News & Analysis
Silliness at the Fed: 'Love Us, Love Our Transparency'
Fed to Make Benchmark Rate Forecasts ... Federal Reserve officials will for the first time make public their own forecasts for the federal funds rate at their Jan. 24-25 meeting, according to minutes from last month's Federal Open Market Committee released today. FOMC "participants decided to incorporate information about their projections of appropriate monetary policy" into their Summary of Economic Projections starting with their next meeting, the minutes said. The move marks another stride toward greater transparency under the chairmanship of Ben S. Bernanke. – Bloomberg
Dominant Social Theme: If you understand us better, you'll start to like us!
Free-Market Analysis: The Federal Reserve is at it again. This increasingly despised institution's leaders seem to believe that by making the Fed's unconstitutional behavior more "transparent" – clearer – they will somehow make it more palatable as well.
This article by Bloomberg is a "doozie" with an important dominant social theme on display. The idea is fear-based, of course. The underlying, unspoken statement is that the world NEEDS central bankers and that, in this case, people are upset with the Fed simply because they don't understand the deliberations of its wise men.
The entire impetus is immensely patronizing. People fear what they don't understand, the Fed's honchos seem to be reasoning. Thus, let us give the hoi polloi a bit more information and they will start to understand the worthiness of our deliberations and the reasons for our dispensations. Here's some more from the article:
By releasing their forecasts, central bankers are likely to alter expectations for the timing of the first increase in their benchmark rate, which has been kept near zero since December 2008. Last month, Fed officials repeated their view that economic conditions would warrant "exceptionally low levels for the federal funds rate at least through mid-2013."
"A number of members indicated that current and prospective economic conditions could well warrant additional policy accommodation," the minutes said. Those members also decided that "any additional actions would be more effective if accompanied by enhanced communication" about the FOMC's longer- run economic goals and policy framework.
Fed officials will show investors their forecast for the federal funds rate in the fourth quarter of 2012 and the next few calendar years, and over the longer run, the minutes said. The summary of forecasts "also will report participants' current projections of the likely timing of the first increase in the target rate given their projections of future economic conditions."
These excerpts really bring the fantasy-land of modern finance into focus. One of the things that makes Austrian economics (the economics that the Daily Bell subscribes to) so subversive, from the establishment's point of view, is its emphasis on human action. Its foremost scholar, Ludwig von Mises, even wrote a book called Human Action.
The idea behind human action is that no matter what actions government takes and no matter what laws are passed, the results will always be different than what is expected. That's because people will REACT to the actions of a higher authority with their OWN actions.
You push, and people pull. You pull, and people push. This is also why regulations don't work. People are always going to react by attempting to do what is in their own self-interest. The more the economy is distorted by command-and-control dictates, the more people will try to observe their own priorities, legally or not. This is how first gray and then black markets are created.
Another issue to consider is one of plain, old financial literacy. In fact, every law and regulation is a price fix, distorting the marketplace and transferring wealth from those who create wealth to those who didn't create it and often don't know how to use it productively.
Price fixing is inherently unworkable and distortive. But central banks are price fixing machines! The good, gray men meeting to determine monetary policy are deciding on the price and volume of money. They are FIXING these values. Why?
Well ... because control over the source and fount of money provides those men with enormous influence and power. And the Anglosphere power elite that apparently has built up a network of central banks around the world derives literally trillions of dollars in power and influence from their participation.
Central banks are the funding stream of one-world government. Without central banking and the ability to print money-from-nothing, the one-world conspiracy itself would begin to founder. Leviathan itself would begin to starve.
The impossibly expensive prison-industrial complex would begin to wither; far-flung military forces would gradually return home; the entire bought-and-paid-for media complex would begin to fracture. Truth would begin to leak out ...
The Anglosphere power elite simply cannot afford to let the central banking meme die. At the same time, the meme IS dying. We have charted the progress of its death via these pages for some two years now.
It is the nature of the 'Net and the Internet Reformation: What central banks do these days they often do in the full glare of the public spotlight. What might have turned up in a polite and elaborate article on the front page of the New York Times is instead dissected in a thousand blogs with a good deal of temerity and boldness.
Because of this, the impossible figures that modern Western banks issue out to favored businesses have become well known. They cannot be justified. The issuance of tens of trillions to failing banks and corporations is simply not palatable to the millions, and even billions, losing their homes and jobs and families.
There is no answer to this essential immorality. There is no response to the idea that a handful of people control the wealth of the world. What answer there is, we see, has to do with making central banks – and the Fed in particular – more "open" and "transparent."
This is, to put it bluntly, idiocy. One does not cure a problem by making its inner workings more evident. The difficulty with central banking is that it is an economically illiterate activity. How does providing a schematic of this illiteracy in any way ameliorate its presence?
This Bloomberg article makes abundantly clear what is going on. Fed honchos meet with each other and use unreliable, government-collected data to try to determine how much money to issue out at what price.
Of course, this is actually a simplification of what occurs. There are indeed other players and actors. But it all comes down to the same thing. PEOPLE are deciding how much money to print. And people CANNOT KNOW.
The result is ruin and devastation. And those running these systems understand full well what their results are. The constant centralizing and debasement of currency that comes from central banking suits them, however. They apparently aim to use it to implement one-world government.
The more miserable people get, the more dysfunctional the larger economy is, the more people will welcome, in desperation, yet more centralizing, including a nascent, central money.
This is the method behind the insanity. Central banks are likely a deliberately destabilizing mechanism. And yet ... providing clarity to lunacy is not an apt anodyne. What makes the honchos at the Fed believe that by illustrating their incompetence with more clarity they will win over their critics?
Do the elites that were so successful in the 20th century have a clue of how to deal with their relentless exposure in the 21st? Do they? The response seems to be a sudden expansion of authoritarianism and war. Not a very satisfactory answer in our view.
More and more it seems to us that "they" are playing a desperate game, trying to keep the proverbial balls in the air as they attempt to progress with alacrity toward their New World Order. But we wonder if they will be able to accomplish this great, if malevolent, task.
Conclusion: Perhaps they will end up taking a step back, as they have before.
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Posted by amanfromMars on 01/06/12 01:39 AM
Top o' the mornin' to ya, AW,
Regarding "The problem is mind control." is it also paradoxically the total solution. Thus would we be in unambiguous agreement on the way forward into Command and Control of Global Operating Systems and Computers and Communications in Creative CyberSpace, which incidentally One and All, you may like to wonder and ponder are creating CyberIntelAIgent Spaces and IntelAIgent Places and Intellectual Property © ur2die4 ® ... ... . or is Everything in Virtual Reality for Free Edutainment and SMARTer Enlightenment.
Your Wish Ours 42 Command. Make a choice if you believe you have one to make which you imagine will alter the future course of fabulous events and programs. All the best will survive and grow and seed tributary feeds of immaculate control and primed power. Which is perfectly fair, is it not, and a great bargain too.
AIBonded Crazy Diamond for Susan, AW, and NINja SA ... ... ... . for Real SMART Yoofs ... ... . and the Young at Heart and Pliable Manic of Mind.
Good Morning, Daily Bell, There is a lot of engaging talking around systemic problems here on these threads and entangled strings, but if one be brutally honest, precious little to practically zero effective action displayed in resolving and replacing and removing abiding difficulties causing base core problems.
However, there are contributing visitors who stop by here who are self-actuating and active and alternatively minded who would change all of that and would dare to care and share as clearly as they can, and as much as public prudence and private security would consider appropriate and necessary, Novel Future ProgramMING Projects, with some most probably to be considered as Virtual Pogroms by the less than enthralled and intellectually compromised, retarded by the Fool's Fix, that Heady Mix of Ignorance and Arrogance that sees no further than a Current Ruling and Reigning Position.
One may also imagine that, in the dark virtual shadows of silence, are there also anonymous lurkers, taking copious notes whilst also, when into the SMARTer Dark Arts, phishing for Juicy Lucy qubits and Bytes to Zeroday Exploit in Vulnerabilities, which are Everywhere, and a Boundless Source of Energy with Limitless Potential.
And that is as much as needs to be presently said today, from me, on the matter. I yield to the floor and honourable ladies and gentlemen. Have a nice day already.
memehunter,
Thanks for those quotes from "The Two faces of Money" [Posted by memehunter on 01/05/12 04:15 PM] They explain and reveal very nicely the ill equipped naked emperor that is the inevitable collapsing folly that is the present monetary system of power and greedy control.
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Posted by Agent Weebley on 01/05/12 08:26 PM
Hi memehunter,
Why do you have this fixation on "interest" being the main culprit in this mess we've gotten ourselves into? Anthony Migchels had that same fixation. It seems odd to me.
The problem is mind control.
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Posted by memehunter on 01/05/12 04:15 PM
Weebley, here is what I wrote (quoted from the "Two Faces of Money"):
1. Important distinction between "unpayable interest" in a debt-based system (our current system) and "payable interest" in a debt-free money:
-Unpayable interest is any charge to a borrower made by a private lender for the use of money he is allowed to create out of nothing as a debt to someone else and an interest bearing asset to himself. The debt so created is primary debt and the interest is essentially unpayable because there is no way to pay it without creating an additional loan which would then create the additional 'money' in the system to pay that interest. This is what takes place in a debt-based system.
-Payable Interest is the charge to a borrower made by a lender who possesses the money he lends, either as savings or capital he has on hand. Because the loan was provided from excess 'earned' money already in the system and now stored as savings, it represents secondary debt. It also means there is enough 'earned' or debt 'free' money outside this lending institution to pay the interest on this kind of a loan. This is what takes place in a debt 'free' system.
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A fractional banking gold standard (meaning "paper gold" being created "out of thin air"; yes, the amount of "paper gold" is in theory limited by the gold supply - but the amount of credit created by private banks is also in theory limited by their reserves in a fiat money system) combined with compound interest is still a bad system, Weebley, because eventually the Money Power(s) will end up with most of the gold. That is my point.
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Posted by Agent Weebley on 01/05/12 03:48 PM
Interest being payable on creation of money/currency/assets* is one thing.
Interest on privately lending some of that money/currency/assets* out is another issue entirely.
*What is an asset? Bionic Mosquito got it right . . . whatever you believe an asset to be.
Click to view link
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Posted by memehunter on 01/05/12 03:11 PM
OK, I can ask the question in a different way (I don't care for you either, Mosquito, so you don't have to reply):
How do we know that the (presumably competing) private gold standards in a free-market situation such as described by the DB would not:
a) Overprint the amount of currency with respect to the supply of gold backing it (without the users of that currency knowing about it, of course), thus reducing the "backing" over time, possibly to almost nothing.
b) Eventually get together and form a cartel (why couldn't THAT happen in a free market, I'd like to know? A monopoly might be impossible in such a situation, but a cartel is very likely).
Essentially, what DB and Abu Aardvark are answering in reply is:
"The Free Market" or "strive to use a free currency".
The Mosquito is right, it is expecting to much to believe that I would think that such an answer is satisfactory.
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Posted by bionic mosquito on 01/05/12 02:59 PM
"... who or what would ensure that a private gold standard would be honest and stable in your free-market environment?"
You betray your naivete by even asking such a question. One far better in writing skills than I am has answered quite well: "Good Lord ... There is never any stability! Strive to be free; strive to use a free currency. Education is the bulwark against manipulation. Always. Independence is the best solution to government monopoly. What other answer is there? More "schemes.""
I would only add: schemes, enforced by who?
DB, your reply is quite proper - and wonderfully succinct as you often demonstrate...
And to Abu Aardvark: "To ask the question is to answer it: THE FREE MARKET!"
Yes, this is quite so. But you might be expecting too much for this simple statement to be understood by the intended recipient.
This thread (at least with memehunter) has run its course for me.
Entertaining as always! And DB, thank you for your forum.
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Posted by memehunter on 01/05/12 02:37 PM
Agent Pete, the reason I addressed the Mosquito in such a way was directly related to his earlier nonsensical comments about me.
If you are talking about me (this is not clear), I'm not sure why you think that my belief systems are "crashed". Again, I am trying to awaken people to the problems of compound interest and to suggest that Austrian economics are not necessarily inimical to the interests of some elites. Of course, most readers here (including the DB elves) will not like that type of talk - I'm not so naive as to think that they will enjoy it.
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Posted by Agent Pete 8 on 01/05/12 02:19 PM
"I am soooo scared. Why do the advocates of nonsenical monetary theories always resort to threats and name calling on this site."
Crashing belief systems do that when shown to be mostly holes. Be firm but gentle.
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Posted by Abu Aardvark on 01/05/12 02:17 PM
"who or what would ensure that a private gold standard would be honest and stable in your free-market environment?"
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To ask the question is to answer it: THE FREE MARKET!
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Posted by memehunter on 01/05/12 02:06 PM
BM: "In reply, I made clear the distinction of interest in a funny-money environment as opposed to interest in a gold-backed environment."
Yes, I agree with the "Faux Capitalist" (which I quoted) that compound interest in a fractional-banking system combined with gold-backing will eventually result in the Money Power owning practically all the gold. But I don't have the mathematical proof of this in this case, hence the distinction between a "funny-money" environment and a gold-backed environment.
However, I have to ask you the same question that I repeatedly ask the DB without ever getting an answer: who or what would ensure that a private gold standard would be honest and stable in your free-market environment?
Reply from The Daily Bell
"However, I have to ask you the same question that I repeatedly ask the DB without ever getting an answer: who or what would ensure that a private gold standard would be honest and stable in your free-market environment?"
Good Lord ... There is never any stability! Strive to be free; strive to use a free currency. Education is the bulwark against manipulation. Always. Independence is the best solution to government monopoly. What other answer is there? More "schemes."
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Posted by memehunter on 01/05/12 01:59 PM
The DB was replying specifically to a post talking about theoretical considerations on compound interest. You should perhaps read more carefully yourself.
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Posted by bionic mosquito on 01/05/12 01:54 PM
"I was offering some theoretical considerations about compound interest and you end up talking about gold."
YOU brought up gold. Read your own posts.
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Posted by bionic mosquito on 01/05/12 01:50 PM
'I'm still waiting for you to justify compound interest in a debt-based money system…'
Memehunter, either you are not reading my words or you are not reading your words (including the words you quote from other sources to make your point).
Please stroll down memory lane with me….
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Posted by memehunter on 01/04/12 03:33 PM
Ron Paul's "Austrian" Jewish Economics (published today on Makow):
Whether a currency is backed by gold makes no difference. As long as we pay interest, it is still Illuminati Jewish economics. The real alternative is interest-free currency.
In reply, Posted by bionic mosquito on 01/04/12 04:41 PM
Now to these comments by memehunter: I look on with fascination whenever someone gets hung up about interest in this manner. I am not speaking of interest in a funny-money environment (the dream of everyone in the PE worth his weight), but interest in an environment of honest (or reasonably honest) money.
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In your post, memehunter, you quoted a source saying that interest is somehow bad - even in a gold-backed currency: specifically described as 'Illuminati Jewish economics.' Or was this derogatory phrase meant as a positive virtue?
In reply, I made clear the distinction of interest in a funny-money environment as opposed to interest in a gold-backed environment.
Please read more carefully next time. It will save you embarrassment.
Now to your question: 'I'm still waiting for you to justify compound interest in a debt-based money system…'
I have no need to justify it. First of all, as you can see from the above, I was speaking to interest in a gold-backed system - the EXACT issue you condemned via your post. I spoke directly to your issue, whereas with your most recent missive you have introduced strawmen.
Additionally, if market participants choose to transact as such, I will not stop them. As long as they have no power over my choices, it matters little to me what they do - and in any case I have no right to preclude them from their folly.
To the second part of your query: '…without resorting to the strawman that being "against compound interest" means being "for governmental force.'
My bad. Please feel free to implement such a system in a free market, without the government as muscle. Yes, go ahead and bring to market a currency with no real savings devoted to supporting it, and the value of the currency will soon reflect this. Then what will your currency buy? Nothing. Yes, go ahead and compete freely and openly with such a scheme.
Yes, please implement this scheme without force, see how far you get. This is why I infer that force will be necessary to implement this scheme. Only because few will support it voluntarily.
I look forward to seeing how far you get
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Posted by amanfromMars on 01/05/12 01:08 PM
"So I understand you properly, are you here advocating yet another version of pixie dust - a magical money printing machine somehow controlled by the fair-minded (or available to "all who need it") as opposed to the elite? If so, there is no intelligence in this." ... . Posted by bionic mosquito on 01/05/12 11:36 AM
That suggests that you agree any present elite control of the machine is unfair, bionic mosquito, which suggests that there might be more intelligence in you than is displayed. ... ... .. but I do admit to be an incorrigible eternal optimist and man does prove himself so oft to be capable of infinite stupidity and dogged persistence in support of a status quo rather than realising everything always is in a state of excitement and flow and progress is always something different and ideally better otherwise is one delivered of recession and austerity and depression and collapse, which is indicative of status quo failure.
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Posted by memehunter on 01/05/12 01:03 PM
DB: "So much verbiage. In a free market no one individual or group could dominate money without the acceptance of the larger society. If someone obtained a monopoly in an unfree society, a free society would undo that monopoly.
[... ]
Don't use the violent weapons of the elite against them. Don't try to DESIGN a monetary system based even partially on government force. This is a dead end in our view. George Orwell wrote a book about it. Animal Farm."
I was offering some theoretical considerations about compound interest and you end up talking about gold. The word "compound interest" is not mentioned once in your reply. Too bad I wasn't there earlier to call you on it.
Reply from The Daily Bell
Why do you think you are educating us?
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Posted by memehunter on 01/05/12 12:47 PM
I'm still waiting for you to justify compound interest in a debt-based money system, without resorting to the strawman that being "against compound interest" means being "for governmental force".
Have you understood that this system can be demonstrated to be mathematically unstable in the long run?
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Posted by memehunter on 01/05/12 12:45 PM
BM: "I am soooo scared. Why do the advocates of nonsenical monetary theories always resort to threats and name calling on this site."
Did you already forget what you posted earlier about me? Nonsensical indeed...
"You assume you and your wife have twice the political pull as someone named Rockefeller. I will humbly suggest this is not true.
If you think the common man will be in charge of such power, you are fooling yourself. That you choose to fool yourself is your business. However please stop trying to fool others. You are only serving the money elite as you are certainly advancing a meme acceptable to them.
Yes, you are advancing the acceptable Hegelian dialectic. There, I said it: you are acting as a tool of the power elite."
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Posted by bionic mosquito on 01/05/12 12:41 PM
"I am merely trying to make people think about compound interest."
There is nothing to think about in a free market of money and credit. Interest is merely the value that one places on the service of capital over time.
"You should perhaps stop fooling yourself before posting such idiocies."
Oooh, very witty.
"The Mosquito, I'm on your case, you'll have to explain that to me, and you better be ready, especially after the inanities you posted about me. I won't forget you, the DB can tell you about that... "
I am soooo scared. Why do the advocates of nonsenical monetary theories always resort to threats and name calling on this site. Are you Ingo Bischoff in disguise?
You aren't the first to advocate monetary gibberish on this site, you won't be the last. One day you might even get a Sunday interview out of it. Others of your ilk have done so more than once. It makes for a good conversation.
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Posted by memehunter on 01/05/12 12:18 PM
Why do people automatically assume that being against compound interest means being for Leviathan or the "initiation of force"?
That's another blatant strawman. I can see it from a mile away.
The Mosquito, I'm on your case, you'll have to explain that to me, and you better be ready, especially after the inanities you posted about me. I won't forget you, the DB can tell you about that...
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