obstacles that hinder turning economics from an art/science into an applied science, and hence, what would the Fed have to know before it could use its big stick to band economic activities in ways that would always keep things bubbling along nicely?
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Originally posted by kmax87I'm not following your first paragraph, can you rephrase it?One of the problems is that real-time data on "real" variables is almost impossible to have. Many times, predictions for the future have to be made using estimates of what the current data is!
I had hoped there was a level of market activity, one where the greatest number of competitors thrived that was well understood across all sorts of market conditions regardless of the stage through a particular business cycle, that would sort of give people like the Fed a very clear idea of the sort of optimum umbrella/envelope/flow regime for which the great stick to band economic activities in ways that would always keep things bubbling along nicely?
Regarding, to address your more general point, the problem is that economics attempts to address a gargantuan problem. There are billions of economic agents each taking several decisions a day. Every one of these agents acts based on not only different measurables and constraints, but also based on their own particular mix of private and public information and preferences. To this, we have to add the behaviour of another gigantic number of firms, which are themselves composed of many individuals. On top of it, agents decisions and results are not independent of other agents' decisions and results. Worse, they're dependent on what one believes the others believe and of beliefs about beliefs and so on.
This is the enormity of the task facing economists.
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Originally posted by kmax87There are no navier-stokes type equations for economics. Some who tried ended up using formulas wrong and look what happened.....
. In aerodynamics there is no explicit mathematical formula that can adequately describe turbulence, but by the same token, that does not prevent the most advanced forms of aircraft from being developed that can essentially taxi take off fly and land all with the pilot hardly doing a thing.
What are the obstacles that hinder turning economics from an art/s ...[text shortened]... g stick to band economic activities in ways that would always keep things bubbling along nicely?
http://www.thestar.com/article/604033
Originally posted by kmax87I still have time to get back into this yet, but a quick little bit.
I had hoped there was a level of market activity, one where the greatest number of competitors thrived that was well understood across all sorts of market conditions regardless of the stage through a particular business cycle, that would sort of give people like the Fed a very clear idea of the sort of optimum umbrella/envelope/flow regime for which the great ...[text shortened]... stick to band economic activities in ways that would always keep things bubbling along nicely?
M2 is very important. It's the most commonly used measure of the money supply since typically people pay with checks and debits and draw funds from savings to make large purchases (as opposed to cash). Also, it is still reported. It's the M3 series that has been discontinued by the Fed. You can find historical measures of M0 and M2 at the St. Louis Fed's website under their (FRED) data section. You do have to register to see the information. This is mainly so that they can track your every move and eventually bring you under the control of the Illuminati. Naturally, it's all very painless. 🙂
BTW it's interesting to look at M0 and M2 (you can find M2 under "Monetary Aggregates" and M0 under "Reserves and Monetary Base"😉 because it tells a lot of the story behind the monetary situation we are in. M0 is accelerating at an unprecedented rate while M2 remains at it's constant trend. You can really see the effects of the reduction in the velocity of money.
Originally posted by PalynkaExactly. Furthermore, individuals are thought to be "forward-looking" at least to some degree. So future information (and beliefs about the future) affect decisions today. For instance, the notion of Ricardian Equivalence says that household's will not respond to tax cuts financed by debt by increasing their consumption. This is because they recognize that this debt must be financed and so over time taxes will increase, and so they save to pay for those future taxes.
I'm not following your first paragraph, can you rephrase it?One of the problems is that real-time data on "real" variables is almost impossible to have. Many times, predictions for the future have to be made using estimates of what the current data is!
Regarding, to address your more general point, the problem is that economics attempts to address a garga ...[text shortened]... of beliefs about beliefs and so on.
This is the enormity of the task facing economists.
Originally posted by telerionHow elegant. Of course, it doesn't happen that way in reality, but hey, neoclassical economists never let the real world get in the way of their pet theories.
Exactly. Furthermore, individuals are thought to be "forward-looking" at least to some degree. So future information (and beliefs about the future) affect decisions today. For instance, the notion of Ricardian Equivalence says that household's will not respond to tax cuts financed by debt by increasing their consumption. This is because they recognize t ...[text shortened]... inanced and so over time taxes will increase, and so they save to pay for those future taxes.
Originally posted by no1marauderI never said I wanted high reserve requirements. I said they were too low. If you want to argue 3% is not too low, fine. But don't say I can never say they can be too high, because they can if you have no workable alternative to fractional reserve banking in place.
LMAO! You've been complaining about banks having low reserve requirements and now you're complaining about them having high reserves? Which is the "problem" you are trying to solve? No matter what the reserve requirement is, banks will be free to keep their reserves higher than it if they so choose. You do understand what a "reserve requirement" is?
The economic problems we are having would not be as bad if rr were not so low. If banks are allowed to speculate with 97% of other peoples money you get what we have now. If they were only allowed to speculate with 75% of OPM wouldn't that be an improvement? Maybe less to bail out, eh?
Banks often fail because they speculate with OPM and bet wrong. When they bet right they pocket the money, when they bet wrong you pay for it with a bailout. This is a disadvantage to low reserve requirements. Why not limit their ability to speculate with OPM?
Of course, if it were not for the repeal of the Glass-Steagall Act by corrupt politicians we would also have been spared much of these economic problems.
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html