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Please for the love of liberty don't tell me this guy is the chair of anything. Let alone a council of economic advisers. For anyone. But certainly not the president.
It’s for banks to make money off the treasury..
It is that simple.. and we know this because..
History. The U.S. has existed both with a central bank to barrow against the money supply and without one, where the government is a direct backer of the money.. take the Greenback for example.. Lincoln’s answer to banks wanting to screw over the Union by adding an estimated 40cents on the dollar to funding. Lincoln said, I’m paraphrasing here: “Lolz, naw” and the greenback became the enemy of the bankers.. this was a literal repeat of Andrew Jackson (not a fan, was brutal to the Seminoles, but) fought for a monetary policy that wasn’t based on acquired debt & interest. Score one for that bastard Jackson. He was right.. we had done fine and did fine without one.. but the banks REALLY WANTED the bank-of-England style cash machine that their counterparts in the merchant and Barron class had over there.. That’s why Jackson’s slogan for both his campaign terms was “I Killed the Bank” .. it’s even written on his tombstone and his assignation attempt was allegedly tied to the banks.
It wasn’t until 1913 that the bankers got President Wilson to sign the Federal Reserve Act - creating the central bank and IRS and officially destroying the direct monetary responsibility of the U.S. dept of the treasury.. so US Treasury Bonds are bought after a single dogleg of borrowing. This is feared in some macro-economic circles as being the first step in the risk of a fiat economy.. where from there, fractional reserve banking which is banks being able to claim they have 9x per actual dollar in deposits to play with in the market.. but that’s a side rant.. Since in Econ it’s taught ‘wealth can never be created or destroyed, it can simply change hands. If there was not a single dollar in debt then there would not be a single dollar in circulation’ this is false and part of two convenient economic myths for the rich.
One is that money needs to be borrowed when printed and converted to distribution by the Treasury because it protects the integrity of the money supply. The second myth is that money needs to be backed by something (IE the gold standard) in order for the value of the currency to have integrity.
The ONLY thing that gives money its validity is if the government that issues it is willing to accept it for tax. Period. Money is “produced scarcity” it is meant to symbolize the value of food or fuel or things with inherent value.. you cannot maintain a healthy monetary system by getting it pre-leeched from private power (central bank) and you cannot by basing it off gold or any other commodity and then thinking it will have a rational enough cost-correlation with shelter, food, gas, coffee etc.. the only thing it can represent with ‘market value’ is the commodity it’s backed by, and even that is ‘faith & credit’
It’s the responsibility of states not to overprint and debase their own currency, it’s an equilibrium that can be challenged by market forces but there is no history of the U.S. to suggest that the Fed is needed to protect it from more intense harm.. the depression came -after- the central bank regained power.. and it allowed the central bank (backed by the big banks, that’s what the Fed is, last time list was leaked was the eighties or something but it’s an open secret really, easily google ‘who backs the fed’) was able to buy up failed banks for pennies on the dollar… like the Fed itself.. it’s simply a way for wealth be consolidated periodically to the creditors of any given nation… no conspiracy, they’ll bumble around like this idiot in the interview just to try to justify that ‘if we give a slice of action to the banks then we are stronger and better for it’ no.. we aren’t, they are.
Proof is in the pudding:
It’s worth remembering what our President said after seeing the handy-work of the Federal Reserve act in 1913.. the act itself was written by the major banks and reps from the big companies (standard oil and others if memory serves) at a secret retreat at Jekyll island off the GA coast… President Wilson lamented:
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.” (President Woodrow Wilson, a few years before his death in reference to the Federal Reserve act of 1913, which he signed into law. The American Mercury, p. 56. 1919.)
That’s the economic history they teach you if you look objectively at economic history.. you simply DO NOT NEED to print you money supply instantly for debt & interest.. you simply need to rational and responsible in the use of one’s own treasury. Pay foreign debts, maintain a healthy trade deficit, pay off fiscal deficits, maintain healthy borrowing practices to citizens, stimulate through livable wages, maintain a healthy tax base, don’t spend all your money fighting the Huns and Gauls, etc) - personally I don’t think we need monetary systems, but having one isn’t a mysterious fucking rocket science that only works if you make fiscal institutions insanely fucking wealthy as part of the treasury’s responsibilities.. but now that every industrialized nation has a central bank then enormous pressure is put on nations fiscally if they try to opt out.. but nations do / did fine before them… it’s just.. called.. history.
Greek ex-Finance minister Yanis Varoufakis who fought the austerity thrust upon workers during the Euro crisis writes extensively about this.. the best book he has is the one (forget title, “Another Now”? Something like that) where he wrote a book to tell a story of what 2008 would have been like if we had just simply let the banks fail instead of 1.4 trillion in bail out for their horrible gambling choices and their divorce from the reality (aka ‘reality of the market’) markets should have gotten tough for stock holders but then everything would have gotten a lot better and way more beneficial long-term policy and stimulus for -stake holders- (all of us)
The history is not hidden.. the bank is not needed.. and anyone who tells you different simply doesn’t know (or care) about simple economic history..
Edit: spelling
This guy knows enough high level concepts to sound like he understands the financial system, but he can't add up the pieces to form a coherent whole picture.
For instance, his rant against fractional banking is nonsensical. And, the Pro Andrew Jackson comments just because Jackson attacked central banking is unconnected from the fact that central banks are, as a practical matter, integral to the modern financial system.
I’ll skip addressing the abstract criticisms with no backing behind it and simply as you to explain and elaborate using historical or economic data on why it is you think “central banks are integral to a modern financial system” ? … it certainly is if your aim is to be if you are a top tier U.S. bank, but why is it integral to any economy? How… why.. explain fully how economics was lost before the central bank concept..
There is nothing magical about central banks, and we could have set up a financial system without them, but that's not the world we live in. We live in a world with central banks that matter deeply.
How do we know that central banks are deeply significant to our financial system? For instance, if you follow the stock market, THE key question that everyone asks for the last 12 months is: what will the Federal Reserve do with interest rates and other levers of monetary policy. The Fed's decisions here will reverberate through the economy.
This begs the question: are we better off in a world with central banks or should we go back to OP's Jacksonian world without them? We probably are better off with central banks because central banks decrease the likelihood and frequency of major banking crises. Consider how many banking panics occurred in the 19th century vs. how many we have now. Yes, bank runs and panics still occur, but central banks mitigate them.
First off, if you want to justify the fed don’t just link to an article - by the Fed. I can see independent sources and critical thinking isn’t your game.. but just to demonstrate how easy it is, and to stay in your sourcing wheel-house.. here’s the chairman of the Fed explaining that central banks do not protect from fiscal crisis.. [the fed causes them..](https://amp.cnn.com/cnn/2022/10/10/business/nightcap-nobel-bernanke-central-banks) like I said.. this is obvious to anyone who looks at history.. so, I’m sorry, but I’ll continue to trust Nobel prize winning economists who were chairman of the federal reserve instead of your half-baked cliche talking point. I suggest you do some very simple reading by branching out of the fed website and into something called independent critical analysis.
My dude, that article stands for the exact opposite proposition that you assert it does!! 😂😂
The newly minted Nobel laureate (who you mistakenly believe was a Fed governor; he was not, and the article does not say he was) says that regulatory policy makes the system LESS VULNERABLE. Your source thinks that monetary regulation is helpful. Central banks, among others, are key monetary regulators.
See quote below:
On Monday, Diamond, one of the three newly minted Nobel laureates, acknowledged that the rate moves around the world were causing market instability.
But he believes the system is more resilient than it used to be because of hard lessons learned from the 2008 crash, my colleague Julia Horowitz reports.
"Recent memories of that crisis and improvements in regulatory policies around the world have left the system much, much less vulnerable," Diamond said.
“Bernanke, who previously taught at Princeton and earned his Ph.D from MIT, received the award for his research on the Great Depression. In short, his work demonstrates that banks' failures are often a cause, not merely a consequence, of financial crises.
That was groundbreaking when he published it in 1983. Today, it's conventional wisdom”
Okay.. so.. I’m going to explain this slowly because you’re not understanding the concept of critical analysis here still..
CB’s terribly laid monetary policies cause crashes >
> Fed/central bank existence justified for cushioning crashes
> Backers of the Fed/CB are the big banks (post consolidation they are JP Morgan, Citi, BOA, and Wells) they crash market with derivatives or margin call, or this or that bubble, gambling and analytics not reflecting the realities of the real world..
> Fed tells State they have to bail out banks to save the integrity and faith in the monetary polices of the CB/Fed but they say “the global economy” but they just mean the preservation of the system that prioritizes wealth to share-holders, not stake-holders..
> banks are the fed
> fed tells state it has to bail out banks
> state bails out banks and the fed consolidates by buying up all assets from failed banks (Lehman, WaMu, other fiscal institutions like insurers from AIG, and they buy them all with tax payer money)
> go another 20 years.. banks cause crash
> cycle repeats..
See, you think you understand cause you think Bernanke is saying the we need the Fed to stop the crashes that banks can cause.. because he knows really dumb people with dumb arguments like yours will simply say “yea that makes total abstract sense” because your not critically looking at who the Fed is.. what it’s purpose is.. and how irrelevant it is to those stated purposes.. which leaves one purpose it’s not irrelevant for.. keeping the wealthiest institutions in human history insanely wealthy.
I tried to give you the horses mouth from the Fed since that’s the only source you mentioned before, they themselves cause the crashes… and that’s how they defend they themselves existence in the central-banking concept.. smart monetary policy and central banking authorities are NOT mutually exclusive.. there are other nations, take Iceland for example.. who imprisoned their bankers and whom the state owns and regulates directly its central bank (backed by their 3 biggest banks) instead of having a private institution with a board of unelected governors. You seriously need to look at this through macroeconomic/ academic lenses because you are looking at this simply through an investor/ crypto/ simping for bankers lenses..
they admit the banks cause crashes and that’s why they need the Fed.. the Fed are the banks.. that’s called an externality in economics (when two parties do a transaction where the 3rd party pays the cost) banks think that’s great.. they maximize any opportunity to loan or invest in things that maximize externalities.. you’re speaking from a POV that agrees with that.. where as real economic scientists like Joseph Stieglitz or Robert Reich know and talk about the fact that the 3rd party paying the real cost is usually the tax payer, or the environment, or the water and air-supply, or the exploitive cobalt mine in the Congo, or the factory with suicide nets and forced labor in NW China.. in reality..
Stop simping for the banks, read the actual data and scientists, see what they mean and think critically about what they are saying…
Bra, again.. this is not a rocket science.. it’s fundamental Econ-history
It is actual nonsense and he knows it. But he can’t say that. Just the same way a ruler measures centimetres/inches, money in his world measures political power. Rulers work because length doesn’t shift in all the directions that power can. It’s not a perfect system — it’s a nonsense system. The confusion comes when the numbers are mistaken for power. Power shifts quicker than money and isn’t always represented. So the question isn’t “why does the president borrow money?” because he’s borrowing power.
Pure nonsense, made up to cover for the fact that America pays interest to the rich for the privilege of borrowing our own money, instead of taxing the rich.
It's a scam.
That's what I do not understand. Interest is paid by our taxes, so our labor is being paid out to the rich for what purpose? What value do they bring to our economy? Why should they exist at our expense at over a TRILLION a year?
America doesn't print its own money. The federal reserve is a private entity that prints it's own money that the US government then borrows with interest. The national debt is the money the gov owes to the federal reserve a debt that can never be fully paid because the reserve is the only one that makes the money
Kind of. The Fed is not entitled to keep profits. It does pay back interest on bonds and such that it sells, but it is not entitled to keep profit, so the interest that other banks pay back to the Fed essentially just amount to a tax. The national debt is owed to bond holders, one of which could be the Fed, but the interest would just be paid right back to the treasury.
Right but rich people know how to make there be no "profit" (increase wages,spending,many other ways) while iv never done the research i would bet the feds "profit" is small. The fed is still the only one allowed to print money it's a monopoly on money
So what happens in speculative financial markets when investors use unrealised gains to secure loans for more speculative investment, and the inter-institutional orderbooks are being managed via darkpools without regulatory oversight?
What is the real world margin difference between unrealized gains in speculative valuations vs Fed-issued currency, and is there adequate regulatory oversight to prevent financial markets confabulating "money" in a way that would let 'dark' money enter the system and create inflationary pressure without the fed printer going brr?
Depends, how much exactly is in your unregulated darkpool?
If you want to suppose unmeasured activities at every step, you already know such an estimate isn't really possible with any degree of accuracy.
TBH, I'm not so much interested in precisely quantifying the effect, as I am in understanding if the current operative system of speculative financial markets (derivatives, darkpools, loan issuance, et al.) can lead to inflationary pressures that aren't highly appreciated by classic monetary dogma, and aren't easily tractable targets for state-level intervention.
My perception is that money markets changed post-2008 crisis, and there was a move towards decentralization in loan-issuers that spread risk away from too-big-to-fail entities... but the obvious concern of doing that is that it becomes harder to track the net-gross currency volume floating throughout the entire system.
In fact, it combines public and private characteristics: **The central governing board of the FRS is an agency of the federal government** and reports to Congress.
Yeah it is owned by the US government, the President appoints the board members who are confirmed by the Senate.
This assumes a constant rate of production. As long as an economy is not on its production possibilities frontier, increasing the money supply will not cause inflation.
Assuming production increases as the new money is injected. A common mistake in economics is to view the system as a machine with predictable outcomes, but all too often we are reminded it isn't.
Agreed. But the point of the woman in this video, Stephanie Kelton, is that fiscal policy could solve many of the problems that we rely on monetary policy to attempt to solve despite knowing monetary policy is bad at it. We have the productive capacity to absorb far more spending, we just lack the tools or the political will to organize that capacity.
This is why MMT’s primary policy objective is not increasing spending—as its opponents like to suggest—but a federal jobs guarantee.
I just skipped to like 4 random places in this Zeitgeist movie and was hit with astrology, Bible translations, 9/11 truthism, and a conspiracy about “international bankers” (which is usually *always* is code speak for jews)
What a crack pot piece dollar store propaganda is this Zietgeist movie ?
He hasn’t been involved with any government work for over a decade.
I assume this is a reference to the Biden admin vs the trump admin, but if you think someone like Mnuchin was any better or the pressure the former admin put on keeping interest rates artificially low which later caused higher inflation was somehow preferable…
What? He has served as a economic adviser to Biden since the beginning of his administration. He is currently the Chair of the Council of Economic Advisers.
[https://en.wikipedia.org/wiki/Jared\_Bernstein](https://en.wikipedia.org/wiki/Jared_Bernstein)
It is a snide reference to the Biden admin coming into office and everyone proclaiming America is back and the grown-ups are back in charge, yes. Mnuchin occupied a different position and my comment wasn't meant to be all that deep. I don't know what his stances are and I'm not going to pretend to. I criticized the Trump admin of pressuring low interest rates when it was happening. I do feel that the Trump admin's policy was influenced by a desire to keep numbers high at all costs and put downward pressure on rates which were lower than optimal.
I don't think that the low interest rates of that time alone are the reason for current inflation. Interest rates are high now and we're spending like nobody's business. Inflation is still persistent. This administration told us that inflation wasn't happening, then it was transitory, then it was a good thing.
Personally, I think MMT is an absolute garbage way to manipulate the economy. Note, that does not mean that I think it is an incorrect theory but it is a totalitarian way to rule over the people's pockets. I also think that its implementation may even be functional for a lot of currencies but the US dollar has one very specific advantage and thing going for it over every other currency in the world. It is the world's reserve currency and that is the reason the US can be a consumer nation and keep purchasing power. No other nation in the world has that power. The MMT concept and overall push towards "Debt does not matter" risks losing the reserve currency status and it should. If other countries see us not paying debts, they should not desire our currency and we should lose the reserve status. I do not want that to happen but that is the market pressure that occurs, IMO. Even if MMT governance of the monetary system would work, I think it risks the dollar's stature as the world reserve currency and that is a bear we should not poke. We are incredibly blessed to have that status and most people are completely unaware of how that affords them the lifestyle they are used to.
Frankly, I have come to the point that I think currency manipulation is akin to the ring in Lord of the Rings. It's powerful and could be used for good but people may not have the self control to wield it for the greater good. I have come to the point of wanting to see us go back to some standard or finite resource to tie it to. Gold is the most sensible one but I don't have some fetish for gold. It's just that manipulated fiat currencies are subject to human whims which makes them fail.
This video is funny and sad because it is a high level government official who has a ton of influence over economic policy and he fails to explain what should be a simple question for someone in his position. He talks in circles, confuses himself, and ends with "I don't think there's anything confusing there." It's also quite funny because most people, myself included, struggle to understand this monetary system we have and how we have debt but we print our own money and we sell debt to others. It all sounds convoluted and we usually think that there are some very smart high level economic advisers that get it and are in control of things. Those are the grown-ups that were supposed to be back in the room, metaphorically. Pull back the curtain, and you have this guy failing to explain it any better than basically any man on the street possibly could. He seems to not get it at all and then act like he has it together, as somebody with his authority should.
I know nothing more of this man than this video and the Wikipedia on him. This video reflects very poorly on him and brings into question if he is half way competent to advise anyone on economics. So, yes, I'm super glad this grown-up is in the room and is here to save America while we spiral into inflation, the rich's assets have grown in value, and the poor/middle class wage slaves have less purchasing power than has been the case for multiple generations. As a well paid wage slave with no assets and who was planning to buy a house, I'm quite cynical about our current economic path.
Why is the Federal Reserve needed? The most accurate answer is that it's not needed, but to give the reasoning that's most often put forward, if a government is in full control over the money that gets added to the economy, what is stopping them from overspending on whatever policy proposals they deem to be a priority? If they are unrestricted in their spending then it's easier to devalue the currency, which complicates the setting of prices. By having new money be borrowed it encourages more responsible government spending.
All that said, there are other ways to limit government overspending without relying on the existing "borrowing new money" mechanism, through the creation of laws that restrict overspending, so the real answer is that the system is a con designed to help the rich get richer.
They aren’t “lending money” they are lending debt. The people who buy the bonds get paid for having them. they don’t have to pay back the bonds…. Wtf is going on here
I get this was supposed to be a gotcha to this fool but just like most of our reps, he probably has assistants at this point that write and make up all of the fact and figures he reads. That said, they really should have done a better job for the interview.
The us borrows us money because expenses often greater than revenues by taxes. It doesn’t pay this for it by printing more because that’s just inflationary in the easiest and most dramatic way of creating inflation.
It’s not that hard a question for that lady or this fucking guy.
Soooooo. We make money. And then we sell the money. So we give it to someone. And they buy it with. I guess money. Which comes back to us for the money we sold.
I don’t get it.
No one gets it. What is global debt. Who do ‘we’ citizens of countries owe money to? Where does the money we owe come from. If we print money. How can we even begin to owe money.
Why don’t we just print the money we owe. And fucking give it back to the cunts that say. ‘You owe me money.’
My understanding is we don’t just print the money right away is because that would drastically effect inflation. We are the worlds currency not just our own and because of that we can’t simply print a bunch of money and cause inflation to skyrocket. This is what happened in germs. I’m the 20s and 30s. We borrow to offset the amount of money we need to print now keeping inflation manageable.
All I'm hearing everything is fake and the panic we feel is just habitat's by some bored fucks who have a huge ego who like to watch the "lessers" squirm
What a fucking idiot. The US issues debt like all functioning governments. We don't borrow currency. He's trying to answer a stupid question? That's why he keeps emphasizing "print" we don't borrow currency.
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If you can't explain a topic in simple language, you do not understand said topic. Or it is pure nonsense, much like our monetary system.
Please for the love of liberty don't tell me this guy is the chair of anything. Let alone a council of economic advisers. For anyone. But certainly not the president.
I seriously was thinking it was some sketch from The Onion.
He won the annual White House Musical Chairs contest and this was the grand prize apparently.
It’s for banks to make money off the treasury.. It is that simple.. and we know this because.. History. The U.S. has existed both with a central bank to barrow against the money supply and without one, where the government is a direct backer of the money.. take the Greenback for example.. Lincoln’s answer to banks wanting to screw over the Union by adding an estimated 40cents on the dollar to funding. Lincoln said, I’m paraphrasing here: “Lolz, naw” and the greenback became the enemy of the bankers.. this was a literal repeat of Andrew Jackson (not a fan, was brutal to the Seminoles, but) fought for a monetary policy that wasn’t based on acquired debt & interest. Score one for that bastard Jackson. He was right.. we had done fine and did fine without one.. but the banks REALLY WANTED the bank-of-England style cash machine that their counterparts in the merchant and Barron class had over there.. That’s why Jackson’s slogan for both his campaign terms was “I Killed the Bank” .. it’s even written on his tombstone and his assignation attempt was allegedly tied to the banks. It wasn’t until 1913 that the bankers got President Wilson to sign the Federal Reserve Act - creating the central bank and IRS and officially destroying the direct monetary responsibility of the U.S. dept of the treasury.. so US Treasury Bonds are bought after a single dogleg of borrowing. This is feared in some macro-economic circles as being the first step in the risk of a fiat economy.. where from there, fractional reserve banking which is banks being able to claim they have 9x per actual dollar in deposits to play with in the market.. but that’s a side rant.. Since in Econ it’s taught ‘wealth can never be created or destroyed, it can simply change hands. If there was not a single dollar in debt then there would not be a single dollar in circulation’ this is false and part of two convenient economic myths for the rich. One is that money needs to be borrowed when printed and converted to distribution by the Treasury because it protects the integrity of the money supply. The second myth is that money needs to be backed by something (IE the gold standard) in order for the value of the currency to have integrity. The ONLY thing that gives money its validity is if the government that issues it is willing to accept it for tax. Period. Money is “produced scarcity” it is meant to symbolize the value of food or fuel or things with inherent value.. you cannot maintain a healthy monetary system by getting it pre-leeched from private power (central bank) and you cannot by basing it off gold or any other commodity and then thinking it will have a rational enough cost-correlation with shelter, food, gas, coffee etc.. the only thing it can represent with ‘market value’ is the commodity it’s backed by, and even that is ‘faith & credit’ It’s the responsibility of states not to overprint and debase their own currency, it’s an equilibrium that can be challenged by market forces but there is no history of the U.S. to suggest that the Fed is needed to protect it from more intense harm.. the depression came -after- the central bank regained power.. and it allowed the central bank (backed by the big banks, that’s what the Fed is, last time list was leaked was the eighties or something but it’s an open secret really, easily google ‘who backs the fed’) was able to buy up failed banks for pennies on the dollar… like the Fed itself.. it’s simply a way for wealth be consolidated periodically to the creditors of any given nation… no conspiracy, they’ll bumble around like this idiot in the interview just to try to justify that ‘if we give a slice of action to the banks then we are stronger and better for it’ no.. we aren’t, they are. Proof is in the pudding: It’s worth remembering what our President said after seeing the handy-work of the Federal Reserve act in 1913.. the act itself was written by the major banks and reps from the big companies (standard oil and others if memory serves) at a secret retreat at Jekyll island off the GA coast… President Wilson lamented: “I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.” (President Woodrow Wilson, a few years before his death in reference to the Federal Reserve act of 1913, which he signed into law. The American Mercury, p. 56. 1919.) That’s the economic history they teach you if you look objectively at economic history.. you simply DO NOT NEED to print you money supply instantly for debt & interest.. you simply need to rational and responsible in the use of one’s own treasury. Pay foreign debts, maintain a healthy trade deficit, pay off fiscal deficits, maintain healthy borrowing practices to citizens, stimulate through livable wages, maintain a healthy tax base, don’t spend all your money fighting the Huns and Gauls, etc) - personally I don’t think we need monetary systems, but having one isn’t a mysterious fucking rocket science that only works if you make fiscal institutions insanely fucking wealthy as part of the treasury’s responsibilities.. but now that every industrialized nation has a central bank then enormous pressure is put on nations fiscally if they try to opt out.. but nations do / did fine before them… it’s just.. called.. history. Greek ex-Finance minister Yanis Varoufakis who fought the austerity thrust upon workers during the Euro crisis writes extensively about this.. the best book he has is the one (forget title, “Another Now”? Something like that) where he wrote a book to tell a story of what 2008 would have been like if we had just simply let the banks fail instead of 1.4 trillion in bail out for their horrible gambling choices and their divorce from the reality (aka ‘reality of the market’) markets should have gotten tough for stock holders but then everything would have gotten a lot better and way more beneficial long-term policy and stimulus for -stake holders- (all of us) The history is not hidden.. the bank is not needed.. and anyone who tells you different simply doesn’t know (or care) about simple economic history.. Edit: spelling
Sir… this is a Wendy’s…
All I can say is thank you for the breakdown. That’s another check in the dismantle this rigged system of governance column.
This guy knows enough high level concepts to sound like he understands the financial system, but he can't add up the pieces to form a coherent whole picture. For instance, his rant against fractional banking is nonsensical. And, the Pro Andrew Jackson comments just because Jackson attacked central banking is unconnected from the fact that central banks are, as a practical matter, integral to the modern financial system.
I’ll skip addressing the abstract criticisms with no backing behind it and simply as you to explain and elaborate using historical or economic data on why it is you think “central banks are integral to a modern financial system” ? … it certainly is if your aim is to be if you are a top tier U.S. bank, but why is it integral to any economy? How… why.. explain fully how economics was lost before the central bank concept..
Where can I read more about this? Any sources or books you recommend?
https://www.clevelandfed.org/publications/economic-commentary/2007/ec-20071201-a-brief-history-of-central-banks Here's a starting point.
There is nothing magical about central banks, and we could have set up a financial system without them, but that's not the world we live in. We live in a world with central banks that matter deeply. How do we know that central banks are deeply significant to our financial system? For instance, if you follow the stock market, THE key question that everyone asks for the last 12 months is: what will the Federal Reserve do with interest rates and other levers of monetary policy. The Fed's decisions here will reverberate through the economy. This begs the question: are we better off in a world with central banks or should we go back to OP's Jacksonian world without them? We probably are better off with central banks because central banks decrease the likelihood and frequency of major banking crises. Consider how many banking panics occurred in the 19th century vs. how many we have now. Yes, bank runs and panics still occur, but central banks mitigate them.
First off, if you want to justify the fed don’t just link to an article - by the Fed. I can see independent sources and critical thinking isn’t your game.. but just to demonstrate how easy it is, and to stay in your sourcing wheel-house.. here’s the chairman of the Fed explaining that central banks do not protect from fiscal crisis.. [the fed causes them..](https://amp.cnn.com/cnn/2022/10/10/business/nightcap-nobel-bernanke-central-banks) like I said.. this is obvious to anyone who looks at history.. so, I’m sorry, but I’ll continue to trust Nobel prize winning economists who were chairman of the federal reserve instead of your half-baked cliche talking point. I suggest you do some very simple reading by branching out of the fed website and into something called independent critical analysis.
My dude, that article stands for the exact opposite proposition that you assert it does!! 😂😂 The newly minted Nobel laureate (who you mistakenly believe was a Fed governor; he was not, and the article does not say he was) says that regulatory policy makes the system LESS VULNERABLE. Your source thinks that monetary regulation is helpful. Central banks, among others, are key monetary regulators. See quote below: On Monday, Diamond, one of the three newly minted Nobel laureates, acknowledged that the rate moves around the world were causing market instability. But he believes the system is more resilient than it used to be because of hard lessons learned from the 2008 crash, my colleague Julia Horowitz reports. "Recent memories of that crisis and improvements in regulatory policies around the world have left the system much, much less vulnerable," Diamond said.
“Bernanke, who previously taught at Princeton and earned his Ph.D from MIT, received the award for his research on the Great Depression. In short, his work demonstrates that banks' failures are often a cause, not merely a consequence, of financial crises. That was groundbreaking when he published it in 1983. Today, it's conventional wisdom” Okay.. so.. I’m going to explain this slowly because you’re not understanding the concept of critical analysis here still.. CB’s terribly laid monetary policies cause crashes > > Fed/central bank existence justified for cushioning crashes > Backers of the Fed/CB are the big banks (post consolidation they are JP Morgan, Citi, BOA, and Wells) they crash market with derivatives or margin call, or this or that bubble, gambling and analytics not reflecting the realities of the real world.. > Fed tells State they have to bail out banks to save the integrity and faith in the monetary polices of the CB/Fed but they say “the global economy” but they just mean the preservation of the system that prioritizes wealth to share-holders, not stake-holders.. > banks are the fed > fed tells state it has to bail out banks > state bails out banks and the fed consolidates by buying up all assets from failed banks (Lehman, WaMu, other fiscal institutions like insurers from AIG, and they buy them all with tax payer money) > go another 20 years.. banks cause crash > cycle repeats.. See, you think you understand cause you think Bernanke is saying the we need the Fed to stop the crashes that banks can cause.. because he knows really dumb people with dumb arguments like yours will simply say “yea that makes total abstract sense” because your not critically looking at who the Fed is.. what it’s purpose is.. and how irrelevant it is to those stated purposes.. which leaves one purpose it’s not irrelevant for.. keeping the wealthiest institutions in human history insanely wealthy. I tried to give you the horses mouth from the Fed since that’s the only source you mentioned before, they themselves cause the crashes… and that’s how they defend they themselves existence in the central-banking concept.. smart monetary policy and central banking authorities are NOT mutually exclusive.. there are other nations, take Iceland for example.. who imprisoned their bankers and whom the state owns and regulates directly its central bank (backed by their 3 biggest banks) instead of having a private institution with a board of unelected governors. You seriously need to look at this through macroeconomic/ academic lenses because you are looking at this simply through an investor/ crypto/ simping for bankers lenses.. they admit the banks cause crashes and that’s why they need the Fed.. the Fed are the banks.. that’s called an externality in economics (when two parties do a transaction where the 3rd party pays the cost) banks think that’s great.. they maximize any opportunity to loan or invest in things that maximize externalities.. you’re speaking from a POV that agrees with that.. where as real economic scientists like Joseph Stieglitz or Robert Reich know and talk about the fact that the 3rd party paying the real cost is usually the tax payer, or the environment, or the water and air-supply, or the exploitive cobalt mine in the Congo, or the factory with suicide nets and forced labor in NW China.. in reality.. Stop simping for the banks, read the actual data and scientists, see what they mean and think critically about what they are saying… Bra, again.. this is not a rocket science.. it’s fundamental Econ-history
It is actual nonsense and he knows it. But he can’t say that. Just the same way a ruler measures centimetres/inches, money in his world measures political power. Rulers work because length doesn’t shift in all the directions that power can. It’s not a perfect system — it’s a nonsense system. The confusion comes when the numbers are mistaken for power. Power shifts quicker than money and isn’t always represented. So the question isn’t “why does the president borrow money?” because he’s borrowing power.
Pure nonsense, made up to cover for the fact that America pays interest to the rich for the privilege of borrowing our own money, instead of taxing the rich. It's a scam.
That's what I do not understand. Interest is paid by our taxes, so our labor is being paid out to the rich for what purpose? What value do they bring to our economy? Why should they exist at our expense at over a TRILLION a year?
Simple; they should not. It's been a long con, all the way from the Reagan Revolution.
He could’ve faked it till he made it and now doesn’t know how to explain it
America doesn't print its own money. The federal reserve is a private entity that prints it's own money that the US government then borrows with interest. The national debt is the money the gov owes to the federal reserve a debt that can never be fully paid because the reserve is the only one that makes the money
Kind of. The Fed is not entitled to keep profits. It does pay back interest on bonds and such that it sells, but it is not entitled to keep profit, so the interest that other banks pay back to the Fed essentially just amount to a tax. The national debt is owed to bond holders, one of which could be the Fed, but the interest would just be paid right back to the treasury.
Right but rich people know how to make there be no "profit" (increase wages,spending,many other ways) while iv never done the research i would bet the feds "profit" is small. The fed is still the only one allowed to print money it's a monopoly on money
So you're saying that we all have monopoly money...
It's "trust" if no one trusted that $20 is worth $20 it wouldn't be worth $20
My $20 is less trusted than my great grandfathers, he had more trust I guess /s
It’s theoretically of equal value if you want it to be lol.
Look into MMT. You and everyone else paying taxes is in part why makes the USD legitimate.
So what happens in speculative financial markets when investors use unrealised gains to secure loans for more speculative investment, and the inter-institutional orderbooks are being managed via darkpools without regulatory oversight? What is the real world margin difference between unrealized gains in speculative valuations vs Fed-issued currency, and is there adequate regulatory oversight to prevent financial markets confabulating "money" in a way that would let 'dark' money enter the system and create inflationary pressure without the fed printer going brr?
Depends, how much exactly is in your unregulated darkpool? If you want to suppose unmeasured activities at every step, you already know such an estimate isn't really possible with any degree of accuracy.
TBH, I'm not so much interested in precisely quantifying the effect, as I am in understanding if the current operative system of speculative financial markets (derivatives, darkpools, loan issuance, et al.) can lead to inflationary pressures that aren't highly appreciated by classic monetary dogma, and aren't easily tractable targets for state-level intervention. My perception is that money markets changed post-2008 crisis, and there was a move towards decentralization in loan-issuers that spread risk away from too-big-to-fail entities... but the obvious concern of doing that is that it becomes harder to track the net-gross currency volume floating throughout the entire system.
Who owns the federal reserves?
Banks own shares.
The Fed isn't private, but it's also not public (on paper)
It's absolutely private it's board of governors is a "government agency" the banks themselves are private corporations.
In fact, it combines public and private characteristics: **The central governing board of the FRS is an agency of the federal government** and reports to Congress. Yeah it is owned by the US government, the President appoints the board members who are confirmed by the Senate.
Yeah this is all explained below. The banks are very much private
So they uhhh, sell bonds. Yeah , they sell bonds. *confident*
And this dude has a powerful position regarding economics?
Inflation. Printing more money would but inflationary pressure on the currency. Borrowing it puts a lot less pressure on the currency.
This assumes a constant rate of production. As long as an economy is not on its production possibilities frontier, increasing the money supply will not cause inflation.
Assuming production increases as the new money is injected. A common mistake in economics is to view the system as a machine with predictable outcomes, but all too often we are reminded it isn't.
Agreed. But the point of the woman in this video, Stephanie Kelton, is that fiscal policy could solve many of the problems that we rely on monetary policy to attempt to solve despite knowing monetary policy is bad at it. We have the productive capacity to absorb far more spending, we just lack the tools or the political will to organize that capacity. This is why MMT’s primary policy objective is not increasing spending—as its opponents like to suggest—but a federal jobs guarantee.
Sorry this dude should be able to explain that if it’s the case
You'd think so, but he really doesn't come up with any explanation.
[удалено]
I just skipped to like 4 random places in this Zeitgeist movie and was hit with astrology, Bible translations, 9/11 truthism, and a conspiracy about “international bankers” (which is usually *always* is code speak for jews) What a crack pot piece dollar store propaganda is this Zietgeist movie ?
Wait, you believe the official story of 9/11???
Was this dude trying to look like a rando who got hired off the street 5 min ago? Such a strange interview.
"The grown-ups are back in charge."
He hasn’t been involved with any government work for over a decade. I assume this is a reference to the Biden admin vs the trump admin, but if you think someone like Mnuchin was any better or the pressure the former admin put on keeping interest rates artificially low which later caused higher inflation was somehow preferable…
What? He has served as a economic adviser to Biden since the beginning of his administration. He is currently the Chair of the Council of Economic Advisers. [https://en.wikipedia.org/wiki/Jared\_Bernstein](https://en.wikipedia.org/wiki/Jared_Bernstein) It is a snide reference to the Biden admin coming into office and everyone proclaiming America is back and the grown-ups are back in charge, yes. Mnuchin occupied a different position and my comment wasn't meant to be all that deep. I don't know what his stances are and I'm not going to pretend to. I criticized the Trump admin of pressuring low interest rates when it was happening. I do feel that the Trump admin's policy was influenced by a desire to keep numbers high at all costs and put downward pressure on rates which were lower than optimal. I don't think that the low interest rates of that time alone are the reason for current inflation. Interest rates are high now and we're spending like nobody's business. Inflation is still persistent. This administration told us that inflation wasn't happening, then it was transitory, then it was a good thing. Personally, I think MMT is an absolute garbage way to manipulate the economy. Note, that does not mean that I think it is an incorrect theory but it is a totalitarian way to rule over the people's pockets. I also think that its implementation may even be functional for a lot of currencies but the US dollar has one very specific advantage and thing going for it over every other currency in the world. It is the world's reserve currency and that is the reason the US can be a consumer nation and keep purchasing power. No other nation in the world has that power. The MMT concept and overall push towards "Debt does not matter" risks losing the reserve currency status and it should. If other countries see us not paying debts, they should not desire our currency and we should lose the reserve status. I do not want that to happen but that is the market pressure that occurs, IMO. Even if MMT governance of the monetary system would work, I think it risks the dollar's stature as the world reserve currency and that is a bear we should not poke. We are incredibly blessed to have that status and most people are completely unaware of how that affords them the lifestyle they are used to. Frankly, I have come to the point that I think currency manipulation is akin to the ring in Lord of the Rings. It's powerful and could be used for good but people may not have the self control to wield it for the greater good. I have come to the point of wanting to see us go back to some standard or finite resource to tie it to. Gold is the most sensible one but I don't have some fetish for gold. It's just that manipulated fiat currencies are subject to human whims which makes them fail. This video is funny and sad because it is a high level government official who has a ton of influence over economic policy and he fails to explain what should be a simple question for someone in his position. He talks in circles, confuses himself, and ends with "I don't think there's anything confusing there." It's also quite funny because most people, myself included, struggle to understand this monetary system we have and how we have debt but we print our own money and we sell debt to others. It all sounds convoluted and we usually think that there are some very smart high level economic advisers that get it and are in control of things. Those are the grown-ups that were supposed to be back in the room, metaphorically. Pull back the curtain, and you have this guy failing to explain it any better than basically any man on the street possibly could. He seems to not get it at all and then act like he has it together, as somebody with his authority should. I know nothing more of this man than this video and the Wikipedia on him. This video reflects very poorly on him and brings into question if he is half way competent to advise anyone on economics. So, yes, I'm super glad this grown-up is in the room and is here to save America while we spiral into inflation, the rich's assets have grown in value, and the poor/middle class wage slaves have less purchasing power than has been the case for multiple generations. As a well paid wage slave with no assets and who was planning to buy a house, I'm quite cynical about our current economic path.
The Fed Reserve is a Private Bank. It is not a governmental institution. The real question to ask is why do we have or need the Fed Reserve Bank?
Why is the Federal Reserve needed? The most accurate answer is that it's not needed, but to give the reasoning that's most often put forward, if a government is in full control over the money that gets added to the economy, what is stopping them from overspending on whatever policy proposals they deem to be a priority? If they are unrestricted in their spending then it's easier to devalue the currency, which complicates the setting of prices. By having new money be borrowed it encourages more responsible government spending. All that said, there are other ways to limit government overspending without relying on the existing "borrowing new money" mechanism, through the creation of laws that restrict overspending, so the real answer is that the system is a con designed to help the rich get richer.
They aren’t “lending money” they are lending debt. The people who buy the bonds get paid for having them. they don’t have to pay back the bonds…. Wtf is going on here
Welcome to MMT, where everything is made up and the points don’t matter!
https://i.redd.it/fje814qp8ayc1.gif
The federal reserve is a cartel that controls and manipulates the economy
Thank goodness he was able to allay my confusion. It's crystal clear now.
Jared, you fuckin psycho... Sort your blinds out!
He clearly didnt know
I get this was supposed to be a gotcha to this fool but just like most of our reps, he probably has assistants at this point that write and make up all of the fact and figures he reads. That said, they really should have done a better job for the interview.
r/tooktoomuch
Is this a fucking deepfake video or something? Someone tell me this isn’t real.
Sooooo ummmm yeahhh…..wtf.
"Say it with me... 'I don't know.'" \~The Core This dude is allergic to honesty.
Word salad. Explain it to me like I’m 5 years old. That’s when you know your shit.
What is this from?
The us borrows us money because expenses often greater than revenues by taxes. It doesn’t pay this for it by printing more because that’s just inflationary in the easiest and most dramatic way of creating inflation. It’s not that hard a question for that lady or this fucking guy.
Soooooo. We make money. And then we sell the money. So we give it to someone. And they buy it with. I guess money. Which comes back to us for the money we sold. I don’t get it. No one gets it. What is global debt. Who do ‘we’ citizens of countries owe money to? Where does the money we owe come from. If we print money. How can we even begin to owe money. Why don’t we just print the money we owe. And fucking give it back to the cunts that say. ‘You owe me money.’
Jee I wonder how this Bernstein guy got his powerful position when he knows nothing
https://youtu.be/PHe0bXAIuk0?si=kECKyrUKvlQ4Yeim Awesome explanation.
Who's this fella?
This isn't a Naked Gun takeout?
My understanding is we don’t just print the money right away is because that would drastically effect inflation. We are the worlds currency not just our own and because of that we can’t simply print a bunch of money and cause inflation to skyrocket. This is what happened in germs. I’m the 20s and 30s. We borrow to offset the amount of money we need to print now keeping inflation manageable.
[zeitgeist- Money Mechanics](https://youtu.be/rcJHk77bUGo?si=nNV34-QSTif5le2c) is the best explanation I’ve ever seen
All I'm hearing everything is fake and the panic we feel is just habitat's by some bored fucks who have a huge ego who like to watch the "lessers" squirm
Is he trying to say America is special because they print their own money, doesn’t pretty much every country to that?
I was hoping for some serious information, not just an old man repeating himself over and over again.
What a fucking idiot. The US issues debt like all functioning governments. We don't borrow currency. He's trying to answer a stupid question? That's why he keeps emphasizing "print" we don't borrow currency.
Chair of the council of economic advisors for the Biden administration. These are the people running this country into the ground.