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bronco
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Registered: 05/31/04
Posts: 563
Location: N/A
 
What Does Any of It Mean Anymore
Wednesday, July 05 2017 @ 02:18 AM CDT

Okay, to start off with I am not trying to talk down or up to anyone. I am an independent not registered as a Democrat or a Republican. I do not vote. Why? I have lost faith in the system. When we talk about such things as the Federal Budget and how much we are spending on any one item or even say, social programs vs military, do we really have any idea what is going on? Does money mean anything anymore? Well of course it does you say. Try living in America without some and you end up in a tent city on the side of the road. True enough but money is still not worth anything. Or to put it another way, it is worth what you want it to be worth.

Are you aware that modern money is created with a simple computer entry in a bank's computer system. Straight out of thin air. Magic!

So it is not that money is worthless, it is just that nothing backs it except your acceptance of it as a medium of exchange. When we finally lose faith in the US dollar, which is only a matter of time, all the votes, opinions, laws, elections, etc. will have had no meaning. How can I pretend that I have any power in a country and world which measures everything in entries on a computer system.

Debt at all levels is so out of control that there is no going back. We are now forced to ride the back of the beast that the bankers have made until it can be ridden no more. When will that happen? No one knows. It might be next week or another 10 years but it is getting closer every day. You think I am wrong and that everything is under control and we have responsible bankers, govt. officials and the multi-multi rich one percenters to watch over us? I now substitute my opinion for some facts. Only one actually. Go to this website and actually stufy all of the numbers and try to conceive of what they all mean.http://www.usdebtclock.org

Illinois is bankrupt. Think of the time when each and every state will be the same. Then think when it happens to the Federal Government or if they just create more money, how much longer does that work?
chikoppi
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Registered: 04/02/04
Posts: 1966
Location: N/A
 
Re:What Does Any of It Mean Anymore
Wednesday, July 05 2017 @ 08:48 AM CDT

Woah. That's a lot to unpack. The angst is understandable, but if you'll take a moment I think you'll see it's not so dire.

I don't find economics a very easy field to unravel. In fact, it often seems damn near impenetrable at times. However, I also know that just because I don't intuitively understand something doesn't mean it doesn't work. There are lots of other parallel examples, from oncological gene therapy to microprocessors.

Monetary policy is certainly complex, but if you consider that the pile of "total money" is valued as representing the whole of the economy, then you see there is limiting factor on the value of the dollar. The more dollars in the pile, the less of the total value each one represents (a fiat monetary system simply makes it easier to manage and stabilize currency supply).

If you're interested in a mostly non-partisan intro to economics, I'd recommend checking out Tyler Cowen (he's mildly libertarian). He produces a video series called Marginal Revolution University that introduces economic concepts.

http://marginalrevolution.com
https://m.youtube.com/channel/UCnkEhPBMZcEO0QGu51fDFDg

As for IL, we're not bankrupt, but our legislators and executives have been. The good news is that over the weekend the Ds and Rs came together to pass balanced revenue and spending bills (with veto-proof majorities). Governor pouty-face vetoed, but the Senate overrode the same day and the House will follow today or tomorrow. It's a responsible budget. Even with the tax hike we still have a lower tax rate then three of our neighboring states, so most of the shouting has really been about political gamesmanship. None of the costly and self-inflicted damage was necessary.

Just keep supporting qualified and moderate candidates who are willing to compromise and don't believe the promises or dire predictions of ideologues. Also, check out "The Better Angels of Our Nature," by Steven Pinker. I think it will help counter some of the hyperbole anxiety we're all constantly subjected to.

https://stevenpinker.com/publications/better-angels-our-nature

“Ya, that idea is dildos.” Skwisgaar Skwigelf
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bronco
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Registered: 05/31/04
Posts: 563
Location: N/A
 
Re:What Does Any of It Mean Anymore
Thursday, July 06 2017 @ 03:07 PM CDT

Everytime a new dollar is created, either through direct action by the Fed or through loans by the fractional banking, if your share doesn't come to you then your share of the overall wealth is diminished. The usual way that the money expansion was shared was historically by pay raises, loans for small business starting out, or occasionally a direct payout by the government. Then that money circulated in the economy and everyone supposedly benefitted.

Well pay raises have been stagnant for 20 years, banks won't loan out money because of the mess they made for themselves and the few tiny payouts to us by the Federal Government are statistically insignificant.

On the other hand we know that the giant corporations and those who manage or own them have increased their share of the wealth dramatically. Even while their actions have harmed the rest of us economically, environmentally and threaten our continued existence as a nation.

The crisis of 2009 was very real and the system came very close to crashing completely. We got out of that one by the skin of our teeth by creating Trillions of new money and propping up all of the big boys that created the havoc in the first place. Nothing has changed, the so called fixes since then have solved nothing. The banks still play roulette with our money and the nation's stability. You don't believe it and have faith in all those democratic candidates who are bought and paid for (just like the Republicans) . Well here is where we agree to have a difference of opinion. I certainly hope you are right because I only have a few years left to live and would like to live them in comfort and air conditioning. But my mind doesn't see anyway they can logically keep it going without some real pain and suffering bringing about a new way to do things.
chikoppi
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Registered: 04/02/04
Posts: 1966
Location: N/A
 
Re:What Does Any of It Mean Anymore
Thursday, July 06 2017 @ 05:16 PM CDT

Quote by: bronco
Well pay raises have been stagnant for 20 years, banks won't loan out money because of the mess they made for themselves and the few tiny payouts to us by the Federal Government are statistically insignificant.

On the other hand we know that the giant corporations and those who manage or own them have increased their share of the wealth dramatically. Even while their actions have harmed the rest of us economically, environmentally and threaten our continued existence as a nation.


Yup. I agree. Wages have not risen with productivity for a long time. That's attributable to a number of factors that are not adequately addressed because (I believe) corporations and the success of corporations receives an unbalanced degree of representation over the interests of individual citizens.

Right now our governor is trying to destroy unions in a bid to make the state more appealing to corporations (read: cheaper labor). As charitable as I try to be, I can't see how his premise of a race to the bottom will help, especially when we're competing with foreign labor.

Quote by: bronco
The crisis of 2009 was very real and the system came very close to crashing completely. We got out of that one by the skin of our teeth by creating Trillions of new money and propping up all of the big boys that created the havoc in the first place. Nothing has changed, the so called fixes since then have solved nothing. The banks still play roulette with our money and the nation's stability. You don't believe it and have faith in all those democratic candidates who are bought and paid for (just like the Republicans) . Well here is where we agree to have a difference of opinion.


We don't disagree. I'm for much more strict regulation of financial institutions and practices. That's a different issue than fiat currency, which was the content of the post that I initially replied to.

Quote by: bronco
I certainly hope you are right because I only have a few years left to live and would like to live them in comfort and air conditioning. But my mind doesn't see anyway they can logically keep it going without some real pain and suffering bringing about a new way to do things.


It's hard to reply without staking-out a position on the role of government in establishing economic norms. There are those who think government should have little to no role in regulating markets, including labor markets. There are those who think government should intervene in markets on behalf of citizens to ensure they are treated fairly and that corpoations are not allowed to externalize risks and costs.

What I do think is that it's a complicated challenge with no perfect answers and that solving it requires humility and compromise. I cringe every time I see a representative or official of any party stripe who takes an all-or-nothing hard line approach (e.g., our governor and speaker).

In a bit of good news, the Illinois house just now overrode the governor's veto, acting through compromise to pass a budget. No one is thrilled with it, but after two long years the hardliners have been sidelined and the parties are talking and working together. We need more representatives in government willing to do that.

“Ya, that idea is dildos.” Skwisgaar Skwigelf
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MikeRobinson
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Registered: 08/29/11
Posts: 717
Location: Chattanooga, TN United States
 
Re:What Does Any of It Mean Anymore
Friday, July 07 2017 @ 04:59 PM CDT

Strange as it may seem, all of this is actually not a problem.   Governments do not operate under the same rules that you do, because their role in the economic process is fundamentally different.

You are constrained to do something that “earns money,” and you are entitled to spend the (limited) amount of money that you have earned.

A government’s purpose is to provide liquidity:   a guarantee that there will be sufficient “currency units” available to denominate all of the transactions that will take place each day.   These currency units are by definition completely fungible:   every dollar bill is like every other.   And, they are abstract:   you don’t need to use a piece of paper to buy something.   The government must, above all, ensure that a sufficient number of these units are available, anywhere and everywhere they might be required.

As long as there is underlying economic activity ... you write a song to get a royalty by which you buy a cup of coffee at Starbucks ... the system works as designed.   Currency units are not, representations of value:   you can’t eat gold, and you certainly can’t eat a piece of paper.   Currency units are a medium of exchange.   They are what enables you to use a song to buy coffee.   You possess that unit because someone loved your song.

For many years, bankers in New York made a good living moving bars of gold from one underground room to another ... good work if you can get it ... until someone finally realized that this little bit of financial theater was irrelevant.   Likewise “the gold standard.”   The number of currency-units in circulation, in order to provide necessary moment-to-moment liquidity, vastly exceeds the amount of gold on the planet, and, even if it did not, why not put all that pretty metal to good use, such as coating the contacts on printed circuit boards?  

There is no actual reason to “tie” a currency-unit to any physical asset whatsoever.   That currency-unit fulfills its purpose simply because we all agree that it does ... no matter how we represent that unit.   It is not valuable “because” it supposedly represents some tiny piece of some piece of metal in the dungeons of New York City or Fort Knox.   “A dollar’s worth a dollar” simply because it is(!) “a dollar!”   (And because it is “legal tender for all debts, public and private,” in a honkin’ big national economy.)
MotherofMeursault
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Registered: 09/28/08
Posts: 380
Location: , United States
 
Re:What Does Any of It Mean Anymore
Friday, July 07 2017 @ 10:06 PM CDT

Fellas. Please.


If Bronco is losing sleep over the tribulations of the central bankers in providing a 'sufficient number of currency units', he should immediately be remanded to an insane asylum. If, on the other hand, he is concerned about the value of each currency unit in his savings account, he's in very good company.

The central bank is perpetually undermining the value of his savings through its money creation schemes, and that directly impacts not only his ability to sip a latte at Starbucks (let them eat cake!), but also to feed and clothe himself into his old age. In the macro economic terms you seem to prefer, he's a statistical nonentity; if he runs out of purchasing power, no one at the central bank will notice or care; and it will be cold comfort to hear that 'governments do not operate under the same rules' that he does. Despite the high rhetoric of assorted statists whose salaries are drawn from the debasement of his savings, he is on his own. Personally, I wouldn't seek to soothe his wounds with paeans to the wise central planners; I'd tell him to invest in those things the state is squandering his life savings on: war and currency debasement. At least that way he stands a chance of getting some of his money back.

MoM
bronco
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Registered: 05/31/04
Posts: 563
Location: N/A
 
Re:What Does Any of It Mean Anymore
Sunday, July 09 2017 @ 09:15 PM CDT

Yes, some respondents seem to have skipped large parts of what I was bringing up. I know we will never go back on the gold standard or any standard where something material backs the currency.

The problem is the cavalier way they create currency and the huge amounts that they are creating. I just said that I wasn't getting my share (like 99% of the folks out there). It is not just government who doesn't have to do anything to get money. Actually government has to do more than the Federal Reserve (Fed). Surely all of you know that the Federal Reserve is not part of the government but is actually a "PRIVATE" bank. So it is private individuals who can create this massive amount of currency and distribute it as they see fit. You think some of it doesn't go into their pockets without them having done nothing to earn it? The Fed has never, repeat NEVER been audited. In a land and a world where money means everything the very people who create it have never even been subject to the same scrutiny that the lowest small business is.

With unlimited wealth, the few and mighty can buy and sell anything. Giant buildings, whole industries, politicians, the markets, commodities. They loot entire nations on the backs and blood of the people. Surely if you know anything about history or current events in third world countries you can't deny this.

The other part I was saying is that if you cut out 99% of the population from participating in this debauchury of greed, sooner or later they are going to get a little pissed off and start to see how much of the game is being played without them. You don't like the 99% number? Okay make it anything you like but if you go very far below 90% you are just fantasizing.

Is it only me that is saying these things? Not likely. It is all over the net and it is not paranoid conspiracy theorists. It is reputable accountants, economists, former government officials who are getting old and now feel free to speak. It is access to documents coming to light after 50 or 60 years that now show a pattern to what may have seemed random events.
chikoppi
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Registered: 04/02/04
Posts: 1966
Location: N/A
 
Re:What Does Any of It Mean Anymore
Sunday, July 09 2017 @ 10:22 PM CDT

How do you think the Fed works, exactly?

https://en.m.wikipedia.org/wiki/Federal_Reserve_System

Also, you might want to investigate the Federal Banking Agency Audit Act (1978):

The Federal Reserve Banks conduct ongoing internal audits of their operations to ensure that their accounts are accurate and comply with the Federal Reserve System's accounting principles. The banks are also subject to two types of external auditing. Since 1978 the Government Accountability Office (GAO) has conducted regular audits of the banks' operations. The GAO audits are reported to the public, but they may not review a bank's monetary policy decisions or disclose them to the public. Since 1999 each bank has also been required to submit to an annual audit by an external accounting firm, which produces a confidential report to the bank and a summary statement for the bank's annual report. Some members of Congress continue to advocate a more public and intrusive GAO audit of the Federal Reserve System, but Federal Reserve representatives support the existing restrictions to prevent political influence over long-range economic decisions.

We can force the Fed to make currency more expensive, but I don't think that's going to have the intended result.

I'm not defending any monetary policy here, and I certainly understand the sense of angst and urgency, but I think complex issues require complex consideration. Inflation is not an issue (the prevailing concern is that it is historically too low) and I'm not at all convinced that it is monetary policy that is responsible for the trend in stagnant wages or rising inequality. I'd like a solution too, but it has to address the actual cause(s).

“Ya, that idea is dildos.” Skwisgaar Skwigelf
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bronco
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Registered: 05/31/04
Posts: 563
Location: N/A
 
Re:What Does Any of It Mean Anymore
Monday, July 10 2017 @ 12:19 AM CDT

I have served as an auditor and have a degree in Accounting. Going into the Fed and reviewing financial statements that the Fed has prepared and perhaps testing a few of the numbers to see if they add back is not an audit. I have never seen an audit conducted in this manner. We always went to the root documents and created our own financial statements.

If you simply take the word of the agency you are auditing that they have included all relevant facts on their statements and they are factual then why conduct an audit in the first place? In a computer age, just to make sure the numbers add up correctly and are in the correct generally accepted format proves nothing. And even then, as I interpret what I read, neither the public nor even Congress are allowed access to these underlying documents but only to the actual financial statements themselves.

As we have repeatedly seen in modern times, it is all too simple to hide things on statements with ambiguous descriptions. Or just leave some of the facts off and hide them. We have even see the auditors themselves be complicent in all of this illegal, unethical flim flam. There are many excellent documentaries on the Enron scandal and others which show how this is done.

What type of accounting entry, I have often wondered, does the Fed use to create it's Trillion new dollars? I suppose you debit some asset account like Unlimited Dollars and credit cash. Whatever form it takes it could be identified by an auditor and a computer program could be written to track it and give you that total number for a fiscal period. Then you would trace all disbursements of this new cash, subract it from your first total and then see if the remainder is shown on their accounts balance. Imagine the fun you could have? Might upset more than a few apple carts on the way.

Of course it seems a lot of people just don't care as long as it is not their apple cart being turned over. You could accrue evidence until the cows came home of the corruption, duplicity, illegal acts, etc. and they would still say it's not important and everything will be fine.

I wonder what people like Thomas Jefferson and Andrew Jackson would think of it?
 
chikoppi
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Registered: 04/02/04
Posts: 1966
Location: N/A
 
Re:What Does Any of It Mean Anymore
Monday, July 10 2017 @ 06:01 AM CDT

Quote by: bronco
Of course it seems a lot of people just don't care as long as it is not their apple cart being turned over. You could accrue evidence until the cows came home of the corruption, duplicity, illegal acts, etc. and they would still say it's not important and everything will be fine.


If you think the Fed is handing out trillions of dollars in free money wouldn't it be super easy to demonstrate? Audits of the banks and agencies that do business with them would disclose how payments from the Fed appear in the books, right? And wouldn't inflation be off the charts?

If you want to light your hair on fire over the Fed I'm not here to stop you. Go for it. I still don't see evidence that monetary policy is in any way responsible for fluctuating wage inequality. I think changing forces in the labor market together with a congress that predominantly serves the investor class is more likely to blame. But we can both seek out the apple cart vandals using our own methods.

“Ya, that idea is dildos.” Skwisgaar Skwigelf
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