Tag Archives: Federal Reserve System

Revealing Fed’s Secrets Fails to Produce Harm That Banks Cited – Bloomberg

Revealing Fed’s Secrets Fails to Produce Harm That Banks Cited – Bloomberg

Who’s surprised?

Not me, that’s for sure. No one cares that the Fed is basically just a bunch of high priests in a temple, pretending to possess vast, secret knowledge, that only they can understand.  But really, they’re just giving out free money to banks they like and keeping it from banks they don’t.  All along the way, they continue to drive down the value of the money in our bank accounts right now.

Why would anyone care which banks took imaginary money from the wizard behind the curtain? It’s the same place all banks (and us) get their money from, really.

Yay, Our System!

NPR: The Fed’s $600 Billion Statement, Translated Into Plain English (Can’t believe they did this—now everyone will know!  OK, now every NPR listener/reader will know. So like five people?)

But seriously, this is awesome—not only is NPR covering that the Fed is literally creating money from nothing, but they’ve done it in such a blatant way no one can misunderstand them.

What’s also nice about the above capped piece (you can click on it to go to the article) is that they took Fed Chairman, Ben Bernanke’s statement about inventing $600 billion from nothing and translated it into plain English, line-by-line, so you can actually understand what the cagey fucker is talking about.  Here’s an example:

Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow.”

becomes:

The economy still sucks.”

another:

Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.”

becomes:

Inflation has gone from low to super low.”

Of course, nowhere do they explain why the rate of inflation going up is good, but hey, at least a fairly mainstream news source is doing us the favor of actually reporting facts that inform us about one of the most important, life-changing things in our life:

Money…

…and how it’s actually worth nothing at all, since some white guys in suits can just conjure it from the aether—like Zero Point Money or something.  Zero Point Energy is a theoretical type of electricity you’d create from nothing.  It’s widely viewed by physicists and engineers as impossible because energy must come from somewhere.  Similar physical laws exist for money, as well (the more you have the less they’re worth), but no one seems to mind the consequences, for some reason.  This allows the Fed to just tappity-tap on their computers and VOILA—$600 billion.  Just like they did back in 2008.

They don’t even need to mix a potion in a boiling cauldron or cast a spell or sign their souls over to the devil.  Well, hopefully, they had to do that last part.

So, how does it feel knowing that while you work your ass off to make money, a group of rich guys in posh offices work to take value away from that money?

666cast episode 32 from website666.com! This week, why the recent election doesn’t matter, how we ARE on the other side of the looking glass and plenty of stories in the ‘news.’  Please listen. Thanks! Let me know what you think! Please subscribe to the feed. Don’t forget to visit webstore666!

666cast episode 32 from website666.com! This week, why the recent election doesn’t matter, how we ARE on the other side of the looking glass and plenty of stories in the ‘news.’  Please listen. Thanks!

Let me know what you think!

Please subscribe to the feed.

Don’t forget to visit webstore666!

Fed’s Bernanke `Doesn’t Understand’ Economics, Jim Rogers Says – Bloomberg

Fed’s Bernanke `Doesn’t Understand’ Economics, Jim Rogers Says – Bloomberg

Oh, man—this guy is saying exactly what I’ve been thinking ever since CoalSpeaker first pointed out the Fed’s latest action to “save” our economy (which they decided to do right while we were distracted with the election). Anyway, so here’s a cutting from an article at Bloomberg.com from today:

Federal Reserve Chairman Ben S. Bernanke’s decision to pump a further $600 billion into the economy shows his grasp of economics is weak, said investor Jim Rogers, chairman of Rogers Holdings.

“Dr. Bernanke unfortunately does not understand economics, he does not understand currencies, he does not understand finance,” Rogers, 68, said in a lecture at Oxford University’s Balliol College yesterday. “All he understands is printing money.”

“His whole intellectual career has been based on the study of printing money,” said Rogers, who predicted the start of the global commodities rally in 1999. “Give the guy a printing press, he’s going to run it as fast as he can.”

I’m continually surprised that most people who are aware of how the Fed works and yet aren’t upset by the fact that there’s a bunch of unelected white guys in suits someplace who can just print up more money while the rest of us have to work for it.

What’s really scary here is that Bernanke’s plan to print up a fresh wad of bills, totaling $600 billion, will devalue our currency even more (they did this before, back in September of 2008 while all eyes were on Congress while they debated how to save the economy, and gosh it really saved us?).  $600 billion is a huge amount of money. 

I’m not sure how else to describe this aside from mass devaluation. 

I think the idea is to encourage foreign investment and make it super cheap for domestic businesses to borrow money.  Since that money won’t buy much, what are businesses supposed to do with it?  Hire new employees and pay ‘em!

That’s the hope, I suppose.  In the meantime, our money buys less.  The other irony is that the inflation rate will go up and make your savings accounts useless or even costly to you.  Think about it.  The inflation rate this year has fluctuated between 1 and 2.6(ish)%.  What’s your savings account interest rate? If it’s not more than that window, you’ve already taken a hit.

Don’t have a savings account?  Good boy!  Shove that cash under the mattress or buy stuff with it.  You’re probably better off.

That’s just my ¥2, of course.

Go read the Bloomberg article for all the details.  Sure, Rogers has a book to sell, but his logic is sound, sadly.

UPDATE: And I just read this in another article on Bloomberg about Japan’s economy:

No matter how much yen the Bank of Japan pumps into the economy, deflation deepens. It’s all about confidence, of which there is virtually none. Companies don’t trust that growth will return and so they avoid investing and hiring and trim salaries. Households fret about the future.

Was puzzling about that article is that it talks about deflation being the cause of a race to the bottom for prices.  He cites Hooters as an example because they sell cheap food and cheap alcohol.  But does that mean deflation?  How many wings is the Yen actually buying?  Hm, maybe it’s that we’re switching positions with Japan.  We’ll all be making more money (if this plan works) but the money won’t buy as much so we’ll have to spend more to get the same stuff.

But injecting money into the economy in Japan hasn’t worked and has inspired price-drops across every sector because the money injection didn’t work.  So, maybe we’re seeing into our own futures?

Geh… why does money have to be so confusing?

Federal Reserve to print billions of dollars in massive shadow stimulus

Federal Reserve to print billions of dollars in massive shadow stimulus

The Federal Reserve’s policy-setting panel began a crucial two-day meeting Tuesday, poised to cast aside its long-held reluctance to micro-manage the economy in a bid to avoid a lost decade of growth.

The central bank’s open market committee (FOMC) is expected to approve massive stimulus spending not seen since the depths of the economic crisis.

At the conclusion of the meeting Wednesday, the Fed is expected to announce it will resume the large-scale purchase of long-term US bonds — essentially printing billions of dollars — in the hope of boosting a weak recovery.

I wonder if this actually happens if it’ll show up on the MSM.

Funny how the Fed has tried things very similar to this before and it hasn’t worked.  It didn’t work the time before that, either.  It’s so funny how these allegedly intelligent people keep doing the same thing, thinking it will yield different results. 

The BIG problem here is they’re essentially loaning money to themselves—at least, if I understand this whole thing correctly.  Usually, they loan money they create from nothing to banks.  Again, that’s assuming I understand this correctly. This means they’ll be able to loan more and profit more.

Whether we’re voting for political leaders who we pretend care for our interests or use money that we pretend has actual value, we are living in a virtual virtual reality.

Kinda scary when you realize this is the other side of the looking glass.

Forgot to say: found via: CoalSpeaker.com

Hack the Economy


Ben Bernanke (right), on my Kindle 2, the real most powerful man on Earth (Photo Credit)

Finally a Solution to the Economic Mess I Can Get Behind…

Last month I came across an article on Arthurmag.com which presented a really great idea– hack the economy. What does this mean? It means rebuilding it on our own–DIY it, retrofit it, reverse engineer the way we provide and receive goods and services. Let me quote the article by Douglas Rushkoff:

The cyberpunk ethos was actually based in the very same DIY (do-it-yourself) ethos I’m espousing now. Cyberpunk was about reclaiming technology, making modifications oneself or with one’s friends, generating value from the bottom up, exchanging goods and services in an alternative economy. I’m not saying we get rid of money—only that we learn to make it ourselves, as communities. I’m not saying we get rid of banks—only that we stop outsourcing our banking to Wall Street firms that mean only to extract value from our communities.

I have always admired hackers—computer hackers and social hackers. I’m just trying to expand the range of technologies and institutions we feel ready and willing to hack. We should hack money. We should hack banking. We should hack business. This doesn’t necessarily mean hacking the dollar, which is just one kind of closed source currency. We should hack money by coding new kinds. Bank hacking has been around for a long time—it’s just that credit unions and other local or community-based bank models were driven down by the anti-competitive practice of banking conglomerates. It’s time for those institutions to be renewed, as well.

As a bohemian artist type, I’ve kinda been doing this off and on for years. Favors for friends repaid with favors in return, is usually what this looks like in the immediate here and now. Granted, I still need a job and I still need money, but it’s important to understand that there are and have always been alternatives to the almighty USD.

Speaking of the US Dollar, you should know it’s a product we are all forced to use and it represents the single most powerful monopoly that exists today. The Federal Reserve literally creates money and loans it to banks at interest. The chairman of the Fed recently said in a 60 Minutes interview (my emphasis added):

The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money than it is to borrowing.

So, why is it only the Fed that can print money? Because they are part of the government? No–because they’re not part of the government. How do I know? Simple–ask yourself which member of the Fed board do we elect?

None of them.

We get to vote for the guy who names the chairman every four years in November (the POTUS) and the senators and congressmen which supposedly have oversight over the Fed, but have only once heard of Congress actually performing said oversight on the Federal Reserve. The reality is that most presidents don’t get to name a chairman of the Fed because the chairmen of the Fed have terms of 14 years (yes, on paper the term is officially 4 years, but they’re almost always reappointed).

So, how do we hack the economy?

That’s a good question. I think the idea is to trade goods and services when ever you can. Stop going through the Dollar system for absolutely everything. Getting rid of a bookcase or couch? Don’t sell it–trade it with someone. Or give it away. There are loads of sites online that help with this process. Whether it’s Craigslist.org or, a site I use here in the Big Apple, NYCDailyDeals.com, there are alternatives to buying or selling everything. Another popular site is freecycle.org.

There are even people trying to get their own currency off the ground since owning gold and silver coins is still legal. LibertyDollar.org is a site that will tell you all about this new form of currency. It’s legal, but no one really takes it as cash, just yet. Now, I don’t approve of the Liberty Dollar because of a message engraved on each coin:

“Trust in God”

Yeah, so let’s replace one BS currency with another? I think the Liberty Dollar folks are missing the point. It’s not “liberty” until you’re really free (to not believe if you choose).

But I digress.

The point here is ultimately this: Humanity has existed in it’s current evolutionary state for something like 200,000 years. It’s done most of that existing without Chase Manhattan or Citigroup or the Federal Reserve System.

We humans came up with the concept of money–why can’t we come up with alternatives?

So, let’s start thinking about ways around relying on money for everything. I know it’s an uphill battle, but we’ve got to start somewhere.

ZEITGEIST (2007)

It’s Documentary Thursday at reviews.thepete.com, when I post a pocket review of a documentary on a given topic that interests me. One thing to bear in mind is that not all documentaries deserve the name “documentary.” However, not all documentaries have to include a British-accented voice-over and a big-money distributor to be worth watching.


Watch or buy it!

Positive Experience/Entertaining? Definitely a positive experience, but I think the filmmaker was a little overzealous with some of the shock treatment-style cinematic devices he uses in this film. This is another in an ever-longer line of “opiniontaries” that generally try to come across as a documentary but ultimately are just trying to put forward their own agenda. Not that this is that different from what other “more acceptable” documentaries do.

Technically any good? This film is incredibly effective. Moving at a quick pace, this film picks you up, carries you along, smacks the crap out of you (and your belief systems) and then drops you off at the side of the road like a cheap prostitute. I’ve heard from friends and strangers that this film changed their lives. I can’t say it changed mine, but it did have an effect.

Over the years I’ve watched a LOT of so-called “conspiracy documentaries.” They all claim to have the answers and the truth and the warnings about the coming “New World Order” blah-blah-blah. I watch them because they are hilarious and, creepily enough, sometimes accurate. Zeitgeist takes the best, most believable of these conspiracy theories and rolls them into one film.

For that reason, I think this is the most effective film to watch if you’re growing dissatisfied with the way the world is run. Zeitgeist does a good job of explaining where our culture comes from and where it is likely going (though I didn’t find myself agreeing with it all the time).

Sadly, it gets mired in 911-related shock tactics that made me wonder if the filmmaker realized how hypocritical he was actually being. Like most opiniontaries, this one gets a few things wrong and the film’s use of what Naomi Klein calls “The Shock Doctrine” as a cinematic technique has the power to undo the rest of the good the film does.

How did it leave me feeling? Definitely educated. After growing up a news-junky and then spending the last seven years exploring the world of conspiracies (for a novel series I’ve written), I do have to say that I have no idea what to believe about our past, present or future. And this film doesn’t help make things clearer.

It does point out a lot of evidence that suggests our civilization is largely built on lies told by power-hungry people who want to control everything through the control of money.

Gotta admit, the film has a point.

Final Rating? GSN – Go See Now – BUT WITH A WARNING: While Zeitgeist is a genuinely powerful and effective movie, it does rely on many of the same tactics it criticizes the “ruling elite” of using to control the masses. It’s important to watch ANY documentary with a clear and critical mind. And most importantly, when you’re done watching it, do some research. Read up on some of the things you’ve been told about.

If nothing else, by presenting such a radically negative view of Western Society, documentaries like this remind us to think for ourselves. Even if you don’t agree, it’s important to consider what other people say. Zeitgeist, I think, nails a lot of things on the head, but it’s not for the faint of heart.

Click the poster image above to go to the official site where you can watch the movie and its sequel (I’ll be reviewing it next week), or buy copies of both on DVD.

Socialism and the Federal Reserve

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In 1913, Woodrow Wilson (see portrait above) signed into law the Federal Reserve Act. The new law allowed for the creation of a central banking system. What does this have to do with socialism and why would I be writing about this in the middle of the current economic strife here in the US?

Not surprisingly, there has been a lot of writing (and blogging) about our economy. I’ve written about it a lot over the years, but most recently I blogged (here: thepete.com/…he-bailout ) about why I’m against the bailout, mainly because it breaks our own rules. After that, I blogged about why it’s bad to break our own rules (here: thepete.com/…onable-man ), basically explaining that breaking our own rules makes us look like untrustworthy liars and it makes our laws look like jokes.

But in that last post I just linked to, I commented about socialism. People are accusing the USG of practicing the "S" word in bailing out Wall Street. I said that those accusers are both right and wrong. Effectively, they’re right, but literally, not exactly.

Here’s where the Federal Reserve comes into it.

The $700 billion the USG wants to give Wall Street will need to be borrowed before it can be gotten from We The People in the form of taxes. All banks and the USG borrow money directly from the central bank–the Fed. Now, the Fed is under no effective control of the USG. We don’t vote for a single person who works for the Federal Reserve and the Fed’s chairman is appointed the president for 14 years. (!)

In any practical sense the Fed is not a government agency. As a result, we can consider them a private organization. I’ve heard some say they are a legal corporation, but I haven’t seen proof of this.

So, since the Fed is private and the USG is borrowing money from them, effectively, the Fed is bailing out Wall Street, not the USG. So, really, it’s corporatism, not socialism.

But it sure feels like it’s socialism, doesn’t it?

Now, that’s the nutshell. Not surprisingly, I have a lot more on the Federal Reserve loaning us money to bail out Wall Street and how the Fed is private. If you’re interested, keep reading.

Effectively, though, I’ve made my point.

Isn’t that funny? I keep having to use the word "effectively" because all this money stuff is so stupid and vague there’s nothing tangible about it–just like our currency. If only we had a gold reserve… :(

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The Federal Reserve Waits for No Government

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So, remember how there was all that funny hubbub regarding the US Congress trying to spend all this time working on a bailout bill for Wall Street? Remember how Bush, this morning, gave another bit of speechification (here: is.gd/3lH2 ) on how we really, really, really need to pass a bill to help Wall Street? Perhaps you remember that other time he talked about the economy where he said that if we didn’t do something the entire economy was in danger?

As Jon Stewart might say:

Funny story!

Turns out the Federal Reserve decided to go on and bail out Wall Street all on it’s own!

Yesterday, the Fed took it upon itself to borrow more money from other central banks around the world. Europe, the UK and Japan all took part in the fun, allowing the Fed to inject $630 billion into our economy, via loans to banks.

Now, the above screencap comes from Bloomberg.com (here: www.bloomberg.com/apps/news ) but neither CNN.com nor Money.CNN.com had any headlines about this. I did a quick search through Google News and it looks like the hardcore money sites are covering this, but I didn’t see any of the mainstream news sites with headlines about it.

So, this means, once again, America doesn’t know what the heck is going on with it’s own money.

Not only that, but the Bloomberg article I cite above doesn’t mention a damn thing about how $630 billion will impact inflation.

In fact, I haven’t stumbled across anything mainstream newsish that even talks about inflation in the context of today’s economy or the bailout or now, the Fed’s bailout.

So, what the heck happens now?

Damned if I know.

Can’t imagine why the tax-payers need to pay for anything now. But watch the media ignore the Fed deal and the Congress push through a bill just the same.

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Kucinich Reminds Us of Our Debt-Based Economy

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I’m no economist but I do find physics interesting. Laws of physics are immutable, generally speaking. One of those laws is that neither energy nor matter can be destroyed or created–just transferred.

A truly stable economy should work the same way, in my estimation. The economic law of "supply and demand" is pretty similar to that physical law I mentioned above, when you think about it.

The economic law of "supply and demand" says that prices are determined based on those to things, supply and demand. High supply means low prices (to make sure you sell as many as you can) and low supply means high prices (to make sure you make as much money as you can). Demand works similarly but is inverted, with high demand making prices high and low demand making them low. In short, if you create more supply, the price goes down.

When it comes to money, the physical laws should apply here, too. After all, paper money used to represent gold. When new deposits of gold were found, the value of all gold would drop. However, back in 1913, the Federal Reserve Act was passed and our current system of banking was created. Any kind of precious metals were cast aside and money stopped being based on the value of gold and started being based on the "good credit of the United States of America."

In other words, the US dollar came to represent the productivity of the American economy.

Now, you can’t just create money any more than you can just create matter or energy. The latter can’t be done because the universe won’t let us. However, because the concepts of money and economy are entirely man-made, the universe has no such regulations over our monetary system.

As a result, new money can be, and often is, injected into our economy. This money is either effectively created from nothing (lended/borrowed) or is literally newly created money (when banks or the USG borrow from the Fed). Either way, the result is inflation and, finally, a weak dollar.

And when the US dollar starts getting compared to the Canadian dollar (as it has been for about a year now), you know things are bad.

This morning on Democracy Now, Dennis Kucinich reminded us that our entire financial system is based on debt. The below is an excerpt that comes from a transcript (here: www.democracynow.org/…s_congress ) of an interview Dem Representative Dennis Kucinich gave to Amy Goodman this morning:

AMY GOODMAN: The issue of corporate compensation? According to the Institute for Policy Studies, chief executives of large US companies made an average of $10.5 million last year, 344 times the pay of the average worker.

REP. DENNIS KUCINICH: Well, this is really a fundamental issue in our society. Again, it’s all about how the wealth accelerates to the top and how work is not respected or rewarded for its own intrinsic value. We’ve really moved, you know. We’ve made a transition in our economy from industrial capitalism to finance capitalism. And with this debt-based economy that we have, where we keep—this public and private debt keeps exploding, as it has under—as it did under Alan Greenspan, quadrupling in a period of twenty years, we see ourselves in a position where the debt just keeps building and building and building, and we’re calling that economic progress. It is not.

We need to challenge again the underlying assumptions about a debt-based economy, about whether or not we should revisit the 1913 Federal Reserve Act, which has an unfortunately privatized monetary system and created a system which includes banks having the ability to create money almost out of thin air with a fractional reserve. We have to look at the implications of that, maybe put the Federal Reserve under the Treasury and have the Treasury really be responsive to the interests of the American people and keeping the economy going.

Yep, the Federal Reserve is a private entity. We don’t vote for anyone who runs it, though we do vote for the guy who appoints the guy who runs it (aka, the president appoints the Fed Chairman). But considering how much control the Fed has over our lives and our money, it seems like we should have a bit more control over them. I really wish Kucinich had a real chance of ever winning the White House. I think it’s his honesty that prohibits this.

Wow, just read that the bill didn’t pass in the House. Kucinich got his way and Wall Street is totally panicking. Looks like that chant I heard down on Wall Street last Thursday was right: "You break it! You bought it!"

Dig that CRAZY irony!!

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