What is the Objectivist alternative to the Federal Reserve?

[Brant Gaede]

Wolf, all Greg said was he doesn't borrow money from a bank but lends his savings to himself to buy things using his own capital. He's not really a bank, of course. That's just his shorthand way of showing he's not beholden to the banking system as it is presently constituted for he's not in debt to it.

Now is an excellent time to borrow. Rates will to revert to mean. They can't go any lower.

We are existing in a massive deflationary impulse and it's time to cut debt. This will continue almost to the end of the current decade when things will start to go massive price-inflationary though not hyper-inflationary.

--Brant

[moralist]

When prices go up because of higher taxation, I just charge more money like everyone else. That's how I can afford to pay the higher prices for what I consume... by charging higher prices for what I produce.

Being a producer is like owning your own boat. No matter how deep the taxes and prices are... you float on the solvent surface instead of sinking "under water" drowning in debt.

This is where the economic freedom is... on the surface of the water. So build an ark and you'll always be safe and sound.

You're a fool.

Yeah... that's what fools called Noah.

In business, production is the constant.

Money is just a variable numerical denominator of production.

Everyone who fails to grasp this simple economic principle gets the drowning they deserve.

Greg

[moralist]

Wolf, all Greg said was he doesn't borrow money from a bank but lends his savings to himself to buy things using his own capital. He's not really a bank, of course. That's just his shorthand way of showing he's not beholden to the banking system as it is presently constituted for he's not in debt to it.

Now is an excellent time to borrow. Rates will to revert to mean. They can't go any lower.

My loan rate to myself is always zero.

Greg

[moralist]

This is where the economic freedom is... on the surface of the water. So build an ark and you'll always be safe and sound.

Greg

There's a hurricane approaching LA.

--Brant

your weather from me for free

Bring it on. I'm already prepared for it. My wife and I have a running joke calling ourselves "big fans of the Apocalypse".

Greg

[Brant Gaede]

Wolf, you are suffused with the current debt-leads-your-way-to-prosperity economic model the US has been on since WWII. When this stops the whole country, including you, will be left out to dry. The model is only sustainable if the debt can be rolled over with future earnings, but we are soon to be beyond that point. The Federal debt level can be infinite to the point of generating concomitant inflation eventually--just electronically create dollars to pay off your dollar debt--but non-Fed debt cannot be repaid by you and I printing up one hundred dollar bills in our basements. Bottom line: deflationary depression followed by inflationary depression with private people stuck inside the agitating washing machine of what is generally going on with no way out mostly because of debt, the worst debt being student debt undischargeable through bankruptcy. (When your debt is discharged you can go back to work making wealth instead of giving what you made back to your creditors who are living on your interest and likely not producing anything themselves.)

--Brant

[Brant Gaede]

This is where the economic freedom is... on the surface of the water. So build an ark and you'll always be safe and sound.

Greg

There's a hurricane approaching LA.

--Brant

your weather from me for free

Bring it on. I'm already prepared for it. My wife and I have a running joke calling ourselves "big fans of the Apocalypse".

Greg

You might stock up on hundreds of small bottles of whiskey and such for barter. Everybody's going to want to get drunk and stay drunk. Just the cheap stuff (except for yourself for "medicinal purposes"). They won't care so much how it tastes only that it's 80 proof.

--Brant

vodka is the easiest to dilute if you want to stretch it out, assuming you're an economic sociopath underneath that virtuous exterior

[Brant Gaede]

Wow, at least 20 posts this thread this morning this subject!

Are we being productive?

--Brant

[moralist]

...the worst debt being student debt undischargeable through bankruptcy.

There's over one trillion dollars in outstanding student loan debt... more than all of the credit card debts combined.

Greg

[moralist]

Wow, at least 20 posts this thread this morning this subject!

Are we being productive?

--Brant

Almost posting in real time. Gotta go to work now. I'll be back to play later.

Greg

[Wolf DeVoon]

Wolf, all Greg said was he doesn't borrow money from a bank but lends his savings to himself to buy things using his own capital. He's not really a bank, of course. That's just his shorthand way of showing he's not beholden to the banking system as it is presently constituted for he's not in debt to it.

Now is an excellent time to borrow. Rates will to revert to mean. They can't go any lower.

We are existing in a massive deflationary impulse and it's time to cut debt. This will continue almost to the end of the current decade when things will start to go massive price-inflationary though not hyper-inflationary.

--Brant

I don't have any confidence in "hedonic adjusted" BLS numbers.

[Brant Gaede]

Wolf, all Greg said was he doesn't borrow money from a bank but lends his savings to himself to buy things using his own capital. He's not really a bank, of course. That's just his shorthand way of showing he's not beholden to the banking system as it is presently constituted for he's not in debt to it.

Now is an excellent time to borrow. Rates will to revert to mean. They can't go any lower.

We are existing in a massive deflationary impulse and it's time to cut debt. This will continue almost to the end of the current decade when things will start to go massive price-inflationary though not hyper-inflationary.

--Brant

I don't have any confidence in "hedonic adjusted" BLS numbers.

I don't either, but these data are based on the assumption that the old CPI data were based on proper metrics themselves. If they were then current Social Security recipients are being short-changed by up to 50%. The goalposts will be kept moving to keep such government expenditures real-world down. If it's all for naught because of deflation exceeding the data, practical expenditures will go up by not being dollar reduced. That would be interesting.

--Brant

[Wolf DeVoon]

I don't have any confidence in "hedonic adjusted" BLS numbers.

I don't either, but these data are based on the assumption that the old CPI data were based on proper metrics themselves. If they were then current Social Security recipients are being short-changed by up to 50%.

Probably are. I helped a crippled old lady unload her groceries yesterday. She bought a box of Jimmy Dean biscuits and bananas.

Shoppers saw the largest price increases at grocery stores, gas stations and in their utility bills. Energy prices were up 5.8% in May from a year earlier, and food prices rose 2.1%, both reaching their highest level since the first half of 2012. The latest inflation numbers are "not an alarming reading," said Conrad DeQuadros, an economist at RDQ Economics LLC. "But it's not just a food story or energy story. It's fairly broad-based…policy makers should take note." Shelter costs, led by higher rents, are climbing. [WSJ]

[Brant Gaede]

Price inflation through commodity price increases hits foodstuffs and energy here at home because commodities, especially oil, are generally priced in dollars world-wide. Thus, if you are living in SE Asia on two dollars a day and half is for your food and your food price suddenly doubles . . . --well, your food price does not double in the United States so you aren't starving, you just don't use your food stamps for soda pop though you are likely to keep using them to pay for your drug addiction, if that's your thing.

--Brant

food stamps and property crimes are likely the two big ways people pay for their "recreational" drugs, for drug addicts don't tend to work regularly--or at good jobs either

[Selene]

Being a business owner is totally different than being an employee. I know because I've been both... and I'd never go back.

Greg

Precisely.

Why, one could ask, doesn't everyone do that?

When Pacino [scent of a Woman] was presenting his young guide's case to the Student-Faculty Discipline Committee,

he talks about the right "path" to take and why he did not take it, because, he said,

"...it was too damned hard!"

Running your own profitable business is one of the most difficult tasks that an individual will ever accept.

However, it is worth every day you put into it.

A...

[Brant Gaede]

Being a business owner is totally different than being an employee. I know because I've been both... and I'd never go back.

Greg

Precisely.

Why, one could ask, doesn't everyone do that?

When Pacino [scent of a Woman] was presenting his young guide's case to the Student-Faculty Discipline Committee,

he talks about the right "path" to take and why he did not take it, because, he said,

"...it was too damned hard!"

Running your own profitable business is one of the most difficult tasks that an individual will ever accept.

However, it is worth every day you put into it.

A...

Until it isn't, for whatever reason. Competing with another same business, that one subsidized by the SBA, can be too daunting. Finding good workers, too. Obamacare? FGABIT! Safety regs. Matching SS contributions. Business licensing. Minimum wages. Workman's comp. The IRS mistakenly seizes your bank accounts--oops! Sorry--not!

--Brant

now take bank robbery--its simple and if you're caught you get years of free room and board and medical care!--or take your excellent credit, before it goes to hell, and borrow from the banks to the max and then go bankrupt. If you have an extended family others can repeat the cycle on and on while you rebuild your credit (and work for them--ha!--you're really running the new company) and do it all over again--for decades (buy all the stuff from your suppliers you can and have it disappear into other companies billings to your company--or whatever [i've heard of dumpsters full of expensive stuff])

just wait until Alibaba goes belly up from phoney accounting ($9 billion revenue $5 billion profit [yeah, right]) supporting just how many billions in market capitalization? (217)--and the Chinese government can smash it anytime like a fly, but will wait until as many fish as possible have been landed (except for maybe the name it will be gone in 5 years or the stock will be under 20 if not in single digits)

[Wolf DeVoon]

[Selene]

... or take your excellent credit, before it goes to hell, and borrow from the banks to the max and then go bankrupt. If you have an extended family others can repeat the cycle on and on while you rebuild your credit (and work for them--ha!--you're really running the new company) and do it all over again--for decades (buy all the stuff from your suppliers you can and have it disappear into other companies billings to your company--or whatever [i've heard of dumpsters full of expensive stuff])

Jest a few itty bitty problems with your plan ...

Think Lenny Dykstra..

A,,,

We won't mention RICO yet, he's a nice Italian boy...

[Wolf DeVoon]

Color me stupid. I'm stacking gold and silver, all the way down to the bottom.

[Brant Gaede]

... or take your excellent credit, before it goes to hell, and borrow from the banks to the max and then go bankrupt. If you have an extended family others can repeat the cycle on and on while you rebuild your credit (and work for them--ha!--you're really running the new company) and do it all over again--for decades (buy all the stuff from your suppliers you can and have it disappear into other companies billings to your company--or whatever [i've heard of dumpsters full of expensive stuff])

Jest a few itty bitty problems with your plan ...

Think Lenny Dykstra..

A,,,

We won't mention RICO yet, he's a nice Italian boy...

If there weren't problems wouldn't I be putting it into action?

I'm always evil scheming. Unfortunately, I always come up with hurting people and even just not getting away with it in my own mind.

--Brant

I need professional help!

[Frediano]

There is nothing inherently wrong(as in, perverting value in the economies) with the idea of a central bank that issues notes based on debt, as long as it follows certain restrictions on its behavior; it is the operations of our FED and US Treasury which ignore those restrictions that is exactly the problem with our implementation of a central bank.

1] It, as the holder of last resort, must insure that the debt it holds is -actual debt- with a legitimate future value. By necessity, it must then insure that the debt packaged and handed to it by member banks is -actual debt- with a legitimate future value. If that fundamental function of a central bank is not met, then its operations (issuing current accounts in exchange for holding debt) perverts present and future value in the economies.

2] It cannot directly or indirectly participate in the value for value economies using the current accounts that it generates. It can only generate revenues from fees for service (value for value.) If in any way it 'spends' the current accounts it creates, or interest received based on holding those notes, it will pervert the value for value economies.

Our FED accepts paper bonds from Treasury with zeros printed on them that are eventually repaid only with yet more paper bonds with even more zeros printed on them. This fails #1.

Our FED returns all interest received (from any source) to the US Treasury for our government to spend. This fails #2.

That is the essence of how the operation of the FED perverts our economies; it is -not- independent from our government if it is accepting valueless bonds and also handing over 'interest' to the US Treasury.

What should the FED do with interest received? Return it to current accounts from which it will need to 'create' less 'money from nothing' the next time it accepts a bond. Not 'hand it to the US Treasury to spend.'

Why couldn't it do that? It could. But if it did that, the US Treasury couldn't spend the interest received by the FED.

Independent my ass.

The media breathlessly announces these transfers as 'FED profits' handed over to the US Treasury. Bull. It is the US Treasury effectively running the presses, money from nothing of value (such as the real value of legitimate debt, a -real- promise to create new value in the future economies in exchange for present current accounts.)

regards,

Fred

[Brant Gaede]

Central banking is socialism of the money supply. Money is the bloodstream of the economy.

--Brant

you're defending socialism--the operative contradiction of Alan Greenspan

[Wolf DeVoon]

Central banking is socialism of the money supply. Money is the bloodstream of the economy.

--Brant

you're defending socialism--the operative contradiction of Alan Greenspan

Who are you replying to, Brant?

[Brant Gaede]

There is nothing inherently wrong(as in, perverting value in the economies) with the idea of a central bank that issues notes based on debt, as long as it follows certain restrictions on its behavior; it is the operations of our FED and US Treasury which ignore those restrictions that is exactly the problem with our implementation of a central bank.

1] It, as the holder of last resort, must insure that the debt it holds is -actual debt- with a legitimate future value. By necessity, it must then insure that the debt packaged and handed to it by member banks is -actual debt- with a legitimate future value. If that fundamental function of a central bank is not met, then its operations (issuing current accounts in exchange for holding debt) perverts present and future value in the economies.

2] It cannot directly or indirectly participate in the value for value economies using the current accounts that it generates. It can only generate revenues from fees for service (value for value.) If in any way it 'spends' the current accounts it creates, or interest received based on holding those notes, it will pervert the value for value economies.

Our FED accepts paper bonds from Treasury with zeros printed on them that are eventually repaid only with yet more paper bonds with even more zeros printed on them. This fails #1.

Our FED returns all interest received (from any source) to the US Treasury for our government to spend. This fails #2.

That is the essence of how the operation of the FED perverts our economies; it is -not- independent from our government if it is accepting valueless bonds and also handing over 'interest' to the US Treasury.

What should the FED do with interest received? Return it to current accounts from which it will need to 'create' less 'money from nothing' the next time it accepts a bond. Not 'hand it to the US Treasury to spend.'

Why couldn't it do that? It could. But if it did that, the US Treasury couldn't spend the interest received by the FED.

Independent my ass.

The media breathlessly announces these transfers as 'FED profits' handed over to the US Treasury. Bull. It is the US Treasury effectively running the presses, money from nothing of value (such as the real value of legitimate debt, a -real- promise to create new value in the future economies in exchange for present current accounts.)

regards,

Fred

Fred, Wolf.

[Wolf DeVoon]

Fred, notes in circulation ($1.24 trillion paper money) is about half of reserve balances, only 1/4 of total Federal Reserve liabilities.

[Brant Gaede]

Wolf, what are "Federal Reserve liabilities" that cannot be met by making more dollars--that are true liabilities?

--Brant

if I knew I wouldn't ask you