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An Open Letter To Janet Yellen
Submitted by Xiaolin Zhong via Mises Canada,
Dear Chairwoman Yellen,
This is an open letter urging you to stop money printing immediately. It has created worse economic inequality and tremendously hindered the economic recovery from the longest recession in history.
You have said that you are extremely concerned about economic inequality. Yet, through money printing, you are the greatest contributor to it. Such inequality can easily be seen in the two consequences of money printing: skyrocketing prices of most important necessity items, such as gas and food on the one hand, and that of commodities and assets on the other. The skyrocketing prices of food and gas have ripped off a great chunk of income of main street people, and that of commodity and assets have brought a dramatic fortune to assets holders and financial speculators, the Wall Street “fat cats” being the greatest beneficiaries. Consequently, the former get much poorer and the latter get much richer. Unlike the fair and beneficial economic inequality due to different efforts resulting in individualized maximum utility, the net of the utility of income and the disutility of cost of income (i.e., the sacrifice of leisure time), this inequality has nothing to do with efforts. The Wall Street “fat cats” have been making tons of money effortlessly, while the Main Street people have been struggling just to make end meets and this is something beyond their reach, no matter how hard they work. This sort of inequality is a recipe for social turbulence and therefore the worst kind. I have tremendous sympathy on those who have been protesting their employers, demanding pay raise. They are not seeking higher income. They are just trying to keep their income from falling. Such protest and demand, however, has been made to the wrong persons. The right person is you.
It seems very difficult for you to appreciate the pain the skyrocketing prices of gas and food have caused to working people. With your wealth, you hardly feel a thing from increased spending on those items. In spite of this, however, you should be able to imagine what such increases mean for those who had had to spend half or more of their income on daily necessities even before it occurred. If your imagination is still not good enough, then you should probably consider trying to make a living just like Main Street people.
Why don´t business employers just increase employees’ wages, you may wonder. Well, they cannot. You know very well that they will if they can. Happier workers are more productive. Employers cannot do that because the increase in commodity prices has been seriously hurting costs. It is already exceedingly tough for them to keep appropriate profits, let along raising wages. Even elite economists such as you understand that there could be no business without profits. If wages increase, business employers will have only two choices: either boosting automation or simply going out of business. Needless to point out that neither case helps improve employment.
Why don´t businesses increase prices to maintain profits, you may wonder. Well, the answer is the same: They cannot. Most consumer goods and services are price-sensitive. Most price increases therefore hinder demand, which has been already extraordinarily low due to reduced income of working people. The frequent deep holiday discounts have demonstrated this clearly. Prices of gas and food can be increased because these items are somehow price-insensitive. Even this insensibility, however, is not unlimited. The prices of commodity and assets can be increased for money seeks safe harbour.
This hits the answer to your next question: why does the expansion of liquidity not cause prices to rise. The answer is that only higher demand results in higher prices. And there can be no demand without income. What is income? By definition, it comes from production. This is not from me. This is what all economics text books have been saying. While disagreeing with most of what economics text books teach, I accept this definition. Even if you do not believe in me, you should believe your elite economist colleagues.
What drives production? The pursuit of profits by businesses and the spending power by individuals (I do not think I need to explain the reason for such pursuits). Average cost declines as production increases, enabling businesses to drop prices in exchange for higher sales volume, resulting in higher profits. The supply-price-demand-supply circle operates like this: the increase in supply of certain goods, say, A, B and C, brings about the drop of their own prices and the increase in demand for them. It simultaneously increases the demand for other goods, say, D, E and F, and drives their prices up. This in turn stimulates the increase in supply of D, E and F, and causes their prices to drop. What will happen to A, B and C? The demand for them will increase and their prices will climb, encouraging more production. So on and so forth. As a result, total supply increases while prices either remain stable or drop gradually, provided the amount of money in circulation remains unchanged. There is no need to expand liquidity for money circulation speeds up as economic activities heat up (I suppose you are familiar with the famous equation: price x output = money in circulation x circulation velocity). Such a healthy operation naturally produces optimal interest rates and there is no such thing as lack of liquidity. Money printing can have no positive impact on the economy, for expanded liquidity has nothing to do with production, hence demand. You know very well that expanded liquidity has never been translated into business or consumer loans. Businesses will not borrow without demand. Consumers will not borrow without income. The only borrowers are financial speculators and those who have no intention to repay.
Money printing does generate tremendous income for Wall Street “fat cats”. Such income, however, is more than off-set by the loss of working people. Money printing is thus the most vicious redistribution of wealth. It has been always the instrument for financial tycoons and corrupted politicians to accumulate wealth. History has repeatedly shown this. You do not need to look back very far to discover this truth. As recently as in 1940, the huge scale of money printing in China generated mountains of wealth for financial tycoons and corrupted politicians.
For real world people, it is a simple common sense that wealth does not fall from the sky. It has to be produced. It is beyond me that such an obvious truth is so difficult for elite economists to comprehend. This is largely because they just sit in the ivy tower, imagining the magic golden touch such as monetary and fiscal policies, mocking practitioners. They are so ignorant and arrogant.
The problem goes even beyond ignorance and arrogance. Elite economists understand clearly that demand relies solely on income. And income means production. Given this premise, the only logical conclusion regarding the cause – effect relationship between supply and demand is that it is the former that drives the latter, and there can be no other way around. Yet they have still been obsessed with the idea that demand can be created to haul supply without supply being produced in the first place. They are not only arrogant and ignorant, but also incapable of logical thinking. Unfortunately, they have long dominated both economics study and economic policy making, cultivating fools like themselves and causing disasters after disasters.
I understand that what I said above need a theoretical explanation. But such an explanation cannot be properly provided in such a short letter. I will be more than happy to elaborate for you in some other places, if you so desire. Despite this drawback, however, what I have said is entirely supported by facts and therefore not invalid, to say the least. As indicated earlier, the worst sort of economic inequality has been created. Not only that. An assets bubble is forming, if not already formed. Inflation will eventually occur, as the prices of commodity reach the point at which businesses cannot survive without raising prices. You do not want to see such inflation. Businesses cannot survive without increasing prices. By increasing prices, however, they will be committing suicide. That will cause horrible inflation and vast unemployment. This is why Churchill said inflation was worse than Stalin. Does such perspective concern you a bit? It is incomprehensible for me that there are such economists and policy makers who could be so foolish as to rely on money printing to pull the economy out of recession.
It is incomprehensible for me as well that elite economists and policy makers such as you never look at policy effects. You just blindly believe in mainstream economic theories. The famous Philips Curve perhaps best exemplifies this blindness. The Curve suggests that there is a trade-off between inflation and employment. This suggestion has been long proven phony by the stagflation during the 70’. But obviously you are still faithful of it. It is already bad that you lack the capacity to question and challenge main stream economic theories. That is still understandable, given your education background and narrow mind. But how could you ignore policy effects? Is it a basic scientific thinking that a theory is proven untrue if its prediction fails just once? Any medicine has side effects. No medicine shall be used without its benefits surpassing its side effects. A physician will stop the medicine he prescribed for his patient if it fails to deliver expected results. You are clearly aware of the side effects of money printing. Yet you have been continuously applying it without seeing any desired results. Can you call yourself a responsible physician?
It appears that none of real world experiences, logic and facts can have impact on your mind with respect of money printing, given that you have no intention to stop it. The only thing left for me to appeal to you is your conscience. I am actually a beneficiary of money printing. The price of my house has been more than doubled in just a few years. That, however, cannot make me happy, not at all. This is because I feel for Main Street people. I feel for them for I myself use to be one of them. For a long period of time, I earned just above minimum wage. Such low income, however, sustained not only my living, but also my education. This kind of life is tough. However, I have neither complaints nor regrets. I am proud of myself for having maintained dignity. I do not blame my employers either. They tried hard to pay me as much as they could. The point here is that such achievement is impossible without low and stable prices of necessities. Now, so many Main Street people are struggling, not for a better life, but for a life not worsening, thanks to money printing. You cannot deny this effect of money printing. As such, if you still have conscience and you are genuinely concerned about low-income people as you said you are, you must stop money printing immediately, not only the purchase of the treasure bonds, but also all lending, especially the ones with near zero interest rates. Anything short of that will disclose your true color: a dog running amongst Wall Street “fat cats”.
Sincerely Yours,
Xiaolin Zhong
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Fuck You.
Sincerely,
Janet
like she really gives a shit.
Cunt parasite
I feel sorry for you Janet if you ever step out on to the street without armed guards
I feel sorry for Cunt parasite, they are better than Janet
Cunt Parasite sounds like a great name for a death metal band.
A journalist assigned to the Jerusalem bureau takes an apartment overlooking the Wailing Wall. Every day when she looks out, she sees an old Jewish man praying vigorously. So, the journalist goes down and introduces herself to the old man.
She asks, "You come every day to the wall. How long have you done that and what are you praying for?"
The old man replies, "I have come here to pray every day for 25 years. In the morning I pray for world peace and then for the brotherhood of man. I go home have a cup of tea and I come back and pray for the eradication of illness and disease from the earth."
The journalist is amazed. "How does it make you feel to come here every day for 25 years and pray for these things?" she asks.
The old man looks at her sadly. "Like I'm talking to a wall."
Economic models assume stationarity and homogeneity of decision making across cultural boundaries.
When I was taking my MBA economy courses, I heard these assumptions quickly uttered by my PhD Professor, but with my Engineering and Scientific background, and a PhD myself, I couldn't but stop the big Professor and ask, "Are you being serious? How can so easily make this HUGE assumptions? What are you basing them on? Do you understand that by making them you risk making your model unable to predict anything?" and he coldly answered, these assumptions is how these models were derived and you need to learn them.
I did and got A's in all the courses, but eventhough I learned all the BS stories they teach you, I can tell you that they are all just stories. All their models are infantile and any bridge they'd build with modeling like this wouldn't last a season without falling. No smart phone designed in this way would work and every space rocket would have blown before takeoff (although, they may have incorporated some economists in the design teams of the private rocket companies now a days as CFO's or comptrollers, that would explain the explosions, always forcing the engineers to prove that something cheaper doesn't work rather than viceversa)
END THE FEDERAL RESERVE
WE THE PEOPLE can print our own debt-free currency and govern ourselves. We can have a government of the people by the people
Thomas Edison put it this way: “If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good"
Henry Ford stated: " It is absurd to say that our country can issue $30,000,000,000 in bonds and not $30,000,000,000 in currency. Both are promises to pay; but one promise fattens the jew, and the other helps the people.”
Remember Weimar
Dear Mr Yellen,
Why are you a fucking hologram?
Eat shit and die.
"There ain't nuthin uglier than an old white woman." Fred Sanford, Sanford and Son
Two words,
Maxine Waters.
http://www.uhura.com/grfx/nn/nichelle.jpg
That's overstating it a little, but as my wife likes to say: "Black don't crack." (Yes, she always says it in English.)
(Double-post.)
"Jane(t), you ignorant slut."
Excellent.
Great letter, will make absolutley no difference what so ever. The un-fed does not and does not have to concern themselves with any type of reality!
Au contraire. I think public humiliation might be quite a tool here. Picture this.
You tube video. Little old lady with maybe 50 grand in savings and her social security check, opens her bank savings statement, looks at her interest income, which is blown up for all the world to see...
and then starts cursing Yellen & Co like a sailor.
Follow up with kids saving for college, whatevuh. The truth won't set us free, but why not kick Mr. Yellen in the nuts, now and then?
PUBIC HUMILIATION?
Well let's watch the actual public humiliation Nov. 4th USA when the "corporations are people" vote. Now that will be public humiliation. Zimbawe has elections more fair. As does Ukraine. At least there is a pretense of passionate choice.
Ho hum USA when idiots, doddering old fools and illiterate puppets form the newest non-functional power base of the "exceptional nation". That Gubbert whatshis name is the prime time example.
And they say I wear a tin foil hat? and hold opinions (that is a crime after all)...but this Gubbert fool is beyone belief. McConnell. Pelosi....the Supreme Court that said "corporations are people" are all low life wankers. Deserve my Ebola spit.
And Yellen? she is simply piercing the glass ceiling by joining the devil. Ignorant bitch.
Long Diebold. Great market opportunities as the serfs rebel.
Dear Janet,
Quit fucking over savers and selling our kid's futures down the river you harpy!
Sincerely,
America.
let me ask all of u the following simple question....
DO YOU THINK THE MONEYCHANGERS GIVE A FUCK ABOUT WHAT IS HAPPENING TO YOU, YOUR BRETHREN AND YOUR LOVED ONES???
do sociopaths care about anything other than what they perceive as important and desirable to themselves???
listen - you want to send a letter to the Fed and its chairsatan...?
THEN MAKE SURE ITS A FUCKING LETTER BOMB...
then maybe someone there will listen....
DEATH TO THE MONEYCHANGERS.
If only the Federal Reserve parasites weren't blood relatives of our Military Industrial Complex parasites...
You might as well write this in Chinese and email it to her cats litter box.
She doesn't do things because she thinks they are "good or bad" she does things because thats what the people that own this country (investors and shareholders of Federal Reserve) tell her to do.
Clear and simple.
The Federal Reserve is a private corporation, with shareholders, the number one priority a corporation has is to earn profit and enrich the shareholders. . . that means robbing you and paying owners (since profit has to come from someplace).
The USA is a "tax farm" one that has grown to a point where it is no longer profitable to run (despite numerous investments by the shareholders) in welfare programs (this is how the shareholders must see it)
Imagine buying a factory, and all your workers started off making you A LOT of money, and as time went along, you employed every off-spring of your employees and paid them a salary, eventually you hit a tipping point where more people not only does not earn you more profit, it starts to inhibit profit and hurt your bottom line, despite you dumping incentives and benefits on them (thinking this would boost productivity).
This presents you with a few choices, fire a large portion of your work-force (decrease population), or find ways to "steal" profit from your employees with cheap accounting tricks (counterfeiting checks) and inflating the currency you pay your workers in (to steal more of their labor after the fact(QE1-2-3-etc.))
Its very simple.
now plan around that.
Good Luck.
Pysical assets of real value and a dependable tribe, period. (location and luck help).
same as it ever was.
@ DRE,
14th Amendment is where your certificate of live birth enters with your mothers signature of abandonment on the bottom. Research Trading with the Enemy, that's you. Your still contracting and doing commerce with a foreign nation daily, why? Because THE UNITED STATES OF AMERICA,INC. is located on foreign land, what we call the USA, or home to US citizens and your Represenatives on the Hill need you in the usury system because that's who their bosses are, big banks and Corporations.
Their signing your death warrants with China and Russia and everyone in this du jure governance is praying you don't find out the truth that your a commodity and colladeral for their federal debt they incure. The more debt they make, the more US citizens must die so they can collect on your Fidelity mutual bond as a way to recoup their losses.
On average, everyones bond is worth approximately 1.5 million dollars until it terms. So figure out how much public debt we have, then divide it by that number and that's how many their going to kill when they get here.
Your mother released her newborn unwittingly into a foreign nation as to participate in their Commerce and by concent/seal her own bill of laiding into a foreign port, at the dock - tors office at the State Hospital. All Maritime Law.
Get it? Her birth canal broke water and delivered a goods or product to a dock in a foreign port. The Dock - tor legally witnessed her delivery, your port of exit, as you entered into a foreign jurisdiction with UCC Laws.
You all are contracting with a foreign .gov. so your considered a squater on their land.
Your Birth Certificate is now a bond, a financial instrument to be traded publicly until your Corp. expires meaning death.
All crimes are UCC Commercial, they operate du jure under public policy, policy is NOT LAW so wipe your ass with your Constitution [Bill of Rights] and your Declaration of Independence because its just that, they don't recognise the 1776 Constitution, they replaced it with The Act of 1871, so their both toilet paper at this point. Ones in the dust bin and ones re written to become a Corporate charter which has nothing to do with your freedom. It's the exact opposite.
A non codified "Declairation" or announcement voca visa statement made by a, or the public, doesn't have to be recognised as a decree of soverignty on foreign soil, it's quite the opposite, that person making that decree can be arrested because your talking like a foreign invader becoming an enemy of a foreign nation because he is too stupid to research he is a registered slave by his own mother and volentary, your sprawl on their Plantation.
If you think your so free and own all the crap you have registered, try to fight them when they come to seize their property and see what happens.
I can declair in the public square all day that I am a free man and I have God given rights, but that goes counter to what my mother signed over to the state when I was born.
US Citizens must get educated quickly, if not, it may cost you your life and or property. Your squaters on Foreign land. Get over your Star Spangle banner bullshit and recognise your born into a usury system owned by multinational Corporations. its not your fault
becase your parents were equally ignorant of the History of the united states of America.
If we were truely that free on soverign land, we wouldn't need an SS. Secretary of State. You need them domestically to enter the jurisdiction of our US Court system to use Notary signed documents so their recognised by a foreign jurisdiction (the court) on your behalf.
Wake up and become aware. The American dream was just that.
Your contracted with a foreign Multinational Corporation. Maybe this might help?
It doesn't matter, It doesn't matter what fraud they perpetrated on you.
All that matters is, you are here, they are running things, and you have almost nowhere to run (atleast nowhere worth running to anyway...) as they have left all other venues barren wastelands.
Sure that is pretty much the legal fraud they perpetrated on the population, all to get you to be obedient drones under their jurisdiction.
But what does it matter if you were never signed over? you would essentially be treated like a germ inside a body the white blood cells (authorities) would just victimize you even more. . . and any property you were allowed to own would be pitiful at best, when you are presented with the perks of being a slave or the freedom to be poor, its easy to see why the masses forfeit personal freedom.... because freedom isn't that great when everyone you know is an oblivious slave.
The devil builds us all cages of gold and comfort, and leaves the door wide open, but people still choose to live in the cage so long as it looks better on the inside than it does on the outside.
The Free Man ideology even while being based in fact , is not conducive to change or beneficial since it lacks any authority or group large enough to retain any meaningful human rights like property and the right to keep what you earn.
You are a man on an island built out of ideology surrounded by sharks, you can choose to live like a shark in the water or a like a dead man on a beach.
Thats not much of a choice despite how admirable and honorable the idea is.
Sounds like you have been listening to Jordan Maxwell, Mad Max.
JJJanet
EEEllen
WWWeimar
would eat your eyeballs out rather than give you one cent
Shut up! According to the government, business doesn't create jobs!! It's like parents don't give birth to their children. Government does!!!
Yeahh!! So let us eliminate private sector and expand govt to a 100% !!
As "unequitable" as targeted printing and purchases has been and is, ZIRP/NIRP is far, far more destructive to real capital and savings. The two things that need to be preserved and respected as this is where real innovation comes from. (infinite "growth" in a closed system with finite resources has always been a myth).
We have been and continue to reward bad behavior, the outcome will be the same as it always is.
Listen Zero's.
"Submitted by Xiaolin Zhong via Mises Canada"?
WTF? Submitted by some Chinese communist out of socialist Canada?!
You can't make this stuff up. "STUNNING".
What part of all fiat goes to zero don't they get? The Chinese invented paper money for Christs sake...
Listen Physics.
Chinese and "MUSLIMS" are not allowed on The Hedge!
You're a moron. China is more capitalist than the US, at least you won't get fined operating a lemonade stand without a license. Who cares about Canada, she wrote it for the Mises Institute of Canda - ya know, the greatest and largest pro-capitalist organization on earth. Plus the whole letter is anti-Fed (which is anti-socialsit because the Fed is Marx's 5th plank). Jackass.
Would be much better to send her a picture if Greenspan and Bernanke hanging upside down from an Esso gas station. ...... a picture is worth a 1000 words. ....... She may get get the message and listen then.
Yellen and (primal) Screamin' soon.
.
Pigs like yellen want immortality. One letter won't do much.
1000 letters may. A few books is even better.
If history remembers yellen as a useless and destructive fuck, and she sees that now, she may cut this POMO crap out.
In the meantime, fuck off and die yellen.
Her heart, mind, and soul are so far down the rabbit hole of the "Church of the Holy Sepulchre of Debt" that she would read this as heresy rather than truth.
Jammit Yelling is an inbred Hebrew bankster, born of Hebrew banksters, beholden to Hebrew banksters, a sell-out to the Rothschild esq elite.
Whaddyaa 'spect from such a puppet?
I remember during the 08-09 corection I said to my colleague looking out the window, "Look at these folks busy with their day, do you think they really give a shit about the 400 pt drop today? No. Because they are too busy trying to eek out a living, making lives better for others, in one form or another. The stock market could go to zero and 95% of people wouldn't care."
Which ought to tell us that behaviour, in general - at its most basic level, is rather predictable REGARDLESS of insane monetray policy. And what a powerful sort of general behaviour it is - the voluntary actions of individuals exchanging scarce resources. Why do we think printing money will somehow move this gigantic pillar of human action?
The Cantillon effect (he who spends it first, spends it best), which Keynesians argue doesn't exist is what has ALWAYS precipitated runaway price inflation, because in the end, volume (demand) dictates price not money printing. Lucas (1976) identified this in that people will recognize things for what they really are and that would include producers and capital. There is no cap ex, becuase there is no demand - there is no volume behind the nominal price push. And it has all but been put to rest the notion that the Phillips curve - the tradeoff between inflation and employment never actually existed. But, we still use it to this (6.5 and 2) day despite evidence demonstrating that it will be shear luck if you can actually get it, and that even if you did, what does it say about the welfare of society - you know - how do you go about evaluating what you achieved? Whats the benchmark? WTF are we looking for?
Let prices go. Mainstreet wins in a recession. Because at least in a recession - there is hope in the notion that even with short term marginal work, I can still afford to feed my family - that is to say - the 95% won't hardly notice ( i am exagerating some, but, i bet not a lot). Its the rich that inevitably get their ass handed to them - those that levered up and particpated hand in hand with the money changers. Their lives change.
I've always thought that I never felt poor during the 80s recession,, but that I have never felt poorer during the 2009-14 boom.
Civil disobedience won't come from a recession of falling prices - it will come from debasement of the currency and the destruction of what little wealth people have left. where they see a group of people that have benefited at their expense. In a delfationary economy everybody loses - almost proportionately. In an inflationary economy 99% lose by more than the 1% that win.
How long do you think that bullshit lasts?
Dear Janet,
I was formerly a professional engineer, and was unemployed for some time, but am proud to announce that I'm now part of the 'New American Success Story' and am contributing to the reduction in unemployment numbers, thanks to my new job as a WalMart greeter! I am feeling a bit of a pinch financially, as the new job pays slightly less than what I used to make, but I understand your recommendation is that I accumulate significant assets as a way to improve my situation. I think I can save around $14/month if I cut out a couple of meals - can you give me some suggestions as to appropriate assets into which I should be investing this surplus income?
Regards
American Middle Class
That'll just about buy an ounce of silver a month.
Elite card table shell game players can always reverse mortgage their unpaid 5 million dollar home and continue to run debt riddled parties, as if you are a EBT government white negro plantation serf plummer. These socialist maggots are funny. Throw them in front of a camera and call it a debt crib MTV show.
Fuck you Hollywood, you're a enabler to the banking handlers. How did the American Reinvestment and Recovery Act work out for designing propaganda? That was 2010, we are now approaching November 4, 2014.
White House ding ling is still campaigning. The desperate negro in chef.
The only logic this thief understands is her destruction.
Obama tyranny ISIL Tutu war driven by a Madonna cub scouts pack with Cher singing in the background.
Wraps it up. Didn't even pick on the View or Oprah. /lol
just ready the blade.
Does Mr. Zhong really think Ms. Yellen needs an economics lesson from him? She knows all the thoeries and the opposing points of view too.
The problem is not her lack of knowledge, but her motives.
END the Fed. It's that simple.
"They are so ignorant and arrogant."
No, they are grifters and con-men, and it is theft and treason.
An American, not US subject.
Yellen: Ineffectual, inert, purposeless appointment, dry hump, fucking appendage, why;see Useless.
Nice letter and all that but she works for the Fed, not YOU, or US Government.
The FED is incorporated (as is the US government) and her #1 job is to see that the FED is strong enough to survive, either through legal means or not. She will print, rehypothicate, steal, skim, mis allocate and or any combo of those tasks as she sees fit to do if it will let the Fed survive another quarter.
dear mr Xiaolin Zhong,
i really appreciate the good intention and fustration pertaining to your article but i am sorry that i diagree with you somewhat.
first of all, the elite economists and powers that be understand full well the horrible effects of thier actions, but they simply dont care. the reason is because if they were to follow the genuine law of economics and COMMON SENSE, they cannot maintain/sustain the illusion of success while their many failed policies are driving the economiy ever downwards.
but more importantly, it is the devious intention, not incompetence that drives the "economic experts" and the powers that be to do what they are doing. the intention to make more money, stay in power and control/control/control. it is all totally selfish and self serving.
these evil deviants do not think like the common people as you said. they are only driven by greeds and power in a vicious circle, feeding upon itself endlessly until one days when everything cannot support the cycle anymore and just simply imploded/exploded.
lastly and most of all, who is really responsible for all these? the common people ... they elected the powers that be; against good advice/common sense and for their own greed and laziness and the cycle goes on and on and on .....
thank you
michael
According to Sprott Global Resource Investments Limited:
http://sprottglobal.com/thoughts/articles/what-greenspan-latest-talk-means-for-gold/
Friday, October 31, 2014
I traveled last week to the New Orleans Investment Conference, previously known as the ‘Gold Show.’ Jim Blanchard, a man known for promoting the right to own gold during the Nixon era, started the conference in 1974.
Early on, the conference was a gathering place for investors in precious metals. Speakers such as Rick Rule broke out into the investment scene through conferences like this one.
I’ll report later on the many speakers who attended the conference - and try to boil down some of the salient points from the highly valuable conference (attendees took nearly a week away from their regular lives to attend).
For now, I’ll confine myself to the headline speaker of the show – former Fed Chairman Alan Greenspan – and what his comments could mean for gold investors.
We did, though, learn a few important things about the Fed.
First off, Greenspan claims he has always remained true to Austrian economics and the principle of sound money. He fell into his role as Fed Chairman purely by accident, he claimed, and what he did there, he did it because he had to.
He explained that the capital needs of the Federal government were so massive that the only way to prevent disaster for the rest of the economy was to keep feeding the beast with cheap money. If the Fed hadn’t created and circulated new money, the Treasury’s insatiable demand for capital would certainly have ‘crowded out’ the rest of the economy, wrecking the entire private credit system.
Political realities, he explained, in the form of entitlement spending and off-balance sheet obligations of the US government, trump the need for sound money every time. It wasn’t his fault – that’s just how the system works. It’s set up to redistribute income from savers, who lose income because of low interest rates, to spenders.
In other words, Greenspan was a man who was forced by circumstance to go against his beliefs. Coming to the show, I had expected to disagree with Greenspan, but what I found was that the Fed Chairman was saying exactly what we have believed all along. Sound, stable currency is incompatible with the welfare state. Greenspan may have slipped away from the path, but he’s a great spokesperson for our message.
The Fed is unlike any other business in the world. It’s the only one that we know of that literally creates ‘something from nothing.’
The Fed wills new currency into existence, which it can then ‘sell’ by charging interest. Every dollar comes into existence as a debt due to the Fed; the more dollars are out there, the more money the Fed makes. The interest it receives is ‘pure profit.’ So it’s no surprise that as the government’s demand for capital has increased, the Fed has ‘accommodated’ that demand. Even if the Fed has to lend the government the money to pay its interest, that new money costs nothing to create, and it adds to the bottom line.
We did get one striking admission out of Greenspan. The Fed is not independent of the government, he said, calling suggestions to the contrary ‘naïve.’
Greenspan didn’t speak much to role of the Fed. He didn’t talk about inflation targets, or comment on how the Fed could help grow the economy, as he would have if it had been a New York Times interview I’m sure.
Hidden in his answers, however, was a big prediction for how the Fed will likely act in the future.
It’s not about juicing the economy or keeping the currency stable, although those are certainly justifications that are used.
The truth is, the Fed is merely adjusting supply to meet demand. That’s what he meant when he said that the Fed had to increase the supply of debt to avoid the private sector being ‘crowded out’ of the market.
Its mission isn’t to keep the currency stable, it’s to help fund the spending of the US government, and to defend the banking system.
This suggests that as long the US government resort to high levels of debt, the Fed isn’t likely to decrease the supply of money.
Greenspan might have an inkling of something he’s not telling.
Here’s what the former Fed Chairman had to say about the direction of gold and interest rates:
“Gold – measurably higher. Interest rates – measurably higher.”
Shes just another puppet for the banker slave masters..if she wanted to end QE, she coudn't.
When we say there is no money to increase workers wages, there is always money to raise CEOs wages and those on the top tier.
All graphs show productivity rising, but static wages after a de-coupling of the two in the 1970s.
We can try and put all the blame on the FED but the problem lies with all elites who think they must be incentivised with ever higher renumeration packages and those lower down must be incentivised by fear of redundancy.
The stick and the carrot.
The carrot for those at the top and a stick for those lower down.
Never try to teach a pig - it wastes your time and it annoys the pig
Janet Yellen has been head of the Federal Reserve bank long enough that we no longer need to speculate as to her job performance. As we begin to critique her ability to perform we must remember perception is often just as important as reality. Another issue that comes into play is how you stack up or compare to the person who held the position previously, this often extends to style as much as it does to substance.
As expected it appears Janet Yellen has chosen to take us down the same the rabbit hole as Bernanke on a journey to prove that if we just continue doing what is not working, all will turn out fine. Caution, this path leads down, and down, and down, farther and deeper then most can ever imagine. If asked to critique "Old Yellar" now playing in theaters everywhere I would by way of the reasoning above have to give her the maximum two solid thumbs down. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/yellens-job-critique.html