Moon of Alabama Brecht quote
March 17, 2015

Towards The End Of The U.S. Dominated International Money System

Welcome to the end of Brenton Woods and the Washington Consensus that defined the world money systems around U.S. controlled institutions and the U.S. dollar as the sole reserve currency.

Defying U.S., European allies say they'll join China-led bank

Germany, France and Italy said on Tuesday they had agreed to join a new China-led Asian investment bank after close ally Britain defied U.S. pressure to become a founder member of a venture seen in Washington as a rival to the World Bank.

The concerted move to participate in Beijing's flagship economic outreach project was a diplomatic blow for the United States, reflecting European eagerness to partner with China's fast-growing economy, the second largest in the world.

It comes amid prickly trade negotiations between Brussels and Washington, and at a time when EU and Asian governments are frustrated that the U.S. Congress has held up a reform of voting rights in the International Monetary Fund due to give China and other emerging economies more say in global economic governance.

Especially under the Obama administration the U.S. abused its important role in international finance to further its political pet projects at the cost of other participants in the system.

On Washington's insistence the International Monetary Fund is breaking its rules to finance a civil war in Ukraine. U.S. spying on the SWIFT banking information exchange is used to sanction U.S. enemies by excluding them from the international banking system. Foreign banks get punished with huge fines because they conduct business with countries the U.S. sees as unpalatable. Wall Streets huge mortgage scam and selling of worthless derivatives to foreign entities left the world economy in shambles and investors and whole countries bankrupt but went completely unpunished.

Enough. Over time the world will no longer adhere to the rules set in Washington. The global banking system will evolve into a multipolar system where different public international banks will act and where monetary information exchanges can be conducted on various systems under various jurisdiction.

This will be a huge loss to the coercive power of the U.S. and thereby a good step towards a more Westphalian world where power is more equally distributed. International sanctions against countries that defy U.S. regime change orders will no longer be sustainable.

Posted by b on March 17, 2015 at 14:27 UTC | Permalink

Comments
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Federal Reserve Board of Governors run, control, and regulate the 12 district banks.

Each district bank has three classes of directors:

(1) Board of Governors selected, three each
(2) bank shareholder selected, three each
(3) Citizen/businesses, three selected (can't remember who chooses this group)

Posted by: MRW | Mar 18 2015 23:32 utc | 101

The Board of Governors yanked the NY Fed's ability to regulate banks five years ago but we only found out about it last week. This was probably in response to Geithner's poor job.

Posted by: MRW | Mar 18 2015 23:35 utc | 102

Here is an example of the profound danger of failing to understand how things work operationally. This is what happened in Canada after 1971, when the USD went 100% sovereign. The bankers understood it; the people didn't. The media failed to inform.

Check this out: http://www.comer.org/archives/2013/COMER_March2013.pdf
Read intro on page 1, then bottom of page 9, top of page 10.

Posted by: MRW | Mar 18 2015 23:41 utc | 103

About this lawyer;
"The lawyer who challenged the Harper government and won”, Published Friday, Aug. 22 2014, 4:16 PM EDT
http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/rocco-galati-is-always-fighting-for-long-shots/article20176185

Posted by: MRW | Mar 18 2015 23:42 utc | 104

AVISO: please, please, please, take this in the spirit of ‘duly noted’. I haven’t read the Amended Pleading all the way through (time constraint), so I don’t know if Galati has the Basel stuff right. He’s absolutely right about the requirement of the Bank of Canada to provide interest-free loans to provinces and municipalities. That’s in the Bank of Canada Act. Statutory law.

You can find the original court docs here on right panel: http://www.comer.org

Posted by: MRW | Mar 18 2015 23:43 utc | 105

ǝn⇂ɔ | Mar 18, 2015 9:15:13 AM | 101

What part of 'the US federal government issues its own currency' don't you understand?

The US federal government has no need to borrow its own money from anyone. And where do you think people and businesses get the dollar bills to begin with? If not the government, then they are counterfeiting.

BTW, there is a law in the US that determines the amount of physical US paper currency the government is allowed to produce at the US Bureau of Engraving and Printing. Used to be around $350 billion. May have changed. No way there are trillions out there.

Posted by: MRW | Mar 18 2015 23:51 utc | 106

james @112,

"but maybe it is due the fact that those who are put in the position to run it are serving the interests of the few as opposed to the many and congress is happy to keep the relationship going."

Exactly what happened in the run-up to 2008. Geithner, who was NY Fed district bank head, abdicated every duty he was supposed to do. Congress, for two decades, let the NY district bank rotate out Goldman Sachs toadies. Hell, even our Sec of Treasury was a Goldman Sachs alumni: Chairman and Chief Executive Officer. Clinton's Sec Treas was Robert Rubin, who was member of the board and co-chairman from 1990 to 1992, just before Clinton came in.

The corruption is deep. And Congress is to blame.

Posted by: MRW | Mar 19 2015 0:00 utc | 107

MRW is the MAN, muy bien amigo!

Posted by: Fernando | Mar 19 2015 3:09 utc | 108

MRW, thank you so much for the very enlightening posts. I think I learnt more about how the Fed works in this one thread than I have anywhere else... Call me a conspiracy theorist, perhaps it's by design :/

Posted by: Almand | Mar 19 2015 3:51 utc | 109

@113 mrw.. i imagine that is like one of those card tricks where you get to pick from a small deck of cards where the cards are the one's given to the president to choose from.. a better question is who gives the list for the president to choose from and why?

@115 - interesting.. why the delay? what else isn't being told? this is my main problem with the financial system in place.. we aren't being told much and what we are given is suspect.. you highlight this indirectly with your comment @115..

@116 - key info from top of page 10 and bottom of page 9 which you suggested i read from the link - "We have the minister of finance, who is the sole shareholder and ultimate authority under the Bank of Canada Act, who is refusing to exercise the authority for which Parliament actually set the bank up in the first place, to float loans to the various levels of govern-ment interest-free for their human capital infrastructure programs. Why? Because it was decided by a group of private bankers over in Basel in 1974 when we joined that private group of bankers – they are private individuals – that they would dictate our policies with respect to the floating of loans. So it was decided – and it is pleaded –that in 1974 the Bank of Canada would no longer, in an arbitrary and absolute fashion, do what it was created to do. So the effect as is pleaded is that the Bank of Canada gives loans to commercial banks, those private individuals, at zero to one per cent interest currently, and then those
banks lend it back to our government at two per cent interest or three per cent interest, commercial rates. That is the conspiracy. They are circumventing the act. They are circumventing Canadian sovereignty."

that to me articulates the main problem..

@117 and 118.. fascinating.. thanks for those links on the lawyer who is representing this case..

@119 mrw.. while it is true the federal gov't might not have a need to borrow money from a private bank, that is exactly what happens with gov't projects.. instead of printing the money based on the strength of the assets that belong to the country including the control over printing money, they have set it up in such a way that instead canada and the usa owe money to these private banks for the interest on money borrowed.. that is how i understand it, or else why have both countries gone into a position of deep debt making interests payments on this debt? last i heard canada was paying in the area of 30% of our gdp to cover the interest owing on the debt.. that money pays the private banks owned by shareholders, not to canadians.. correct me if you think i am wrong, but that is how i understand it..

@120 mrw.. while i agree that corruption is deep, i would spread the blame around more then laying it all at the foot of congress.. perhaps one could say politicians are only too happy to keep this going so long as their next election campaign is supported by the same powers that have undue power and influence over such matters and institutions already.. our own ignorance holds us back.. i have never trusted people in suits which is your basic wardrobe of bankers and politicians..

Posted by: james | Mar 19 2015 3:57 utc | 110

murcunt
*As was true with the United Kingdom, the decision of any country to join is certainly a decision made by a sovereign country.* [0]

so why the pressure on sk and all murcunt poodles to spurn aiib in the first place, this about turn is rather disingenuous or may be i smell a rat. ?

zwo rule 1
U CANT BE TOO CYNICAL WHEN IT COMES TO UNITEDSNAKES
all murcunt poodles suddenly ditching uncle sham together.... after initially snubbing the chinese following murcunt dictat ?

if something sounds too good to be true then it prolly is.
trojan anyone ?

as for that *sovereign* bit....
*when I and several other Americans called the Korean Embassy in Washington to register our concerns, we all received similar versions of the same prepared response, “Don’t call us; call the U.S. State or Defense Departments; they are the ones who are pressuring us to build this base.* [1]

look u moron, if sk is *sovereign* then im jesus christ !
hehehehe

*U.S. Assistant Secretary of State Daniel Russel took a swipe at Liu's remarks, saying he finds it "curious that a third country would presume to make strong representations about a security system that has not been put in place and that is still a matter of theory.*

amazing, these sobs !
coming from a cuntry which has been serially sabotaging china's businees deals with other countries by psyops, arm twisting an *ally*, terrorist attacks, regime change and bio weapon attack.

im lost for words !

* When asked why China is opposed to a THAAD deployment, State Department spokeswoman Psaki said, "Why are the Chinese opposed? I would ask the Chinese government that question.*

now listen up both u good for nuthin !@#$%^!
would the unitedsnakes fucking allow china to install its version of thaad into cuba.....never mind mexico/canada, which is what u'r doing in japan, guam, sk. ???

[0]
http://english.yonhapnews.co.kr/national/2015/03/18/52/0301000000AEN20150318000451315F.html

[1]
http://fpif.org/naval_base_tears_apart_korean_village/

[2]
http://www.globalresearch.ca/the-militarization-of-the-far-east-us-threatens-china-s-major-cities-america-s-strategic-naval-base-in-korea/29921

Posted by: denk | Mar 19 2015 5:19 utc | 111

The conflict over the China-backed Asian investment bank


The decision by major European powers to join the $50 billion China-backed Asian Infrastructure Investment Bank (AIIB) is a significant blow to the United States. It is a clear sign that, amidst deepening global stagnation, the economic mechanisms through which the US has exerted its hegemony are breaking down as other imperialist powers assert their independent interests.

US Isolated as China Gains European Allies for Development Bank


BEIJING (DPA) — The United States appears to have manoeuvred itself into an isolated corner by opposing a Chinese-backed development bank that has now received support not only from France, Germany and Italy, but also from long-time US ally Britain.

Ok, the first is from the 'wild Trots' at wsws.org, but the second is from bona fide neo-liberal flagship Deutsche Presse-Agentur.

The Götterdämmerung is now official. The music from same was the sound track for the White Tiger film. It may be the case that the German-Russian-Chinese White Tiger will rise up to replace the incarnation in the USA ...White Tiger is dead, long live White Tiger ... but an ascendant White Tiger is manifestly less dangerous than one in precipite decline.

Posted by: jfl | Mar 19 2015 7:47 utc | 112

the cunts are gloating everywhere....
one example,

shithead
* The pivot to asia is working. China cannot make friends with anyone, while the US can. Now South Korea is telling China to butt out of its missile defense plans. Pillsbury's book ignores the fact that the standard for the global hegemon to attain is the love-hate relationship, not the ALL-hate relationship, [1] in regard to which China appears clueless. This standard follows Churchill's line on democracy.* [2]

p.s.
wsws mod favor this prick but censor my
comments,
very interesting. !

[1]
wow, china is *all hate*, only cunts appreciate the power of love., just wow !
no wonder that BritishBushitCunt lectured the chinese envoys
*make friends, not enemies * !
hehehe


[2]
https://www.wsws.org/en/articles/2015/03/17/burm-m17.html

Posted by: denk | Mar 19 2015 9:48 utc | 113

otoh, this west pointer is no dick,

http://www.sott.net/article/294064-West-to-East-Global-power-balance-shifting-the-American-empire-is-dying

Posted by: denk | Mar 19 2015 11:40 utc | 114

@ MRW at multiple

Yours was the most splendid tour de force presentation of recent memory. I hope those missing segments are restored, the ether was certainly enriched beyond due if that is where they're residing. I agree fully that: should you not know where you were and how things worked, you now don't know where you are or how things have changed; and furthermore you haven't an idea of where you wish to go or how to get there. Crisis is a poor time to ponder complexities or study subtle nuances needed; rarely will there be time to get something correct a second time or suitably corrected afterward. The Federalist Papers record the persuasion used to ratify the constitution. If it isn't there, no conspiracy theory can later provide motive alien to those writings or improve upon the contemporaneous logic contained; the papers are the measure to which historical revisionism must be measured (and usually found severely lacking). Ignorance of either economics or history is a fatal flaw, history is not a conspiracy theorist's opinion.

Posted by: Formerly T-Bear | Mar 19 2015 14:36 utc | 115

Thank you to everyone for the good wishes.

Posted by: MRW | Mar 19 2015 15:38 utc | 116

MRW@120

I checked the Fed website and there is $1.31 trillion in Federal Reserve Notes in circulation.

Posted by: Wayoutwest | Mar 19 2015 16:07 utc | 117

@ james 125

I think the numbers you cite are now out-of-whack, so I will muddle through.

People selected for the Federal Reserve Board of Governors include the chairman of the Federal Reserve, and other presidential appointees. They are described under the Federal Reserve Act, and I don't remember them right now.
----------------------
The delay is inexcusable, imo. Geithner was Treasury Secretary then. Maybe he asked to have it hidden to save embarrassment; after all, he was prez of the NY Fed then. He was supposed to investigate and regulate the mortgage bankers who caused the subprime crisis. In the USA, mortgage banks are not regulated under the federal bank charter, which is why CEOs started using mortgage banks in the 90s to get around the rules, what white collar criminologists called "control fraud" because it's fraud by those in control. The best explanation of how that worked is here: http://harryshearer.com/le-shows/may-1/

Posted by: MRW | Mar 19 2015 16:12 utc | 118

Wayoutwest | Mar 19, 2015 12:07:54 PM | 132

Correct. But there is a limit on the amount they can create annually.

Posted by: MRW | Mar 19 2015 16:14 utc | 119

Wayoutwest | Mar 19, 2015 12:07:54 PM | 132

That amount is around $350+ billion, something like that. (I don't walk around with these numbers in my head all day. :-))

Posted by: MRW | Mar 19 2015 16:18 utc | 120

@ james 125

@119 mrw.. while it is true the federal gov't might not have a need to borrow money from a private bank, that is exactly what happens with gov't projects.. instead of printing the money based on the strength of the assets that belong to the country including the control over printing money, they have set it up in such a way that instead canada and the usa owe money to these private banks for the interest on money borrowed...

I don't know about Canada.

In the US, the federal government has zero need to borrow from a private bank. (That is the same in Canada.) Zero. Remember the process here is, and in this order:

(1) Congress 'appropriates' (spends).
(2) US Treasury authorizes the Federal Reserve to mark up its General Account at the Fed in the amount of the spending. Yeah, out of thin air.
(3) US Treasury gives the Fed the names of the vendors.
(4) Federal Reserve pays the vendors by marking up (depositing) the banks' checking accounts for onward forwarding to the various vendors.
MONEY SUPPLY IN REAL ECONOMY GOES UP.
(5) US Treasury issues treasury securities in the amount of the spending.
(6) US Treasury auctions the treasury securities.
MONEY SUPPLY RESTORED TO BALANCE.

--------------------

Another reason why treasury securities are issued is: let's say you got a $10 million government contract for janitor services in government buildings. You can't leave $10 million in your commercial bank account. The FDIC only insures commercial bank accounts up to $250,000 each. You would buy what they call short-term paper, or short-tern 'debt', aka, a 3 month - to 1 year treasury bill for safety.

BTW, here's how "interest on the debt" is handled in the US. Every August, the US Treasury asks the Fed to calculate how much interest it will have to pay on all outstanding treasury securities. Let's say that amount is $400 billion. The US Treasury "prints up" $400 billion worth of treasury securities and auctions them off. No children, no grandchildren involved.

Posted by: MRW | Mar 19 2015 16:41 utc | 121

@ james 125,

@120 mrw.. while i agree that corruption is deep, i would spread the blame around more then laying it all at the foot of congress.

The Federal Reserve Board of Governors answer to Congress. That's why you see the chairman on the hill twice a year,

Posted by: MRW | Mar 19 2015 16:44 utc | 122

MRW@135

Fed Reserve Notes are inly a fraction of the money supply, about one tenth of the M2 and with the Fed no longer tracking the M3 how do you determine how much money the Fed actually creates?

Posted by: Wayoutwest | Mar 19 2015 16:57 utc | 123

@MRW #120
Sadly, you clearly have zero understanding of the actual processes by which the US government "creates" money.

You equally have zero understanding of how the US dollar functions in reality.

Here are a few hints:

1) Currency is not physical cash. Currency is electronic representations which are directly convertible into physical cash, but the actual amount of cash isn't that great because most people and even fewer companies buy hardly anything over $10K with cash. The $6T resides as bits in bank accounts all over the world - outside the US and held by non-Americans. It could theoretically be converted to cash - but it doesn't need to in order to cause problems for the US. If demand for the dollar falls, you get all those $6T chasing fewer and fewer things which could be bought with dollars - which DOES create inflation.

2) The Federal government doesn't create many dollars from nothing - i.e. adding zeros directly to bank accounts. It creates dollars by creating debt - either the Treasury selling obligations on future dollars or the Fed buying loans from the market. That's because if the government truly printed money, that would directly create inflation for all whereas the present system only creates inflation for the masses.

3) The influence of the Fed isn't just in its monetary powers - it is in its regulatory powers (or lack thereof). The Fed affects things not just by buying crap bonds and calling them "good" - thus bailing out those who have regulatorily captured the Fed - but also by ensuring that no one else can regulate the Fed's constituency via monopolization of regulatory functions over the banks. Greenspan's greatest sins lay not in interest rate policy, but in his active advocacy of less regulation over that which he was entrusted to regulate.

I hope your theoretical understanding is better than what you've posted thus far, because thus far it is very, very poor.

Posted by: ǝn⇂ɔ | Mar 19 2015 16:58 utc | 124

@mrw. thanks for the additional perspective here.

here's a link on canadian public debt. this is what i think has happened in canada with public debt.. our government (one can extrapolate to other countries in the west) have moved towards privatizing many profitable industries that were gov't owned. it has meant that instead of putting the wealth of these industries back into the gov'ts coffers, they have gone into the hands of private corporations. this is the basic agenda of capitalism as i understand it. it makes a few folks rich and a lot of folks poor. the private banking sector plays an important role in all of this too but i am unable to articulate it's role other then to make money off lending, while not giving any return on leaving money in the same bank system.

@137 mrw. - the fed reserve bog's also answer to the heads of the private banks(gs,boa and etc). if they were doing something that wasn't in these banks best interest, there would be changes within as well.. how else does one explain the mortgage bubble that was allowed to happen into 2008? i don't think all the blame rests with timothy geithner. how do you explain the role of fnm, or fre - nyse symbols for fannie mae and freddie mac, or what are referred to as the gse's( gov't sponsored enterprises)? essentially a giant ponzi scheme was in operation.. when does the next one happen? is it only the responsibility of the fed head, or is he walking a fine line trying to balance the desire for exploitation by the private banks, with a congress that is supposed to protect the public? well - we can see this isn't happening.. i doubt that it ever will either based on the system in place.

one could argue a bubble continues to build in the real estate industry at present too.. probably a big bubble of money is being blown up in the military industry as well that the public will be on the hook for.. these are my own subjective thoughts here which can be taken apart. i don't have any answers for any of this, but understanding the process is helpful, especially if one wants to find solutions.

Posted by: james | Mar 19 2015 17:28 utc | 125

Wayoutwest | Mar 19, 2015 12:57:50 PM | 138,

The Daily Treasury Statement.

Posted by: MRW | Mar 19 2015 17:38 utc | 126

james | Mar 19, 2015 1:28:30 PM | 140

Listen to the link I gave @133. Entertaining, too, btw.

Posted by: MRW | Mar 19 2015 17:41 utc | 127

james | Mar 19, 2015 1:28:30 PM | 140

Canadian treasury securities are just government CDs, just like they are here. It's where people park their savings to ensure safety, because the government is guaranteeing them. There is nothing nefarious about them.

Instead of getting a CD at the TD Bank, you get one from the Bank of Canada. The Bank of Canada CD pays less interest, but it is 100% guaranteed to be there for you in case the TD Bank goes belly up. (enormous long shot)

Posted by: MRW | Mar 19 2015 17:47 utc | 128

james | Mar 19, 2015 1:28:30 PM | 140

@137 mrw. - the fed reserve bog's also answer to the heads of the private banks(gs,boa and etc).

They are not supposed to, james. Under law. The Federal Reserve Board of Governors answer to Congress.

You are correct that Timothy Geithner as President of the NY Fed appeared to take his marching orders from the big banks on Wall Street. Documented beautifully in Neil Barofsky's "Bailout."

Dr. Bill Black details Geithner's sins here. Great read. http://neweconomicperspectives.org/2014/05/geithners-single-revealing-sentence.html

Posted by: MRW | Mar 19 2015 17:58 utc | 129

ǝn⇂ɔ | Mar 19, 2015 12:58:42 PM | 139,

You've got things horribly mixed up. ALL US DOLLAR ACCOUNTS GLOBALLY are in correspondent banks at the Fed. Yeah, you can go to Buenos Aires and open a US dollar account, but your bank in Buenos Aires has a correspondent bank at the Fed, and that technically is where your money is.

2) The Federal government doesn't create many dollars from nothing - i.e. adding zeros directly to bank accounts. It creates dollars by creating debt - either the Treasury selling obligations on future dollars or the Fed buying loans from the market. That's because if the government truly printed money, that would directly create inflation for all whereas the present system only creates inflation for the masses.

This is just a garble. Congress is the only entity that has the legal right to spend US dollars, create new interest-free US money. It does that in appropriations. The US Treasury handles congress's appropriations (spending) from that point on with the Fed. THEN, AND ONLY THEN, does the US Treasury create treasury securities in the same amount to mop up the money supply that the new appropriations have created in the economy. In Federal Reserve parlance, it's known as "reserve add before reserve drain." Sometimes, the "drain" includes additional taxes.

Your understanding of inflation is inaccurate. Demand-pull inflation is too many dollars chasing too few goods. Cost-push inflation is pressure on the supply side, when the price of oil or commodities goes up and affects the price of transportation and goods and services.

The Fed has two mandates. Here they are from the Federal Reserve Act, as amended in 1977:

"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates."

Your "but also by ensuring that no one else can regulate the Fed's constituency via monopolization of regulatory functions over the banks" is just confused.
Greenspan's greatest sins lay not in interest rate policy, but in his active advocacy of less regulation over that which he was entrusted to regulate.

Well, this is accurate.

Read Freedom From National Debt by Frank N. Newman. 2103. 87 pages. He was Deputy Security of the US Treasury. He describes how it all works.

Posted by: MRW | Mar 19 2015 18:17 utc | 130

"Deputy Security of the US Treasury" should read "Deputy Secretary of the US Treasury."

My Autocorrect rewrites words for me. Hate it.

Posted by: MRW | Mar 19 2015 18:19 utc | 131

@MRW #139
Wrong and wrong again.

There are correspondent banks that link up with the US system, but it isn't universal.

Equally your commentary on Congress is totally wrong. The Fed can create money anytime they want to by simply buying up debt - as they have done with their balance sheet expansion since 2008. Banks also create money by lending.

Really, if you're trying to show credibility, you are failing miserably.

Posted by: ǝn⇂ɔ | Mar 19 2015 18:39 utc | 132

I also find it interesting that you are attempting to show credibility by quoting the Fed's charter.

The Fed's charter is a piece of paper. The Fed's actions are a different matter.
On paper, the Fed is responsible for regulating most of the key bank functions. In reality, they do no such thing.

Fail and fail again.

Posted by: ǝn⇂ɔ | Mar 19 2015 18:40 utc | 133

What was that about Jen Psaki's hooters?

Posted by: Some Guy | Mar 19 2015 18:57 utc | 134

Posted by: ǝn⇂ɔ | Mar 19, 2015 2:39:03 PM | 147,

Banks also create money by lending.
Correct. Loans create deposits. It's called bank credit money. That money, however, has to be paid back, requires collateral, and produces interest (bank profit). Further, across the banking system, one person's asset is another person's liability.
Equally your commentary on Congress is totally wrong.
Then listen to Bernanke say it:
https://www.youtube.com/watch?v=pH2RLObp41o

Or Greenspan:
https://www.youtube.com/watch?v=1geq2xAHr1w

The Fed can create money anytime they want to by simply buying up debt - as they have done with their balance sheet expansion since 2008.
You're talking about Quantitative Easing. Quantitative Easing was buying treasury securities on the open market, in other words, net financial assets that already exist, and removing the interest income from the real economy. The Fed bought them from one of the primary dealers (the people who have the legal right to buy and sell treasury securities). The Fed has no idea who the seller is. The seller gets the money from the sale. The Fed now receives the monthly interest income on the treasury securities, not the seller. However, all that profit gets returned to the US Treasury. That means the money "Returns to Sender." It gets extinguished.

The Fed is not creating new interest-free money. it is paying the seller his money back as the banker for the US Treasury.

Posted by: MRW | Mar 19 2015 19:13 utc | 135

@ Posted by: ǝn⇂ɔ | Mar 19, 2015 2:39:03 PM | 147

Methinks it's your credibility showing. Bretton Woods, International Monetary Fund, World Bank, etc. agreements conjoined the monetary authorities throughout the world, that means the funds on deposit in the Fed due an Argentine bank are through the central bank of Argentina which control access and flow of funds to whatever local bank that is involved. If you are going to pretend to know the banking system, you need be better than that. Facts are hard items to believe against. The Bank of International Settlements has developed their SWIFT system to facilitate such transfers. Go check it out.

Posted by: Formerly T-Bear | Mar 19 2015 19:27 utc | 136

@mrw - thanks for that link @133 with bill black being interviewed.. i am presently listening to it and it is very good. here is the link again for anyone interested...

hereU is a wiki page on william k. black, or bill black.

i encourage others to listen to the interview linked above.. bailout is the name of the game. it happened in spades in the 2008 debacle which interestingly with lenders responsible for the liars loans.. they wanted volume due the commissions to loan brokers in spite of the high risk of those they lent to.. i am just skimming the surface.. listen to the interview..

Posted by: james | Mar 19 2015 20:34 utc | 137

@MRW #150
Oh right, so the Heads of the Fed would tell Congress that their supposed monopoly on US Government spending is actually false, because the Fed has usurped it?
The facts remain: The Fed has expanded its balance sheet by multiple trillions - all without any Congressional votes. Equally, who can/will force the Fed to straighten out its balance sheet?

@Formerly T-bear #151
Wow, a nice conflation of extra-sovereign NGOs with the banking system.
Bretton Woods - which one are you referring to? The one where other signatories could trade their excess dollars for gold? The one where Nixon "temporarily" suspended said convertibility resulting in "free floating" currencies? The one where the "free floating" currencies were negotiated down (for the US) and up (for Japan) in the Plaza Accord?
The IMF in turn does nothing but lend money. They have zero place in international bank to bank relations except as the means by which large creditors can pull their money out of troubled nations.
The World Bank in turn exists solely for the purpose of promoting US interests. In the beginning, it lent money for the purchase of US industrial and agricultural products. Since then, it has changed to more overtly political crap like loans for solar PV.
As for brokered deposits - brokered deposits are a subset of the total deposit system. The World Bank and IMF play NO role in that. SWIFT is Belgian, and the actual service level bank that handles much of cross border, cross central bank work is the BIS.

Posted by: ǝn⇂ɔ | Mar 19 2015 23:34 utc | 138

@ Posted by: ǝn⇂ɔ | Mar 19, 2015 7:34:52 PM | 153

No one can disabuse you of your opinion, but opinion is all you have and the one you have is a delusion. Enjoy !

Posted by: Formerly T-Bear | Mar 20 2015 3:29 utc | 139

ǝn⇂ɔ | Mar 19, 2015 7:34:52 PM | 153,

The facts remain: The Fed has expanded its balance sheet by multiple trillions - all without any Congressional votes. Equally, who can/will force the Fed to straighten out its balance sheet?

Obviously, you didn't watch this, which I linked to above:
https://www.youtube.com/watch?v=pH2RLObp41o

Posted by: MRW | Mar 20 2015 4:21 utc | 140

@Formerly T-bear #154
Indeed - impossible to form a new opinion when no alternative, credible information is available.

@MRW #155
Bernanke yapping means nothing. The Fed supposedly will do whatever Congress wants it to do, unless it doesn't. Which, for example, with Dodd-Frank, it did not do. There are many other examples: where is the audit which Ron Paul has been demanding for years?
Bernanke and Greenspan have no credibility - the former is a figurehead professor, the latter was a bank lobbyist before being tapped to be Chairman of the Fed. Greenspan also distinguished himself by:
1) Failing to recognize bubbles he created until a decade after he left his Fed position
2) Actively pushing for the repeal of Glass-Steagall
3) Actively advising people get ARM mortgages
4) Actively lobbying against regulation of derivatives

And I'm supposed to believe he's any form of credible resource?

Posted by: ǝn⇂ɔ | Mar 20 2015 13:44 utc | 141

i hope MRW's intimate relationship with the workings of the Federal Reserve banking system hasn't resulted in a kind of capture-bonding.

...'cause after a hundred years it's plain to see that the Fed has failed miserably at its goals while inflating away most all of greenback's value. chronic quantitative easing is proof of that. maximum employment, stable prices and moderate long-term interest rates? pfft. bank regulator of last resort? pfft. the Fed is rogue, unconstitutional and unaccountable and its powerful chairperson is unelected.

but sure, we can blame that other finely designed, well-oiled institution, the US Congress, incompetent, dysfunctional, corrupt legislative body, for scratching its balls, er, i mean, dropping the ball on oversight...

Posted by: john | Mar 20 2015 13:52 utc | 142

More indication of Formerly T-bear's lack of information:

World Bank Charter: http://www.worldbank.org/en/about/what-we-do
he World Bank Group has set two goals for the world to achieve by 2030:

The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development. The World Bank Group comprises five institutions managed by their member countries.

Established in 1944, the World Bank Group is headquartered in Washington, D.C. We have more than 10,000 employees in more than 120 offices worldwide.

Financial Products and Services

We provide low-interest loans, zero to low-interest credits, and grants to developing countries. ]

The IMF Charter: http://www.imf.org/external/about/overview.htm
What we do
The IMF promotes international monetary cooperation and exchange rate stability, facilitates the balanced growth of international trade, and provides resources to help members in balance of payments difficulties or to assist with poverty reduction.
How we do it
Through its economic surveillance, the IMF keeps track of the economic health of its member countries, alerting them to risks on the horizon and providing policy advice. It also lends to countries in difficulty, and provides technical assistance and training to help countries improve economic management. This work is backed by IMF research and statistics.

Both the World Bank and the IMF are NGOs which are largely controlled by the US, with Japan and the UK being secondary controllers respectively. Their job is to promote US interests via loans. They were originally chartered to facilitate primarily US economic interests, but have morphed over time into the political side.

Neither institution plays any role in international bank operations or regulations in any way. The IMF can play a role in national bank operations if it makes a gigantic loan, but no more than any large lender of last resort.
As we're seeing in the Ukraine, even the IMF's own charter is subject to non-compliance when sufficient US interest is at stake. In particular, the IMF is not supposed to lend to countries in conflict, nor are IMF loans supposed to be used for military purposes - much less the outright theft going on in the Ukraine now.

Posted by: ǝn⇂ɔ | Mar 20 2015 14:21 utc | 143

@ Posted by: ǝn⇂ɔ | Mar 20, 2015 10:21:39 AM | 158

And just how does what you have just cut and pasted together just above relate to:

Wow, a nice conflation of extra-sovereign NGOs with the banking system. Bretton Woods - which one are you referring to? The one where other signatories could trade their excess dollars for gold? The one where Nixon "temporarily" suspended said convertibility resulting in "free floating" currencies? The one where the "free floating" currencies were negotiated down (for the US) and up (for Japan) in the Plaza Accord? The IMF in turn does nothing but lend money. They have zero place in international bank to bank relations except as the means by which large creditors can pull their money out of troubled nations. The World Bank in turn exists solely for the purpose of promoting US interests. In the beginning, it lent money for the purchase of US industrial and agricultural products. Since then, it has changed to more overtly political crap like loans for solar PV. As for brokered deposits - brokered deposits are a subset of the total deposit system. The World Bank and IMF play NO role in that. SWIFT is Belgian, and the actual service level bank that handles much of cross border, cross central bank work is the BIS.
at reply # 153

Sorry to learn about your learning disability, the reading comprehension one.

Posted by: Formerly T-Bear | Mar 20 2015 14:51 utc | 144

MRW-
A brief question.

You indicated earlier that when Congress appropriates money, the Fed credits the bank accounts of the vendors in the amounts owed, and simultaneously issues an equal value of treasury notes to balance out the money supply increase back to zero.

Now with QE, the Fed buys outstanding treasury notes. Doesn't this have the effect of expanding the money supply by the value of those notes that the Fed purchases? It would seem it would, if when those notes were originally issued they functioned to reduce the money supply.

Posted by: sleepy | Mar 21 2015 0:51 utc | 145

SLEEPY | Mar 20, 2015 8:51:00 PM | 145 - [who knows whether this is going to stick]

Now with QE, the Fed buys outstanding treasury notes. Doesn't this have the effect of expanding the money supply by the value of those notes that the Fed purchases? It would seem it would, if when those notes were originally issued they functioned to reduce the money supply.
The outstanding treasury notes are already out there. Let's say, in a university trust, pension fund, construction firm account, or maybe, even your local government.

Someone wants to sell some. They don't care who the primary dealers sell them to.

Let me back up a minute to give you the lay of the land

Let's say the university trust bought 30-year bonds in the late 80s and 90s when the yield was a lot higher than today's average 2.5%. Let's say the yield on the 1988s 30-year bonds the university bought was 9.1%, and the yield on the yield on their 1997 30-year bonds was 6.5%.

The university trust has been rolling over the interest monthly for the last 17-27 years, preserving its initial capital, and getting a better return on its money than anything else these days. On top of it all, its capital has been completely safe. It did not suffer during the 2008 crisis because its money was in bonds, not in the local bank.

But now the university needs to pay for a hell of a lot of maintenance, and it's going to be costly. So it wants to cash in a couple its t-bonds to get the capital to pay for it. It decides not to cash in its 1988 bonds because the yield is higher. It will cash in some of its 1997 bonds.

So it contacts one of the designated primary dealers who will sell them for whatever the market is bearing these days. Those bonds are yielding 6.5% for the next 12 years. It makes them attractive to a lot of people who want safety and some interest.

Anyone could buy this bonds, sleepy. They are being sold on the open market. The Chinese could buy them. A bank could buy them. The city of Tallahassee could buy them. Maybe another university. Who knows.

The purchase of those bonds by, say, the city of Tallahassee wouldn't alter the money supply one bit. It's just an exchange from one bank account to the other. However, if it were the city of Tallahassee buying these bonds, the city of Tallahassee would be receiving the interest income for the next 12 years, not the university trust.

But the city of Tallahassee didn't buy these bonds. The Federal Reserve did. It gets the interest income.

This is where you have to think differently for a second.

As long as the university trust or the city of Tallahassee was collecting the interest income over the years, yes, slowly, slowly, over time, the net financial assets of the private sector is rising from the interest paid by the federal government. In that regard, you might say that the money supply is slowly rising. Except that it's not, because the US Treasury uses the auction/sale of new treasury securities to pay for interest income owed every year on outstanding treasury securities.

But when the Federal Reserve is collecting the interest income--which is exactly the same amount as the city of Tallahassee would get--it must return that money to the US Treasury, by law. It isn't even annually anymore. It's weekly.

When the Fed gives that interest income back to the US Treasury it is removed from the real economy. Extinguished. Gone from the planet.

In 2012, the Fed's interest income was almost $100 billion. That's how much money the Fed gave back to the US Treasury. That was how much money was removed from the real economy, money that could have been spent on a lot of goods and services.

The only thing that remains from the Federal Reserve point-of-view, is that the purchase of treasury securities put the cash paid to the seller (the university trust) into the reserve account of the bank where the university trust banks.

From Bernanke's POV, that was supposed to convince commercial banks to step up its credit lending and get the economy going again. Didn't happen.

Posted by: MRW | Mar 21 2015 2:32 utc | 146

ǝn⇂ɔ | Mar 20, 2015 9:44:52 AM | 141

You neglected (5).

(5) Turned Social Security into a user fee, and slapped a regressive tax (FICA) on the working class in 1983 as a bank lobbyist working for Reagan, claiming that Social Security was going to run out of money.** He capped the need to contribute to Social Security at $110,000 income. What he was doing was hoping that the hoi polloi would rise up and object, and Social Security would go private. It would have been the ultimate win for his Wall Street buddies.

That, of course, is what people like Pete Petersen are preaching today. I thought I saw that Greenspan had joined him recently. I wish we still had public docks. He belongs in one.
================

** Social Security can never run out of money. Social Security payments are made by law. It is law that determines Social Security payments: Congressional decision. Even if everyone lost their job in this country and couldn't pay into the so-called Social Security Trust Fund (just a name for a basket of insurance policies, doesn't really exist), the federal government would still be required to pay Social Security payments out of its general account at the Fed every month. (Social Security recipients get their check from the US Treasury. The checks do not say Social Security Trust Fund.)

On the other hand, as the trustees reported in their Annual Report, the Supplementary Medical Insurance (SMI) Trust Funds are "both projected to remain adequately financed into the indefinite future because current law automatically provides financing each year to meet next year's expected costs."

Posted by: MRW | Mar 21 2015 3:00 utc | 147

Everyone. I am going into this detail because people have to know how this works, and you need to tell others. I explained this to a 16-year-old. She got it immediately. On the other hand, it took me over three years to grasp how I had been duped, and even then, I couldn't accept it. So I started calling and emailing the Fed, the US Treasury, and the Congressional Research economists, and reading countless papers from history.

I'm not interested in the personalities who have gamed the system, nor the horrific lack of regulatory oversight that has allowed this current economy to exist. I am aware of all that. Nor am I interested in getting into political arguments. If you have a fiat currency, you only control it through regulation. When the full faith and credit of your government backs up your currency, then your government's regulations dictate that value. It's either a clean operation or it's not.

But if regular folk don't understand operationally how their currency works, then they're doomed. Moreover, they can't demand what's theirs. I get insane listening to Hannity talk about people (he means blacks) who are too lazy to work.

It is the government's job, it's constitutional duty, in a downturn to create the jobs needed so people can feed themselves. The stimulus in 2009 should have been $2-4 trillion (which would have turned into $8-12 trillion in growth).

Anyone thinking that business creates jobs is smoking the wrong weed. No business man on the planet hires people if there are no customers, if there are no sales. The business sector, which accounts for 16% of the spending in this country, is sitting on $2 trillion in cash waiting for the customers to come back.

The household sector is 70% of the spending in this country. If the household sector doesn't have the income because there are no jobs, or it's "deleveraging"--paying down debt--or it's saving its money--demand leakage, then there are no sales.

Only the government can change that. So what does our august group of congressmen spend their time on, instead of doing what they, and they alone, can fix? Israel.

Posted by: MRW | Mar 21 2015 3:20 utc | 148

MRW@148

Your Keynesian stimulus worked many times during the era of seeming unlimited expansion and growth but aren't we seeing the End Of Growth as a reality that limits the effectiveness of this nostrum.

Could this be why the PTB are ignoring real stimulus and concentrating on the final accumulation of power and wealth so they and their progeny are somewhat isolated from the coming dismantling of living standards in the West.

Posted by: Wayoutwest | Mar 21 2015 3:42 utc | 149

Posted by: MRW | Mar 20, 2015 11:20:40 PM | 148

Thanks again for your contributions. My main obstacle to understanding these issues has been the meaning/definition of the unfamiliar words used by the financial services and banking sectors to describe things which couldn't possibly be as complicated as I (We've) come to think of them.

I'm greatly encouraged by "I explained this to a 16-year-old. She got it immediately. On the other hand, it took me over three years to grasp how I had been duped..." in your opening remarks. I haven't read or absorbed every comment you've made, so forgive my ignorance but, are there any brief equivalents to a financial Dictionary/Thesaurus on the www which you found particularly helpful in the early part of your 3-year journey toward understanding/enlightenment?

Posted by: Hoarsewhisperer | Mar 21 2015 4:59 utc | 150

If I were asked to pick a couple of factors which have contributed the most to the decline of Western economies they would be
1. Export of local jobs to low-wage countries by people who wanted to become wealthy and "influential" without "working" for a living.
2. The strident push to lower wages for local workers, and lower taxes for the wealthy, by people who want not only to remain wealthy, but to become more so.

Posted by: Hoarsewhisperer | Mar 21 2015 5:19 utc | 151


Posted by: MRW | Mar 20, 2015 11:20:40 PM | 148

The business sector, which accounts for 16% of the spending in this country, is sitting on $2 trillion in cash waiting for the customers to come back.

But the customers aren't coming back. And isn't that cash from QE and therefore paired with a mountain of debt? So that the only way for these businesses to generate more cash will be to take on more debt- so therefore zero interest rates to infinity? I'm not trying to quibble but what do you think the endgame is? The seizure of all public assets by corporations and the abolishment of sovereign debt default?

At any rate thanks for taking the time to break down this three card monte game.

Posted by: Nana2007 | Mar 21 2015 6:16 utc | 152

In the late sixties a class in economic history required reading six books on economics; due to time constraints this was impossible to fulfill. Over time that requirement morphed into reading the six great classical economists. Having read Smith, John Stewart Mill, an abridged OUP Marx, and in the process of reading the collected writing of John Maynard Keynes (some 30 volumes incl. Index).

What has become clear is how totally lacking is the teaching of economics in the educational system; a remarkable void for so central an understanding to the conduct of personal and public affairs. It appears a complete absence of awareness of simple commercial banking (those impressive buildings on street corners), whereas investment banking might as well be in some other universe. Many of the comments here give witness to this condition. It is to no ones detriment this is so, complex systems are not something any is born with an understanding of, that is the reason there is an educational system, its reason for being (and its failure). In its stead, likely because there is a need for structure, a complex of conspiracy conjectures have arisen to meet this need to understand and have now so dominated the public discourse as to poison that well of knowledge. The great problem is that once something is learned, it becomes extremely difficult to unlearn, the trash in becomes a garbage dump.

It is possible to steer clear of learned nonsense but it takes guidance to find several various paths through the veritable swamps economic knowledge is to be found. Economics is the attempt to study ourselves and how the species attempts to make its livelihood. Of necessity some grounding in law, politics, administration and management, history, psychology and human behavior are all intertwined in the study of economics, without these groundings, studying economics is impossible, only the understanding of some ideology of a theology attempts to displace the real thing. Note should be taken of how many of the aforementioned groundings are actually taught in secondary education. Picture a map where only small traces of outline are shown scattered about, the balance of the map designated terra incognita, there be dragons here (it is designed to scare the children). That map conveys the state of the population's ability to conduct public discourse and therefore public business. Such conditions cannot end well for a republic let alone democracy; if either are to flourish, the public must avail of an education equal to that of any prince to conduct affairs of state. Sadly that isn't the case today.

Posted by: Formerly T-Bear | Mar 21 2015 7:26 utc | 153

@149-153,

GREAT questions all. I'm going to answer them, but I gotta' get something to eat (it's really late here) and go to sleep.

Will answer this weekend.

Posted by: MRW | Mar 21 2015 7:40 utc | 154

Formerly T-Bear | Mar 21, 2015 3:26:17 AM | 153,

You read Keynes? I am fucking impressed. I've only read a few chapters, but intend to get there. Do your know that Nobel Laureate Paul Samuelson and Milton Friedman both admitted to economist Paul Davidson that they hadn't read Keynes. Just a few chapters, like me, but probably more; it's their damn occupation. I never realized that Keynes was against out-sourcing, except for natural resources that we don't have, or locally-specific agriculture (bananas can't grow in Kansas). He wrote that in 1933.

Wayoutwest @ 149
You may call it the Keynesian stimulus, but as I explained above, when Republican Mormon banker Marriner Eccles was trying to convince the Senate (1932) and subsequently Prez winner FDR to get off gold and create a gigantic jobs program (stimulus), Keynes had not published his General Theory (1936) then. Eccles hadn't even finished high school. He became a millionaire before he was 22, and he was a banker.

Off to eat. ;-)

Posted by: MRW | Mar 21 2015 7:57 utc | 155

@ Posted by: MRW | Mar 21, 2015 3:57:15 AM | 155

I haven't read ALL of Keynes yet, I've Vol. 29 containing late found papers concerning his General Theory and about three Vol. of works of the early 30's, his reconsideration of employment and unemployment policies amongst those. I will probably leave his Vol. on probability unread of them all. It has been a fascinating journey into the workings of his mind as well and traces the changes and modifications he had up to his death, a truly lifelong living mind.

Today, almost all mention of Keynes or of Keynesian is made in erroneous assumptions and not Keynesian at all; a good measure of the proponent's measure of excellence, but then, having read himself directly, such judgments are usually sound more often than not. Do read and comprehend Keynes, it is a enriching experience for which you will be the wealthier for the effort.

Posted by: Formerly T-Bear | Mar 21 2015 9:52 utc | 156

@ Posted by: MRW | Mar 21, 2015 3:57:15 AM | 155 to Wayoutwest @ 149

Keynes had published in 1923 A Tract on Monetary Reform and in 1930 both: A Treatise on Money, 1 The Pure Theory of Money and A Treatise on Money, 2 The Applied Theory of Money. There may be a likelihood that Eccles was knowledgable of these works through his experience as a banker. Keynes first book: Indian Currency and Finance (1913) saw the beginnings of Keynes' observations and adversarial stand on the gold standard he later developed as his response to Britain's economic malaise following WWI and later during the Great Depression. So there was a body of Keynes' work available at the time Eccles made his arguments to the banking committee although Eccles is likely to have come to the same conclusions through his banking experience independently of Keynes' work. Both were highly educated for their day. Maybe that will help clear up a little.

Posted by: Formerly T-Bear | Mar 21 2015 10:20 utc | 157

Posted by: Formerly T-Bear | Mar 21, 2015 6:20:31 AM | 157 & 156.

OK, just got back from eating and reading. ;-) now off to bed. But you might be interested in what I'm reading now: economist Paul Davidson's "The Keynes Solution - The Path to Global Economic Prosperity." If you do, read the Appendix first: Why Keynes's Ideas Were Never Taught in American Universities. That was an eye-opener.

Davidson is an unbelievably clear writer. He is either a natural writer, or he had one hell of an editor assigned to him. This book is a treat to read. That's why I was out so late. I couldn't tear myself away.

Davidson publishes a journal called something like Post-Keynesian Economics, in addition to teaching, so his knowledge of the history is detailed and full of color. He knew all the players. I sort of fell upon him, watched some youtubes, and am now dedicating the next week to getting this book read.

Posted by: MRW | Mar 21 2015 13:13 utc | 158

Formerly T-Bear | Mar 21, 2015 6:20:31 AM | 157

"Today, almost all mention of Keynes or of Keynesian is made in erroneous assumptions and not Keynesian at all."

What Davidson says.

Posted by: MRW | Mar 21 2015 13:16 utc | 159

mrw and t bear.. interesting conversation which i am following. thanks.

Posted by: james | Mar 21 2015 16:51 utc | 160

@ MRW and James ## 158, 159, 160

As this post goes dormant, maybe one other thing might be observed. Given all the statements and replies given MRW's attempt to illuminate and educate the uninformed, ill informed and misinformed, it would be the height of folly to put the banking system anywhere near these illiterates control, same goes for their political representatives in government who are cut from the same illiterate cloth. The only sane answer is to have bankers who are intimately knowledgable as to how banking actually works be in control of banks. After all, up until the 1970's, the system was historically rational and worked for the most part as designed. What you do not do is give those bankers the liberty to ignore the specific remit they are constituted with and until the 1970's this remit was in effective operation. It is for the reader to find out what that system was, how it operated in those historical contexts. The next thing the reader must do is discern what changes were occurring in the economy and from there determine where the system went amiss and why it went amiss. To do any of this, those so interested will require whatever information there remains that has not been distorted by the ideological prism of the hour. Since this can only happen in the future, accounting of the conditions then in evidence will determine what answer will be obtained. To do so at this time would put perceptional constraints on the possible choices, much in the way gold standard ideology still puts constraints on those possible choices even to this day. It is hard to imagine these necessary conditions able to happen in the hegemon, the anti-intellectual, anti-elitism and the abjuration of fact is so deeply set as to be a cultural landmark, one which will exact the price of incapacity to survive as a republic. That is where you are now, enjoy, because it is not going to get better, so help yourselves.

Posted by: Formerly T-Bear | Mar 22 2015 9:37 utc | 161

@161 t bear.. i am not convinced of the sanctity of the federal reserve, or those who run it being of a character to not abuse it and.... i'm not an american.. i question the usa's position and control in the many international finance institutions where the usa does financial warfare with it's dominant position.. that strikes me as really corrupt.. i see the imf as a front for mostly western banks to lend money to countries with terms that favour a gutting out of these countries in the worst form of capitalism. personally i think the whole international financial world needs to be reshaped and i think the usa's actions at this moment in time are helping to shape it, although not in the way that they might have foreseen.. basically the usa is a bully and they use finances to continue to bully..

mrw stated he didn't want to get into this type of a conversation as i recall, but i think others do.. the title of the thread suggests this too, although i am happy to engage and learn more about the federal reserve.. i mostly take a more cynical attitude towards what looks like neutrality on federal reserve or gov't pages about how it works..

Posted by: james | Mar 22 2015 16:23 utc | 162

@ Posted by: james | Mar 22, 2015 12:23:59 PM | 162

Sanctity and rationality are not even the same, one is based on some belief, the other taken from observation, deduction and conclusion. The Fed is not different from any other central bank; to call the Bank of England or the central Bank of France or any other nation for that matter either immoral or evil is a statement out of pure ignorance. Central banks are charged, among other functions, with conducting the foreign exchange necessary to conduct international business, the marketing of domestic product to foreign markets. Where ever does the idea this is corrupt come from; just that one does not understand something does not automatically make that something corrupt. You seriously need to find the time to read from original sources the history of economic development of the nineteenth and twentieth centuries and stay as far away as you possibly can from tracts from unknown or unknowable provenance, particularly if there is any University of Chicago School of Economics connection or any libertarian ideology. You also need to find a reputable history of Banking and the development of modern banking. It may be a while before you find sources you trust that delve into how the modern bank serves the economy, but those sources are out there. There will be those whose wild ravings about the evils of banking will drive all rationality from the scene; you follow such at your peril. I don't know what to tell you other than that, and good luck in your search. One possible source might be Modern Monetary Theory sites, although focused upon MMT do offer some good background of the monetary and therefore banking systems. But that is for you to investigate and discover for yourself or you can be satisfied to sheeple whatever conspiracy theory that tickles your fancy, your choice on that one.

Posted by: Formerly T-Bear | Mar 22 2015 17:13 utc | 163

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