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| | From:  BadBobTx (Original Message) | Sent: 12/12/2007 3:44 PM |
The Fed yesterday made a cut of 25 base points and then whined about inflation. This was followed up this morning by a move by the Fed that will put more liquidity into the market. They are putting money at the discount window and allowing the banks to bid on it. Now if your competitor bids 3% for the money and you are paying 4.5% you will be forced to make bid. As I understand it they were putting money at the discount window and no one was taking advantage of it, there seems to be a stigma with borrowing from the discount winow. So now if you don't bid for it you could find yourself paying more for your money than your competitor. So the bottom line is that money that just sit there will now be flowing into the market. My questions is aren't the moves by the Fed inflationary themselves and contrary to what they are whining about.? Bob |
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BadBobTx, You're right. Any money added to the market will cause a devaluation of the money already existing. In other words, our money is worth less (or worthless) today than it was yesterday. When the value of the U.S. dollar goes down, it then takes more money to purchase the same amount of goods. This is called INFLATION. Inflation is a direct result of monetary manipulation. The problems associated with inflation fall directly on the heads of those who operate the unconstitutional Federal Reserve......which is neither Federal, nor Reserve. THE HISTORY OF MONEY -- Lincoln's Greenback The historical quotes contained at the above link are well worth the time it takes to read this short piece, but there's little doubt that they could have done a better job with the formatting. Joel |
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| | | From: codify | Sent: 12/15/2007 4:10 AM |
Bob... I thought maybe Hayekian would add some to this, since I'm totally confused. 1. The subprime mess to me is like a mini-run on banks. They are trying to print enough money to cover the cash outs. Course what they'd rather see is calmer investors. 2. Given the above you'd think thay'd be raising interest rates, and not lowering them. The real issue is the yield spread, especially long term. And I think their goal is to widen the spread, but as yet its been illusive. 3. The only way I see them really surviving this one is to create a little chaos and convert to the Amero or something. Like Europe did already. The confusion comes when the dollar has been rising of late and I can't figure out why. It is confounding to say the least. To me anyway. Doubt I answered any questions, but here's to the resilience of our economy. Cheers! |
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lets never forget that its not money. banks just get to bid on who gets the lowest service fee to the fed for creating more debt. |
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Codify, I'm with you. It would be very nice if my old friend, Hayekian would ring in on this one. It would make for a very interesting conversation, for sure. Joel |
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| | (1 recommendation so far) | Message 6 of 16 in Discussion |
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You are correct, BadBobTx - the interest rate cut as well as injection of liquidity (i.e. - expansion of the money supply) are both inflationary. It appears that Bernanke's Fed is willing to tolerate 5% inflation rates. It appears to me that there is a policy of deliberately deflating the dollar against other currencies. This might not be bad policy if the intent is to increase exports, decrease imports, and reduce the trade deficit. Indeed - in an era of "tariff free trade", where our Federal government is too stupid to switch away from payroll and income taxes to consumption taxes (which levels the tax burden playing field by taxing imports at the same rate as domestic production), this may be the only way for American workers to compete in global markets. This also dramatically increases the price for imported oil, which will eventually make alternatives economically competitive. Anyway - if the point was to reduce inflation, the Fed took the wrong action. That is why I think there is likely an ulterior motive having to do with international trade. |
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Hayekian, Thank you for stopping by. Much appreciated. I hope everything is well with you. Winter has set in up here in the great white north, meaning that I'll now have more time to spend on the net. Please stop in more often. Joel |
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You're welcome, Joel. Lows were in the high 30s today, highs in the low 60s in Baton Rouge. I don't spend that much time on the net anymore. Between the strident right wingers and the strident left wingers, there doesn't seem to be that much reasoned discussion going on. |
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Between the strident right wingers and the strident left wingers, there doesn't seem to be that much reasoned discussion going on. I've had the same feeling lately Hay, I really am tired of all of the hate, got caught up in it a little myself tonight. Not sure it's worth all of that. Bob |
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Neither side seems to have a clue that the fundamental role of government ought to be to leave people alone unless they are harming other people. Bunch of busybody control freaks all around us, whose motto seems to be "There ought to be a law ..." There seems to be no recognition that every rule/law represents a loss of freedom. |
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Hayekian, We've had lows in the -20s. Our high temp today is going to be about 12 above. We had a dense fog last night, and the trees are all snow white this morning making for a white on white landscape. It's actually very pretty. I have a plan regarding the passage of laws. Pass any law you please, but in doing so you must also remove three old laws from the books. If we were to follow this plan, it wouldn't be long before we get ourselves back where we started......The Ten Commandments. Glad to have you back, Hayekian. There are a few people I've met on these boards whom I have a great amount of respect for, and you are certainly counted among them, Sir. Please stop in more often. Joel |
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Here you go, Hayekian. Compliments of my daughter. Joel |
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Looks cold how do you turn it off. What ever happened to that global warming stuff. We've been in the mid 70s the last couple of days. It got all the way down to 27 the other night. brrrrrrrrrrrr Bob |
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BadBobTx, You got down to 27 degrees ABOVE ZERO? Holy Cow, man, that's 54 degrees warmer than it was here last week! Nature turns off the cold weather when it gets danged good and ready to, and not a minute earlier. hehehe. Here's a picture from Memorial Day (May 28th, 2007) Winter can sometimes last for up to 8 months up here. That's my front yard, looking south, with three inches of fresh snow on it. The tomatoes were planted in the back garden. Most of them lived through it, but not all. Joel |
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You got down to 27 degrees ABOVE ZERO? Oh yeah, got the heavy coats out, fire in the fire place, everybody all bundled up doing their Christmas shopping, it was great. But sadly it's back in the 70s the last couple of days.  Bob |
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Thanks to your daughter, Joel - very nice. Especially nice when I don't have to live in it!  |
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