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Thread: More on finance...

  1. #1

    More on finance...

    This excerpt was brought to my attention this morning. It is all information I know, but it is laid out here nice and cleanly in two paragraphs from the book, ?The Great Depression of the XXI Century" by Tanya Cariina Hsu...


    ?In 1907, J.P. Morgan, a private New York banker, published a rumor that a competing unnamed large bank was about to fail. It was a false charge but customers nonetheless raced to their banks to withdraw their money, in case it was their bank. As they pulled out their funds, the banks lost their cash deposits and were forced to call in their loans. People therefore had to pay back their mortgages to fill the banks with income, going bankrupt in the process. The 1907 panic resulted in a crash that prompted the creation of the Federal Reserve, a private banking cartel with the veneer of an independent government organization. Effectively, it was a coup by elite bankers in order to control the industry."

    "When signed into law in 1913, the Federal Reserve would loan and supply the nation?s money, but with interest. The more money it was able to print, the more "income" it generated for itself. By its very nature, the Federal Reserve would forever keep producing debt to stay alive. It was able to print America?s monetary supply at will, regulating its value. To control valuation, however, inflation had to be kept in check. The Federal Reserve then doubled America?s money supply within five years, and in 1920, it called in a mass percentage of loans. Over five thousand banks collapsed overnight. One year later, the Federal Reserve again increased the money supply by 62 percent, but in 1929, it again called the loans back in, en masse. This time, the crash of 1929 caused over sixteen thousand banks to fail and an 89 percent plunge on the stock market. The private and well-protected banks within the Federal Reserve system were able to snap up the failed banks at pennies on the dollar."
    Andrew Macpherson

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  2. #2
    Z8 Addict Z8doc's Avatar
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    yep, that is the way I understand it too. Not sure what anyone in government would or could do about it as their goal is to make everyone slaves to the debt that they control. "Control the debt, control the conflict", in this case, the "perceived" conflict is between us and our government officials and their policies with the Fed positioned squarely in the middle playing both ends against the middle.
    Best Regards,

    Jeff
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  3. #3
    Sport Button On - DSC Off raka's Avatar
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    The latest from Matt "organized greed always defeats disorganized democracy" Taibbi

    http://www.rollingstone.com/politics...-jail-20110216

  4. #4
    Great piece, also this is a really cute little vid.....

    Andrew Macpherson

    Expert Z8 Inspections, with full support for both Z8 sale and purchases.

  5. #5
    On that same subject this is an absolute must read!
    http://www.zerohedge.com/article/wha...blow-your-mind
    Andrew Macpherson

    Expert Z8 Inspections, with full support for both Z8 sale and purchases.

  6. #6
    Z8Mania
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    My criticism of the charts is they don't show debt as a % of GDP.

  7. #7
    That is well covered in a heart stopping article here - http://noir.bloomberg.com/apps/news?...d=aa0cI64Gx.4E
     
    Andrew Macpherson

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  8. #8
    Z8Mania
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    That not good....

  9. #9
    Administrator thegunguy's Avatar
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    Looking at that graph, I thought this bit of dialog from a recent classic was perfectly fitting:

    Dr. Egon Spengler: There's something very important I forgot to tell you.
    Dr. Peter Venkman: What?
    Dr. Egon Spengler: Don't cross the streams.
    Dr. Peter Venkman: Why?
    Dr. Egon Spengler: It would be bad.
    Dr. Peter Venkman: I'm fuzzy on the whole good/bad thing. What do you mean, "bad"?
    Dr. Egon Spengler: Try to imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light.
    Dr Ray Stantz: Total protonic reversal.
    Dr. Peter Venkman: Right. That's bad. Okay. All right. Important safety tip. Thanks, Egon.
    thegunguy

  10. #10
    Z8 Millennial Monster hayvenhurstkid's Avatar
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    The only proposed cuts in the budget are to "discretionary" spending, which only accounts for roughly 15% of the total budget. There simply are not enough cuts to even remotely bring the deficit under control. It is as simple as first grade math. Entitlement programs, which consist of Medi-Care, Medicaid, Social Security, welfare, and the like, combined with defense spending account for close to 80% of our budget. So guess what? Unless you cut those programs or raise taxes dramatically or both, the deficit will never be brought under control. The can will simply be kicked down the road for a few more decades and then the whole thing will go bankrupt, meaning the United States.
    Marty

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  11. #11
    Z8Mania
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    ^^^^^^^

    Agree 100% on don't cross the streams and the USA- unless we're battling Zul- then we can cross the streams- but not even that will save us if we don't realize its not a matter of picking and choosing the items on the list of options- we have to literally pick all the choices. "Damn the torpedoes!"

  12. #12
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    "The only proposed cuts in the budget are to "discretionary" spending, which only accounts for roughly 15% of the total budget. There simply are not enough cuts to even remotely bring the deficit under control. It is as simple as first grade math. Entitlement programs, which consist of Medi-Care, Medicaid, Social Security, welfare, and the like, combined with defense spending account for close to 80% of our budget. So guess what? Unless you cut those programs or raise taxes dramatically or both, the deficit will never be brought under control"
    And in the same way that cutting discretionary spending does little to help the budget, taxing those with no money will not help raise funds. Thus, the rich must be taxed. You can count on the Republicans to fight this tooth and nail.

  13. #13
    Z8Mania
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    Well, of course you can't get blood from a stone. But you have to ask if a system that half the people don't participate in is fair. Or if that same system gets the vast majority of its revenue from a tiny minority of those in it is fair. Or even if such a system should be fair? Should it try to dictate peoples' behavior?

    The bottom line on our problems is something we all know: the time of doing just one thing (cutting, increasing taxes) is over. The time to do all of the above is here. Sacrifice all around.

  14. #14
    Freedom Ouray's Avatar
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    Everyone with the exception of the lowest compensated should have to pay taxes. If you follow any other path those that do not pay any tax always want more at the expense of those who do pay tax. Put aside the correct level of tax that anyone should pay, if you do not have any skin in the game, human behavior being what it is, will just always ask for more...

  15. #15
    Administrator thegunguy's Avatar
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    The issues are obviously very complex, requiring analysis from all sides, but I'm never a fan of more taxes. By that, I just can't buy in to handing over thousands of dollars to a government that is inefficient, wasteful, and reckless. There is little to no repercussion to poor financial management, and it's so difficult to measure any return on my "investment". So, yeah, I don't want more taxes.

    My arguably too simple "solution" would be to actually give the president and legislature huge financial incentive to run the country on budget (as in efficiently and in sacrificing programs that we can't afford). Pay Obama $1B to reduce our spending inline with current revenue. Maybe with some real cash incentives, they can ignore outside interest and actually act on behalf of the populous. It sounds great when I'm enjoying a glass of wine.
    thegunguy

  16. #16
    Z8Mania
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    I vote for you both for Prez/ Vice Prez!

  17. #17
    I'm going to make a confession, I'm a big fan of the Austrian school of economics, a Libertarian and a Ron Paul supporter - there, said it.

    So, now with that out the way, lets look at the real core issues here.

    Thirty years of deregulation have gutted our manufacturing and industrial production, our sole surviving 'industry' is the ponzi casino of Wall St, which is basically run by those behind the privately owned Fed. They bribe, lobby and cajole the idiots in Washington into doing thier bidding while destroying this country. (sorry Ouray - please do chip in and disagree - I'm always open to being wrong - I used to be a Democrat!)

    Honestly banking should be a utility, and Government should be run as a business, not a burdensome charity case.

    Why do we need 22% of our population, almost 1 person in 4 in the national work force, to be on a .gov payroll (with pension)? Going to war in three countries around the world also makes no sense, unless you work inthe Industrial-Militay complex. I especially appreciated this ex-CIA staffers take on it...




    This makes no sense, and if you think that makes no sense look at this!
     
    Andrew Macpherson

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  18. #18
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    "Why do we need 22% of our population, almost 1 person in 4 in the national work force, to be on a .gov payroll (with pension)?"
    I also think that 22% of the work force in government is very high. But with all due respect, I believe that this percentage can only be reached if one counts all local firemen, policemen and teachers as government workers. I don't think that we have that many federal judges, FBI or IRS agents (thank God!), park rangers or men in military uniforms. One group is on the state and local payroll, the other is on the federal payroll.

    Firemen, policemen and teachers will never even own salvage-titled Z8s.

    I agree with Z8Mania who calls for sacrifice all around. . . .. . Where are the adults in Congress? They all act like . . .. . teenagers

  19. #19
    They all act like . . .. . teenagers
    They act like the entirely greedy and corrupt folls they are, looking for the next source of campaign contributions. They try to align themselves with the will of the people to get elected, then do the bidding of the corporations once in power.

    Dem Inc & Rep Inc are as different as Coke and Pepsi, they are selling the same business model, divide and conquer, but it is the banksters who've really conquered.

    This link shows the author of the excellent Creature from Jekyll Island, the history of the Fed, on Glenn Beck's show last week.
    Andrew Macpherson

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  20. #20
    Freedom Ouray's Avatar
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    Personally I think the country is at a cross road of significant proportion. As a nation we can decide to live within our means or continue to lever our grandchildren's futures and wind up in the trash heap of bankrupt countries. Being an optimist I think that people are starting to realize that bankruptcy is not an option for our country. It will be painful, just witness Wisconsin, but at the end of the day the alliance of local unions with local politicians is the crucial issue for local governments and their budget challenges. At the federal level the issue is entitlements, the third rail of politics. Let's be honest and call social security what it is which is welfare for the elderly. Nothing wrong with that, except that it was not designed to fund 20 years of retirement. When first rolled out the entitlement age began just after the average lifespan of our citizens. Now people live 20+ years longer. It is time to means test individuals and move the retirement age out the curve. As for the only industry left being Wall Street that is an over simplification of tremendous proportions. If a country believes in capitalism and free markets then efficient use of resources and maximization of profits will move jobs around the nation and the globe. Car manufacturing, a former corner stone of the midwest economy, has not died in the U.S. it has just moved south and east to more labor friendly states from less friendly states and from union to non union labor. I come from a union family and believe that unions serve a good purpose, as long as they keep in mind that they should not kill the golden goose, which is the company or government they work for, with unrealistic work rules and benefits. I lost my defined contribution pension in 1987, just a few years after starting work. I have been saving for retirement ever since. The benefits that some of my family members enjoy are unbelievably generous and I have been telling them for 20 years that they were ultimately unaffordable. That day has begun to arrive across the public sector, much as it has already arrived over the private sector over the last 30 years. If you disagree with that thought, take a moment and think of all of the steel mills, airlines, auto manufacturers that have filed bankruptcy and many of which have disappeared over the last thirty years. This is not because they did not have talent or because they made bad products but rather because capitalism is brutally efficient over time and companies with disadvantages will be replaced by others. Use airlines as an example, here is a business that seemingly has high barriers to entry, the cost of equipment, but in reality new start ups occur all of the time. Why is this? The planes and equipment can all be leased, the labor cost of a new airline is cheaper then that of a mature airline so they can under cut the mature airline's prices, thus the beginning of the end. The key to survival is keeping cost in line with the competitions cost. It may not seem fair but it is reality. The future of the U.S. is extremely bright, the opportunities are unlimited unless we decided to limit them ourselves. There is a reason that the U.S. is recovering faster then Europe and that reason is that our culture is one of hard work torwards our goals, fantastic labor pool talent and a drive to win. If we loss that and become ever more socialist in nature our best days are behind us. I still believe our best days are in front of us. I will get off or my soap box now, but once again will suggest reading "Atlas Shrugged" by Ayn Rand. Great read, even if taken to an extreme. Hard to read the book and not see eery similarities to the current political environment.

  21. #21
    Z8Mania
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    Quote Originally Posted by bwall View Post
    . . . .. . Where are the adults in Congress? They all act like . . .. . teenagers
    Politicians usually do and its because everyone has a special interest group except the rest of us.

  22. #22
    Z8Mania
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    Ouray, you are right and if you take Andrews point about deregulation but Id shade it to be more about globalization and I think there you go- we now compete with others who will do things for a fraction of what we do and they dont expect such a pampered existence. Thats the problem we now face. However, I am convinced the USA has brighter times ahead. We just have to work hard to get there.

  23. #23
    Freedom Ouray's Avatar
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    state of dc summed up nicely

    State of Congress summed up nicely in this joke I found on line:


    A US Congressman was seated next to a little girl on
    The airplane when the Congressman turned to her and said,
    'Let's talk. I've heard that flights go quicker if you
    Strike up a conversation with your fellow passenger.'

    The little girl, who had just opened her book,
    Closed it slowly and said to the stranger, 'What would you
    Like to talk about?' 'Oh, I don't know,' said the stranger.
    'How about the banking crisis?' and he smiles.

    OK, ' she said. 'That could be an interesting and
    Timely topic. But let me ask you a question first. A horse,
    A cow, and a deer all eat the same stuff - grass - . Yet a
    Deer excretes little pellets, while a cow turns out a flat
    Patty, and a horse produces clumps of dried grass. Why do
    You suppose that is?'

    The Congressman, visibly surprised by the little
    girl's intelligence, thinks about it and says, 'Hmmm, I have
    No idea.' To which the little girl replies, 'Do you really
    Feel qualified to discuss banking when you don't know sh it?
    Last edited by Ouray; April 7th 2011 at 03:18. Reason: changed title

  24. #24
    Now that's really awsome!!
    Andrew Macpherson

    Expert Z8 Inspections, with full support for both Z8 sale and purchases.

  25. #25

    Wonderful open letter to Ron Paul posted on ZeroHedge...

    An open letter to Congressman Ron Paul of Texas

    Antal E. Fekete

    April 6, 2011

    Dear Dr. Paul:

    There are serious questions about the legality of Quantitative Easing. You are among the few who are well-qualified and well-placed to get to the bottom of it.

    Most people believe, and the media confirm them in that belief, that the Fed can legally create dollars ?out of the thin air? in any quantity, and can do with them as it pleases. This may well be the pipe dream of Dr. Bernanke who is quoted as saying that the U.S. government has given the Fed a tool, the printing press, to stop deflation ? but it hardly corresponds to the truth. The Fed can create new dollars only if some stringent legal conditions are satisfied, and then, it can only dispose of them in certain ways prescribed by law.

    Contrary to a statement of Dr. Bernanke, made before he became the Chairman of the Board of Governors of the Fed, he could not drop freshly printed dollars from a helicopter, no matter how many reasons for such an action he may be able to cite. Another thing the Fed is not allowed to do legally is to purchase Treasury paper from the U.S. Treasury directly. It must be purchased indirectly through open market operations. If you don?t put the Treasury paper through the test of the open market before the Fed is allowed to buy it, the presumption is that the market would reject it as worthless, or would take it only at a deep discount. The law does not allow the F.R. banks to purchase Treasury paper directly from the Treasury because that would make money creation through the F.R. banks a charade, reserve requirements a farce, and the dollar a sham.

    If that were the only problem with Quantitative Easing, it would be bad enough. But there is something else that is even more ominous. The fact is that the Federal Reserve banks can purchase Treasury paper only if they pay with F.R. credit that has been legally created.

    F.R. credit (F.R. notes and F.R. deposits) is legally created if it has been issued in accordance with the law. The law says that F.R. credit must be backed by collateral security at the time of issuance, usually in the form of an equivalent amount of U.S. Treasury paper. The procedure is as follows.

    The F.R. bank seeking to expand credit takes its Treasury paper, owned outright and free from encumbrances, and posts it as collateral with the Federal Reserve agent who will then authorize the issuing of credit. In other words, if the F.R. banks do not have the unencumbered Treasury paper in their possession, then they cannot create additional credit legally.

    There is some evidence that the F.R. banks do not have F.R. credit available to make the kind of purchases Dr. Bernanke is talking about as part of his Quantitative Easing. Nor do they have unencumbered Treasury paper in sufficient quantity that they could post with the F.R. agent for authorizing the issue of additional F.R. credit.

    The point is that the process of posting collateral first, and augmenting F.R. credit afterwards must under no circumstances be reversed. What the F.R. banks cannot legally do is to buy the Treasury paper first with unauthorized F.R. credit, post the paper as collateral, and justify the illegal issuance of credit retroactively. Nor can they borrow the bond from the Treasury, post it as collateral, and pay for the bond retroactively.

    This is an important limitation separating the regime of market-based irredeemable currency from the regime of fiat money involving outright monetization of government debt ? the graveyard where the Continental dollar, the assignat, the mandat, the Reichsmark, and the Zimbabwe dollar (among countless others) rest.

    At any rate, retroactive authorization of F.R. credit, if that?s what the Fed is up to, would be a violation of both the letter and spirit of the F.R. Act. It would mean converting the dollar into outright fiat money through the back door, bypassing Congress. It would show absolute bad faith on the part of the Chairman of the Federal Reserve Board of Governors, Dr. Ben Bernanke, who certainly knows what the law is. Such a blatant violation of the law would make him totally unfit for the powerful office he occupies. It would call for his immediate and dishonorable discharge by the President, pending Congressional investigation of the matter.

    The various violations of the law of which the Fed is accused point to a concerted effort to remove the shackles the law has put on the money spigots lest crooks help themselves to the public purse. These violations are not isolated incidents. They are aiming at the corruption of the monetary order of the nation and the world. Moreover, they would ultimately figure prominently among the causes of the financial instability the world has been suffering from since 1971 and, more recently, since 2008.

    Without understanding this fundamental truth, all talk about stabilizing the monetary system and reining in the runaway budget deficit is an exercise in futility.

    Yours very sincerely,

    Antal E. Fekete
    Professor (retired)
    Memorial University of Newfoundland
    Tel./Fax: +36-1-325-7996
    Andrew Macpherson

    Expert Z8 Inspections, with full support for both Z8 sale and purchases.

  26. #26

    Yes!!!!!!

    Andrew Macpherson

    Expert Z8 Inspections, with full support for both Z8 sale and purchases.

  27. #27

    Very good little clip out today...

    Andrew Macpherson

    Expert Z8 Inspections, with full support for both Z8 sale and purchases.