Some one has to start it, Americas default.

It's called a conversation.

You had asked for the mechanism which is used to control inflation and I provided that monetary policy approached control through the money supply.

You countered:

To your question I provided review of the policy apparatus.
No matter though, it's late.
I can see that I fired the first shot.
Perhaps you will allow that persistent flag burning is even more annoying than "flag waving"

Good night all.

Yikes- one more thing:

Mas- "Keynesian framework".....
I don't know that I endorse it but I like to see what the cooks are putting in the stew.

 

You have told us that you are educated in this area. You have said that 'you' were a banks accountant with qualifications.
I asked 'you' for 'your' explanation of the suggestion that interest rates controlled inflation . I dont expect you to post a reply from the internet.

If you don't know you dont know.

Whats wrong with this world --people cant speak without looking at the internet first.

A forum is to swap thoughts and meet people at the other side of the world. Its the new equivelent of Ham radio.

I want to talk to you, not the internet. Mas and Binti YOUR experiences, your life, your opinion.

I might as well google it !

This thread is as boring as the global warming thread. Sorry no link.

 

Frosty-truce.

Accountant?
No- I am only trained as a lowly ecologist.
Your point is taken.
Goodnite

 

Hi Frosty, The "bank accountant" was a Melbournian? rwatson I think?

I postulate and pontificate, and some clown nitpicks or "puts words of inaine drivel purporting to be my view" and that is sooooo booooorrrrring... I am listening to / watching the keiser-report-episode-201 and then '202' - - - both quite entertaining...

The EU discussion concluded at about 05:00 GMT this morning and the plan was agreed but NO DETAILS - that means they "passed the parcel" - or 'kicked the can down the road'... AGAIN.... so ostensibly Greece is partially saved and Italy has no chance as their national debt is beyond the EU to bail out... This will be a very big slow implosion, making very little noise but will effectively enslave nearly every-one in the world for more than 50 years... We is SCREWED... in the form of an inclined plane set in spiral form... This device will be firmly inserted into the fundamental-orifice of every individual...

Is that clear? The Global Debts, (US$700trillion from USA, and who knows, hidden elsewhere in the world), are being passed on to be borne by all the citizens... NO ESCAPE...

To understand much of what I present you will need to do a lot of reading and research and I present some that I feel are sensible and reliable in a general and macroeconomic view... Macroeconomics is the "BIG picture" view and is more reading between the lines of trade-policy, exchange-rates-trends and also general-commodity-trends... and lots more...

Read this for starters (print it out and keep it for reference / to re-read)
http://www.dailyreckoning.com.au/self-interest-history-disaster/2011/10/27/ "Self-interest + History = Disaster"
http://www.dailyreckoning.com.au/saving-money-in-a-debt-soaked-economy/2011/10/27/ "Saving Money in a Debt-Soaked Economy"

Much of the stuff I link to has embedded advertising and self-promotion - - - That is how they survive - but the reading is free if you subscribe and get the emails...

Just prepare to find a "pleasant" survival refuge that does not cost you money but where your skills will be appreciated...

 

These few sources sure output a lot of "material."
Charge Casey and GATA a penny per spam and the debt could be reduced :idea:

 

Cant be much worse than after the war. It didnt take long to get going again.

People --or more so Children are wonderfull at diversifying in there approach and dont even notice that there was a problem.

You Can lie down and die if you want to, but I suspect the young wont.

Never meet a problem head on, it may not exist when you get there.

Cross the bridge when you get to it, etc etc.

 

Michael Maloney: "We Pay Tax for the Privilege to Have Currency"


Well - DUUUUHHHH !! Of course we *&^*&^%^* do !! He sounds surprised.

This has to be the most flippant, uneducated summaries of the financial system I have ever heard.

Mas, for someone who has done some sort of study of the process, I don't know how you can put this link under your name.

Some classic lines -
"Money is created by the Government issuing Bonds " - yeah, So ???

How else would it be done ? He makes it sound like some sort of sin. This is the basis of the modern monetary system that has created more wealth, technological advancement in the 40,000 years of mans history.

Can you imagine the chaos of having a precious metals based system. ?

Business would slow to a crawl.

Mas would have to ship ten gold bars to the US to have his Epoxy for his boat shipped over from DOW Chemicals in the US. He would have to insure that shipment of currency by supplying half a gold bar to the local Insurance Agent who would have to cut 10% off before he sends it to his underwriters overseas.

"Oh no", says the Gold Bar Fundamentalists "We would have Certificates"

Ok - then we are back to PAPER.


Then the other flippant simplification Banks Create Money !:-

Fred Deposits $100 to Bank A. Freds Account say +$100

Bank A loans $90 to Bill (out of Freds money )
so Bill can buy a Car from Tom. Bills Account says -$ 90

Tom Deposits his $90 into Bank A Toms Account says +$ 90

The Bank Loans Sue $80 from Toms
Account to pay her rent Sues Account says -$ 80



Micheal Maloney says "The Banks have created $360 from the initial deposit of Freds $100"

What a lot of idiot simplicity - how can he make a video making that asinine assertation. The man is a sandwich short of a picnic !

The actual balances on the Banks Books are

Assets
Statutory Deposits with the Reserve Bank....$20 ($10 from each deposit)
Secured Loans..........................................$90 (the car)
Unsecured Loans......................................$80 (Sues Loan)
---------------------------------------------------------------------------
Total Assets............................................+$190


Liabilities
Depositors Funds.................................... -$190


Net Cash CREATED...................................ZERO

There is no income until the Borrowers start paying Interest
The expenses will come from any Interest Due to the lenders.

The BIG unstated fact is that the Statutory Deposits held by the Reserve Bank obligates the Government to support the Banks if Fred and Tom ask for their money back before the bank gets enough actual funds.

That's what happened in Australia - the government (through the Reserve Bank ) guaranteed all Depositors Funds from the official Banks.

I understand similar things happened to Fannie Mays depositors amongst others.

Lets get some educated, rational discussion happening here - not the rabid, nonsensical ramblings of lazy minds.

 

Well err I--I suppose we could try. What do you think guys?

 

Dont you mean we have a currency so we can pay tax. Im trying my best not to sound nonsensical or rabid but if it were not so we would be paying tax with chickens, which is what you were educating us about in your previous post about Mas buying with gold.

Infact Im so rabid and nonsensical today I could hardly understand your point,--.

 

mas- so driving home last nite the radio carried a bit that the Chinese were laying in with support of bonds issued from Greece.
That gave me pause for some reason.

Looking about I see that this is old news?:

http://seekingalpha.com/article/293214-irony-behind-china-s-european-bond-buying.

Oops- documentation of an ideal.
My humble apologies to frosty....

Rational discussion?
How do you put it mas..? "never let a the facts interfere with a good story"?

I am in- My pa dragged us out of bed to see the first feet on the moon and had us sit and listen to the long proceeding through the Nixon mess.
I believe it's important to pay attention- we live in interesting times.

 

I'm not what anyone may call educated by any means, but their is one big huge flaw in the system and it's called the FED Reserve System in general. The faith in the value of money is off the back of the "People" (taxes) not the FED or the Government itself.

The FED is a private "Bank" that in respect that through dept now has the power to pretty much do anything it wants and effectively now runs the show.

Now consider this point carefully... If we could take the FED completely out of the picture and all there value added interest they attach to the principal of the dept how much better off the worlds population would be as a whole. Why are we paying a huge amount of interest on capitol (money) based on "nothing" but the populations back :?::?:

Imagine if the government just created it's own "money from nothing" less the FED and their cut "interest". Imagine our tax dollars actually paying down the "Actual National Dept Principal" instead of servicing the "Attached Interest Service Dept Incurred to the FED" and even with today's substantial high tax rates it is still lacking enough revenue to address the real dept of the actual principal borrowed on the notes "Borrowed" against the taxpayers backs.

Minus interest we the taxpayers worldwide could actually manage to address the "Real Dept of Governments". It's the "interest generated on nothing" that goes to the bankers or the FED that is making the whole Ponzi Scheme completely unmanageable".

 

Well thats not how I see it or the markets as the DAC is up 3.9% already.

The banks exposed to Greeks debt have agreed to take losses of 50%.

Thats basically it,-- half the problem is gone right there, this is apparanly only half of the banks profit of last year.

Problem seems to be solved, not the doom and glooon predited Eh Mas

Now then,---- America!!

Ive no idea what Bambie is on about but it sounds very impressive.

Something about abandoning the Fed sounds good to me --what a fking stupid idea in the first place which brings me back to USA's management. you remember what I said about ---of course you do.

USA reminds me of a Harley Davison made many years ago and was good when it was invented but needed constant beefing up of the agricultural crank case that could not hold up.

But it was modified and modified and still exists today . Not much good but to do away with it would not be American.

So there it is the epitomy of USA a huge useless piece of crap of more historical value than practical.

Oh Im happy now the European crisis is over even though it was only a little one in comparison --still,-- tra la la la, oh im a happy chappy ,--I wont loose all my money tra la la

 

Ok, that was simple enough now show me the accounting of the derivatives the hypothetical bank has both sold and bought.

 

Or better yet combine what Bambi said with what powerabout said and I think everyone will begin to see the problem. Add in all the interest "graft" and you end up with money from nothing. Or better yet nothing but debt. Being a really small business owner myself I've seen some pretty shady accounting in my time. By over simplifying things its possible to make any system seem like its on track, but add in just a few simple realities and it gets harder and harder to accept.

While I appreciate the attempt to upgrade the conversation I'd think it more educational if someone who actually new all the finer details to start from the beginning. The Fed "loans" money and If I remember right "pays" someone else to actually print it. So the Fed makes face value minus the cost of printing, plus interest. But the Fed doesn't produce enough money to "pay" the interest. So its kinda a scam from the word go.

Then it gets to the government contractors or federal budget orifice where it begins its trip down the ladder. The bank is just a cog in the machine. What type of bank is also key to the discussion, Mortgage lenders for instance tend to just trade debt back and forth yet collect huge amounts of interest. Money from nothing in most peoples books. Ok they built up there loan status through the old tiered reserve system but again looks a lot like money from nothing. The banks original certificate of deposit remains the same and its only a small fraction of the depositors money that must remain.

I'd love to see a step by decrepit step life of a dollar as it eeks its way through the system and see exactly how much it balloons as it goes and if the system is even tenable. Looks like its not or we'd not have such a ridiculous devaluation of the dollar. If its not 320 or whatever that one guy claimed then lets figure it out.

Keeping it simple start with ten dollars, Ok so if the fed charges 1% interest we're up to $10.1o , so it seems like someone's got to be allowed to create that ten cents out of the process somewhere or someones not going to be able to pay back there loan.

 

Just in - as Bix Weir seems to address most of the posts since my last...
The new "Deal" coming out of Europe is a lose-lose-lose-lose agreement!

The real problem is not the Greek debt but rather the Greek CDS market which towers over the Greek bonds issued. The bond holders and "system gamers" bought massive amounts of CDS's to cover their exposure but with the "voluntary" 50% payoff nobody knows what to do with the CDS payouts. Here's the latest:
Greek Accord Won't Trigger Credit-Default Swaps, ISDA Rules Say
http://www.businessweek.com/news/20...gger-credit-default-swaps-isda-rules-say.html

The ISDA knows that their damned if they do and their damned if they don't trigger the CDS payouts! Now all those banks that said they had no exposure to Greek debt have to admit that they actually WERE NOT hedged properly with CDS's after all.

If the CDS's don't payout let's look at the losers:

- Greece still has to pay 50% on bonds issued and has no future prospects for issuing new debt or coming out of their economic woes.

- Greek bond holders are only going to get 50% return on their "safe government" investments and will have to take an immediate writedown.

- Credit Default Swap holders likely will NOT get paid out because this "mandated" deal is classified as "voluntary"

- Banks that claimed to have hedged their Greece exposure with CDS's now have to declare their true exposure that has already been devalued by 50%

- The CDS market, which was already a shaky part of the Quadrillion dollar derivative complex, has now proven to be an unreliable hedging mechanism

And on and on and on...

This "Stability" that the EU has just provided should only last a matter of DAYS before the world is turned upside down!

Stay safe out there.

Bix Weir
www.RoadtoRoota.com

Bear in mind that since much is not documented, much analysis is "reading between the lines and making certain assumptions", like, for example, USA still has control and full possession of its reputed 8000 odd tonnes of gold bullion... WHICH MAY NOT EXIST as it may have been "swapped", "loaned", - or otherwise have a 'lien on it' in some form...

This email (above in purple) identifies what is the elephant in the room... CDS's will bite, and the exposed banks in EU and elsewhere will feel the additional pain which could possibly induce collapse in some banks with potentially a disastrous domino effect...

rwatsin - and some others, remember that Mike Maloney is marketing and selling gold bullion, so what he says is useful but READ BETWEEN THE LINES and what he described is a good analogy/metaphor for the fiscal situation in the global markets... Microeconomics - or normal accounting practices do not apply as the jargon is specific and relates concisely to Macroeconomic analysis...

The "Banking System" is Fractional Reserve - not standard accounting 101... the mortgage is then sold-on as a part of a package of AAA rated assets... The money so released is then available to the bank and so on... Read up on the 'phony' - Keynes economic theory, that is the system in favour at present that got us all into this debt fix... Sheesh...

INTERESTING TIDBIT: Did you know the saying "May you live in interesting times" is actually a Chinese CURSE?!
http://en.wikipedia.org/wiki/May_you_live_in_interesting_times