4 votes

Help answering a "Wall Street" statist?

I'm in a fun FB discussion with a few friends. One, who happens to have worked for several of the "TBTF" banks (currently at Wells Fargo I think), says this during a discussion along the lines of "what has the Fed done to our dollar?"

His reply: "this is completely silly.. our / any economy wouldn't have been able to grow as they have over the past 100 years if it weren't for the flexibility and funding the FR has provided.. If all of today's wealth was represented in gold, it would either be 100000 per oz, or we'd have a lot less overall wealth."

Besides pointing out some of the fundamentals of gold and silver, and how continual dilution of the money supply (FRNs) via "printing" reduces the relative worth of each FRN and thereby saps the purchasing power of those especially who are on "fixed incomes", does anyone have suggestions on additional arguments or sites to point him to? I don't imagine I'm going ot break thru years of brainwashing since he's been working for "the banks" for years, but hey - it's worth a try.



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Sounds like

..you are fighting when you shouldn't be. If that's his argument, then he's already convinced himself.

-quiet engineer

ask him how fun would the

ask him how fun would the game monopoly be if it came with a monopoly money printer just for the banker of the game. talk about cheeky behavior. the game comes with a single set of money for a reason

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Federal Reserve Monopoly

I once thought about a version of Monopoly that would show people how central banking really works.

The game would played as normal, except for two things:

(1) When anyone lands on a property, it goes up for auction to the highest bidder, as well as houses, hotels and rents.

(2) The banker would be a central banker.

As the game progresses, the central banker pays $200 as each player goes past Go. This puts a certain amount of money in the game. However, anytime and without warning, the central banker could start paying out $1,000 for passing Go or $5,000 or just $20. Any amount the central banker thinks is "prudent."

If done properly, the central banker should be able to run prices up and, when prices are super high, crash the economy down and end up owning all the mortgaged property.

It would be fun to put together, and teach people a valuable lesson, but I doubt there is much of a market for it.

Twain it!

The origin of the the game was to show common folk what JP Morgan & the Monopoly Boyz had done with our United States monetary system.

Remember, gold & silver were in contracts. Most banks were local.

Then 1913. The Fed. JP Morgan is represented as the mustached imp on the chance & community chest cards. The police office & jailer depict two more characters. Each square on the board is related to a place of business related to monopoly of the day. Search: "Money Trust"

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Mark Twain Legal Tender

And the goal...skip rent if you can get away with it. It has dawned on me as we play this with our boys that I am teaching them to be deceitful in game form.

Of course I spent many a hour playing Monopoly and have never skipped rent. It is just different looking at it threw and adult's eyes than a childs...and my husband who thinks it is wrong skip rent in the game is the only reason I am even thinking about it. Seems his family didn't play the game like that...

Oh well the real reason I am looking you up is I was doing a little gov.track research and was wondering if you knew about this:

http://www.govtrack.us/congress/bills/112/hr2453

H.R. 2453: Mark Twain Commemorative Coin Act
112th Congress, 2011–2012

To require the Secretary of the Treasury to mint coins in commemoration of Mark Twain.

Sponsor:Rep. Blaine Luetkemeyer [R-MO9]Status: At President
-----------------
Of course when I saw that bill I immediately thought of our own Missouri Liberty Hero here on the DP: Mark Twain :)

Will they be gold coins Mr. Twain?

Why it appears so! Silver too!

AND LEGAL TENDER as well: "(b) Legal Tender- The coins minted under this Act shall be legal tender, as provided in section 5103 of title 31, United States Code." http://www.govtrack.us/congress/bills/112/hr2453/text

Seems to me a call to the White House from Mr. Twain himself and his supporters might be in order? :)

...

Love It!

I have wondered about a game like this, a modern day, debt based monopoly to teach people a lesson.

People need to understand that its not the amount of dollars you have, it is how much those dollars are worth, the value they have, and most importantly, is there anyone manipulating the value of those dollars for thier own benifit, ie to steal from you.

Fanstasic Idea

Add in, every 20 trips around the board, a new central banker is rolled for and/or elected. Money and promises of future debt relief would be a factor.

Just open the box and see

Cyril's picture

BUMP !

BUMP !

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

Dear OP - "AragornSoS"

Dear OP - "AragornSoS",

your friend might find this edible enough food for thoughts :

Part 1 - A factual assessment

http://www.youtube.com/watch?v=dv7H7iiyBsw

Part 2 - A parallel "curiosity"

http://www.youtube.com/watch?v=F27fGMXg3o0

Wish him good luck for me, him and his dear FRNs. Let's meet and do the smalltalk around a beer in 10 years to see where that took us.

That will be on me. He'll be welcome.

;)

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Read the 1st sentence in the Fed Reserve Act.

1838 ~ 1913. For over a century, our standard monetary unit for was the silver dollar. Through feast & famine.. Through war & peace... compared to all other nations, our Dollar measure was remarkable stable. Money supply & production increases tracked together. Price inflation was flat. Rate of change was mild up & down. What happened?
____________________________________________________________________

Federal Reserve Act, December 23, 1913. What really happened?

Read the first sentence of the act. Ask them why we use a pretend Dollar. No silver. No weight. No purity. Just an "elastic" measure. Ask them to build their home with an elastic measure... An elastic measuring tape. It would be a farce. A folly.

Opening line. "An Act To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes."

December 23, 1913. The ever before Christmas Eve. Thus begins the act to eviscerate United States Banking. Money of the United States has left this supposed "Reserve System" decades ago. It is a hollow promissory note system. Vacuous & void. An ”elastic currency” is a measure of what? Make-believe?

  • Elastic ruler to measure a ruler?
  • Elastic yardstick to measure a yard?
  • Elastic tape measure to measure ticker tape?
  • Elastic empire to measure its own debt?

Measure of the 1913 Federal Reserve Act first sentence concludes without a conclusion. As what cost? Up with which, I will not put.

    Make things as simple as possible. No more so.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Cyril's picture

+1 On "Elasticity"

On "Elasticity" :

I quote :

"End The Fed", by Ron Paul, pages 156, 157 :

"[...]Even the Bible is clear that altering the quality of money is an immoral act. We are instructed to follow the rules of "just weights and measures". "You shall do no injustice in judgment, in measurement of length, weight, or volume. You shall have just balances, just weights, a just ephah, and a just hin" (Leviticus 19:35-36). "Diverse weights are an abomination to the Lord, and a false balance is not good" (Proverbs 20:23). The general principle can be summed up as "You shall not steal" (Exodus 20:15).

The Bible assumed that money was a precious metal and honest weight and measures were to be practiced. The words of Jesus even contain a germ of the Austrian theory of the business cycle, which addresses the problem of unsustainable investments. "For which one of you, when he wants to build a tower, does not sit down and calculate the cost to see if he has enough to complete it ? Otherwise, when he has laid a foundation and is not able to finish, all who observe it begin to ridicule him" (Luke 14:28-29).

Although some claim love of money itself is the root of all evil, others say that it is dishonesty in money that has been a major source of evil throughout history.[...]"

(emphasis mine)

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Bump for Elasticity

"then there was your kid, in a bald cap and granny glasses, holding a kite.. shouting... I've discovered Elasticity!!" ~ Charlie Harper

Just open the box and see

Yes indeed.

Wholeheartedly agree.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

one answer

if the FRN didn't exist and we still have gold and silver for money at $20 per ounce of gold (~$1 for silver) then I would most likely be able to buy a new 50" tv with a lot less than 1 ounce of gold. The problem these FED lovers don't see is that in a stable money environment economic progress is not only an increase in GDP but a decrease in cost of living. What the FED did was to inflate the currency so that we never see the wonders of how innovation has reduced the cost of production. Now costs only go up not down even with innovation because of inflation. And the money in your pocket will buy less the longer you keep it. Whereas, without the fed the money in your pocket would buy more the longer you kept it.

ABSOLUTELY...

...there seems to be a complete inability for these folks to understand fractions and gradations of a whole...as if coins could not be made lighter or smaller as the cost of living decreased and investment needs decreased as well...all inside the crucible of human intelligence, innovation and capacity

Imagine how confused they'd be if you handed them a ruler that showed gradations down to 64th's of an inch...or heaven forbid...128th's. egads!

The problem lies in the assumption of growth being "good" and then defining "growth".

Wha? .....hey....who stole my country?

growth

what is growth of GDP? growth in the production of a nation measured in dollars that are losing value. what kind of nonsense is that? This is why these numbskulls can't see bad times coming because everything is always positive. Then they fool with the inflation variable to make things look even rosier. What an awesome plan!

I bet if real inflation were stacked up against GDP for the last 100 years we would have very little real growth in terms of dollars. All the wonders of invention we have today are due entirely to the effectiveness of innovation and not one bit due to the FED. Basically, we have really cool stuff IN SPITE OF THE FED!

i can appreciate that

as an engineer :)

And great point on the use of language. I have a similar issue with the use of "fair" by the liberals especially... taxes must be "fair". People have to do a "fair share". but what, exactly is "fair"? As far as I can tell, they deliberately use an undefined term that makes the discussion a play on emotion instead of fact and logic, and then any conservative that opposes their "fair" suggestion is painted as a greedy, heartless bastard that wants to see babies die and kill puppies or something equally absurd.

Plus, it allows them to continually redefine what "fair" means. today, maybe it's 35% of your income. Tomorrow? We'll talk again, maybe it's different... we have to be "fair" after all. To make sure we have "good" "growth".

I did make the point to him as well that an increase in "things" does not necessarily translate to growth of wealth, if each of those individual "things" are worth fractionally less than the original "thing".

Tell him to watch this

http://youtu.be/HfpO-WBz_mw and to educate himself. The three hours of his life will teach him more than 10 years working for a TBTF.

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    He's right, our economy would

    He's right, our economy would not have been able to grow without the fed because the Fed has created an inflated bubble economy since its creation. Sure we've developed massive sky scrapers, fast cars, and other shiny objects for us apes... err humans to hold but we've done a considerable amount of awful things too as a result of easy print on demand money (war, theft, fascism). With tangible metallic money, the economy wouldn't have expanded as fast and we might have been slightly less technologically advanced, but what have we gained as a result?

    Southern Agrarian

    exactly!

    and that bubble is bursting now. So we will be worse off than before the FED because the world always balances out distortions.