Bitcoins and gold standard dollars -- was Re: Anyone want to make a housecall?

S. Dale Morrey sdalemorrey at gmail.com
Sun Jun 2 16:03:17 MDT 2013


The question that really needs to be answered is how do you view the US
Dollar?
Is it a long term store of wealth or a medium of exchange to facilitate
transactions?

My opinion is that ALL currencies are just a medium of exchange and it
needs to flow freely.  As long as it move
Currency in my mind is not a longterm store of value, just a short term
asset.

I believe that if people would just move their assets out of cash and into
longer term stores, then there would be more cash in circulation and less
need to keep devaluing the currency.  Of course we have magnified the
problem by taking on so much debt as a portion of income & assets.

Longterm stores of value would be things like gold, silver, stocks and to a
lesser extent land.  Also there are asset classes such as rental properties
that generate currency, however on the whole you are better keeping your
money out of money and into other assets that aren't subject to so much
demurrage or inflation.


On Sun, Jun 2, 2013 at 4:18 PM, Levi Pearson <levipearson at gmail.com> wrote:

> On Sun, Jun 2, 2013 at 12:11 PM, Joshua Marsh <joshua at themarshians.com>
> wrote:
> > On Sat, Jun 1, 2013 at 5:14 PM, Levi Pearson <levipearson at gmail.com>
> wrote:
> >
> >> And you say "beholden to its anonymous shareholders" like that isn't how
> >> all corporations work.
> >>
> >
> > This is coming from someone who listens to the No Agenda show, so take it
> > with a grain of salt. I'm more concerned about the fact that the Fed
> *is* a
> > corporation and not that is runs like one. The law does put limits on
> what
> > shareholders can do, but we live in a capitalistic society and the all
> > mighty dollar can get people to do wild things.
>
> You have to have a plausible mechanism through which these mysterious
> 'people' could do 'wild things' if you expect anyone to take this
> seriously.
>
> > so, if you want to know who the shareholders of your regional Fed are,
> look
> >> at the largest banks in the region.
> >
> >
> > I have never seen a list of shareholders. I've read a few people claiming
> > to know who they are, but they don't have verifiable sources. The Fed
> > doesn't release that information. We can assume that some banks have
> > shares, but we don't know how much. There is only a minimum purchase
> amount
> > for members. And the laws allow for some of the shares to be sold to the
> > public. What I'm interested in is more transparency.
>
> No, the law does not allow shares to be sold to the public.  There was
> a provision that allowed it *at the time the Fed was created*, but
> only *if* the regional banks did not meet their funding goals through
> sale of shares to the banks as I described.  They did meet their
> funding goals, so no public shares.  And the shares that the banks own
> have to be maintained according to the rule that 3 percent of their
> capital stock must be maintained as shares in the regional Fed.  They
> can't otherwise be bought or sold.  And as I explained before, owning
> shares only lets you have a say in day-to-day operations, and that say
> is balanced equally against all the other member banks in the region,
> regardless of size.  The open market operations that influence money
> supply are *not* decided by regional shareholders, but by the FOMC.
> The FOMC has more members appointed by the Federal Government (7) than
> it has elected by regional banks (5).  So there's no mechanism for a
> mysterious bank shareholder, or conspiracy of mysterious bank
> shareholders, to control open market operations.
>
> If you really must invent a conspiracy, you're going to have to have
> someone buying off the President and Congress, who appoint and confirm
> those 7 members of the Board. That's not really very plausible either,
> but it seems more likely than controlling most of the nationally
> chartered banks throughout the country.
>
> > TINFOIL HAT ON: These people have the button that makes money out of thin
> > air. There is nothing stopping them from working together to make small
> > tweaks to the economy that slowly hurt individuals in the long run and
> make
> > their shareholders billions of dollars. Add to that the fact that our
> > government gets a large kickback on those profits and I don't see
> Congress
> > or the President or anyone doing anything about it in the foreseeable
> > future. The sad part is that we would never know.
>
> By 'these people' I assume you mean the FOMC, because they're the ones
> that control the open market operations of the Fed.  When have you
> ever seen 12 elected or appointed people work together that closely on
> something that requires that kind of subtle manipulation?  And where
> are you getting the 'government gets a large kickback on those
> profits' thing?  Are you referring to the Fed returning the majority
> of the interest it collects on Treasury securities to the Treasury?
> This means that somewhere around 7% of the national debt is actually
> interest-free.  Not really a kick-back.
>
> The Fed is actually audited on a regular basis in several different
> ways.  The issue that some grandstanders in Congress have is that the
> Government Accountability Office (GAO) is (by law) not given details
> of certain kinds of operations that have to do with dealing with
> foreign entities, open market trading, and that sort of thing. There
> is some information about these released weekly as part of their
> balance sheet (you can see this at the Fed's website) but the details
> of individual transactions are kept private to allow the Fed to do its
> job without short-term meddling by Congress.  It was explicitly set up
> this way due to fears that short-term political pressure could force
> the Fed to make bad decisions, which I think is a reasonable fear
> given the election cycle of Congress.  But Congress is ultimately in
> charge, and it authorized a full audit in 2011. The gross amounts
> affecting the balance sheet were already known, but the audit showed
> *where* the individual transactions were made. As predicted, this made
> a lot of people really mad, however it did show that the outside
> auditors that reported no accounting errors were correct in their
> assessment. This means that the Fed is doing what the FOMC has
> decided; nothing is going on "under the table" at regional Fed banks.
> This is not necessarily what Congress or the President would have
> done, but that is precisely why the Fed is not in direct control of
> the President or Congress.
>
> So, what this comes down to-- do you trust the idea of having elected
> officials appointing people to make decisions for the governance of
> the Federal Reserve?  Or do you think the people should have a more
> direct say in what's happening via a more democratic process?  This
> has strong parallels to the Federalism vs. Direct Democracy debates
> that you often hear, but interestingly you will find people taking
> opposite sides depending on whether you are discussing lawmaking or
> monetary policy.  For my part, I think the Fed plays an essential role
> in a modern economy, and I think that the way that the governance of
> the Fed is organized is a compromise between insulation from
> short-term political whim and operating in the long-term best
> interests of the country.  Maybe not the best possible organization,
> but certainly not as mysterious and sinister as some believe.
> Ultimately, the Fed exists at the pleasure of Congress, which has the
> power to destroy it with a single vote, and if a better system for
> managing the currency comes along it will be replaced.
>
>         --Levi
>
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