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And its still inaccurate. Future obligations are not debt, they are future obligations. Huge difference, the people that include future obligations are just being deceptive.
You have to pay for housing, taxes, food, etc in the future right? Is that debt? No...just as governmental obligations are not debt.
Nope. The prevailing economic ideology in the FED/government over the last 3~4 decades has been Monetarism. Keynesian has only come back a bit because Monetarism and other theories have little to say about what you do when you're in a liquidity trap.
Isn't it amazing how you believe things first...and then to justify them later?
Are you under the impression that nobody in the Austrian school has a ph.d? The notion of inflation is fairly the same in the Austrian theory and Monetarism, Keynesian theory has a more complex notion of inflation.
Ron Paul knows about as much about economics as a pet rock.
You keep saying this, but its inaccurate. The FED does not control interest rates, they are market based. The FED controls the money supply. Now increasing or decreasing the money supply can shift rates, but the actual rates are still based on the market.
There is no sense in which "the market" can control the supply of a currency. When you have a commodity based money the money supply is based new discoveries of the commodity, the lack of new discoveries, the ability to extract it, etc. These are not controlled by the market.
There is a huge difference, the government has much different incentives than an independent central bank. Furthermore, the result is not "always the same". In the past and present fiat currencies controlled by governments have collapsed, where as currencies controlled by independent central banks have done very well.
The FED did not cause the bubble, bubbles are naturally occurring economic phenomena. The FED did fail to control the bubble though.
Like I mentioned earlier I don't believe the Fed or Bernanke knows what inflation really is. May be you believe Bernanke's definition, while I believe the opposite definition in the article. Time will tell who is correct, but I don't believe Bernanke's concept of inflation. I realize this is the belief of many in government but that doesn't make it right.
Even Alan Greenspan said this in 1966, "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. ... This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the
way of this insidious process. It stands as a protector of property
rights. If one grasps this, one has no difficulty in understanding the
statists' antagonism toward the gold standard."
Then he went on and helped create the current bubble that we are suffering through today. He kept interest rates low for far too long. Nobody knows when to change the rates, that is what I've been saying. It will always be too late.
You may not like Ron Paul but he has been warning about this mess for many years, while others were saying real estate prices would continue to increase 10% every year and they also said they didn't forsee any bubble and the economy was fine.
Those future obligations have been promised and although they are not debt, they will soon be on the books and we will be on the hook for them. Do you think they will just disappear? If I owe someone money in 2012 it may not be a debt on my books now, but I will still need the money to pay them back at some point.
I wasn't trying to insult PHD's, but sometimes those people spend more time in school than in the real world. I know many people who have PHD's and Master degrees and couldn't balance their checkbook.
Monterarism is just a sheep in wolf's clothing. It is a branch from Keynesian economics just as I said Keynesian economics tries to adapt when they realize their policies failed. Although not the same it still has its roots in Keynesian theories.
Obviously your opinion of inflation is different than mine and you have more faith in the Fed than I do.
Like I mentioned earlier I don't believe the Fed or Bernanke knows what inflation really is. May be you believe Bernanke's definition, while I believe the opposite definition in the article. Time will tell who is correct, but I don't believe Bernanke's concept of inflation.
Sorry, but this whole line is just nonsense. The different schools of economics do not think of "inflation" much differently, they do use different terms at times though. Which is all what the political piece of rubbish you posted is picking up on. There are two things 1.) an aggregate increase in the cost of goods, 2.) an increase in the money supply. The Austrian view is that these things are one and the same, they are equivalent. The Keynesian view is that they are different, but related. For a Keynesian inflation is when aggregate demand exceeds aggregate supply which can be caused by 2.).
In terms of Monetarism, to quote Milton Friedman:
"Inflation is always and everywhere a monetary phenomenon."
The monetarist understanding of inflation is no different than the Austrian, although different terminology is often used.
And contrary to what you want to believe, Keynesian theory has NOT been the prevailing theory the last 3~4 decades. It has been Monetarism.
Quote:
Originally Posted by LeavingMA
He kept interest rates low for far too long. Nobody knows when to change the rates, that is what I've been saying. It will always be too late.
The low rates did not cause the bubble, this claim is just politics. Its not in any sense based in economics.
Quote:
Originally Posted by LeavingMA
Those future obligations have been promised and although they are not debt, they will soon be on the books and we will be on the hook for them. Do you think they will just disappear? If I owe someone money in 2012 it may not be a debt on my books now, but I will still need the money to pay them back at some point.
You are just confusing future obligations with debt again. You have to buy food in 2012, so I guess its debt?
Quote:
Originally Posted by LeavingMA
It is a branch from Keynesian economics just as I said Keynesian economics tries to adapt when they realize their policies failed.
This is a complete fabrication, Monetarism is based on classical economic theory (e.g., Adam Smith). It gained popularity due to some of the failures of original Keynesian theory.
Sorry, but this whole line is just nonsense. The different schools of economics do not think of "inflation" much differently, they do use different terms at times though. Which is all what the political piece of rubbish you posted is picking up on. There are two things 1.) an aggregate increase in the cost of goods, 2.) an increase in the money supply. The Austrian view is that these things are one and the same, they are equivalent. The Keynesian view is that they are different, but related. For a Keynesian inflation is when aggregate demand exceeds aggregate supply which can be caused by 2.).
In terms of Monetarism, to quote Milton Friedman:
"Inflation is always and everywhere a monetary phenomenon."
The monetarist understanding of inflation is no different than the Austrian, although different terminology is often used.
And contrary to what you want to believe, Keynesian theory has NOT been the prevailing theory the last 3~4 decades. It has been Monetarism.
The low rates did not cause the bubble, this claim is just politics. Its not in any sense based in economics.
You are just confusing future obligations with debt again. You have to buy food in 2012, so I guess its debt?
This is a complete fabrication, Monetarism is based on classical economic theory (e.g., Adam Smith). It gained popularity due to some of the failures of original Keynesian theory.
Obviously we completely disagree. You also keep saying that the Fed didn't create the bubble or isn't too blame, but it appears you believe that they can help fix the economy? I believe it works both ways.
Food is also a basic commodity and I don't associate that with future debts that we will owe to people. The government isn't going into debt buying food for me in the future.
Right, but the problem is that you're not even getting the facts right. Every one of your posts is filled with factually inaccurate claims...
Quote:
Originally Posted by LeavingMA
You also keep saying that the Fed didn't create the bubble or isn't too blame, but it appears you believe that they can help fix the economy? I believe it works both ways.
Yes, I said that as its the truth. It is likely that the FED's interest rate policy was a factor in the formation of the bubble, but suggesting that it was the sole cause or even the primary factor has no basis in reality.
The FED's job is not really to fix the economy, its to control monetary policy. The FED has been largely successful in its monetary policy, credit is starting to flow again, there has not been rapid deflation, etc.
Quote:
Originally Posted by LeavingMA
Food is also a basic commodity and I don't associate that with future debts that we will owe to people. The government isn't going into debt buying food for me in the future.
Ugh...the number you are talking about is not "future debt". Its future obligations, to say it again debt and future obligations are two different things. Why people want to continue to mislead on this point is beyond me.
Debt has been realized, its something that has to be paid back. Future obligations have not been realized and there is currently nothing to pay. The government can do a number of things to deal with future obligations none of which involve more debt.
Like I mentioned earlier I don't believe the Fed or Bernanke knows what inflation really is. May be you believe Bernanke's definition, while I believe the opposite definition in the article. Time will tell who is correct, but I don't believe Bernanke's concept of inflation. I realize this is the belief of many in government but that doesn't make it right.
Even Alan Greenspan said this in 1966, "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. ... This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the
way of this insidious process. It stands as a protector of property
rights. If one grasps this, one has no difficulty in understanding the
statists' antagonism toward the gold standard."
Then he went on and helped create the current bubble that we are suffering through today. He kept interest rates low for far too long. Nobody knows when to change the rates, that is what I've been saying. It will always be too late.
You may not like Ron Paul but he has been warning about this mess for many years, while others were saying real estate prices would continue to increase 10% every year and they also said they didn't forsee any bubble and the economy was fine.
Those future obligations have been promised and although they are not debt, they will soon be on the books and we will be on the hook for them. Do you think they will just disappear? If I owe someone money in 2012 it may not be a debt on my books now, but I will still need the money to pay them back at some point.
I wasn't trying to insult PHD's, but sometimes those people spend more time in school than in the real world. I know many people who have PHD's and Master degrees and couldn't balance their checkbook.
Monterarism is just a sheep in wolf's clothing. It is a branch from Keynesian economics just as I said Keynesian economics tries to adapt when they realize their policies failed. Although not the same it still has its roots in Keynesian theories.
Obviously your opinion of inflation is different than mine and you have more faith in the Fed than I do.
I would not say Greenspan is directly responsible for the bubble that occurred. Is he partially or should the buck stop on part of his door step? Sure. But the FED's keeping rates low didn't in any major way contribute to the bubble occurring.
The main contributor to the bubble occurring, is the fallacy that the market can and will police itself. Greenspan and others really didn't think (and I don't know how they didn't for the life of me) that people who's lively-hood it was, would set themselves on a path of MAD (mutually assured destruction). The market and market "makers" to use the term broadly didn't believe it would really happen either. They plaid it out to the end, thinking that the other blinking would divert the catastrophe. This was global thermonuclear war on a financial scale w/out actual hostilities between the countries involved. And now were having to pick up the pieces in the market wasteland.
We don't have a free market system. The whole point and stated goal of the Federal Reserve is to provide "intervention" in the markets. Intervention means to halt normal market forces. They have been doing this since they were created. All economic bubbles and resulting crashes since 1914 can be traced back to their monetary policy of the moment.
The problem with the current Federal Reserve is nobody knows the rationale for their "intervention". If it is to provide stability, then the current collapse of the economy proves they have failed spectacularly. I don't believe that one person, with no accountability, has the ability to decide the nation's monetary policy yet this is what we have.
It's not completely their fault BTW, the federal government is spending far far more than it can ever hope to pay back and the fed is buying up much of this debt. The end result will be a lot more inflation than we have now, at best. At worst, it's frightening.
We don't have a free market system. The whole point and stated goal of the Federal Reserve is to provide "intervention" in the markets. Intervention means to halt normal market forces. They have been doing this since they were created. All economic bubbles and resulting crashes since 1914 can be traced back to their monetary policy of the moment.
The problem with the current Federal Reserve is nobody knows the rationale for their "intervention". If it is to provide stability, then the current collapse of the economy proves they have failed spectacularly. I don't believe that one person, with no accountability, has the ability to decide the nation's monetary policy yet this is what we have.
It's not completely their fault BTW, the federal government is spending far far more than it can ever hope to pay back and the fed is buying up much of this debt. The end result will be a lot more inflation than we have now, at best. At worst, it's frightening.
I agree completely and it is similar to what I've been saying. Nobody wants to put any blame on the Fed.
Right, but the problem is that you're not even getting the facts right. Every one of your posts is filled with factually inaccurate claims...
Yes, I said that as its the truth. It is likely that the FED's interest rate policy was a factor in the formation of the bubble, but suggesting that it was the sole cause or even the primary factor has no basis in reality.
The FED's job is not really to fix the economy, its to control monetary policy. The FED has been largely successful in its monetary policy, credit is starting to flow again, there has not been rapid deflation, etc.
Ugh...the number you are talking about is not "future debt". Its future obligations, to say it again debt and future obligations are two different things. Why people want to continue to mislead on this point is beyond me.
Debt has been realized, its something that has to be paid back. Future obligations have not been realized and there is currently nothing to pay. The government can do a number of things to deal with future obligations none of which involve more debt.
Just because you don't agree with me doesn't mean my posts have been filled with inaccurate claims.
Do you really believe the Fed should be able to print money just to bail out banks and other institutions? They also do all this with no checks and balances.
I guess you don't think we have had any inflation either. Even though people's wages have barely gone up over the past 10-20 years, but food, oil, gas, electric, etc. are all more expensive now then they were before. The real estate market has been inflated so homes and rents are more expensive. What we have now is a system that punishes savers and people on fixed incomes, but wants people to borrow and use credit. The dollar is worth a lot less than it was even 10 years ago.
So why should I trust anything the Fed is doing. Up until the fall of 2008 Bernanke was still stating that the economy was strong and showed no immediate signs of slowing down. He expected growth right through 2008 and 2010 and for housing to continue to increase only at slightly slower rates.
So the same people who had no clue this mess was coming and kept saying the economy showed no weaknesses are the ones saying they saved us.
I guess I'm just waiting for the next coming mess, which won't be far off. Then we will all see how great the Fed is and how they all took us for a ride.
Just because you don't agree with me doesn't mean my posts have been filled with inaccurate claims.
You're right, the reason why they are inaccurate is because they do not match the facts
Quote:
Originally Posted by LeavingMA
Do you really believe the Fed should be able to print money just to bail out banks and other institutions?
No, I believe that the Fed should be able to stabilize the financial system. But you're just confusing things again, TARP (the bailout program) was a government program. The Fed has not bailed out any banks, it has supplied liquidity to the markets.
Quote:
Originally Posted by LeavingMA
They also do all this with no checks and balances.
You see, you don't even bother to read about things when they are supplied to you. This is an utter lie, there are a number of checks and balances. To say it again, look up "Federal Banking Agency Audit Act". This gives the GAO the ability to audit the federal reserve system.
Quote:
Originally Posted by LeavingMA
I guess you don't think we have had any inflation either. Even though people's wages have barely gone up over the past 10-20 years, but food, oil, gas, electric, etc. are all more expensive now then they were before.
This is funny....do you see the irony here and between the article you posted? Did you even read the article you posted?
Regardless, why would I think there has not been inflation? Whether you're looking at the money supply or aggregate prices, there has been inflation. This is not some mystery or hidden secrete. In terms of wages not keeping up with aggregate prices, that is true to a small degree over the last decade.
In terms of your clams about Bernanke, they are largely inaccurate. Bernanke, like Greenspan, did understand the bubble though. Another poster in this thread stated the main issue though, it was their faith in the self regulation of markets that caused the problems. But the Austrians have the same faith to a even greater degree.
.....You see, you don't even bother to read about things when they are supplied to you. This is an utter lie, there are a number of checks and balances. To say it again, look up "Federal Banking Agency Audit Act". This gives the GAO the ability to audit the federal reserve system. .....This is funny....do you see the irony here and between the article you posted? Did you even read the article you posted?......
This post makes me laugh. Do You Even Do This? If you had, then you would have noticed the act that you mention has these exclusions. This act by design specifically prevents audits of the very items being discussed in this topic. It was this act that removed the government's ability to do any significant audits of the Federal Reserve in 1978.
Audits of the Federal Reserve Board and Federal reserve banks may not include—
transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organizations
deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operation;
transactions made under the direction of the Federal Open Market Committee; or
a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection.
Furthermore the GAO website has a statement to this effect.
Currently, GAO lacks audit authority over the Federal Reserve's monetary policy, foreign transactions, and Federal Open Market Committee operations. Legislation pending before Congress would remove all restrictions on GAO's authority to examine Federal Reserve activities. Although whether to expand GAO's authority is clearly Congress' call, GAO believes that if its authority is expanded, measures should be included to protect against release of confidential documents and to prevent undue interference with the Federal Reserve's ongoing policymaking functions.
I would say that I find it amazing that you make a post chatizing others for not reading your weblinks that you google up when you didn't do it yourself. Except in your case, it doesn't amaze me.
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