Changes to The Constitution.

[Jimmy Higgins]

People that can't afford to fix the car aren't able not because of their fears of inflation keeping them from saving money... it is they aren't making much to begin with and can't afford to set aside much, and what they do, is eaten up by the inevitable cost of life surprises, car, appliance, etc...

Why would any rational person put their money (labor) in a place that is guaranteed to lose value (a normal savings account)?

Lots of people, that have money to set aside and can more easily weather unexpected costs.

Thanks to the fed we have had negative real interest rates for a long long time. Guaranteed to cause price distortions and mal investments in the economy. Which it has. Which is why bit coin was developed and why it is still extremely popular.

Almost no one is worried about inflation eating at their money during historically low inflation between the 90s and just before the pandemic. That is your imagination. People that aren't saving, can't afford to save because they are working jobs that aren't paying enough. Your obsession with the Fed is making you miss the target.

Why is China's and Republic of Congo savings rate so much higher than the US? https://www.investopedia.com/articles/personal-finance/022415/top-10-countries-save-most.asp

Is it because those people have the great jobs that are paying so much more than the US?

Let me guess, each of the top 10 have their dollar tied to a commodity, like gold.

People in the US care about inflation and its impact on product prices. It does not care about the impact of 20 years of inflation on a savings account.

 

[Jimmy Higgins]

I agree with RVonse that a stable currency over time is a desirable goal, but eliminating the Fed would not accomplish that goal and would permit more frequent economic cycles with larger amplitudes.

The fed is also very un-democratic for a supposedly republic democracy. They are run by past private banksters who are not even accountable to congress or the people. Ron Paul was not even allowed to audit what they are doing. Yet they have power over a tremendous influence of the economy in general and livelyhood of the citizens.

It would be one thing to have such an organization if it was doing the perfect job which it isn't. Because failure is much more easy to accept if was reached democratically.

That absolute last thing we want are for politicians to run central banking policies. Imagine, Matt Gaetz or Ron Paul in charge of the Fed.

 

[ZiprHead]

Since when was (is) the federal government in the business of putting out fires? That is usually done at the city or even the county level. If the federal government has been engaged to put out house fires, it is even bigger and more bloated than I thought.

You never heard of the US Forest Service???

 

[Jimmy Higgins]

Since when was (is) the federal government in the business of putting out fires? That is usually done at the city or even the county level. If the federal government has been engaged to put out house fires, it is even bigger and more bloated than I thought.

You never heard of the US Forest Service???

Dude, that is a corrupt organization. I've tried to order two forests and they won't even return my phone calls!

 

[jonatha]

Why is China's and Republic of Congo savings rate so much higher than the US?

Because neither China (until recently) nor the Republic of Congo has much of a social safety net, so people know they have to save up for retirement, etc.

In the case of the Republic of Congo the lack of anything much to spend excess money on might also be a factor.

 

[Swammerdami]

Why should the average factory worker need to care about 2% or risk free overnight money at 5.3%?

Why should the average factory worker need to care that the mandibular first bicuspid presents with two canals more often than the second bicuspid does?
Why should the average factory worker need to care that CO2 and H2O are three-atom molecules, while N2 and O2 each have two atoms?
Why should the average factory worker need to care that firing 5.56×45mm rounds in an AR-15 marked as .223 Remington can result in damage to the rifle or injury to the shooter?
(Oh, wait a moment! This is America; the average worker certainly DOES need to know all about the AR-15!)

Maybe the average worker should also know that the $400 he doesn't have would become $420 after a year if he puts it in an online savings account, but would only be $400 if he left it under his mattress. It sounds like you think he's too stupid to even know that much.

You are making this too complicated,

Too complicated? Here's something very simple for you to ponder:
The soundness of the American dollar has been the envy of the world for a century. It's hard to speculate about your regime since you've not said what, if anything, would be used as money. Bitcoin?

Thanks to the fed we have had negative real interest rates for a long long time. Guaranteed to cause price distortions and mal investments in the economy. Which it has. Which is why bit coin was developed and why it is still extremely popular.

The US has not had “negative real interest rates” for a very long time.

You're both wrong. I've attached a graph, using CPI less food and energy as proxy for inflation and 10-year Treasuries as proxy for interest rates. Red line below Blue line means "Real" (i.e. inflation-adjusted) interest rates are negative. The graph shows unemployment rate also, as the FRB mandate is to delictely steer between the two enemies: excessive inflation and unemployment.

We're getting off-topic. Please bump one of several old threads on this topic rather than continuing to hijack here.

Worst of all the fed has cheated humanity in general ...

Wow.

 

[laughing dog]

I agree with RVonse that a stable currency over time is a desirable goal, but eliminating the Fed would not accomplish that goal and would permit more frequent economic cycles with larger amplitudes.

The fed is also very un-democratic for a supposedly republic democracy. They are run by past private banksters who are not even accountable to congress or the people. Ron Paul was not even allowed to audit what they are doing. Yet they have power over a tremendous influence of the economy in general and livelyhood of the citizens.

It would be one thing to have such an organization if it was doing the perfect job which it isn't. Because failure is much more easy to accept if was reached democratically.

What makes you think that Ron Paul was not allowed to audit what the Fed was doing?

If there was no Fed, what would replace it? Surely you would not trust monetary policy to a group who cannot even pass a budget?

 

[laughing dog]

Why should the average factory worker need to care about 2% or risk free overnight money at 5.3%?

Why should the average factory worker need to care that the mandibular first bicuspid presents with two canals more often than the second bicuspid does?
Why should the average factory worker need to care that CO2 and H2O are three-atom molecules, while N2 and O2 each have two atoms?
Why should the average factory worker need to care that firing 5.56×45mm rounds in an AR-15 marked as .223 Remington can result in damage to the rifle or injury to the shooter?
(Oh, wait a moment! This is America; the average worker certainly DOES need to know all about the AR-15!)

Maybe the average worker should also know that the $400 he doesn't have would become $420 after a year if he puts it in an online savings account, but would only be $400 if he left it under his mattress. It sounds like you think he's too stupid to even know that much.

You are making this too complicated,

Too complicated? Here's something very simple for you to ponder:
The soundness of the American dollar has been the envy of the world for a century. It's hard to speculate about your regime since you've not said what, if anything, would be used as money. Bitcoin?

Thanks to the fed we have had negative real interest rates for a long long time. Guaranteed to cause price distortions and mal investments in the economy. Which it has. Which is why bit coin was developed and why it is still extremely popular.

The US has not had “negative real interest rates” for a very long time.

You're both wrong. I've attached a graph, using CPI less food and energy as proxy for inflation and 10-year Treasuries as proxy for interest rates. Red line below Blue line means "Real" (i.e. inflation-adjusted) interest rates are negative. The graph shows unemployment rate also, as the FRB mandate is to delictely steer between the two enemies: excessive inflation and unemployment.

We're getting off-topic. Please bump one of several old threads on this topic rather than continuing to hijack here.

Worst of all the fed has cheated humanity in general ...

Wow.

Your graph does not show negative real interests for a very long time under any normal understanding of “ a very long time”.

 

[Swammerdami]

According to the "proxies" in that graph, real interest rates are negative right now. Remember that "real interest rate" is defined as nominal rate minus inflation rate.

 

[Elixir]

According to the "proxies" in that graph, real interest rates are negative right now. Remember that "real interest rate" is defined as nominal rate minus inflation rate.

I bought CDs a few months ago on that premise, and they’re outperforming the markets since then, if not the few managed accounts I still have.

 

[Tigers!]

I agree with RVonse that a stable currency over time is a desirable goal, but eliminating the Fed would not accomplish that goal and would permit more frequent economic cycles with larger amplitudes.

The fed is also very un-democratic for a supposedly republic democracy. They are run by past private banksters who are not even accountable to congress or the people. Ron Paul was not even allowed to audit what they are doing. Yet they have power over a tremendous influence of the economy in general and livelyhood of the citizens.

It would be one thing to have such an organization if it was doing the perfect job which it isn't. Because failure is much more easy to accept if was reached democratically.

That absolute last thing we want are for politicians to run central banking policies. Imagine, Matt Gaetz or Ron Paul in charge of the Fed.

There is a certain senator, Bob Menendez, who should be kept well clear of money too it seems.

 

[Patooka]

Changes to The Constitution. (in order of importance)​

1) No more lobbies, bribery, or money given to any politician with SEVERE penalties approaching those for treason acts. The federal government would equally distribute marketing time for the candidate advertisements. All based on popularity and NOT private and/or secret dark money.

2) Total size of the federal government linked to the productivity and size of the private economy. In no circumstance allow the federal government bigger than 50% of the total economy. During a serious downturn, federal employees would be laid off in proportion to the private economy. All federal employees would have a retirement systems identical to the average private wage earner. If the average private earner has no defined pension than neither will the average federal employees.

3) No more insider stock trading for the speaker of the house and/or other members of congress. Anyone caught corrupting themselves with private enrichment would be barred from federal office....forever.

4) Salaries of members of congress would be carefully linked to average compensation for the average private wage earner of the United States. Congress will NOT have the ability (as they do now) to increase their own salary. Other compensation such as social security and medical benefits would be exactly the same systems every other US citizen is compelled to use.

5) Language to specifically undue "citizens united ruling". Large corporations to never have the same rights as private citizens

6) Get rid of the fed and make whatever serves its place accountable to the public.

You know what America needs? More politicians who dumb down incredibly complex and nuanced systems into one sentence sound bites. That'll fix everything.

 

[bilby]

During a serious downturn, federal employees would be laid off in proportion to the private economy.

Why? This would be about the stupidest possible response to an economic downturn, and would lead to conditions not seen since the Great Depression.

"Let's scrap the fire department. If my house catches fire, everyone else's houses should be set afire, in proportion to the damage caused at my house". A true stroke of genius, that.

Since when was (is) the federal government in the business of putting out fires? That is usually done at the city or even the county level. If the federal government has been engaged to put out house fires, it is even bigger and more bloated than I thought.

Furthermore, if you wish to argue Keynesian economics to stimulate the economy in a downturn, there are many other ways to stimulate the local and or national economy with spending "such as infrastructure spending", "hyperloop tunnels", "alternative energy", other than more federal administration and bloated do nothing government jobs that cost a lot of money and never go away.

Which government jobs entail doing nothing?

Be specific; Give me one example of a government job that you think achieves nothing at all.

 

[bilby]

For example: if I sweep your floor and you pay me $10 today I should be able to put that $10 in a retirement bucket. And in 50 years when I retire, I should then be able to take that same $10 and buy exactly what the same goods and services I produced.

If you sweep my floor, and you know that inflation will be zero, would you rather I pay you for that work today, next week, next year, or in forty years time?

If someone offered you a job where you're going to be paid tomorrow, and I offered you a job doing the same work, but say I will pay you in 2063, which job would you prefer to take, knowing that inflation will be zero?

People prefer money now, rather than the same amount of money later.

That simple (and obvious) statement is exactly equivalent to "inflation exists"; In order to eliminate inflation, it's necessary to eliminate that preference for money now, over money later. How do you propose to do that?

 

[bilby]

Anyway, this is more about morality than technical financial competence. 2000 years ago a person by the name of Jesus destroyed the money changers tables and then got crucified for it. History may not repeat itself but it sure does rhyme a lot.

Yeah, and 60 years ago a man called Auric Goldfinger tried to irradiate all the gold in Fort Knox, to increase the value of his own holdings immeasurably.

Exactly like your story, the moral is: Weird shit happens in fiction.

 

[bilby]

I agree with RVonse that a stable currency over time is a desirable goal, but eliminating the Fed would not accomplish that goal and would permit more frequent economic cycles with larger amplitudes.

RVonse's position (shared by a very large number of people) is:

A) I am not wealthy, and this makes me sad.

B) I work hard, so I feel like I should be wealthy.

C) I have no idea why simply working hard isn't sufficient to make me wealthy.

D) I know how economics works, so my expectations can only be wrong if someone is cheating me.

E) That someone is the Fed Reserve.

A, B, and C are all true; D is simply untrue, and E is utter nonsense. But he believes with all his heart, so good luck changing his mind.

 

[Swammerdami]

Ron Paul was not even allowed to audit what they are doing.

How amusing! I wonder if you're aware that early in the Trump Administration, a special tour of Fort Knox was organized so that Treasury Secretary Steven Mnuchin, Senator Rand Paul, and a few other top Republicans like Mitch McConnell could see whether the gold was there or not. (Paul was on record as "suspecting it wasn't there.") Mnuchin and McConnell commented that the gold was "incredibly secure." An old vault seal was broken so that these bigwigs could look at the bullion close up. https://www.governmentattic.org/30docs/VisitBullionDepositFtKnox_2017.pdf

Mnuchin -- very wealthy due to his hedge funds and Hollywood productions -- brought his wife and turned the trip to Kentucky into a junket. Rand Paul didn't bother to show up. -- He was probably busy making a speech about how he didn't know if the gold was there or not!

@RVonse -- Money is an interesting and confusing topic, and you should review some of the threads we already have on the topic. I'm sure you know the printing-press solution worked out poorly in Zimbabwe and Weimar Germany. Bitcoin at present serves only a tiny fraction of the transactions served by the U.S. Dollar, yet consumes huge amounts of electricity. Perhaps, like Rand Paul, you want to revert to precious metals as money, but are reluctant to admit it here.

What you've written is rather non-specific: "Get rid of the fed and make whatever serves its place accountable to the public." Keeping the U.S. Dollar sound is a top priority of the FRB. If "the public" had its way, the "whatever" would be printing money to buy everyone new iPhones. Yet your complaint about the FRB is the 2% average annual inflation! Inflation would be much worse in your "public-accountable whatever."

I suggest you study up on this (confusing?) topic before repeating your outrageous opinions!

 

[bilby]

The fed is also very un-democratic for a supposedly republic democracy. They are run by past private banksters who are not even accountable to congress or the people.

View attachment IMG_0899.webp


You don't know how any of this works, and are so incapable of understanding it that you actually believe it's simple and that you do understand it as well as anyone.

The reason the Fed is run by bankers is the same reason that open heart surgery is done by doctors.

Do you really think that public opinion is the best way to select experts, and is better than merit and experience based appointments?

Democracy is the last resort, used for decisions that don't have factual answers.

The answers to questions of fact are determined by experts, who use their observations and experience to determine what actually should be done.

Only questions of pure opinion can and should be resolved by resorting to democracy. It's a terrible way to decide anything.

 

[Swammerdami]

During a serious downturn, federal employees would be laid off in proportion to the private economy.

Why? This would be about the stupidest possible response to an economic downturn, and would lead to conditions not seen since the Great Depression.

Yes. When private spending is down, public spending should rise to compensate. Otherwise a Great Depression may result. This theory was explained in the 1930's by the great mathematician and economist  John Maynard Keynes and is now accepted across the entire spectrum of economic and political thought.

 

[Politesse]

The fed is also very un-democratic for a supposedly republic democracy. They are run by past private banksters who are not even accountable to congress or the people.

View attachment 44319


You don't know how any of this works, and are so incapable of understanding it that you actually believe it's simple and that you do understand it as well as anyone.

The reason the Fed is run by bankers is the same reason that open heart surgery is done by doctors.

Do you really think that public opinion is the best way to select experts, and is better than merit and experience based appointments?

Democracy is the last resort, used for decisions that don't have factual answers.

The answers to questions of fact are determined by experts, who use their observations and experience to determine what actually should be done.

Only questions of pure opinion can and should be resolved by resorting to democracy. It's a terrible way to decide anything.

With respect, this post suggests you also are not strongly aware of how the Fed is staffed or run; it is hardly a college of "experts" nor is superb merit necessarily what leads to getting jobs there. No, I wouldn't call on a majority vote to elect a heart surgeon, but neither would I trust the governor-appointed hospital administrator to do that job, nor the med school friends she managed to find desk jobs for when she came on board. A heart surgeon would be preferable, best of all a heart surgeon who doesn't have a powerful personal financial incentive to let a certain proportion of heart surgeries per month fail.

To put it another way, if Jerome Powell had any relevant academic qualifications whatsoever, Donald Trump would never have considered appointing him to the chairman's seat. Yet there he is.