This page has been archived and commenting is disabled.

How The Fed Creates Money

Tyler Durden's picture




 

Submitted by Adam Taggart via Peak Prosperity,

As a follow-on to the two previous chapters -- one explaining the nature of fiat money, the other showing how money is loaned into existence through our fractional reserve banking system -- this week's video details the Fed's near-magical ability to create money out of thin air (literally!).

We've devoted these past three chapters of the Crash Course to the process of money creation in order to understand this key question: What does the future look like for fiat currencies? (e.g. the dollar, the euro, the yen, the pound...)

In the case of the dollar (which operates similarly to the other major world currencies), we've learned that -- since all are "loaned into existence" -- all dollars are backed by an equivalent amount of debt. Debt upon which interest must be paid. As all outstanding debt must compound over time at the rate of its interest (at least), we come to this important conclusion: Our money system is designed to grow exponentially. And it requires ever more debt in order to do so.

Is this good? Is this bad? At this point, we're not here to cast judgment (yet). But, it does raise some important questions:

  • If the money supply must always increase over time, isn't the purchasing power of each unit of currency (e.g., each dollar) destined to speed its way towards zero?
  • What happens when hard limits prevent the system from expanding at the rate it needs to? (see: 2008 liquidity crisis)
  • Are those responsible for the rate of increase in the money supply doing a responsible job? (see: central bank quantitative easing programs since 2008)

Most of the people holding the majority of their wealth in fiat currency have little clue how it is created or managed. This leaves them very vulnerable to what happens to it over their lifetime.

How vulnerable are you?

 

Coming next Friday: Chapter 9: A Brief History of US Money

For those who simply don't want to wait until the end of the year to view the entire new series, you can indulge your binge-watching craving by enrolling to PeakProsperity.com. The entire full new series, all 27 chapters of it, is available -- now-- to our enrolled users.

The full suite of chapters in this new Crash Course series can be found at www.peakprosperity.com/crashcourse

And for those who have yet to view it, be sure to watch the 'Accelerated' Crash Course -- the under-1-hour condensation of the new 4.5-hour series. It's a great vehicle for introducing new eyes to this material.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 08/09/2014 - 17:51 | 5070931 goldhedge
goldhedge's picture

Amerika Stronk!

Sat, 08/09/2014 - 18:09 | 5070969 InjectTheVenom
InjectTheVenom's picture

END. THE. FED.

Sat, 08/09/2014 - 18:13 | 5070984 kchrisc
kchrisc's picture

Guillotine the Fed!

Sat, 08/09/2014 - 18:21 | 5071004 Boris Alatovkrap
Boris Alatovkrap's picture

Boris' urban proximity sub-terranean copper mine operation is more legitimacy than is Federal Reserve wealth dilution and selective skimming operation.

Sat, 08/09/2014 - 18:26 | 5071012 negative rates
negative rates's picture

This is the clash of the nature of money, verses the use fiat money. Do not get confused, they are two entirely different things.

Sat, 08/09/2014 - 20:05 | 5071283 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is think to understand... when nature is to call, use fiat money for colonic scrub.

Sat, 08/09/2014 - 21:25 | 5071477 RafterManFMJ
RafterManFMJ's picture

Boris if you're ready to franchise, I have a ready supply of lightly-documented workers who will work for a shockingly low rate; they will probably work for beans and an incentive pay scale.

In addition to copper, many homes around here inexplicably have accumulated stocks of coal and wood outside that is easy to harvest after dark.

Sat, 08/09/2014 - 21:52 | 5071561 Boris Alatovkrap
Boris Alatovkrap's picture

"shockingly low rate"

Ha ha! Boris is see what you are do with extravagent english linguistic pleasure! You are very smart funny!

On more serious notation, Boris is well supply with minor, but is sharp needful for stripper for extraction of ore contaminant.

Sat, 08/09/2014 - 23:28 | 5071826 wintermute
wintermute's picture

Buy your Bitcoins before its too late beeeeeeeeetchizzzzz!

Sun, 08/10/2014 - 08:04 | 5072288 Truthseeker2
Tue, 08/12/2014 - 19:21 | 5084552 Boris Alatovkrap
Boris Alatovkrap's picture

You are thread troll bandit.

Sat, 08/09/2014 - 18:29 | 5071015 kaiserhoff
kaiserhoff's picture

Be careful mit der sawsall mein Freund,  vill cut your leg oft in eine New Yawk minute.

Sat, 08/09/2014 - 18:50 | 5071071 Urban Roman
Urban Roman's picture

More important than that, make sure electricity is off. Water, less important but nice as a courtesy.

Oh, yeah, also gas.

Sat, 08/09/2014 - 20:01 | 5071275 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is alway to be very very careful for checking voltage differential against ground before dig trench. (Okay, so maybe Boris is have mother-in-law to dig trench - is win-win scenario:) But you are mention gas line. With redirection of gas supply trajectory for bypass of Ukraine, this may become new hazard in Western territory of Russia. Thank you, you are very good friend advisor for Boris!

Sat, 08/09/2014 - 18:38 | 5071023 Landotfree
Landotfree's picture

Our money system is designed to grow exponentially. And it requires ever more debt in order to do so.

 

False or a lie.

The system is built to expand, peak, collapse, and liquidation of the unfunded walking liabilities.   It does require more debt/credit to expand, unfortunately humans do not have unlimited power to supply the equation, usually 60-80 years or a generation before liquidation of the unfunded walking liabilities.   Last time 100+ million had to be liquidated, my guess this time 1-2 billion.

The system is not designed to exponentially grow, it must be feed exponential growth... or its starts eating the hairless monkeys.  Attach interest to you medium of exchange, eventually liquidation... last time ovens and atomic bombs were used among other things.

"End the Fed"

Sure, well its going to end either way but you can pull the plug... you will go directly to the liquidation phase... I have my popcorn ready.   Quite a few are going to have to go when the wheel stops spinning.  

I have my bet on Asia as the leader in the category of liquidated walking liabilities when all is said and done.

 

Sat, 08/09/2014 - 21:24 | 5071475 The Phallic Crusader
The Phallic Crusader's picture

any system predicated on fractional reserve lending/creation of new money will achieve exponential growth.  That's just math.

Add in interest on money created out of nothing this way, and debts grow increasingly faster than the currency available to pay it.

So, while at any given point, you could freeze new money creation, that means freezing the ability to pay outstanding debt, meaning collapse and liquidation as you say.

I think the interesting thing is the money from nothing/creation by private banks aspect.  Because of the interest function, people are working 'for nothing' and the system guarantees a transfer of wealth from productive labor to passive capital.

 

Entropy and waste are built into the system, and like a giant star, massive concentrations of capital warp the normal rules, in a sense. 

 

Think of buying a house.  Say a guy buys it for 100k, gets a 30 year, ends up paying around 270k for it.  But the bank created 90k out of thin air based on a reserve 10k in deposits - money that by no means is the banks legal property.

So bank essentially buys this house, a real good, for nothing as a proxy for worker, who must spend 30 years toiling to give nearly 3 times that amount to the bank.

The system is insane, and it is no wonder that banks and banking dynasties of the late middle ages are largely still around today...

 

We are all slaves to the private banks which have taken the issuing power from The People - to whom it properly belongs.

Sat, 08/09/2014 - 21:32 | 5071499 RafterManFMJ
RafterManFMJ's picture

No my friend, the system is FAR from insane ... Evil? Demonic? Sure! But not insane.

Here, for the pleasure of ZH I present ten bankster quotes.

“The bank hath benefit of interest on all moneys which it creates out of nothing.”
William Paterson, founder of the Bank of England in 1694

“Let me issue and control a nation’s money and I care not who writes the laws.”
Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

“If my sons did not want wars, there would be none.”
Gutle Schnaper, wife of Mayer Amschel Rothschild and mother of his five sons

“The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”
The Rothschild brothers of London writing to associates in New York, 1863

“Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of a pen they will create enough deposits to buy it back again. However, take it away from them, and all the fortunes like mine will disappear, and they ought to disappear, for this world would be a happier and better world to live in. But if you wish to remain slaves of the Bankers and pay for the cost of your own slavery, let them continue to create deposits.”
Sir Josiah Stamp, President of the Bank of England in the 1920s, the second richest man in Britain

“When you or I write a check, there must be sufficient funds in our account to cover the check; but when the Federal Reserve writes a check, there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.”
From the Boston Federal Reserve Bank pamphlet, “Putting it Simply.”

“Neither paper currency nor deposits have value as commodities. Intrinsically, a ‘dollar’ bill is just a piece of paper. Deposits are merely book entries.”
“Modern Money Mechanics Workbook” – Federal Reserve of Chicago, 1975

“I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people.”
Reginald McKenna, as Chairman of the Midland Bank, addressing stockholders in 1924

“I am just a banker doing God’s work.”
Lloyd Blankfein, CEO, Goldman Sachs, 2009

“Banks do not have an obligation to promote the public good.”
Alexander Dielius, CEO, Germany, Austrian, Eastern Europe Goldman Sachs, 2010

Source - libertygoldandsilver.com

Sat, 08/09/2014 - 22:44 | 5071703 Dr Hackenbush
Dr Hackenbush's picture

“Let me issue and control a nation’s money and I care not who writes the laws.”
Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

 

Please indicate where, how and when this quote was made.  Looking for a credible, objective source. 

Sat, 08/09/2014 - 23:05 | 5071762 RafterManFMJ
RafterManFMJ's picture

True or not? It really doesn't sound like something he would say, and I could find no video of it, sorry.

Sun, 08/10/2014 - 01:01 | 5071942 Dr Hackenbush
Dr Hackenbush's picture

Thanks!  I often find made up quotes and wanted to see if others have the same experience.  As a monetary reformist,  I find it hurts the cause. Also, from an objectivist standpoint, an often repeated misquote completely mires down any plausible chance of finding the true etymology

 

 

 

Sun, 08/10/2014 - 10:45 | 5072502 radiobomb
radiobomb's picture

"dont beiieve every quote on the internet", Benjamin Franklin, 1736.

Sat, 08/09/2014 - 21:33 | 5071502 Unknown User
Unknown User's picture

How about we nationalize the Fed, wind down fractional reserve (i.e., pay off the debt), and issue value based money, i.e., the US Notes.  Just like the good old US Constitution said we should. The Fed pretends to be an agency of the US government, so nationalizing it wouldn't be a problem. Issuing value based money isn't a problem. But winding down the fractional reserve scam is a big problem ... for the banksters. 

 

Sun, 08/10/2014 - 09:51 | 5072393 newworldorder
newworldorder's picture

I would normally agree but here is the problem.

The FED is no longer the US FED, but the worlds central bank.

The $$ is no longer the US currency but the debt currency to the world.

Successive US governments with the help from the US FED have succeeded beyond their wildest dreams in controlling world wide resources through finance.

With the FED, IMF, BIS, World Bank we are closer to one world financial CONTROL than most think or would care to admit. Where this ends, I do not know, but you can bet the average person in the world has no clue.

Sat, 08/09/2014 - 18:30 | 5071021 negative rates
negative rates's picture

Audit the Fed, then end the fed, the fed is always wrong, but never in doubt.

Sat, 08/09/2014 - 20:59 | 5071422 Greenskeeper_Carl
Greenskeeper_Carl's picture

i think 'audit the fed' is a more realistic way to bring the average person around (I say this as a way to get more people involved, i am 100% for ending it, no audit needed). The status quo has done too good of a job of making people stupid and thoughtless for a campiagn of "end the fed" to work. All you will do is sound like a crazy person to most people going around saying that. Too many people think it is a branch of govt, or part of the treasury. Ive explained how it works to people, and goten blank a lot of blank, uncomprehending stares at the end. An honest audit of it would reveal how disgustingly corrupt it is, and how much behind the scenes actions theyve taken, and its probably even worse than most of us think. Even the half assed audit they did revealed trillions of "loans" given to banks around the world. Once people are made aware of what the fed really does and what it is as an institution, no rational person could defend its existence

Sat, 08/09/2014 - 23:19 | 5071795 sleigher
sleigher's picture

"no rational person could defend its existence" 

 

I wouldn't be surpised...  My brother is somewhat rational.  His argument is "what are we supposed to let congress control it?"  And I have to say, he has a point.  End it anyways, if nothing else it kills off a bit of evil in the world.

Sat, 08/09/2014 - 23:49 | 5071860 El Vaquero
El Vaquero's picture

Hell, I'm one of those extremests who wants to go back to carrying coins minted from PMs around.  I'd let nature and trade control the money supply.

Sun, 08/10/2014 - 07:48 | 5072263 sleigher
sleigher's picture

Agree 100%.  

Sun, 08/10/2014 - 09:43 | 5072383 messymerry
messymerry's picture

Audit the FED, tar and feather the FED, THEN end the FED...the FED is wrong by design. 

Sun, 08/10/2014 - 13:27 | 5072898 estebanDido
estebanDido's picture

It's easier to audit the vatican books. Not recommended for healthy reasons.

 

Sat, 08/09/2014 - 18:11 | 5070972 goldhedge
goldhedge's picture

/s

Sat, 08/09/2014 - 19:51 | 5071247 ZH Snob
ZH Snob's picture

being as fiat can only be paid in more fiat (or debt) and this revolving circus has just about run its course it would seem that he who holds the most fiat loses the most when the music stops.  there has to be a re-structure or reset of this debt into real commodities, and in the future no one with any sense will accept any type of currency that is not directly backed by something tangible, real and of a measureable value.

Sun, 08/10/2014 - 01:11 | 5071966 good man
good man's picture

My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... http://goo.gl/bhiamE

Sat, 08/09/2014 - 17:56 | 5070946 debtor of last ...
debtor of last resort's picture

That Yellen lapdance, in the early days, sure made my $50 into another million by now.

Sat, 08/09/2014 - 18:25 | 5071010 Bossman1967
Bossman1967's picture

Yellen ever giving a lap dance is as repulsive as what they are doing to our country

Sat, 08/09/2014 - 18:32 | 5071026 debtor of last ...
debtor of last resort's picture

Our country? Tell that to the millions of people that suffer from overexpansion outside your country asshole.

Sat, 08/09/2014 - 18:06 | 5070961 Sudden Debt
Sudden Debt's picture

The system needs more humans and that's why they open the borders in europe and america to get more units in so they can borrow so the system can survive another day.

To bad they all use the system to support them and the liabilities increase much faster than the credit.

Sat, 08/09/2014 - 18:11 | 5070976 InjectTheVenom
InjectTheVenom's picture

Damn, and all this time I thought the open border was all about getting more votes for the 'blue' team !

Sat, 08/09/2014 - 19:32 | 5071195 Urban Redneck
Urban Redneck's picture

Jeff Immelt and his buddies borrow more every week than of "them" put together.

Sat, 08/09/2014 - 21:00 | 5071424 Otrader
Otrader's picture

I thought open borders was for cheap corporate help.  You know, to tame the inflation beast.

Sat, 08/09/2014 - 18:14 | 5070986 debtor of last ...
debtor of last resort's picture

Yeah, that's why they opened the borders and imported those niggers from Africa. Slave labor,

Now; get two, with Ebola, for only $99,95

Sat, 08/09/2014 - 18:36 | 5071037 debtor of last ...
debtor of last resort's picture

And of course, for the Americano' s without any feelings for humor, sarcasm, cynism, beyond your dollar borders, i forgot the sarc....

Sat, 08/09/2014 - 18:12 | 5070978 philosophers bone
philosophers bone's picture

UltraCoin?

Sat, 08/09/2014 - 18:18 | 5070994 pauhana
pauhana's picture

Rehypothicated to the moon, Alice!

Sat, 08/09/2014 - 18:27 | 5071014 stormsailor
stormsailor's picture

nuke martha's vineyard

 

Sat, 08/09/2014 - 18:52 | 5071082 Urban Roman
Urban Roman's picture

... orbit ... sure.

Sat, 08/09/2014 - 19:38 | 5071213 stormsailor
stormsailor's picture

its for the chidren

Sun, 08/10/2014 - 09:37 | 5072379 messymerry
messymerry's picture

The Russians and the Iranians are going to EMPDC...and (drum roll please,) Chicago. 

Sat, 08/09/2014 - 18:28 | 5071017 Captain Obvious.
Captain Obvious.'s picture

"To infinity and beyond!"

Sat, 08/09/2014 - 18:32 | 5071019 PeeramidIdeologies
PeeramidIdeologies's picture

Everyone know the dollar is toast. But how and when? That is the question. My line of thinking is that it will be deliberate, the evil dollar must be vanquished, and reserve currencies are things of history. A couple more signals will confirm. Or I'm bat shit crazy. Either or.

Sat, 08/09/2014 - 21:35 | 5071511 RafterManFMJ
RafterManFMJ's picture

Batshit be full da Ebola! Cook for one hour b4 consumin'.

Sat, 08/09/2014 - 18:33 | 5071029 stormsailor
stormsailor's picture

and feed hillary and janet to 100 month starved 12 ft alligators.  i bet the pay for view on that would set a record,  throw in pelosi and biden as the warm up event.

Sat, 08/09/2014 - 18:35 | 5071034 GreatUncle
GreatUncle's picture

And if you cannot grow your worth as fast as they create all this value then you will be forced into poverty and that is for the majority of people.

 

So all those wonderous charts showing fantastic surreal growth a large swathe of the population felt the inverse of this and a rapid devaluation of themselves. (2008 until today)

Sat, 08/09/2014 - 18:54 | 5071057 crazytechnician
crazytechnician's picture

Same old shit,

Blame the Fed for all of the world's problems.

An easy escape goat for sure. Do not consider the immense politcial pressure the Fed has been under since it was created ......

Yeah Yeah , End The Fed and the world will be such a wonderful place all of a suddern ......

Oh - and don't forget that Amerika did so wonderfully well under the Fed system - until 2008 nobody was complaining that they were running a fucking Ponzi scheme , just like none of Madoff's clients complained for 20 years until they found out it was a fucking scam.

You lot should put up or shut up - you guys voted for this system for nearly 100 years and now you are complaining ? Huh - Fuck Off Losers !!!!!!!

Sat, 08/09/2014 - 18:54 | 5071089 Ralph Spoilsport
Ralph Spoilsport's picture

"An easy escape goat for sure."

Strange optics of riding an illegal cartel out of town, hounds baying at your heels.

Sat, 08/09/2014 - 19:01 | 5071117 crazytechnician
crazytechnician's picture

"don't forget that Amerika did so wonderfully well under the Fed system - until 2008 nobody was complaining that they were running a fucking Ponzi scheme , just like none of Madoff's clients complained for 20 years until they found out it was a fucking scam."

Sat, 08/09/2014 - 19:37 | 5071208 AllWorkedUp
AllWorkedUp's picture

Ahh, another piece of crap Hasbara Zionist invading ZH posters. Who else could actually defend the Zionist Fed. Scum you are.

Sat, 08/09/2014 - 20:56 | 5071419 Otrader
Otrader's picture

Fed employees posting on ZH....defending......da fed! Heyyy, I got an idea, how about a fed audit?

That will put all blame or suspicion to rest. Or, not.

Sun, 08/10/2014 - 06:46 | 5072188 doctor10
doctor10's picture

Never mind the hundreds of millions dead in the multiple world wars of the 20th century that transferred the wealth of billions to the coffers of bankers and arms merchants.  None of which could have happened without the Fed.

Sat, 08/09/2014 - 23:05 | 5071763 Mute Button
Mute Button's picture

Madoff's clients had actual wealth they chose to hand over to Bernie.

When did we have a choice and when did we have real wealth?

If I recall, trying to use a different currency in place of the FRN, gets us thrown in jail for counterfeiting.

So quit telling us it's raining and put your small Johnson back in your tighty whiteys.

Sun, 08/10/2014 - 03:07 | 5072080 HippieHaulers
HippieHaulers's picture

"You lot should put up or shut up - you guys voted for this system for nearly 100 years and now you are complaining ? Huh - Fuck Off Losers !!!!!!!"

Hey that's not fair. I've only been voting for 90 years!

Sun, 08/10/2014 - 09:41 | 5072381 newworldorder
newworldorder's picture

Do you relly think the verage "citizen" knows anything about the US financial system.  If you do, find 10 coworkers nd try to converse with them on the subject. you will get an eye opener.

Sat, 08/09/2014 - 18:46 | 5071062 lasvegaspersona
lasvegaspersona's picture

All purely fiat moneies do face a hyperinflationary demise. The real question is: why has the dollar, which began 43 years ago, as a purely fiat system, still survived?

One thing that has kept it going is the fact that other central banks use our bonds as their reserves. This keeps all those dollars out of the economy and unable to exert an inflatioary effect. Unfortunately for the USA this has ended. We now face the certain hyperinflation that must be the result of the governmnent demanding to spend $40 billion each month on goods obtained from overseas. We are not even in the early stages of this process. Other countries are preparing for a new system quietly. The Euro has a system that is different and does not depend upon this storage of its bonds by other central banks. It is designed to act as just a medium of exchange and is not pretending to be a store of value. It also respects gold and carries 10,800 tons on it's combined balance sheet as reserve assets.

The advantages of this design will become obvious when the dollar finally fails.

Sat, 08/09/2014 - 18:58 | 5071105 crazytechnician
crazytechnician's picture

Well to answer that would be one of simple math. In the last 5000 years the average life span of any fiat currency has been 27 years. So for the dollar to last 43 years , that is since Nixon took the dollar off of gold , would fit in perfectly with that mathematical model , with the US dollar being at the longer end tail of the chart.

Sat, 08/09/2014 - 20:14 | 5071315 lasvegaspersona
lasvegaspersona's picture

The dollar was failing in 1980. Volker was warned in Belgrade and came home, within 4 days raised interest rates. He saved it but it was not a permanent fix. Now we are in the same shape but we have no ability to raise rates. This time is for real and it is more than just exceeding some average for fiat survival. We got to  43 years with help.

Sun, 08/10/2014 - 03:50 | 5072118 crazytechnician
crazytechnician's picture

Raising interest rates is NOT an option , that would trigger world wide banking & corporate collapses and a trigger a cascade domino of CDS , it would be a catastophe , all they can do now is ZIRP and NIRP until the inevitable Rollover. It was Einstein who said the most powerful force in the universe is compounding interest , we will shortly see that force play out.

Sat, 08/09/2014 - 18:49 | 5071073 q99x2
q99x2's picture

Today's term for money creation by the FED is called financial terrorism and the FED is a group of financial terrorists waging war against the world in their efforts to control it. Whole thing represents how primative humans are.

Dudes, WE HAVE COMPUTERS NOW. We are capable of living in a society without banksters, politicians and issued currencies.

Sat, 08/09/2014 - 19:05 | 5071131 crazytechnician
crazytechnician's picture

Dudes, WE HAVE BITCOIN NOW. We are capable of living in a society without banksters, politicians and issued currencies.

Sat, 08/09/2014 - 20:18 | 5071323 lasvegaspersona
lasvegaspersona's picture

Bitcoin may survive as a medium of exchange.

I won't trust it as a store of value.

It'll be like a refund VISA card, first thing out of my wallet.

Sat, 08/09/2014 - 18:54 | 5071087 ekm1
ekm1's picture

Learn to differ between USD Reserves (or cash in both electronic and paper form) and Debt

Not the same thing. Not the same kind of money, not the same kind of debt.

 

Debt = A owes money to B

USD = Economy owes goods/services to USD holder

 

Debt has expiry and yield

USD (currency) is debt without expiry and without yield.

 

Debt is self destructive, default and gone

USD Reserves (or any reserves like euro, canadian dollar otherwise known as currency) is not self destructive and can be destroyed only by Fed or Government.

 

Commercial banks create most of Reserves and All Credit to real economy

Fed creates only Excess Reserves and creates zero credit to the real economy.

Sat, 08/09/2014 - 20:07 | 5071290 ekm1
ekm1's picture

Unless the real economy has direct access to fed, fed ca not lend any money, it can't create credit

Sun, 08/10/2014 - 03:04 | 5072076 Dr Hackenbush
Dr Hackenbush's picture

USD =  A owing B = Debt = expiry and yield = pay down = destroyed 

- theory killed in one sentence  

 

Sat, 08/09/2014 - 18:57 | 5071101 ebworthen
Sat, 08/09/2014 - 19:38 | 5071216 JustPrintMoreDuh
JustPrintMoreDuh's picture

Really?  So no skittle eating FRN shitting unicorns then?

Sat, 08/09/2014 - 20:21 | 5071329 lasvegaspersona
lasvegaspersona's picture

Don't believe them...it is unicorns...cotton candy machine  ...hurump...

Sat, 08/09/2014 - 19:36 | 5071206 Urban Redneck
Urban Redneck's picture

Only looking at the exception to the rule (reserve currency) and claiming to explain the "nature of fiat money" is an inherently flawed methodology.

Sat, 08/09/2014 - 20:15 | 5071313 tostaky06
tostaky06's picture

US love slavery, lincoln should be ashamed of his successors

Sat, 08/09/2014 - 20:57 | 5071417 Pumpkin
Pumpkin's picture

How the Fed Creates Money?

 

I know this one.  As fast as it fucking can.

Sat, 08/09/2014 - 21:20 | 5071469 gatorboat
gatorboat's picture

Was this idiot born yesterday?  Fiat currency has been ripped apart from every possible angle by hundreds of thousands of people on the internet since 2008 and a shit load before that.

And no, even a billion "end the Fed" comments won't end the Fed.  Why do people keep parroting that meaningless phrase?

There's a simple solution to the Fed.  Somebody come up with a gold-redeemable currency.  Fed's "US dollar" would die overnight.

Oh by the way, somebody IS doing that.  Russia and China (and most of Asia).

Sat, 08/09/2014 - 22:11 | 5071618 Defiant1968
Defiant1968's picture

Sorry I could only vote one up arrow

Sun, 08/10/2014 - 09:04 | 5072348 messymerry
messymerry's picture

There's no gold left in the U.S..  It will have to be a foreign currency...

Sun, 08/10/2014 - 09:31 | 5072371 Pumpkin
Pumpkin's picture

a gold-redeemable currency

 

Gold-redeemable is an invitation for fraud.  There is absolutely no reason not to use the real deal, gold coin.  That is the only solution.

Sun, 08/10/2014 - 09:35 | 5072375 newworldorder
newworldorder's picture

You are correct. The FED has become the worlds Central Bank. It is the ultimate backstop and anyone in money power wants it that way.

Sun, 08/10/2014 - 10:34 | 5072473 RaceToTheBottom
RaceToTheBottom's picture

So china is going to go from printing three time what the US does to becoming a fiscal conservative country?

If it were that easy, even a caveman (US) would do it.

Sat, 08/09/2014 - 22:50 | 5071729 DeusHedge
DeusHedge's picture

Half right. And do you come up with some "bogus articles"? :o) Since the money system isn't weighted to a common price, such as a percentage of the price of gold (which I think should be reinstated), it is entirely reliant on the public's confidence in it. Since the most immediate impact of tight monetary policy (raising interest rates) is decreased output and investment, the usd is set at a comfortable inflation of about 2% a year. Not that I'm for deficits or decreased interest rates, as such things would become handy in a severe recession but have now put us on the path to severe inflation and then possibly an economic collapse, depending on how our wise leaders handle the situation.

Sat, 08/09/2014 - 23:09 | 5071773 teslaberry
teslaberry's picture

i love how everyone hates bankers, because they are the new slave masters------but let me ask you-------do you think there are not a host of historical types of slavery that existed before banking?

do the moguls, and mongols, and fuedalists, and muslims and persians and romans and holy see and europeans-----do not ALL these historical powers demonstrate that non-bank slavery is even more common?

 

if you are thinking about an alternative system that isn't just another type of slavery----------you have to really start using your brain......

 

one form or other of slavery is the rule, not the exception. 

Sun, 08/10/2014 - 03:39 | 5072112 Otrader
Otrader's picture

"A great industrial nation is controlled by it's system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world--no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men." — President Woodrow Wilson

Sun, 08/10/2014 - 09:32 | 5072373 newworldorder
newworldorder's picture

Other than the means of financial control. What has changed since this statement?

Sun, 08/10/2014 - 12:00 | 5072695 pgroup
pgroup's picture

Translation - we are a better group of few men than the few men now in control so change will be simply the song remains the same.

Sun, 08/10/2014 - 12:01 | 5072696 pgroup
pgroup's picture

Translation - we are a better group of few men than the few men now in control so change will be simply the song remains the same.

Sun, 08/10/2014 - 14:59 | 5073142 Everyone is lying
Everyone is lying's picture

Translation:

Get the rope. There's a lot of hangin' to do.

Sat, 08/09/2014 - 23:10 | 5071775 SilverRoofer
SilverRoofer's picture

Up in Smoke!

Sun, 08/10/2014 - 06:35 | 5072061 Radical Marijuana
Radical Marijuana's picture

"Is this good?

Is this bad?"

This has become more criminally insane than can be fully comprehended.  The comment above that I most agreed with was posted by Landotfree. The combination of progress in science and technology, added into social pyramid systems based on backing up lies with violence, has driven runaway social polarization and destruction of the natural world, which continues to happen AT AN EXPONENTIAL RATE! 

I will try to indicate how CRIMINALLY INSANE this monetary system is by repeating the comment that I posted previously:

http://www.zerohedge.com/news/2014-08-08/america%E2%80%99s-immune-system...

America’s Immune System Has Failed … So the Cancers of War and Corruption are Spreading


The primary source of the metastasizing cancer in the USA is the monetary system,
which had its main symbolic moment occur about a hundred years ago, while the modern form of that monetary system was a couple centuries older in Europe. Most of American history has been about the battles between the American people and the international bankers. For about a Century, the American people have been losing those battles more and more, at an exponentially accelerating rate. The feedback loops of the roles of money through the political processes have been the main ways that the powers of "We the People" ended up driving what now looks like terminally insane social sicknesses.

However, there was never any actual beginning to the primary problem, which was the short-term social successes that flow from being able to back up deceits with destruction. The biggest bullies have always dominated societies with their bullshit. Those where the reasons how and why the American public "money" system was able to become runaway enforced frauds, developing at an exponential rate for more than a hundred years. If one goes back to the beginnings of the undermining of the original American constitution promoting money be backed by gold and silver, whose value was set by Congress, one observes the persistent application of the methods of organized crime to the political processes gradually resulted in the public "money" supply becoming MAD Money As Debt, made out of nothing by private banks. Of course, that includes the Federal Reserve Board, as the most intense expression of the ways that the methods of bribery, intimidation, and assassination of those politicians who could not be otherwise bribed or intimidated, were able to successfully dominate the political processes, in order to establish systems of legalized lies, backed by legalized violence.

Everything in the article I linked above by George Washington also relates to this recent article too:

http://www.zerohedge.com/news/2014-08-09/when-money-runs-out-so-does-empire

That article touches upon the paradoxical ways that those who have the power to legally counterfeit the public "money" supply as debts, made out of nothing, which can disappear back to nothing when those debts disappear, have the supreme power. IT IS THE MONETARY SYSTEM WHICH IS THE MAIN METASTASIZING CANCER, driving the apparent insanities of recent American (along with NATO) wars, which can only be understood as those being the banksters' wars, which accomplish greater and greater degrees of debt slavery, because the banksters have captured control over the political processes (including the mass media.)

http://realecontv.com/how-the-big-wall-street-banks-screw-the-public

How the big Wall Street banks screw the public

It was, and still is, the role of the money, through its feedback loops through the political processes, which was the foundation of the runaway DEBT SLAVERY SYSTEMS, BACKED BY WARS BASED ON DECEITS. However, that necessarily drives the paradoxical longer term effects of social successes based on the series of shorter term abilities to back up lies with violence: FINAL FAILURE FROM TOO MUCH SUCCESSFULLY ENFORCED FRAUD.

The history of warfare based on deceits, backed by destruction, developed the War Kings that survived through that selection process, which made and maintained the sovereign states, whose legalized powers were covertly captured by the Fraud Kings, the private banks that made and maintained the MONEY SYSTEMS AS THE MAIN SOURCE OF THE METASTASIZING CANCER THROUGHOUT A GLOBALIZED SOCIETY.

The degree to which everyone is forced to use the public "money" supply also is the degree to which the almost inconceivably crazy corruption of the monetary system results in all the other basic political problems, which are also analogous to parasites killing their host, as well as analogous to autoimmune diseases. After those kinds of diseases have become such runaways, it becomes tragic nostalgic nonsense to propose "solutions" based on being able to go backwards to what it could have, or perhaps should have, been possible to imagine before there were more than a hundred years of runaway social sickness and insanity symbolized by the development of the monetary systems which exist now. That is, going back to money backed by gold and silver is now way too late, and would be too trivial a series of political miracles, to provide any miracle cures.

There are no good reasons to believe that there actually are going to be some political miracle cures for these diseases. The only reasonable expectation is that these diseases are going to get much worse, and become horribly fatal. Of course, at that point, a crucial issue with respect to the analogies between human beings themselves, and the society as a whole, becomes relevant. Namely, individual human beings are actually ancient ecologies, inside of other ancient ecologies. An individual human being is made of trillions of cells, coexisting with even more microscopic organisms, whose total genome is collectively bigger than that of the human genome. Therefore, social systems, made up of only hundreds of millions or billions of individuals are WAY simpler than biological beings made up of hundreds of trillions of cells.

The death of the social system, due to its runaway diseases, will cause chaotic collapses back down to whatever levels of social organization may be able to survive through that. I suggest that the best that we MIGHT be able to do is work towards preventing the collapses from being as bad as they otherwise would, and enabling recovery from those collapses faster than they otherwise could. However, there is no way to save the established systems of enforced frauds. Rather, the internationally banksters' agenda of consolidating a global government based on the continuation of their systems of enforced frauds has become a criminally insane project.

THE GRAND PARADOXES WE ARE PRESENTED WITH ARE DUE TO SOME HUMAN BEINGS UNDERSTANDING GENERAL ENERGY SYSTEMS BETTER, WHILE THAT IS NOT APPLIED TO UNDERSTANDING POLITICS BETTER. The basic problems are that BOTH the established systems, AND their controlled opposition groups, want to stay within the old-fashioned frames of reference based on false fundamental dichotomies, and related impossible ideals, in which erroneous dualities are presumed and relied upon, despite how mistaken those are. (The degree to which Americans have become ignorant of their history matches the degree to which "solutions" based on going backwards to what was in that history are NOT possible.)

The basic problems are not merely that governments are the biggest form of organized crime, controlled by the best organized gangs of criminals, but that they MUST necessarily be! When one applies the general concepts of energy systems to human systems, one discovers that those match the principles and methods of organized crime. Furthermore, when one perceives human beings as special cases of entropic pumps, then one perceives that human realities are always organized lies operating robberies. Governments, and lesser forms of organized crime, emerge as the dynamic equilibria between different systems of organized lies operating robberies.

At the present time, the runaway enforced frauds that dominate the USA are becoming extremely unbalanced. THERE IS NO DOUBT THAT EVERYTHING IN THE ARTICLE I LINKED ABOVE BY GEORGE WASHINGTON IS CORRECT! However, the issues then arise about the analogies between medicine and politics, regarding diagnoses and prognoses. The government of the USA has become almost totally based upon systems of legalized lies, backed by legalized violence, whose excessive successes are destroying themselves. The debt slavery systems have already generated numbers which are at levels of debt insanities, which no longer have any mathematically feasible ways to be resolved. Since those debt controls were always actually backed up by death controls, the runaway debt insanities are threatening to provoke death insanities. Indeed, there are no political practical ways that I am aware of which could provide the series of political miracles to prevent the MAD Money-As-Debt systems from not continuing to madly destroy themselves, while taking everyone else down with them, to the degree that everyone else was forced to use that MAD public "money" supply, and therefore, everyone else was forced to live their lives inside of those enforced frauds.

HOWEVER, WHEN IT COMES TO SUGGESTING "SOLUTIONS" (or treatments for the social sicknesses) I CONTINUE TO FIND ALMOST NOTHING BUT REACTIONARY REVOLUTIONARIES, RECOMMENDING THAT WE GO BACK TO THEIR PREFERRED FAVOURITE OLD-FASHIONED RELIGION OR IDEOLOGIES. Despite that the currently established systems of globalized electronic frauds, backed up by the the threat of the force of atomic bombs, are based on things like quantum mechanics and the special theory of relativity, NONE of that kind of science plays any critical role in the minds of those proposing old-fashioned sets of "solutions" for those exponentially increasing problems. Similarly, despite the awesome levels of progress in basic biology, and therefore, biomedical technology, which ought to be applied to better understand the metaphorical comparisons between individual human illnesses, and collective social illnesses, again almost NONÈ of that kind of insight is applied to improve those analogies. I recommend that we should go through a profound series of intellectual scientific revolutions, especially including our basic ways of thinking about time and space, which then changes the ways that we think about entropy operating through energy systems, which then apply to politics.

The case in point is that the primary source of the metastasizing social cancer that is killing society is the monetary systems becoming runaway enforced frauds, driving worse and worse social polarization and destruction of the natural world.

It is NOT possible for there to be any sufficiently adequate reforms to the established monetary systems. Nothing less than monetary revolutions would be enough. However, the irrational hope for monetary revolutions to ameliorate the apparently irreconciable social polarization are surpassed by even more irrational hopes that such a monetary revolution could then cope with the degree to which there has also been even more important forms of runaway irreparable destruction of the natural world.

The exponential paths of debt slavery generating numbers which have become debt insanities is going to result in those established systems of debt slavery backed by wars based on deceits pumping up the energy for severe social storms to blow through. The MAD monetary systems are going to cause their own mad collapses into chaos. Due to the ways that the metastasized cancer of the monetary systems already has become entangled through the funding of the political processes, there currently appear no treatments which could avoid killing the patient. Indeed, everything that the established systems do is treat the problems of too much debt with even more debt. They can not do anything else within their frame of reference. Therefore, the outstanding issues are when and how are those established systems going to die, and what MIGHT survive through those deaths?

IF any human beings at all survive, then they will still live in their realities then, which will necessarily be their new systems of organized lies, operating robberies. Social organizations in the future will continue to necessarily be operated through the principles and methods of organized crime. The crucial questions, in my opinion, are NOT whether the agenda of consolidating the current systems of enforced frauds can succeed. That agenda of the international banksters has become too criminally insane to work. Rather, the questions are whether the human species can better complete the human experiment of building brains that can better model their world, including models of themselves within their models of their world.

The outstanding issues are whether progress in science and technology can be made more consistent with political processes. The crux of that are the ways that warfare was the oldest and best social science, whose successes were based on backing up deceits with destruction, upon which basis was built the science of economics, in which successes were based on enforced frauds. In my view, we have no choice but to embrace those social facts, as not only existing, but also necessarily existing. The problems outlined by George Washington in that article I linked above are all about the established social and political systems becoming more and more extremely unbalanced. However, the only realistic ways to make and maintain better dynamic equilibria require that we better understand the deeper nature of those problems.

However, there is NO reasonable basis to believe that is going to happen! I have spent the last 30 years PROVING THAT, inside of the Canadian context, which is basically the same as the American, although Canada tends to follow along behind. After spending a few decades working on the issues of the laws controlling the funding of the political processes in Canada, including 2 major court cases against the Canadian government, taking up a total of 15 years, about the laws controlling the funding of political parties:

http://www.elections.ca/content.aspx?section=res&dir=loi/court&document=...

Uses of Political Contributions

Quarterly Allowance

(while, during that time, I discussed those issues face to face with tens of thousands of different people from all walks of life, and I continue to work on those issues through Canadian Electoral District Associations) there is NO doubt whatsoever that "democracy" in North America is already dead, and nothing more than a cruel joke! IN FACT, THERE IS NOTHING ELSE TO REALLY DO BUT TO WAIT AND WATCH AS OUR TERMINALLY SICK AND INSANE SOCIETY COMMITS COLLECTIVE SUICIDE! Attempting to wake more people up and educate them is thrashing about hoping that there will be some miracle cures for the runaway terminal illnesses that afflict our civilization. On the basis of several decades of my own personal political experiments, there is NO doubt in my mind that the majority of "We the People" ARE Zombie Sheeple. They are stuck inside of the vicious ruts of their lives being controlled by the established political systems, of debt slavery backed by wars based on deceits. THE ESTABLISHED SYSTEMS ARE TERMINALLY CRAZY AND CORRUPT, WHILE THE VAST MAJORITY OF PEOPLE ARE STUCK IN THE RUT OF HAVING ADAPTED TO LIVE INSIDE OF THOSE ESTABLISHED SYSTEMS FOR GENERATION AFTER GENERATION ...

I am one of a tiny handfull of people who have succeeded in actually proving in a court of law that the government had been arrogantly dishonest, and received punitive damages from having done that. However, the government was able to respond by changing the election laws, so that their previous lies then became the legal truth. Meanwhile, the overwhelming vast majority of people continued to be deliberately ignorant regarding those events. Nothing changed that 99% never participated in funding the political processes, while 1% paid for everything. (That is even worse in the USA!) Similarly, my second court case demonstrated that the government can pass extremely unfair laws, which the judges, that those governments appointed, will agree are constitutionally valid. (Similarly, the American courts have been rubber stamping seriously unconstitutional laws.) Playing in the long game of politics is like participating in a sports league where the team that wins the previous season gets to change the rules and appoint the referees for the next season. The long game of politics has become so totally rigged that it is practically hopeless, while one is still forced to play!

The situation in the USA is many orders of magnitude WORSE than in Canada. Everything that George Washington wrote about in the article I linked above is RIGHT, but that does not matter. Our civilization IS terminally sick and insane. Anything else to prevent us from dying from those causes would take a prodigious series of political miracles, which, by definition, are extremely improbable! IT IS PRACTICALLY GUARANTEED THAT THE VAST MAJORITY OF PEOPLE WILL CONTINUE TO DELIBERATELY IGNORE THE INFORMATION ABOUT HOW THE MONETARY SYSTEMS ACTUALLY WORK. FURTHERMORE, MOST OF THE FEW THAT DO PAY ATTENTION ARE SURELY GOING TO CONTINUE TO PROPOSE BOGUS "SOLUTIONS" WHICH ARE NOT CONSISTENT WITH THE ANALYSIS OF THE PROBLEMS!

So far, progress in science and technology has been primarily employed through social pyramid systems which are based on enforced frauds. The main thing that the MAD Money As Debt system actually did was enable strip-mining the natural resources of a fresh planet, at an exponentially accelerating rate, which is reaching real limits of diminishing returns. Since the ruling classes have successfully waged a war against the consciousness of those they ruled over, IT IS IMPOSSIBLE TO HAVE RATIONAL PUBLIC DEBATES! Hence, MAD Money As Debt is a criminally insane system, that automatically gets worse faster, while the overwhelming vast majority of people do not know anything about that, but rather, have been conditioned to not want to know anything about that.

THE MOST IMPORTANT RESULT OF THE EXISTING MONETARY SYSTEM IS NOT THE RUNAWAY SOCIAL POLARIZATION, BUT RATHER THE RUNAWAY DESTRUCTION OF THE NATIONAL WORLD.

BOTH ARE HAPPENING AT EXPONENTIALLY ACCELERATING RATES, WHILE THE VAST MAJORITY OF HUMAN BEINGS CONTINUE TO DELIBERATELY IGNORE THAT!

Sun, 08/10/2014 - 10:24 | 5072460 radiobomb
radiobomb's picture

kudos, & +100 to you RM for your court cases !   So good to hear that some real-world action was engaged in.  Too many armchair radicals & keyboard ninjas, not enough direct action.  How typical that as a result of your court cases that laws were adapted to paraphrase lies and deceipt into 'legal' process, rather than the issues themselves being addressed and rectified.

It's a MAD world.....

Many points in your excellent post were also discussed in the recent ZH Orwell & Huxley article.  And yes, most peole glaze over during political discussion - as Huxley predicted. Circus Maximus has never been a higher priority since William Randolf Hearst was charged with distracting the USA public from prosecuting Ford/CocaCola/JPM/Standard Oil/BIS/etc for Trading-With-The-Enemy after WW2, and bought all the independant media outlets to silence the accusing voices.... demonizing hemp & its cousin , and fundamentally changing the free press for ever in the process.

Propaganda, Neuro-linguistic programming [NLP], distraction [sport/celebrity/etc], dumbing-down [education to obey and accept, rather than to promote free-thinking and self-reliance],  .... all at peak.

Sun, 08/10/2014 - 02:56 | 5072069 hedgiex
hedgiex's picture

If the US$ deflates over time without a burst, the Pound shall go first (undergirded by an inconsequential economy), then Euro (with drunkards in peperutal bawls), then Yen (the real economy being marginalised).

More realistic to play currencies this way

Sun, 08/10/2014 - 03:09 | 5072086 the tower
the tower's picture

It's funny how most people just repeat whatever they are presented with...

Fractional reserve banking is not as bad as it has to be... Central banks should only create more money when economic activity asks for it: when you work you create wealth, which is expressed in money. When you produce a product you create wealth, which is expressed in money. So, in a healthy economy, the central bank will create the amount of money that it is asked for, which is the same amount as the wealth that is being created.

The problem with fractional reserve banking is the interest that the central banks charge for the creation of money, and the amount of money created without there being a sound economic demand.

So, fractional reserve banking is not bad in itself, it's the interest being charged for creating money, and the people who abuse the creation of money. The solution is to stop central banks from charging interest on the creation of money, and to balance the creation of money with economic activity.

A system based on gold - as often proposed - is not the solution as there is only a finite amount of gold in the world so the holders of gold would get exponentially rich.

In a world which creates wealth out of nothing (labor, creating value from selling products at a profit) we need a system that does NOT go exponentially wrong. So, be it fractional reserve banking WITH interest, or gold, or bitcoin, it would always be a ponzi.

The answer is fractional reserve banking WITHOUT interest and with proper checks in place that the creation of money is not abused, meaning prison for those who do.

Sun, 08/10/2014 - 03:42 | 5072113 shouldvekilledthem
shouldvekilledthem's picture

Bitcoin users are not affected.

Sun, 08/10/2014 - 09:47 | 5072388 AdvancingTime
AdvancingTime's picture

Money has become so cheap to borrow that many people are now arguing that you must take it even if you don't know what to do with it. It is hard to imagine how much this is distorting the economy, markets, and reality in general. A total disconnect between life on main street and the financial world is occurring and it is putting the economy in a very dangerous place.

It is often hard to determine what is true, but a report on Bloomberg that 32 Trillion dollars in funds were held in offshore accounts around the world made me shutter. How safe is this money, and what exactly is it doing? Can you say Cyprus? More on this subject in the article below.

 

http://brucewilds.blogspot.com/2013/05/cheap-money-more-and-more-and-mor...

Mon, 08/11/2014 - 01:15 | 5075106 bid the soldier...
bid the soldiers shoot's picture

How the Fed creates recessions

 "One good conspiracy deserves another" no?

You know the conspiracy theory that I'm so involved with?  That the Pentagon wants to acquire all the available crude oil reserves that it can because the planet has moved into 'peak oil.'

And the other theory  --  sort of a matched set  --  would be that the Fed, in the person of Alan Greenspan, spawned the economic blow the world took in 2008. 

Of course, he didn't produce it overnight. No, he started it in the early 90's

In 1992, President George H.W. Bush signed the Housing and Community Development Act of 1992.[15] The Act amended the charter of Fannie Mae and Freddie Mac to reflect the Democratic Congress' view that the GSEs "... have an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families in a manner consistent with their overall public purposes, while maintaining a strong financial condition and a reasonable economic return;"[16] For the first time, the GSEs were required to meet "affordable housing goals" set annually by the Department of Housing and Urban Development (HUD) and approved by Congress. The initial annual goal for low-income and moderate-income mortgage purchases for each GSE was 30% of the total number of dwelling units financed by mortgage purchases[17] and increased to 55% by 2007.

In 1992 the Fed began both to build its inventory of subprime mortgages and inflate the infamous bubble.

Greenspan's next job would be to grease the butt hole of Wall Street to make a pleasurable and painless insertion of the first MBSs and CDOs into that place where the sun doesn't shine.

I refer to the 1999 Repeal of the Glass-Steagall Act.  

Greenspan's reputation was such that he could have stopped Congress in '92 and '99 from enacting those laws.

"Do not send to know for whom the repeal tolls...

I assume it was at the Fed's suggestion that the tranches of these MBS all had some subprime suicide explosives to scuttle them all.

In 2005 when he was Chairman-in-waiting, Bernanke had the Fed stop publishing M3, where all the QE from 2009 till now would be entered in a big round hand with quill and ink. 

HOW DID HE KNOW?

Why did the Fed want a recession?  I'll give you a hint.  It has to do with running out of crude oil.  That's all I can say now.

And if you don't like my CT, build one of your own.


 

Mon, 08/11/2014 - 08:50 | 5075652 free_lunch
free_lunch's picture

Not even 1% has a clue and most never will, because the ugly truth is that the majority is too stupid to understand even when spelled out:

Century of Enslavement: The History of The Federal Reserve-VIDEO

That's why they have to be ruled by deception and propaganda, the masses are too stupid and too selfish for any form of self determination or real democracy. That's another sad and ugly truth.

Edward Bernays and the Art of Public Manipulation-VIDEO

Go out in the street and talk to 30 random people about any important subject for 10 minutes and you will understand why real democracy would be even worse..

Recommended:
This is a video on the psychology of propaganda. Prof. Kroth reviews five major techniques for how mass media manipulates and twists the view people have of their world.

Don't think you or anybody else can change anything, this is impossible, for the simple reason mentioned above: the average IQ is way too low and people are too narcistic to really care for the common good.

Preach to the choir

 

Do NOT follow this link or you will be banned from the site!