Was the fed just nationalized?

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  • #298863

    lownslow
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    @lownslow
  • #298864

    Hamlet
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    • Total Posts: 25
    @hamlet

    The Fed was NOT nationalized.

    WE were made property of the FED.

    The “bailout” is just a loan from the FED, with money created out of thin air. The FED is flooding the world with DEBT which MUST be paid back. The FED will soon own everything.

    The only way out is Universal Debt Forgiveness, but I suspect the US Military will take exception to that idea.

  • #298882

    Ohio Barbarian
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    @ohiobarbarian

    The article doesn’t even mention modern monetary theory, which is precisely what is happening here. We have a fiat currency, which literally means Let there be money! It’s created out of electrons in the form of 1s and 0s on computers, and magically transferred to Wall Street banks and the Treasury. It is totally faith-based, meaning it will work so long as people believe in the value of the currency.

    The Fed’s done this for years to prop up Wall Street and the banks, and to fund imperial misadventures. Now it’s just expanding some of its magic to some ordinary folk. And no one ever cares if the debts are paid.

    Deficits don’t matter.–Dick Cheney

    It is better to vote for what you want and not get it than to vote for what you don't want and get it.--Eugene Debs

    If Democrats don’t stand for the people, why should people stand for them?--Jim Hightower

    • #299024

      The Red Menace
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      @twilightsporkle

      Cheney was right. Deficits don’t matter. In fact the opposite is true; if there’s a surplus, then something is wrong!

      Unfortunately a lot of Americans still buy into the idea that government spending is just like personal finance; that the government has a finite amount of cash, needs savings, should avoid debt, etc. None of that is actually true, but the editorial pages keep running those every-so-clever political cartoons of Uncle Sam opening his wallet to find moths.

      Also we’ve ALWASY had a fiat currency. it’s right there in the constitution, the government can print money as it wishes. it used to be (somewhat) constrained by tying currency value to precious metals… but you can’t actually make a metal-based currency work in a nation of 325 million, tied into a global trade network. There’s a common misconception that when Nixon took the US off the gold standard, that our currency became empty, had no value backing it.

      We’re the value. Our labor and productivity. The worth of American currency is backed by the industry of American workers, instead of some dragon’s hoard in Kentucky. And as has often been pointed out, productivity is up, but wages are stagnant… So these two facts combined make it pretty obvious that the US labor force is literally getting robbed.

      • #299035

        Ohio Barbarian
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        • Total Posts: 12,768
        @ohiobarbarian

        @twilightsporkle He was only right one other time, when he pushed through the Great Lakes Compact to preserve wetlands and such.

        One would think that all that money pumped into Wall Street from 2008 on would have caused massive inflation, and one would be right, it did, according to Richard Wolff, and he makes sense to me. The thing is, the only inflation was within the market where it was dumped, the stock market.

        That money stayed within the financial capitalist class, and never made it out into the general economy. It seems to me that we now have two separate economies—one for the 1% in the market casinos and one for everybody else. So there was rampant inflation in the stock market, but not so much outside of it.

        I don’t think a huge infusion of money into the main economy would cause inflation for some years, anyway. Our discretionary income has been so low for so long it would take a lot to significantly increase it enough to heat up inflation.

        I think. I’m not positive about this. Nonetheless it’s worth the risk. People need help now. That’s the bottom line.

        It is better to vote for what you want and not get it than to vote for what you don't want and get it.--Eugene Debs

        If Democrats don’t stand for the people, why should people stand for them?--Jim Hightower

  • #298949

    D503
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    @d503

    They have to print more bills because the .0001% have the rest locked up in their banks…;)

    "Violence is the last refuge of the incompetent." - Asimov; "If you push something hard enough, it will fall over." - Fud's First Law of Opposition

  • #298951

    Utopian Leftist
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    @utopianleftist

    It is more like “castles in  the air.” It’s all a gigantic illusion. How do you think China and India suddenly became so prosperous? They discovered that they can print money, too.

    Pretty soon, when the whole world does it because the US has gotten away with it for so long, then everything will entirely collapse unless we the people do something before it’s too late.

    "All fascism is a result of a failure of the left to provide a viable alternative." ~ Trotsky

    • #299026

      The Red Menace
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      @twilightsporkle

      India and china can print money all day long, and so long as the people of China and India are producing at pace, all those yuan and rupees will maintain consistent value. When the money supply exceeds the backing – labor, in modern money – then inflation will come up. But the thing is; if the money supply is creating more stimulus than inflation is causing recession… then you don’t really need to worry about inflation. it’ll deflate naturally anyway, sped up with taxation.

      People like pointing a the Wiemar Republic’s economic collapse as evidence of how bad inflation is. But they have it backwards; the rampant, cascading inflation of the Weimar deutschmark was CAUSED BY the economic collapse, not the other way around. Germany had no metal to back its currency (that had been looted) and its labor force was unable to pick up the slack, since it had been reduced by half, industry was in shambles, and middle-level employment had collapsed in the course of the war.

      • #299090

        Utopian Leftist
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        • Total Posts: 391
        @utopianleftist

        cannot be a civilized solution to our problems!

        Bob Marley said it best. “Every day the bucket goes to the well. One day, the bottom will drop out.”

        It has nothing to do with the Weimar Republic. Everything to do with simple logic.

        eta: Ohio Barbarian said pretty much exactly what I was saying:

        It is totally faith-based, meaning it will work so long as people believe in the value of the currency.

        "All fascism is a result of a failure of the left to provide a viable alternative." ~ Trotsky

        • #299188

          The Red Menace
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          • Total Posts: 1,077
          @twilightsporkle

          “Simple logic” is, in this case, very misleading, because by “simple logic” you’re tempted to think that government finances work like household finances. That the government is reliant on revenue income (taxes) in order to create a savings account, which is the limit it can spend from without ending up in debt to someone.

          But that’s all untrue.

          First off, the only entity the government ends up in debt to is itself. And since the government controls currency supply and interest rates, being “in debt” is really more just an accounting note than an actual financial status. No one is going to repo the White House, or garnish Uncle Sam’s paychecks. About hte closest we come to being “in debt” in the personal finances sense of the word is when the US trades its debt from itself to another nation… but this is literally just a guarantee of eventual cash influx from the US, which again, controls the existence of said cash.

          Second, the government does not have a limited account. When congress passes, I dunno, a $2.2t spending bill, it is NOT withdrawing $2.2t from some sort of savings account. Instead, it is authorizing the creation of $2.2t in new money. Government spending is not “spending” in the way you understand it. Government “spending” is actually the government creating money.

          So what’s the purpose of taxation, then? Doesn’t the government need taxes for revenue to spend? Not quite. Taxes are useful for offsetting the impact of spending (creation), but it’s not exactly a direct exchange. That is, you do not need to find $2.2t in tax monies to pay for that $2.2t spending bill. The purpose of taxation is to remove money from circulation, in effect “destroying” it. Taxation is a means of speeding up deflation. Because yes, that $2.2t of money coming out of nowhere is going to increase inflation.

          Augh, inflation! That’s bad! Right? Well, it’s not awesome, but it’s hardly the economy-ending apocalyptic doomsday notion that Misesian capitalism claims. So long as the input of new money stimulates the economy more than the inflation depresses it, you can basically ignore inflation forever. of course there can come a point where inflation’s depression DOES overcome the stimulus of new money, and where that point is is different for every nation; it’s extraordinarily high for wealthy nations, and very low for poor nations, essentially. The US can churn out money until the sun goes nova and hardly notice the inflation, but Botswana sweats every time it mints a new 2 pula coin.

          Which brings us to backing. It’s often claimed that US currency has no backing since we left the gold standard. But that’s not true. It’s simply not backed by gold. Instead, US currency – like almost all currency in the world – is backed by the overall economy of the issuing state. Essentially, labor and hard resources are the base unit of worth backing every currency on earth.

          And finally, to proclaim that currency is “faith based” is sort of like saying the sky is blue… of course it’s faith-based, it’s always been faith-based, all the way back to the time the Chinese invented bronze rings as a medium of exchange. A currency only works so long as people believe it can be used for exchange. If that faith vanishes, the currency is nothing but, well, little ugly bits of metal and natty paper – or in modern exchange, meaningless patterns of 1’s and 0’s.

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