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How The Fed Distorts Everything
Jeff Deist, of The Mises View, explains how the Fed has created a perilous landscape in which there is no 'honest' pricing left - everything has been distorted. As David Stockman exclaimed, "The system we have now is one in which the Fed decides, through a Politburo of planners sitting in Washington, how much liquidity is necessary, what the interest rates should be, what the unemployment rate should be, and what economic growth should be."
As Stockman concludes,
"There is no honest pricing left at all anywhere in the world, because central banks everywhere manipulate and rig the price of all financial assets. We can't even analyze the economy in the traditional sense anymore, because so much of it depends not on market forces,m but on the whims of the people at the Fed."
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Huh, who benefits from this?
<-- buy physical today. 1 in hand 2 in bush
<-- wait for price drop
It's all about marginal productivity.
Too much money demands more people to use it, so opening the borders to all the highly educated civil persons that are flowing over by the fucking millions will help stimulate the economy.
-bullshit brought to you by Paul Krugman and the Democratic Party
I don't worry: We're just gettin high on all the free funny money and partying like its 1789!
Trouble is, nobody likes coming down. So no way the Fed can really tighten else it's La Bastille!
Federal Reserve and all other Central Bank is now in end game. There is no withdrawal plan any more than when degenerate is rape subject in back alley.
"The Fed decides... ...and what economic growth should be."
Except the Fed cannot create economic growth.
It can only destroy growth with printed money which they will - utterly.
Pinto, the fed can create *negative* economic "growth". That's why economists are so inverted when they speak English.
I have, on a modest level, played this one in the hand logic. True logic applied to this situation, I sit with my modest stack that I own and watch the sociopaths manipulate my life savings. What is more to me is that forces I do not respect are manipualting my whole life's work. Just another bubble. My life; my labour are nothing but an algo derivative losing contract. I am a slave and no longer of use. We go back to company town, company housing, company store (with credit) We are reverting back to what was only advantaged by the few. This is...
Pause for thought here. Yes I will buy more. I will wait for honesty in the markets to somehow return? Methinks this will not happen without a massive revolution of inflation slaying all options of survival for what here are called "the ignorant and deluded".
My Point? Until you get to the point that you see the chains hitting your wrists; until you realize that the chains are there.,,,,reality will remain on the TV set
Dear Mr. Warner,
You are come work for Boris and you are pay honest wage for honest day extraction of copper ore.
Sincerely,
Boris
(P.S., please you are bring own heavy duty leather glove and rubber boot.)
Mr. Boris. I carry no heavy boots. Am good Estonian girl with child-bearing slave hips.
Boris is very much to be sorry! Is not understanding you are Miss Warner. Boris is introduce to you cousin Jerge who is with large, how you say, equestrian endowment.
Boris is very much to laugh!
Gold in the yards is to be betters than horse in the bush?
And to extrapolate my view.
I think that all this self-absorbing analysis is a blue pill/red pill plan. All this posting of opinion and objections are very interesting and absorbing. Just like TV and Roman gladiators and anything that keeps people from actually taking a stand.
I see my neighbours. Nice folks. I see them compromise moral behavior and justify it. Result. They gain at the expense of others. That is a small illustration. From the microcosm comes the world. We got bankers Too Big To Prosecute? Come on. This sickness started somewhere way closer to someone's own sense of entitlement.
Self reinforcing slide into oblivion. Which is the chicken and which is the egg?
Hard to win any argument with the FSA about Obama phones and welfare debit cards when banksters steal everything in the world.
They cannot control physical demand with low paper dervivative prices. In the end, it is a physical money market and not controllable. I believe that all we have seen is the firesale of other people's property in a last ditch gamble to buy time for the economy. It failed. And the truth of the matter is, a higher gold price would have saved the economy because 80% of the world saves in gold. They have pushed the recovery out into the future with misguided gold policy. They have crippled the US banking system and US government with a mountain of gold debt due to leasing and sales. It will unwind on its own.
How very true and very scary it has become
I don't agree with Mises particularly when it comes to what to do next (some things I do, some I don't), but let's all agree we should END THE fucking FED! Let's do that, then talk about the next steps. Can we of disparate political and economic ideologies agree with that first step? Come on all you flavors. Can we fucking agree on that and then fight each other after?!
To stop fed - you need to stop using dollars. If you live in USA - you need to use dollar only for live, all saving in no-dollar
The dollar is not the problem. It is the Federal Reserve Note called the dollar.
yes and people around the world need to stop using it.
So it seems the consensus is that we need to keep bitching and not End the Fed.
Seriously? No. The Fed can only be "ended" by Congress. "Da people" don't control Congress. Congress is just another product sold to "da people" by very smart-n-savvy advertising companies. You can't compete with that. The bullshit used to manipulate the dumbasses into voting Red and Blue Team can easily cope with some "End the Fed" movement (even IF "the problem" of The Fed could be articulated to "da people", which it can't so is a non-started to begin with).
The problem is not "The Fed". The problem is the percentage of authority worshipping dumbasses (on what we commonly - but incorrectly - called "the left" and "the right") voting for the same two Teams - over and over and over - BECAUSE these two teams actually do address the dumbass's biggest worries about our society: fornicating-harlots and "the children".
The Germans seem to have figured out that the Fed is a big part of the problem.
Well, yeah. But don't forget, the Germans (and rest of the EU) voted to create the EU which is just another centralized version of DC. A majority of people want a centralized authority of really nice wise people to lead them to peace and prosperity. The only real problem with that is a majority of people can't comprehend that the nice wise people are actually the exact same self-serving assholes they see in the mirror every morning.
But, the magic of self-generating bullshit produces optimism, duplicity, and self-delusion which - together - allows society to advance while the smart-n-savvy people get most of the benefits of the centralization. If our brains weren't magical bullshit machines, humans would still be living in the trees.
So, when the Germans figure-out what to do about the Fed the Fed might be ended, but (guess what) our dumbasses here would fight to the death to defend the Fed, simply because the Germans were trying to say it was bad (Oh, look, there's a slow-motion eagle flying over The Fed, I better send all my sons to defend the Fed to their deaths).
We've got the ONLY natural human system possible: corporate authoritarianism (aka fascism) with worshipping dumbasses.
Cue: Patrioit music.
So fuck the Germans who are protesting the Fed in the real world, and let's all just suck our own dicks and post shit on the internet?
I believe it's Chapter 26 in "The Creature From Jekyll Island" that proposes a more comprehensive solution. Ending the Fed and allowing the Jackwagons in Congress to still control the currency is downright idiotic! Private mints once existed in the USA, and MUST be allowed to return to minting Au/Ag coinage.
congress is a puppet team of fed, what's the point of changing actors?
There is none. We have a system of money purchasing politicans. Most people wanted this system. We can't let "free speech" be limited after-all, think of the constitution! Gosh, think who might get elected? The unwash-masses.
I had to down arrow ya- cause the point of the piece isn't about a bunch of sheep voting red or blue which is certainly true- it's about an unelected, ungovernable, and unconstitutional private banking cabal which manipulates and lourdes over the lives of all of us. Hang them all tomorrow and our lives would become infinitely richer. Would we be better or worse off? I think all of us at ZH know the answer to that.
(Well, i was responding to the other guy's question, not the article).
Re: Hang them all tomorrow and our lives would become infinitely richer. Would we be better or worse off?
Well, honestly, you can't "hang them all" because you HAVE do it "legally", otherwise you're going to be living in a society without "laws" (even tho, yeah, that's what you've got now but the concept of a society with laws is still a good fantasy to aspire too).
So, THAT'S where the concept of "a gov't of by and for da people" comes-in. But, come on, that's for children. All societies are run by the smart-n-savvy people, everywhere on the planet, at all times. Even in the US during the magical 50's when we had the magic middle-class that everybody want to go back to when oil was cheap and life was just like on TV. The smart-n-savvy ran it then too.
We're just at the end game now. The smart-n-savvy have it all, and there's no way to just start over. There's nothing magic about this situation, the smart-n-savvy people won. Ok, NOW WHAT?
They are not smart and savvy. They are greedy moneychangers. The tree of liberty must be refreshed with the blood of tyrants and freemen from time to time. Even when the tyrants cry foul.
Ross Perot, or any third party candidate, well liked, will splint the vote, and the most disliked will get elected. The voting system design is broken, and it is also owned, controlled, and manipulated to achieve results for TPB. If voting changed anything, it would be illegal.
If someone doesn't agree that the Fed needs to be aborted then they don't have 2 braincells to rub together... Or they are shilling for TPTB.
Political ideology doesn't matter, the Fed is fucking us all with no lube.
Explain WHY to the people benefiting from the current system, and the brain-dead Krugmanites, AND the kick-ass daddy type who love their BIG-MIC kicking the crap out of the entire world. When a system makes 70+ percent of the population happy (in some way) it's pretty tough to come-up with a reason why Ending-the-Fed would make things better.
What? No free hip-replacements? You mean I can't kick the sand-people's ass and take their gas? You mean we can't borrow our way to prosperity? You mean we can't build this cool sports stadium? I think I'll keep this Fed thing (what the hell are they again?)
I'd give them a copy of The Creature From Jekyl Island. After reading that, if they still think letting a private cabal create our currency out of thin air while charging us interest in the process is still a good idea... Then I would give them the hard copy to the face.
I agree with a comment that Jim Rickards made in one of his interviews. He said that he thought it could go one of two ways. We blindly continue on our merry way and don't deal with the problem and then just "react" when the real issue arises or we could start dealing with the problem of how to start dismantling the Fed. He was troubled that we weren't even starting to talk about how to dismantle the Fed and return to some form of a mixed gold standard.
And I agree that the fact that we're not even starting to talk about how to properly dismantle the Federal Reserve and get back to sound money is only going to increase the pain later.
So LTER, I agree. We should be talking about how to dismantle the Fed but unfortunately, we (as a society) don't even have this on the radar.
I used to think a gold standard was the way to go. Bill Still changed my mind. Without getting into a debate about the Nazis, I think the economic miracle in Germany during the 30's makes the case for a labor backed currency. The Oligarchs own a lot of gold, they would still have the power under a gold standard.
If you guys hate my monetary policy you will really loathe my foreign policy.
https://www.facebook.com/DelendaEstZionism
Lies and deception is all they know. Seems to have worked well for them thusfar...
http://zionismsucks.com/2014/06/12/holocaust-the-great-lie-of-the-20th-c...
That $4 trillion balance sheet? If you guys think Japan is bad, you're in for a rude awakening.
Re: If you guys think Japan is bad, you're in for a rude awakening.
It might be "bad", but's it's been there for decades now.... limping along with people expecting it to "end" any moment. But, it's still there.
Japan is the Asian "satellite" of the western banking cabal. The ¥ doesn't enjoy "reserve currency" status.
Here's an example where Mises is wrong about cars just having more bells and whistles. Which car would you put your family in https://www.youtube.com/watch?v=joMK1WZjP7g
Anyone who cannot drive under the new Marxist car safety options should have their license revoked and go back to driving school.
We didn’t have the click it or ticket Marxist law revenue collection system back then. In fact, seatbelts were optional to wear. Guess what? We’re still living today. Reminds me of the 55 to stay alive highway driving propaganda.
The nanny state is collapsing on the US administration shoulders.
Fuck you and your narcissism. I'm glad that cars are safer despite the push frrom the industry against it. You can still drive an old one and put your worthless kids in it to feed your narcissistic sense of superiority, if you wish. Last time I checked, you can still legally buy any old piece of shit for a few hundred bucks if you want, and place your piece of shit kids in the passenger seat. In lawless Middle Eastern countries, you can add a gun turret. Rock on.
Buy a old toyoto acceleration recalled vehicle or a multitude of new GM product line recalls. Please pick your poison.
lol "safer"..
I've got a Ford Pinto I can sell you. It's cheap. Runs good and burns the tires. Also in the lot is a Ford Explorer with Firestone tires. People are flipping out over how awesome it is. And I think I have an AMC Jeep CJ5 if you can flip the payment on your BroncoII.
President Nixon: "[My] views are, frankly, whether it's the environment or pollution or Naderism or consumerism, are extremely pro-business. We are fighting, frankly, a delaying action in many instances. ... There is pollution. We all know that. You can fly over various places and you can see the stuff in the air. Maybe, there are safety problems, I assume. [Unintelligible] I think they're greatly exaggerated, but there are some. But where there is pollution and where there is safety, the general principle that I believe in is that, well, then we'll do the best we can to eliminate the toxins. But we can't have a completely safe society or safe highways or safe cars and pollution-free and so forth. Or we could have, go back and live like a bunch of damned animals. That won't be too good, either. But I also know that using this issue, and, boy, this is true. It's true in, in the environmentalists and it's true of the consumerism people. They're a group of people that aren't one really damn bit interested in safety or clean air. What they're interested in is destroying the system. They're enemies of the system. So, what I'm trying to say is this: that you can speak to me in terms that I am for the system. ..."
Ah yes, the system. Let's all fight for the pro-business system. The more things change....
No thanks, I have 5 cars and have run out of garage space. All cars are paid for with low mileage. Except one. 97000 for a 2003 peasant car. Both Lincoln SUVS are a hair over 50k for 2007 mark LT and 2008 Navigator.
The fourth/fifth car is not your business. The new fifth car will be a M5, have to sell one to open a garage space. Don't have room for six.
Will wait until 2015 market collapse before picking up the BMW M5.
Have you met Top Gear?
They could just mandate public transit and make everyone "safer" ;-)
Is there a law against buying a '57 whatever? Or do you just have sand in your vagina. Top Gear got you down for quoting your favorite douchebags out of context? I'm starting to like the guy if he's getting to you with his quotes of your favorite authors.
"Is there a law against buying a '57 whatever?"
No, not yet.
"Top Gear got you down for quoting your favorite douchebags out of context?"
No, he's revealing himself, as are you.
But I really wanted to highlight this of yours:
"Fuck you and your narcissism. I'm glad that cars are safer despite the push frrom the industry against it. You can still drive an old one and put your worthless kids in it to feed your narcissistic sense of superiority, if you wish. Last time I checked, you can still legally buy any old piece of shit for a few hundred bucks if you want, and place your piece of shit kids in the passenger seat. In lawless Middle Eastern countries, ou can add a gun turret. Rock on."
The cost is passed on to consumers, raising the price and his kids are worthless POS's because of you accusing him (without evidence) of narcissism? And just what middle eastern countries are "lawless"?...name them.
"The cost is passed on the consumers...." Mindless tripe. An airbag costs less than $100 to build. The "cost" that is being passed on to consumers is the yacht owned by the CEO and everyone in management. Tell me Mr. winker, how much of the cost of a car goes to management and advertising versus building it. Any idea or are you just blinded by ideology?
As for lawless Middle Eastern countries, Iraq comes to mind. Seems like a survival of the fittest society in the works. Want to move there?
"The cost is passed on the consumers...." Mindless tripe. An airbag costs less than $100 to build. The "cost" that is being passed on to consumers is the yacht owned by the CEO and everyone in management."
Mindless tripe is it? And then you go on to make my larger point...lol.
Oh well done LemmeEatYours, yet again ;-)
You make your larger point all by yourself winky.
Anything you'd like to add...again?
I mean before we get into Atomizers worthless piece of shit kids...
I thought Randians were supposed to not care about such things? His problem and all of that. Are we suddenly caring?
"I thought Randians were supposed to not care about such things? His problem and all of that."
I don't know what you think, it changes daily...hourly even.
"Are we suddenly caring?"
I think I have a pretty good idea about what YOU think about HIS kids, its the "we" he and I am having a problem with.
So, to encapsulate your societal-one world view-economic drivel, Iraq has no laws...higher consumer prices DO in fact flow to a companies bottom line, thus a CEO's compensation...and...Atomizers kids are "worthless...pieces of shit".
But one last thing, how did you know I was at the beach? And no, I don't have a vagina like you ;-)
Oh noes. What is this crock of shit? I never like taking credit or using my ZH name in vain. Don't start that shit, you'll be standing outside looking into the fightclub.
I don't have any army that pentrates ZH. Just a solo guy that cares about our country. FYI.
'I mean before we get into Atomizers worthless piece of shit kids'
lol...poor ole Rand, trapped within her own screen name.
The sad fact is, people like Rand don't give a flying fuck about your kids or mine, they use them (just like she tried to do here) for their own benefit.
You didn't build those kids, it takes a village and all the other assorted nonsense.
Its past time to call her (and all of them out on it).
Are you really laughing out loud, nmewn? I'd like your comment, put it on my wall, and then friend you. But I don't have a narcissist book account. You rebel, you. I shall await your witty, rebel reply full of clever, typographic symbols that reflect your hipness and originality of thought. Then again, I haven't memorized the brilliant words of the person who never produced anything yet convinced guys like you that society should be built around the people she wrote about who did, fictionally speaking. So please, quote some Ayn Greenrand and put me in my place. With extra punctuation and hip abbreviations. And if you really want to win the point, say it in bold.
Not sure what provoked your post. I'll let the ZH readership decide. Neo-liberals or Neo -Cons have never fallen into the game play. Most of the geopolitical scholars where pre 911.
Without government taxpayer expansion, Wallstreet never grows. Some fuck sticks never understand this mechanics.
It was all directed at LemmeEatYours, who is a card carrying socialist as far as I'm concerned.
And I really don't care what the ZH readership thinks of my assessment of her.
The FED distorts everything in the same way that hotdog makers distort the meaning of what is a hotdog. From what I recall, Mises was all for, "substitution" as an economic principle. As long as it is still a "reasonable" facsimile of a hotdog, it is a hotdog regardless of what is in it. Probably why he was run out of Austria, they loves em some Vienna sausages in Austria.
Mises loved him some arbitrage opportunities especially when it was at the expense of the proles. Look at what the difference is between what Americans call Vienna sausages and what actual Austrians call Vienna sausages.
http://www.armour-star.com/prod_vienna.asp
don't even get me started on what, "Austrians" have done to "baseball", "apple pie" and "Chevrolets".
http://theweek.com/article/index/218393/libertarian-island-a-billionaire...
Because of the uncertainty in today's market and the direction events might take the subject of "value and worth" continues to garner a fair amount of interest and remains relevant. History is chucked full of distorted markets, debts unpaid, promises unfilled, and bubbles.
These "interesting times" play havoc with the value of things and what they are worth. Like some of the cruel games children play you don't want to find yourself without a chair or holding the "hot potato" when the game ends. More on this important subject in the article below.
http://brucewilds.blogspot.com/2014/05/value-and-worth-constantly-change...
picked on helluva time to quit snortin glue.....
http://www.youtube.com/watch?v=7WAwuSK36Gw
MyJapanification.com! Japan is the hotbed and birthplace of biflation where Abe may just pull off his dream of inflation in the midst of collapsing wages, trade and end demand.
C/E I'm joking. Japans' employment rate dropped by a "tenth".
JPY Unemployment Rate 3.5% 3.6% 3.6%
Abenomics (Fed) 101
Centrally Planned Destruction, paid for by those who haven't been born yet.
Want to stop this shit in it's tracks? Pronto?
Don't buy a friggin AR and join the militia. That's what they want. They want a target. Get off of their RADAR.
Stop
fucking
Producing.
That's where they get their power, off of the skim.
Sit the fuck home.
See how they squirm and squeal when you don't show up for work.
They
Don't
Produce
a fucking
Thing.
Same for the assholes in DC. They all make their money off of production. You and your neighbors get together and barter for what you need. Cut them right the fuck out of the picture, right out of the equasion.
They NEED you to leech off of. You DO NOT need them.
You'll change things in 6 months without firing a shot.
For me, the real point is that the markets are so manipulated that fundamentals are what? Quaint? You don't need capital when you have debt.
Liberals are asking for a wealth tax? Fools ... that's what we have now. They are sipphoning off our capital.
Screw'em
Well, the well meaning nice (but hopelessly clueless) liberal (D)umbasses want to redistribute the loot downward NOT upward. However, like their (R)etard (inbread) cousins, they can't see very simple patterns like: the Blue Team doesn't really redistriubute downward as much as sideways AFTER skimming off a huge chunk with "social programs" administered by cronies. But, don't be too hard of the (D)umasses. Find me a (R)etard that doesn't love manly Big-Gov like Big-MIC, Big-Road, Big-Water, Big-Airport, & Big-PoliceState (you know, to protect our children from the trrrsss) with Red-Team cronies laughing all the way to bank.
http://www.fas.harvard.edu/~histecon/crisis-next/1907/docs/Chen-Warburg_...
Banking Reform in a Hostile Climate:
Paul M. Warburg and the National Citizens’ League
Lucy D. Chen
IV. The Issue of Reserve Centralization
.
The League emphasized its Midwestern origins and separation from Wall Street in order
to appeal to and reach out to the average American citizen who held bankers responsible for the
panic of 1907 and who did not necessarily understand the intricacies of banking reform.
Consequently, the publicity campaign of the League may be understood as an outcome of the
criticisms launched at Wall Street following the events of 1907. In order to connect with and
mobilize these voters so that banking reform could be instituted, the League initiated a massive
movement in 1912 with a blitz of addresses and pamphlets written in non-technical jargon. The
organization depended on this constituency to then go forth and spread the League’s message to
other citizens. The League hoped that in due time, there would be a large enough population to
champion their beliefs—and those of the League—to their representatives. In a statement
directed to the members of the National Citizens’ League, General Secretary A. D. Welton wrote,
.
“By joining the League, you proved your interest in the cause of banking reform.
Every member of the League should prove again that interest by doing active
missionary work. It is necessary to spread the gospel of a sound, panic-proof
banking system…One way is for League members to write direct to their
Representatives and Senators, urging action and giving the reasons for it. Another
way is to urge your interested friends to do the same.”
.
And to this constituency, the League emphasized, above all other principles, its commitment
against a completely centralized banking system. In a pamphlet entitled, “Origins of the
League,” it was written, “Co-operation, not dominant centralization, of all banks by an evolution
out of our clearing-house experience.” In various brochures addressed to audiences as diverse
as small business owners and Southern cotton planters, the League continuously discussed the
benefits American citizens would derive from a banking system that facilitated coordination
among a system of regional banks free from the influence of Wall Street.
While this position appears to directly oppose Warburg’s previous statement that nothing
short of a modern central bank would be able to solve potential currency crises, the League
simply desired to highlight very prominently those aspects of its banking reform platform that it
felt would appeal to its target audience. The League still ultimately aspired to a plan that would
centralize bank reserves, but this design was embedded within a larger discussion of a system of
banks cooperating under a National Reserve Association. As Laughlin wrote in a pamphlet
entitled, “Banking Reform and the National Reserve Association, “A Central Bank in the United
States is undesirable and unsuited to our conditions. What we need is not centralization but
cooperation, entered into by all of our independent banks, both national and state. For this
reason, we must favor the National Reserve Association as opposed to a Central Bank.”39
Laughlin argued that the currency shortage of 1907 occurred when each individual bank only
looked after its own interests and what the country needed was union in the face of potential
panics. In order to avert future such liquidity crises, the scheme proposed by the League would
divide the country into fifteen self-governing districts with local reserves that would federate
themselves to form a National Reserve Association. The design stipulated that each of the
districts would elect one director to the board of the National Reserve Association and also that
one-third of that board would come from industries unrelated to banking. Finally, the plan also
included a suggestion to create a central reserve association with an initial capital of about
$300,000,000 to be obtained from the government. Under such an arrangement, Laughlin wrote,
.
“No centralized power could dominate an organism whose life is drawn from functions local to
each community. The individual bank is put into helpful relations with its nearest neighbors, and
not under the control of a dominating Central Bank.”
.
Although these statements made by the
League in their public pamphlets appeared to disagree with the earlier words of its creators in
favor of centralization, the League was merely specifying in its publications that a central bank
in the European sense—one that lacked the local associations proposed by the League—would
be regarded with great distrust. In general, the League sought to highlight for the American
public those aspects of the Aldrich bill that de-emphasized Wall Street control over the financial
system and curbed the power of the central institution.
The call for instituting a system of cooperating regional banks was a theme that continued
throughout the subsequent pamphlets distributed by the National Citizens’ League. But, it is
interesting to note that the League also tailored its message about banking reform to different
audiences by exploring the differing points of emphasis in the pamphlets it distributed that
targeted certain groups. The following discussion of the two differing appeals made by the
League—one to the small business owners and the other to Southern merchants—regarding the
creation of a National Reserve Association helps to elucidate the League’s answers to the
public’s two primary concerns regarding reserve centralization: Wall Street control and the
efficiency of the financial system.
In an address to small businessmen about the National Reserve Association that was later
published in a pamphlet, Farwell was particularly critical of New York bankers, as he said,
.
“If any one had tried to construct a banking system which he wished to have controlled by, and
centered in, Wall Street, he could not possibly have accomplished his object better than by
formulating our present plan of doing business.”
.
Farwell also introduced his discussion of the
function of a National Reserve Association by saying that the new plan was formulated “in order
to deliver ourselves from this ‘sword of Damocles’ and get the whole system as far away from
Wall Street as possible.” The use of such disparaging language towards New York and the
amount of time Farwell spent in his speech on discussing the role of Wall Street in the 1907
panic indicates that he likely appealed to his audience’s dislike of bankers to turn them towards
the National Reserve Association plan, which he presented as the best alternative. To these
businessmen, Farwell also emphasized the fact that the National Reserve Association was not, in
fact, to be a central bank held in the hands of Wall Street. Rather, it would be a “cooperatively
owned machine for rendering liquid the good current commercial paper of all banks and, also,
through mobilization of the reserves, a steadfast bulwark against any possibility of lack of
confidence in the system.” Thus, Farwell, in discussing the aims of the League to these small
business owners, sought to portray the National Reserve Association as an entity separated from
Wall Street.
Perhaps an even clearer example of the lengths the League went to in tailoring its
argument to appeal to different audiences is in the writing in a pamphlet entitled, “A National
Reserve Association and the Movement of Cotton in the South.” In the piece, Laughlin
described the import of coffee and bananas and the export of cotton through Southern ports and
how these processes would be made smoother with a National Reserve Association. The
principal argument being made to Southern merchants was that of efficiency. Because these
merchants dealt with various bills of exchange (including foreign bills) and required a greater
amount of currency during the crop-moving period, it was extremely unwieldy to have to rely on
New York banks to discount the bills and ship currency to the South. Laughlin maintained,
“Such a cooperative agency as a National Reserve Association…is, by its very nature and
operation, adapted to meet the peculiar difficulties which confront the South during the
movement of the cotton crop.” The presence of Southern branches of the National Reserve
Association would allow the South to be relatively freer from New York influence. Laughlin wrote,
.
“By such a cooperative association the South would be enabled to coin its own cotton into
notes through its own local associations; and there would be no reason for the expensive
shipment of cash to and from New York. Moreover, by making the south dependent on only
itself, it would be free from its present dependence on New York.”
.
The case Laughlin made to
the Southern merchants on the benefits of having a National Reserve Association emphasizes
that the proposed scheme would make the economy run more smoothly, addressing the common
fear that the institution of a central bank would only benefit the banking class.
Taking the League’s appeal to small business owners and Southern merchants together
illuminates the manner in which the League dealt with the country’s two main concerns with
regard to banking reform. First, the issue of Wall Street dominance was addressed by
emphasizing the marked separation between the interests of the League and those of New York
and with repeated declarations that the proposed system would free the financial system from the
influence of banks. Second, the League appealed to the fear of another credit crisis similar to the
Panic of 1907 and addressed the public need for currency, particularly in times of stress on the
banking system, by arguing that the proposed system would be much more efficient.
....
As a whole, the main issue at stake was that of reserve centralization. The League downplayed the
notions that the National Reserve Association would function as a single, all-powerful, central
institution and instead stressed the aspects of the plan that called for coordination, rather than
centralization, among a system of local associations.
Perhaps as a result of this large-scale publicity and educational campaign, the press was
remarkably favorable towards the Aldrich plan and the aims of the National Citizens’ League.
An editorial published in The New York Times on October 21, 1911, discussing a minor change
in the composition of the executive committee of the proposed National Reserve Association
began with the line, “The amendments to the tentative plan proposed by Senator Aldrich for the
adoption of the Monetary Commission indicate a praiseworthy stubbornness to principle and an
equally praiseworthy open mindedness in detail.” The editorial then later affirmed statements
made by Laughlin and Farwell in the Citizens’ League pamphlets, as it read, “It is clear at once
that New York cannot secure representation in proportion to its predominance in the banking
world.”
.
Such a statement indicates that the movement was successful in establishing itself as
independent of Wall Street influence and that the proposed Aldrich plan had the best interests of
the public at heart. The editorial finished by stating, “The proposal now enters upon its critical
stage. It meets the demand for details when it was becoming insistent…Let those who are
criticizing for the sake of criticism ponder the risk they run in weakening the only plan which has
received and deserved praise.”48 Such praise in the popular media was also engineered, in part
by the League. From July 1911 until January 1912, numerous speeches and the letters of leaders
of various branches of the League that emphasized the fact that the Aldrich plan would benefit
all Americans and that it would greatly weaken Wall Street’s hold on the financial system were
published in the Times.
.
Although the League sought to allay the public’s fears that proposed banking reform
measures inherently called for greater centralization of reserves and power on Wall Street by
underscoring the League’s preference for a federation of local banking associations under a
National Reserve Association, a letter from Warburg to Laughlin dated April 22, 1912, indicates
that an independent central reserve was still very much a concern and priority for Warburg.
Despite the League’s numerous assertions that the National Reserve Association would be free
from the influence of Wall Street and that it would be impossible for any one interest to
dominate the organization, it is clear that even after the defeat of the Aldrich Bill, Warburg still
felt that centralization of reserves was necessary in the country’s banking reforms. Moreover,
Warburg felt that it was necessary for men with experience in finance to be involved in the
operations of the proposed institution. In response to a plan that would lessen the amount of
reserves to be held at the central reserve institution, Warburg wrote,
.
“I am worried about [Willis’] articles in the Journal of Commerce. He writes against centralization of reserves, and I believe he has the Fowler idea in mind of federating 7% and leaving the balance alone.”
Warburg further stated,
“I am writing thus fully about Fowler, because I feel the necessity of killing the
prestige which he might possibly enjoy with the committee, which might
otherwise be too willing to listen to his plan of scattered reserves and scattered
note issue. Fowler has never been a banker, and never been successful, and I am
astounded by his courage to advocate a new and untried scheme approved by no
practical banker, against a plan which has been carefully developed on the well
established European principles by the combined banking and business-brains of
the country.”
.
Warburg’s strong criticism here of a competing plan that sought to further decentralize reserves
in the country may shine a light on his real feelings towards reserve centralization.
.
His statement
reflects a distinct fear of decentralized reserves and note issue, indicating that the National
Citizens’ League’s repeated statements that the National Reserve Association was essentially
decentralized system of federated local associations were likely just statements meant to rouse
public support for the Aldrich bill. Furthermore, Warburg’s harsh criticism that the opposing
plan did not originate from the mind of a banker is yet another sign of his actual feelings towards
a plan free from the ideas of bankers.
The arguments raised by the pamphlets of the National Citizens’ League combined, the
organization’s favorable press coverage regarding its willingness to take public criticism, and
ultimately the statements made by Warburg in a private letter to Laughlin all suggest that the
League may not have represented the plan for a National Reserve Association completely
faithfully to the public with its repeated emphasis on the decentralized nature of the proposed
system. Under the direction and leadership of Warburg, the League placed tremendous
importance on its Midwestern origins and frequently denounced Wall Street in its pamphlets in
order to sever ties with the banking class. But it appears from Warburg’s own writings from that
time that these aspects of the League were publically highlighted while others, in particular the
identities of the organization’s actual leadership and its commitment to having a centralized reserve system, were obscured for the sake of drawing public support to the cause of banking
reform. This is not to say that the League was purposefully dishonest in concealing these aspects
of its organization to the American public. Rather the country’s financial elite, led by Warburg,
was cognizant of the difficult political realities of the time and was forced to garner the public
support needed to pass the banking reform bill it felt the country needed.
V. Conclusion
In ...... ....." l.c.
etc ...
comment: the details and backroom mechanisms of fascism were worked
out way before the term was "coined", that is "banking" is a duplicitous
and fascistic creation/operation, the centralization and canonization of which is manifest evil in our time; no?
Central Planning plain and simple.
Emergency action has become micro managing.
Will someone please remind the Fed that they are NOT to encourage inflation. That they ARE mandated to
provide moderate interest rates (not zero). And they are only to ENCOURAGE full employment, not guarantee it.
Pr1nt
moAR
WELLLLFFFFS