Federal Reserve

[Makalakumu]

I found this on google video...

http://video.google.com/videoplay?docid=-466210540567002553&q=Federal+Reserve&hl=en

What do you think of this?

 

[michaeledward]

This 41 minute video is pretty interesting .....

Those who don't know history, are doomed to repeat it.

It brings an interesting light on the recent Dow Hits 12,000 thread.

Further, it seems the solution to President Bush's rather expensive expedition.

 

[Makalakumu]

I am finding some of the issues surrounding the federal reserve and our financial system in this country to be very provocative indeed.

The issues this movie brings up about the gold standard seem very valid to me.

So, too, do the issues regarding the root cause of inflation...which is the Federal Reserve itself.

And then there is the fact that we pay interest for every dollar that they print for us. Think about that! For some reason, in 1913 our government levied the American people to line the pockets of a private corporation for the sole task of printing paper money.

The end result of all of this is that US funds and monopoly money now have something in common...they are both backed by nothing but our belief.

No belief = no worth.

Scary thought, ain't it.

 

[Makalakumu]

Oh, and I love the quote by Henry Kissinger...

"Those who control the food supply, control the people."
"Those who control the energy supplies, control the continents."
"Those who control the money, control the world."

And Michael, I think that reforming our financial system may be the only real way for the American people, not just the government, to get out of debt.

 

[crushing]

Nice find. This is the kind of stuff the 'right-wing militia types/libertarians' of the 90s would try to get the word out on. Poor saps had such high hopes after the 1994 election, then the 2000 election. Instead, they got 'the same as it ever was'. No, they got even worse. Despite the conservative promises we got even more government, continued military actions, and less transparency.

Here is a link to a few related articles on the topic of the Federal Reserve and the lack of accountability and overstepping of power.

http://www.moneyfiles.org/banking00.html

 

[Rich Parsons]

I am finding some of the issues surrounding the federal reserve and our financial system in this country to be very provocative indeed.

The issues this movie brings up about the gold standard seem very valid to me.

So, too, do the issues regarding the root cause of inflation...which is the Federal Reserve itself.

And then there is the fact that we pay interest for every dollar that they print for us. Think about that! For some reason, in 1913 our government levied the American people to line the pockets of a private corporation for the sole task of printing paper money.

The end result of all of this is that US funds and monopoly money now have something in common...they are both backed by nothing but our belief.

No belief = no worth.

Scary thought, ain't it.

What happens is one does not believe in Gold? If no one wants it or trades it then would it not be worthless. I understand it is used in science and manufacturing and has a value, although if it has no value for trade other than silicon for chips then is it truly what one needs to base money on?

 

[michaeledward]

What happens is one does not believe in Gold? If no one wants it or trades it then would it not be worthless. I understand it is used in science and manufacturing and has a value, although if it has no value for trade other than silicon for chips then is it truly what one needs to base money on?

This is the 'Intelligent Design' argument, isn't it?

To not believe in gold would be insane. It is something they can touch, hold, measure, weight. It exists.

What I think you are asking is, what if people do not share the same belief as to the value of gold. I think the answer to that is that gold is a finite material. No one has yet been able to create gold out of something else (Isn't silicon made from beach sand. One web site said silicon is the second most common element on earth). The program indicated that one of the reasons for early gold standards was the weight to value ratio. Large values of gold can be assembled in managable weights and sizes.

Currency is a symbol of energy. If I put a days worth of energy toward meeting the objective of my boss, he provides me with currency. It would be nice if that currency, ten years from now, would still represent the same amount of energy. I think this program told us that the current system guarantees the same amount of energy will be worth less. I'll have to work harder, and longer, to receive the same value.

One way to stop that, is to measure that energy against a fixed quantity. That gold is finite on the planet, seems as good a place to start as any.

 

[Makalakumu]

This is the 'Intelligent Design' argument, isn't it?

To not believe in gold would be insane. It is something they can touch, hold, measure, weight. It exists.

What I think you are asking is, what if people do not share the same belief as to the value of gold. I think the answer to that is that gold is a finite material. No one has yet been able to create gold out of something else (Isn't silicon made from beach sand. One web site said silicon is the second most common element on earth). The program indicated that one of the reasons for early gold standards was the weight to value ratio. Large values of gold can be assembled in managable weights and sizes.

Currency is a symbol of energy. If I put a days worth of energy toward meeting the objective of my boss, he provides me with currency. It would be nice if that currency, ten years from now, would still represent the same amount of energy. I think this program told us that the current system guarantees the same amount of energy will be worth less. I'll have to work harder, and longer, to receive the same value.

One way to stop that, is to measure that energy against a fixed quantity. That gold is finite on the planet, seems as good a place to start as any.

The other thing that a gold standard would do is that it would make what you earned 10 years ago MORE valuable today. Thus, there is now incentive to save lots of money.

 

[Rich Parsons]

This is the 'Intelligent Design' argument, isn't it?

To not believe in gold would be insane. It is something they can touch, hold, measure, weight. It exists.

What I think you are asking is, what if people do not share the same belief as to the value of gold. I think the answer to that is that gold is a finite material. No one has yet been able to create gold out of something else (Isn't silicon made from beach sand. One web site said silicon is the second most common element on earth). The program indicated that one of the reasons for early gold standards was the weight to value ratio. Large values of gold can be assembled in managable weights and sizes.

Currency is a symbol of energy. If I put a days worth of energy toward meeting the objective of my boss, he provides me with currency. It would be nice if that currency, ten years from now, would still represent the same amount of energy. I think this program told us that the current system guarantees the same amount of energy will be worth less. I'll have to work harder, and longer, to receive the same value.

One way to stop that, is to measure that energy against a fixed quantity. That gold is finite on the planet, seems as good a place to start as any.

ME,

I am not trying to quote previous arguements, just asking questions.

For to me Gold is worthless. It is too heavy, and I do not find it attractive. Other than Science and Medicine and Engineering and Manufacturing it has no true value to me.

Grain does.
Beef does.

But they are both hard to carry and hard to keep fresh and hard to give to others.

To me the Gold Standard is just an old standard that worked some, it may have been better or worse depending upon who you are or what numbers one looks at.

(* I do agree that a nice review of the Fed Reserve would be nice *)

So, what is of value to me, and to others, that is easy to carry and easy to touch and exist as you say?

I guess for me it is anything abstract, including gold, for even if the Dollar is backed by Gold it is still abstract to me. I cannot go it all and move it easily, to cumbersome. So Barter maybe the only true solution for me. I use the Dollar as everyone else uses it. I could as easily use the Yen or the Euro or Beaver Pelts, or Bird Feathers or stones on a leather thong, or what have you. To me it is all abstract for if I exchange something, that I cannot use at the moment I am exchanging it for something that someone else may or should want in the future.

Could you explain to me why Gold has such a value? Other than it just does, and has before? Why could it not be moon rocks or Granite or Oil, or ..., .

 

[Makalakumu]

Gold has value because humans say it does. We value it because it is rare and because it has a high density which makes it easy to carry around a large mass in a very small volume.

I agree with the points that you are making. Gold seems like a silly standard for backing because you can't use it for clothing or shelter and you can't eat it or drink it. However, the point the movie is making is that it is SOMETHING.

IMHO, a better standard for the dollar would be Oil, but that is a different discussion.

Right now, the dollar is backed by NOTHING. It is a worthless peice of paper that has nothing back up belief in its worth. Worse yet, the federal reserve can print these peices of paper at will. There is absolutely no federal oversight. The end result of this is that this unelected group of private citizens in this private corporation controls the entire economy. If we use the money that they print, they control us.

The federal reserve has created a culture of debt. They are the sole cause of inflation and this has destroyed the purchasing power of the dollar. I wonder what would happen if people realized that the reason the dollar buys less and less each year is because of this organization.

 

[michaeledward]

ME,

I am not trying to quote previous arguements, just asking questions.

For to me Gold is worthless. It is too heavy, and I do not find it attractive. Other than Science and Medicine and Engineering and Manufacturing it has no true value to me.

Grain does.
Beef does.

But they are both hard to carry and hard to keep fresh and hard to give to others.

To me the Gold Standard is just an old standard that worked some, it may have been better or worse depending upon who you are or what numbers one looks at.

(* I do agree that a nice review of the Fed Reserve would be nice *)

So, what is of value to me, and to others, that is easy to carry and easy to touch and exist as you say?

I guess for me it is anything abstract, including gold, for even if the Dollar is backed by Gold it is still abstract to me. I cannot go it all and move it easily, to cumbersome. So Barter maybe the only true solution for me. I use the Dollar as everyone else uses it. I could as easily use the Yen or the Euro or Beaver Pelts, or Bird Feathers or stones on a leather thong, or what have you. To me it is all abstract for if I exchange something, that I cannot use at the moment I am exchanging it for something that someone else may or should want in the future.

Could you explain to me why Gold has such a value? Other than it just does, and has before? Why could it not be moon rocks or Granite or Oil, or ..., .

I believe there are two factors that make gold an appropriate standard upon which to base currency transactions.

1 - It is finite. Gold is created only in a Supernova explosion of a star. We are not making any more of it. It is 'ZERO SUM'. The government can not just go out and make more, because it is spent beyond its means. When governments make more money (printed paper), they decrease the value of that money by the basic law of supply and demand. They increase the supply, therefore, demand will drop. Beaver Pelts and Bird Feathers face the same problem as unbacked paper money. You want to increase your net worth, open a farm raising beavers or birds.

2 - It is rare. There is sufficient quantities of this element on the planet to establish wealth. But not so much as to make the value low.

3 - Other factors that cause gold to be a good choice for currency. It is an element. We can not break it down to other parts, reducing available quantities. It is very pliable, and therefore easy to divide and distribute. As described in the video, it has a good weight, size, value ratio. I believe they used an example of lead (maybe it was Iron), where the weight to value was impracticle.

I suppose other items on the planet also meet these two attributes of this element. They could quite possibly be substituted for gold. But, from the items you listed, oil can be burned, granite is probably too plentiful, and too heavy, moon rocks are too rare.

I still don't understand how gold qualifies as 'abstract'.

 

[Rich Parsons]

Gold has value because humans say it does. We value it because it is rare and because it has a high density which makes it easy to carry around a large mass in a very small volume.

I agree with the points that you are making. Gold seems like a silly standard for backing because you can't use it for clothing or shelter and you can't eat it or drink it. However, the point the movie is making is that it is SOMETHING.

IMHO, a better standard for the dollar would be Oil, but that is a different discussion.

Right now, the dollar is backed by NOTHING. It is a worthless peice of paper that has nothing back up belief in its worth. Worse yet, the federal reserve can print these peices of paper at will. There is absolutely no federal oversight. The end result of this is that this unelected group of private citizens in this private corporation controls the entire economy. If we use the money that they print, they control us.

The federal reserve has created a culture of debt. They are the sole cause of inflation and this has destroyed the purchasing power of the dollar. I wonder what would happen if people realized that the reason the dollar buys less and less each year is because of this organization.

What are the other monies around the world backed by? I would be surprised to find anyone seriously backing paper with something hard. I know the British Pound is for Sterling Silver originally, but is it still backed by hard metal?

Like I said I have no problem with changing the system, I just think I would questions those who pushed for Gold as owning Gold. I would also suspect those who pushed Oil or anything else as they might have something to gain by it being chosen. Just trying to keep my eyes open so as not to fall into the same trap.

Could I not say that Green Ink is valuable? Or paper with red and blue threads and a metal tag and green and other ink be valuable? The value is in the perception of the beholder.

Now if we changed the holding in reserve amounts, this would decrease the inflation and other issue, but one cannot back something with itself. But has not the Dollar become valuable in itself? If there was no value then I would not want to get paid in it and want to get paid in some other format.

 

[Kacey]

I still don't understand how gold qualifies as 'abstract'.

Gold is not abstract; the gold standard, and the value of gold itself, however, is an abstract concept. One cannot eat gold, build with it, wear it as clothing, etc. Gold - or silver, or diamonds, or wampum, or any other valuable substance that is in relatively short supply - adds a level of abstraction to an economic system that is, at its foundation, based on barter. Barter was the original basis for an economic system; you had a processed pelt that I wanted as a blanket, and I had meat from a new caught elk that you wanted for dinner - after some discussion, based on the relative value of each item and the difficulty engendered in obtaining and processing each item, we agree to a trade. Over time, the barter system became more codified, providing a standard value to items, and later services, to trade. Today, rather than bargain individually for each item or service I want, the services I provide as a teacher are assigned a value; the money I recieve for this service is agreed, by society, to have a value for other goods and services, and I use it to purchase those things I need or want. Trading small pieces of paper - or plastic, gold, or other substances agreed to have value - for goods and services is a very abstract concept, and very far removed from the barter on which it was originally based.

 

[Rich Parsons]

I believe there are two factors that make gold an appropriate standard upon which to base currency transactions.

1 - It is finite. Gold is created only in a Supernova explosion of a star. We are not making any more of it. It is 'ZERO SUM'. The government can not just go out and make more, because it is spent beyond its means. When governments make more money (printed paper), they decrease the value of that money by the basic law of supply and demand. They increase the supply, therefore, demand will drop. Beaver Pelts and Bird Feathers face the same problem as unbacked paper money. You want to increase your net worth, open a farm raising beavers or birds.

2 - It is rare. There is sufficient quantities of this element on the planet to establish wealth. But not so much as to make the value low.

3 - Other factors that cause gold to be a good choice for currency. It is an element. We can not break it down to other parts, reducing available quantities. It is very pliable, and therefore easy to divide and distribute. As described in the video, it has a good weight, size, value ratio. I believe they used an example of lead (maybe it was Iron), where the weight to value was impracticle.

I suppose other items on the planet also meet these two attributes of this element. They could quite possibly be substituted for gold. But, from the items you listed, oil can be burned, granite is probably too plentiful, and too heavy, moon rocks are too rare.

I still don't understand how gold qualifies as 'abstract'.

Gold is abstract for I could replace it with Lead, and still have the weight and size and other issues except perceived value. What makes Gold have real value, other than everyone agrees to say it has value. If we all agreed that Lead has value then we could us it. Lead has more value to me as it also protects one from radiation. Gold is not as good a filter.

But you see it is perception that Lead is not valuable. If Lead was traded on the open markets and we could sell short options on lead, then people could make all the same arguements. Lead would have value. We could use Silicon for it is made of sand, but as you stated it can be made and sand is very plentiful.

So, while I understand your concern and support it, for the Federal Reserve, I am confused by the choice of Gold. Gold would then sky rocket in cost, as this country and banks would have to have more of it. This means that some would get very rich off of this transaction. It would also put the hard money into a few hands. The number being smaller than today. So, while I agree something should be done, I am questioning the plan, as it is not without flaws in itself and they should be discussed to try to limit concerns and issues. The Fed Reserve should have better control. In particular if the USA is backing the dollar they print.

 

[Brian R. VanCise]

I heard recently that China is on the gold standard. If that is true that is a very, very scary situation for us. If our debts are ever called in how will we pay? Particularly if they demand gold.

 

[Rich Parsons]

I heard recently that China is on the gold standard. If that is true that is a very, very scary situation for us. If our debts are ever called in how will we pay? Particularly if they demand gold.

I thought China Yuan was backed by the Communist Governement only.

 

[Brian R. VanCise]

You see Rich that is what I thought as well. However a friend of mine who is doing a lot of business with them said that they were buying gold like crazy and that they were in a position to go on the gold standard so to speak. (this was rellayed through chinese government officials to him) I would appreciate if anyone else has better information on this.

 

[SFC JeffJ]

Isn't the Chinese govt. somehow tying the value of their currency to ours?

 

[michaeledward]

Gold is abstract for I could replace it with Lead, and still have the weight and size and other issues except perceived value. What makes Gold have real value, other than everyone agrees to say it has value. If we all agreed that Lead has value then we could us it. Lead has more value to me as it also protects one from radiation. Gold is not as good a filter.

But you see it is perception that Lead is not valuable. If Lead was traded on the open markets and we could sell short options on lead, then people could make all the same arguements. Lead would have value. We could use Silicon for it is made of sand, but as you stated it can be made and sand is very plentiful.

So, while I understand your concern and support it, for the Federal Reserve, I am confused by the choice of Gold. Gold would then sky rocket in cost, as this country and banks would have to have more of it. This means that some would get very rich off of this transaction. It would also put the hard money into a few hands. The number being smaller than today. So, while I agree something should be done, I am questioning the plan, as it is not without flaws in itself and they should be discussed to try to limit concerns and issues. The Fed Reserve should have better control. In particular if the USA is backing the dollar they print.

Yes, you could choose to have a lead standard. I indicated that there were several attributes that an exchange medium would need to meet.

Is it finite? Lead is finite. Lead makes up only .0013% of the earths crust.
Is it rare? Lead is not considered a rare element.
Can it be created, raised or grown? No it can not.
Can it be distilled? No.

So, of the four attributes I have chosen, Lead meets the criteria of three of these. Not bad.

Incidentally, I believe the Federal Government confiscated all of the gold that used to be held in banks when we last removed the currency from the Gold Standard .... Fort Knox, don't you know.

 

[Makalakumu]

Incidentally, I believe the Federal Government confiscated all of the gold that used to be held in banks when we last removed the currency from the Gold Standard .... Fort Knox, don't you know.

And the Federal Reserve holds the rights on all of the gold in Fort Knox as collateral for the money it prints. How is that for robbery?