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barnaby33Participantcooprider14, I’ve tried telling you this several times with subtlety, it doesn’t seem to work. THE FED DOES NOT PRINT MONEY. THE FED CREATES CREDIT, AGAINST COLLATERAL. Printing money is the purview of the treasury. There are a couple of big reasons why that is important.
1)The FED cannot print us out of this mess. The credit has already been created and spent, the inflation has already occurred. If the treasury does authorize printing the bond market will take immediate notice. 160B “stimulus” plan, hmm we’ll just demand higher interest rates for TBills.
2)If under the normal course of events someone pays the fed back the loan, the credit created is destroyed. That in itself isn’t deflationary, but the interest paid on the debt can be.
3)As debtors default the credit is destroyed and that is deflationary. It is so for two reasons, one the bank that made the loan has to take a hit on its books meaning it has to raise capital to cover the loss and two it is less willing to loan out money to others, thus slowing velocity.
4)The FED didn’t really create the problem, lots of non-bank entities did (New Century for example). What the FED did fail to do, was stop the banks from buying the bad debts, which is a regulatory failure, not a monetary one.
5)If you want to blame the FED, fine blame Greenspan, he was at the helm during the historic lowering of interest rates that led to all the crap loans in the first place.
Josh
barnaby33Participantcooprider14, I’ve tried telling you this several times with subtlety, it doesn’t seem to work. THE FED DOES NOT PRINT MONEY. THE FED CREATES CREDIT, AGAINST COLLATERAL. Printing money is the purview of the treasury. There are a couple of big reasons why that is important.
1)The FED cannot print us out of this mess. The credit has already been created and spent, the inflation has already occurred. If the treasury does authorize printing the bond market will take immediate notice. 160B “stimulus” plan, hmm we’ll just demand higher interest rates for TBills.
2)If under the normal course of events someone pays the fed back the loan, the credit created is destroyed. That in itself isn’t deflationary, but the interest paid on the debt can be.
3)As debtors default the credit is destroyed and that is deflationary. It is so for two reasons, one the bank that made the loan has to take a hit on its books meaning it has to raise capital to cover the loss and two it is less willing to loan out money to others, thus slowing velocity.
4)The FED didn’t really create the problem, lots of non-bank entities did (New Century for example). What the FED did fail to do, was stop the banks from buying the bad debts, which is a regulatory failure, not a monetary one.
5)If you want to blame the FED, fine blame Greenspan, he was at the helm during the historic lowering of interest rates that led to all the crap loans in the first place.
Josh
barnaby33ParticipantI love you bugs. You make me swoon (In a straight guy sorta way.)
Josh
barnaby33ParticipantI love you bugs. You make me swoon (In a straight guy sorta way.)
Josh
barnaby33ParticipantI love you bugs. You make me swoon (In a straight guy sorta way.)
Josh
barnaby33ParticipantI love you bugs. You make me swoon (In a straight guy sorta way.)
Josh
barnaby33ParticipantI love you bugs. You make me swoon (In a straight guy sorta way.)
Josh
barnaby33Participantkewp, I think it would be more accurate to say, the inflation through credit creation has already occurred. What is happening right this instant is that the FED is sucking liquidity away from the big banks who were just hoarding it or buying stocks with it, to get it to smaller institutions via the TAF. All of this is being done to slow the deflation that is occurring through correspondent credit contraction. Why we are finally seeing prices rise, what most people think of as inflation, is that all of that exported inflation to you-know-where is starting to come home to roost.
Which do you think will kill the economy first, re-imported inflation, or credit contraction deflation? My votes on the second.
Josh
barnaby33Participantkewp, I think it would be more accurate to say, the inflation through credit creation has already occurred. What is happening right this instant is that the FED is sucking liquidity away from the big banks who were just hoarding it or buying stocks with it, to get it to smaller institutions via the TAF. All of this is being done to slow the deflation that is occurring through correspondent credit contraction. Why we are finally seeing prices rise, what most people think of as inflation, is that all of that exported inflation to you-know-where is starting to come home to roost.
Which do you think will kill the economy first, re-imported inflation, or credit contraction deflation? My votes on the second.
Josh
barnaby33Participantkewp, I think it would be more accurate to say, the inflation through credit creation has already occurred. What is happening right this instant is that the FED is sucking liquidity away from the big banks who were just hoarding it or buying stocks with it, to get it to smaller institutions via the TAF. All of this is being done to slow the deflation that is occurring through correspondent credit contraction. Why we are finally seeing prices rise, what most people think of as inflation, is that all of that exported inflation to you-know-where is starting to come home to roost.
Which do you think will kill the economy first, re-imported inflation, or credit contraction deflation? My votes on the second.
Josh
barnaby33Participantkewp, I think it would be more accurate to say, the inflation through credit creation has already occurred. What is happening right this instant is that the FED is sucking liquidity away from the big banks who were just hoarding it or buying stocks with it, to get it to smaller institutions via the TAF. All of this is being done to slow the deflation that is occurring through correspondent credit contraction. Why we are finally seeing prices rise, what most people think of as inflation, is that all of that exported inflation to you-know-where is starting to come home to roost.
Which do you think will kill the economy first, re-imported inflation, or credit contraction deflation? My votes on the second.
Josh
barnaby33Participantkewp, I think it would be more accurate to say, the inflation through credit creation has already occurred. What is happening right this instant is that the FED is sucking liquidity away from the big banks who were just hoarding it or buying stocks with it, to get it to smaller institutions via the TAF. All of this is being done to slow the deflation that is occurring through correspondent credit contraction. Why we are finally seeing prices rise, what most people think of as inflation, is that all of that exported inflation to you-know-where is starting to come home to roost.
Which do you think will kill the economy first, re-imported inflation, or credit contraction deflation? My votes on the second.
Josh
barnaby33ParticipantI was just about to, you beat me to it Radelow!
What I so seriously dislike about Ron Paul is that he doesn’t really ask a question, he rants. At the very end of his rant he asks a leading question. This is why Bernanke and the FED must love him. He makes people who dislike fiat currencies seem like loonies. If you could just engage in a clear headed debate with BOB and put that on youtube, it would probably get a lot more, and more serious attention.
Joshbarnaby33ParticipantI was just about to, you beat me to it Radelow!
What I so seriously dislike about Ron Paul is that he doesn’t really ask a question, he rants. At the very end of his rant he asks a leading question. This is why Bernanke and the FED must love him. He makes people who dislike fiat currencies seem like loonies. If you could just engage in a clear headed debate with BOB and put that on youtube, it would probably get a lot more, and more serious attention.
Josh -
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