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-- The Secret Criminal Society of the Federal Reserve
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Originally posted by Krypton Who chooses the candidates to be decided by the government?

Nominated by the President, sent to a Senate committee for recommendation, and then if sent to the floor, voted on for confirmation.

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Originally posted by Lesbianosaur Nominated by the President, sent to a Senate committee for recommendation, and then if sent to the floor, voted on for confirmation.

Yea, but who chooses the candidate pool from which the president picks??

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Originally posted by Krypton Yea, but who chooses the candidate pool from which the president picks??

Depends on the Administration - usually a task force will be set up that will consist of congressional liasons, white house staffers, and a few area specialists from perhaps the Fed or Commerce Departments in the case of Fed appointees.

So for instance, you might get a staffer from the chair and ranking member of the Senate Finance Committee, the Deputy White House Chief of Staff and a few assorted White House assistants, and an Undersecretary for Commerce or some such group.

But again, the way the White House is organized and how it operates depends on the Administration and personalities involved.

The Crash -- Coming Financial Collapse of America

[[ LINK REMOVED ]]


A very scary and possibly real situation that could unfold very shortly.



Also, check out "History of the Federal Reserve" for other information that connects with this video.

[[ LINK REMOVED ]]


DISCLAIMER: Predicting the market is predicting the future. You can only count on probabilities.

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Originally posted by Krypton The Crash -- Coming Financial Collapse of America [[ LINK REMOVED ]] A very scary and possibly real situation that could unfold very shortly. Also, check out "History of the Federal Reserve" for other information that connects with this video. [[ LINK REMOVED ]] DISCLAIMER: Predicting the market is predicting the future. You can only count on probabilities.

so how is the federal reserve profiting from the crash?

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Originally posted by pkcRAISTLIN so how is the federal reserve profiting from the crash?

LOL, I dunno, I'm watching right now to find out!

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Originally posted by pkcRAISTLIN so how is the federal reserve profiting from the crash?

It's not particularly about the Federal Reserve. It's about the government's increasing debts that will bankrupt the republic and crash the economy. That will happen at the point in which foreign or domestic investors will no longer fund the government deficits. This documentary was made around 1993-4 when the US account deficit was 4 trillion. Today it is more then 9 trillion dollars, and they now borrow money just pay interest on previously borrowed money. They can't even pay the loans back. It'll be a black day when the government can't even pay interest.

Ron Paul blames Federal Reserve for weakening economy
By CAIN BURDEAU / Associated Press


Ron Paul, a long-shot Republican presidential contender and Texas congressman, said Monday that the Federal Reserve is to blame for the country's weakening economy.

Paul highlighted his economic remedies � abolishing the federal income tax and returning to the gold standard, among them � on a three-city tour of Louisiana.

The libertarian-minded Paul was the only candidate to visit Louisiana on the eve of the state's Republican caucuses Tuesday. The caucuses are an intermediary step in picking a favorite candidate. A presidential primary will take place on Feb. 9 and a state convention will convene on Feb. 16.

Paul blamed the Federal Reserve for the current economic conditions; stock markets worldwide fell Monday after Wall Street declined last week. On his Web site, he said the Fed has taken the United States "into a terrible crisis."

Paul told an overflow crowd at a suburban New Orleans hotel Monday that the Fed has allowed the dollar to weaken, which in turn, he said, has hurt the middle class and led to inflation.

"I would enjoy being the next president to get rid of our central bank," he told supporters. The crowd gave him a raucous welcome, chanting at one point, "Who dat? Who dat say they're gonna beat Ron Paul?" � a riff on a popular football chant for the New Orleans Saints.

Paul, on his Web site Monday, said the economic policies of his opponents are based on ill-advised "print-and-spend" theories. He added that he would cure the economic crisis by ending the "hyper-expensive, hyper-dangerous empire all around the globe."

Paul is a 10-term congressman from southeast Texas whose campaign differs on many points from most of his Republican rivals. He opposes the Iraq war and the death penalty, for instance, and votes against military appropriations.

He would also like to abolish the Education Department, Energy Department and Internal Revenue Service. He is against abortion and gun control.

In Nevada, Paul was a distant second to former Massachusetts Gov. Mitt Romney. Still, Paul called Nevada "a shot in the arm" and pledged to keep campaigning "all the way through a brokered convention."

As of late, Paul has been raising hefty sums, pulling in about $20 million in the last quarter of 2007, according to his campaign.

He's been running an Internet-driven campaign, trying to appeal to and excite younger and libertarian-minded voters. Monday marked another so-called "Money Bomb," in which his campaign aims to raise as much money online as possible in one day.

http://www.dallasnews.com/sharedcon.../D8UAJ1LG0.html

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Originally posted by venomX I do believe Occ's post covered the paranoia present in many politicians at the time, so posting more and more quotes of politicians of that time doesn't advance your argument. After all, Occ's post points to there being widespread distrust of the banking sector in that particular point in time. Knowing this we can understand why so many politicians where so distrustful even though the wide distrust was due to frequent bank runs that bankrupt banks (and I am aware of your theory that bank runs were perpetrated by big bankers to benefit, etc.. there no proof so i take it as speculation). Now apart from that, Occ's post also covers the meeting in secrecy and then putting on a show. It was a ploy to get the bill passed, we are in agreement regarding that. Now, a bit of smoke and mirrors does not logically lead to a widespread conspiracy or to it being wrongful or illicit in nature. Considering the widespread distrust in bankers, the bill would have not passed. And considering that this bill WAS useful and probably is part of why the US enjoys a strong economy today, I think your unsubstantiated speculation is undue.

Occ's speculation really didn't answer anything other than your need to cling to an illusion, IMO.

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December 17, 1913 My Dear Senator Weeks: Throughout my public life I have supported all measures designed to take the Government out of the banking business. This bill puts the Government into the banking business as never before in our history. The powers vested in the Federal Reserve Board seen to me highly dangerous especially where there is political control of the Board. I should be sorry to hold stock in a bank subject to such dominations. The bill as it stands seems to me to open the way to a vast inflation of the currency. I had hoped to support this bill, but I cannot vote for it cause it seems to me to contain features and to rest upon principles in the highest degree menacing to our prosperity, to stability in business, and to the general welfare of the people of the United States. Very Truly Yours, Henry Cabot Lodge

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The whole scheme of the Fed with its commercial paper is an impractical, cumbersome machinery- is simply a cover to secure the privilege of issuing money, and to evade payment of as much tax upon circulation as possible and then control the issue and maintain, instead of reducing interest rates. It will prove to the advantage of the few and the detriment of the people. It will mean continued shortage of actual money and further extension of credits, for when there is a shortage of money people have to borrow to their cost. 'A few days before the Fed passed, Senator Root denounced the Fed as an outrage on our liberties. He predicted: "Long before we wake up from our dream of prosperity through an inflated currency, our gold- which alone could have kept us from catastrophe- will have vanished and no rate of interest will tempt it to return." - Mr. Alexander Lassen, before the Senate Banking and Currency Committee, 1913

Remarks made by Congressman Louis T. McFadden in 1934

Congressman McFadden served as the Chairman of the Banking and Currency Committee for an entire decade

http://en.wikipedia.org/wiki/United...rvices#Chairmen

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Mr. Chairman, the Fed has offered to collect the British claims in full from the American public by trickery and corruption, if Great Britain will help to conceal its crimes. The British are shielding their agents, the Fed, because they do not wish that system of robbery to be destroyed here. They wish it to continue for their benefit! By means of it, Great Britain has become the financial mistress of the world. She has regained the position she occupied before the World War.

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In 1912 the National Monetary Association, under the chairmanship of the late Senator Nelson W. Aldrich, made a report and presented a vicious bill called the National Reserve Association bill. This bill is usually spoken of as the Aldrich bill. Senator Aldrich did not write the Aldrich bill. He was the tool, if not the accomplice, of the European bankers who for nearly twenty years had been scheming to set up a central bank in this Country and who in 1912 has spent and were continuing to spend vast sums of money to accomplish their purpose.

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We were opposed to the Aldrich plan for a central bank. The men who rule the Democratic Party then promised the people that if they were returned to power there would be no central bank established here while they held the reigns of government. Thirteen months later that promise was broken, and the Wilson administration, under the tutelage of those sinister Wall Street figures who stood behind Colonel House, established here in our free Country the worm-eaten monarchical institution of the "King's Bank" to control us from the top downward, and from the cradle to the grave.

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Originally posted by pkcRAISTLIN so how is the federal reserve profiting from the crash?

By shorting anything US, dollars, companies, administrations, you name it.

Haliburton's moved to dubai, the bushes have massive properties in central america. Most of the monied class in the US has access to foreign currency / markets / realestate.

I'm completely stunned by today's rate cut. This guy's going to make it cheaper to wipe your a$$ with dollar bills then expensive imported toilet paper.

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Originally posted by Krypton [[ LINK REMOVED ]] THE FIAT EMPIRE Very good. It will specifically show how inflation hurts us and who is really in charge of our lives.

It definitely brings up some good points, especially those which are mentioned right here after the 52 minute mark

Thank you, Jim Cramer!!

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Originally posted by Trancer-X Occ's speculation really didn't answer anything other than your need to cling to an illusion, IMO.

thanks kids, but i'll leave the "speculation" concerning complicated economic issues to those that actually have a degree in the topic.

none of you have even come close to refuting occrider's excellent post concerning the fed, but keep on banging about shit you only half understand

the federal reserve has nothing to gain by ruining the US economy, and even if they did, how do you explain the (cyclic) periods of growth and prosperity of the US economy? what were the fed doing, biding their time?

lay off the crack pipe

The Coming Category 5 Financial Hurricane

by Ron Paul


Before the US House of Representatives, September 15, 2005

The tragic scenes of abject poverty in New Orleans revealed on national TV by Katrina�s destruction were real eye-openers for many. These scenes prompted two emotional reactions. One side claims Katrina proved there was not enough government welfare, and its distribution was based on race. The other side claims we need to pump billions of new dollars into the very federal agency that failed (FEMA), while giving it extraordinary new police powers. Both sides support more authoritarianism, more centralization, and even the imposition of martial law in times of natural disasters.

There is no hint that we will resort to reason now that the failed welfare policies of the past 60 years have been laid bare. Certainly no one has connected the tragedy of poverty in New Orleans to the flawed monetary system that has significantly contributed to the impoverishment of a huge segment of American society.

Congress reacted to Katrina in the expected irresponsible manner. It immediately appropriated over $60 billion with little planning or debate. Taxes won�t be raised to pay the bill � fortunately. There will be no offsets or spending reductions to pay the bill. Welfare and entitlement spending is sacrosanct. Spending for the war in Iraq and the military-industrial complex is sacrosanct. There is no guarantee that gracious foreign lenders will step forward, especially without raising interest rates. This means the Federal Reserve and Treasury will print the money needed to pay the bills. The sad truth is that monetary debasement hurts poor people the most � the very people we saw on TV after Katrina. Inflating our currency hurts the poor and destroys the middle class, while transferring wealth to the ruling class. This occurs in spite of good intentions and misplaced compassion.

We face a coming financial crisis. Our current account deficit is more than $600 billion annually. Our foreign debt is more than $3 trillion. Foreigners now own over $1.4 trillion of our Treasury and mortgage debt. We must borrow $3 billion from foreigners every business day to maintain our extravagant spending. Our national debt now is increasing $600 billion per year, and guess what, we print over $600 billion per year to keep the charade going. But there is a limit and I�m fearful we�re fast approaching it.

Runaway inflation is a well-known phenomenon. It leads to political and economic chaos of the kind we witnessed in New Orleans. Hopefully we�ll come to our senses and not allow that to happen. But we�re vulnerable and we have only ourselves to blame. The flawed paper money system in existence since 1971 has allowed for the irresponsible spending of the past 30 years. Without a linkage to gold, Washington politicians and the Federal Reserve have no restraints placed on their power to devalue our money by merely printing more to pay the bills run up by the welfare-warfare state.

This system of money is a big contributing factor in the exporting of American jobs, especially in the manufacturing industries.

Since the last link to gold was severed in 1971, the dollar has lost 92% of its value relative to gold, with gold going from $35 to $450 per ounce.

Major adjustment of the dollar and the current account deficit can come any time, and the longer the delay the greater the distortions will be in terms of a correction.

In the meantime we give leverage to our economic competitors and our political adversaries, especially China.

The current system is held together by a false confidence in the U.S. dollar that is vulnerable to sudden changes in the economy and political events.

My suggestion to my colleagues: Any new expenditures must have offsets greater in amount than the new programs. Foreign military and foreign aid expenditures must be the first target. The Federal Reserve must stop inflating the currency merely for the purpose of artificially lowering interest rates to perpetuate a financial bubble. This policy allows government and consumer debt to grow beyond sustainable levels, while undermining incentives to save. This in turn undermines capital investment while exaggerating consumption. If this policy doesn�t change, the dollar must fall and the current account deficit will play havoc until the house of cards collapses.

Our spending habits, in combination with our flawed monetary system, if not changed will bring us a financial whirlwind that will make Katrina look like a minor storm. Loss of confidence in the dollar and the international financial system is a frightening possibility � but it need not happen if Congress can curb its appetite for buying the people�s support through unrestrained spending.

If Congress does not show some sense of financial restraint soon, we can expect the poor to become poorer; the middle class to become smaller; and the government to get bigger and more authoritarian � while the liberty of the people is diminished. The illusion that deficits, printing money, and expanding the welfare and warfare states serves the people must come to an end.

September 17, 2005

Dr. Ron Paul is a Republican member of Congress from Texas.

http://www.lewrockwell.com/paul/paul276.html

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Originally posted by Trancer-X The Coming Category 5 Financial Hurricane by Ron Paul Before the US House of Representatives, September 15, 2005 The tragic scenes of abject poverty in New Orleans revealed on national TV by Katrina�s destruction were real eye-openers for many. These scenes prompted two emotional reactions. One side claims Katrina proved there was not enough government welfare, and its distribution was based on race. The other side claims we need to pump billions of new dollars into the very federal agency that failed (FEMA), while giving it extraordinary new police powers. Both sides support more authoritarianism, more centralization, and even the imposition of martial law in times of natural disasters.

hurricane katrina was an inside job!

It's saddening to see so many ill-informed people blindly relying on the same kind of thinking which got us into this mess in the first place - to get us out of it

I don't know about our self-proclaimed financial (but otherwise quite anonymous) experts here on TranceAddict, but at least Jim Cramer (as well as many other, notable financial experts) seems to understand what's going on.

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James J. "Jim" Cramer (born February 10, 1955[2]) is an American television personality, former hedge fund manager, and best-selling author. In 2007, NewsBios.com named him one of the 100 most influential business journalists in the United States. Cramer is host of CNBC's Mad Money and co-founder of TheStreet.com. According to the January 27, 2007, episode of High Net Worth on CNBC, Cramer claimed to have a net worth of over $100 million. He currently resides in Summit, New Jersey. Matt Lauer and other NBC commentators and anchors frequently refer to Cramer as a 'genius' on macro-economic questions. http://en.wikipedia.org/wiki/Jim_Cramer

Peter Schiff seems to get it as well...

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Peter Schiff is an American stock broker, financial analyst, and author who frequently appears as a guest on CNBC, Fox News, and Bloomberg Television and is often quoted in major financial publications. He is the president of Euro Pacific Capital Inc., a brokerage firm based in Darien, Connecticut. Schiff is known for his extremely bearish views on the United States stock market, bond market, the US dollar, and the United States economy in general for which he has earned the nickname "Dr. Doom." He is also credited as a contributor to his father's 1985 book[citation needed], "The Great Income Tax Hoax: Why You Can Immediately Stop Paying This Illegally Enforced Tax". His father, Irwin Schiff, was convicted to a jail sentence for protesting the income tax. Every Wednesday at 8PM ET Schiff hosts a live internet radio show called "Wall Street Unspun." Education Peter Schiff was born in New Haven, Connecticut and was raised in Manhattan and Miami. He graduated from the University of California, Berkeley in 1987 with a degree in finance and accounting. Career Schiff began his career in financial consulting with Shearson Lehman Brothers.[2] He launched Euro Pacific Capital in 1996 when he bought a broker-dealer in Florida without clients or revenues and then reincorporated the business in California. In 2006 Schiff relocated to Darien, Connecticut in order to find brokers "who think like him," according to an article in The Advocate of Stamford, Connecticut. The New York Metropolitan Area, he said, has the biggest concentration of brokers in the country, making it easier to recruit them, he said.[1] The company retains an office in Newport Beach, California as well as in Phoenix and Medford, Oregon. Schiff said in August 2006 that he planned to open offices eventually in Manhattan and somewhere in the Midwest.[1] Schiff holds NASD Series 4,7,24,27,53,55, & 63 licenses.[2] In an August 2006 interview Schiff generated much controversy when he repeated his long-held investment thesis: "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship ...I see a real financial crisis coming for the United States." On May 16, 2006 in debate on Fox News, Schiff accurately had forecast that the U.S. housing market was a bubble that would soon come to bust.[3] On December 13, 2007 in a Bloomberg interview on the show Open Exchange, Schiff further added that he felt that the crisis would extend to the credit card lending industry. [4] Following this observation, it was soon reported on December 23, 2007 by the Associated Press that "The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP... At the same time, defaults -- when lenders essentially give up hope of ever being repaid and write off the debt -- rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission." [5] Peter Schiff has heavily endorsed Republican presidential candidate Ron Paul[6] and started an e-mail campaign[7] asking his clients and colleagues to donate the legal maximum of $2,300 to the Ron Paul presidential campaign. Recent financial conditions have led to a surge in popularity for the most pessimistic financial prognosticators. http://en.wikipedia.org/wiki/Peter_Schiff

Audit the Fed! Audit the Fed!



The Fed seems to be the only "government" branch without checks & balances. What an ingenious power grab ay? To control our supposedly "capitalist" economy with central planning just like a communist state! No need to tax; they control the currency issue! It's ingenious!

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Originally posted by Krypton Audit the Fed! Audit the Fed! The Fed seems to be the only "government" branch without checks & balances. What an ingenious power grab ay? To control our supposedly "capitalist" economy with central planning just like a communist state! No need to tax; they control the currency issue! It's ingenious!

seriously, you've completely lost your marbles. "controlled" economy? what a load of nonsense. the fed is also subject to governmental oversight.

if i ever visit the US, will you spare me some of whatever youre smoking?

quote:

Originally posted by pkcRAISTLIN seriously, you've completely lost your marbles. "controlled" economy? what a load of nonsense. the fed is also subject to governmental oversight. if i ever visit the US, will you spare me some of whatever youre smoking?

LOL!?

I thought this was interesting...

quote:

Opacity Some believe the Federal Reserve System is shrouded in what its critics call excessive secrecy. Meetings of some components of the Fed are held behind closed doors, and the transcripts are released with a lag of five years.[44] Even expert policy analysts are unsure about the logic behind Fed decisions.[45] Critics argue that such opacity leads to greater market volatility, because the markets must guess, often with only limited information, about how the Fed is likely to change policy in the future. The jargon-laden fence-sitting opaque style of Fed communication, especially under the previous Fed Chairman Alan Greenspan, has often been called "Fed speak."[45] The Federal Reserve System has also been considered reserved in its relations with the media in an effort to maintain its carefully crafted image and resents any public information that runs contrary to this notion. Maria Bartiromo reported on CNBC that during a conversation at the White House Correspondents� Dinner in April 2006, Federal Reserve Board Chairman Ben Bernanke stated investors had misinterpreted his recent congressional remarks as an indication the Fed was nearly done raising rates. This triggered a drop in stock prices just when the market was about to close.[46][47][48] In 1993, Rep. Henry Gonzalez confirmed that the Fed did have tapes and transcripts of the meetings and could have complied with the FOIA requests, but had misrepresented the existence of the transcripts and chosen to ignore questions from Congress.[49] After the existence of the transcripts was revealed, the Fed agreed to release the transcripts on a five-year time lag. The time period has been extended, so that for example 1992's transcripts were not released until 1998.[49] Some critics believe the Fed exacerbated this idea when the Fed decided to stop publishing the M3 aggregate of financial data,[citation needed] which details the total amount of money in circulation at a time. The Fed said that economists did not need M3 when they had M2.[50] However, a journalist from the Connecticut Journal-Inquirer disagreed and saw no reason (according to his own views) to stop posting the numbers other than to keep the amount of America's debt or a pending stock market crash or worsening economy hidden.[51] In addition, Congressman Ron Paul questioned the action of discontinuing the M3 statistic, as the move would only save the Federal Reserve less than .001% of their annual budget.

http://en.wikipedia.org/wiki/Federal_reserve#Opacity

Don't be so quick to blow it all off. It's not the fringe tr00fa folks who are sounding alarm bells...

i especially love this bit

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The Federal Reserve System has also been considered reserved in its relations with the media in an effort to maintain its carefully crafted image and resents any public information that runs contrary to this notion.

asides from that being an unsubstantiated opinion, the next part might explain why the fed is reserved in its comments to the media.

quote:

Maria Bartiromo reported on CNBC that during a conversation at the White House Correspondents� Dinner in April 2006, Federal Reserve Board Chairman Ben Bernanke stated investors had misinterpreted his recent congressional remarks as an indication the Fed was nearly done raising rates. This triggered a drop in stock prices just when the market was about to close

so, they're being all "secretive", but when they do talk things go awry.

there are meetings held behind "closed doors" everyday in the government and private sector. trying to equate that with anything sinister is retarded.

as for release of minutes of meetings, that's far less time than the equivalent governmental procedures. and of all the released documents of the "secret" meetings thus far, what nefarious activities have been unearthed? surely THAT should be in your wiki article?

quote:

Originally posted by Krypton It's not the fringe tr00fa folks who are sounding alarm bells...

Ron Paul has definitely been laying it down

quote:

Why Not the Gold Standard? Talking Points on the Likely Consequences of Re-Establishment of a Gold Standard: Brad DeLong U.C. Berkeley Consequences for the Magnitude of Business Cycles: Loss of control over economic policy. If the U.S. and a substantial number of other industrial economies adopted a gold standard, the U.S. would lose the ability to tune its economic policies to fit domestic conditions. * For example, in the spring of 1995 the dollar weakened against the yen. Under a gold standard, such a decline in the dollar would not have been allowed: instead the Federal Reserve would have raised interest rates considerably in order to keep the value of the dollar fixed at its gold parity, and a recession would probably have followed. Recessionary bias. Under a gold standard, the burden of adjustment is always placed on the "weak currency" country. * Countries seeing downward market pressure on the values of their currencies are forced to contract their economies and raise unemployment. * The gold standard imposes no equivalent adjustment burden on countries seeing upward market pressure on currency values. * Hence a deflationary bias which makes it likely that a gold standard regime will see a higher average unemployment rate than an alternative managed regime. The gold standard and the Great Depression. The current judgment of economic historians (see, for example, Barry J. Eichengreen, Golden Fetters) is that attachment to the gold standard played a major part in keeping governments from fighting the Great Depression, and was a major factor turning the recession of 1929-1931 into the Great Depression of 1931-1941. * Countries that were not on the gold standard in 1929--or that quickly abandoned the gold standard--by and large escaped the Great Depression * Countries that abandoned the gold standard in 1930 and 1931 suffered from the Great Depression, but escaped its worst ravages. * Countries that held to the gold standard through 1933 (like the United States) or 1936 (like France) suffered the worst from the Great Depression o Commitment to the gold standard prevented Federal Reserve action to expand the money supply in 1930 and 1931--and forced President Hoover into destructive attempts at budget-balancing in order to avoid a gold standard-generated run on the dollar. o Commitment to the gold standard left countries vulnerable to "runs" on their currencies--Mexico in January of 1995 writ very, very large. Such a run, and even the fear that there might be a future run, boosted unemployment and amplified business cycles during the gold standard era. o The standard interpretation of the Depression, dating back to Milton Friedman and Anna Schwartz's Monetary History of the United States, is that the Federal Reserve could have but for some mysterious reason did not boost the money supply to cure the Depression; but Friedman and Schwartz do not stress the role played by the gold standard in tieing the Federal Reserve's hands--the "golden fetters" of Eichengreen. o Friedman was and is aware of the role played by the gold standard--hence his long time advocacy of floating exchange rates, the antithesis of the gold standard. Consequences for the Long-Run Average Rate of Inflation: Average inflation determined by gold mining. Under a gold standard, the long-run trajectory of the price level is determined by the pace at which gold is mined in South Africa and Russia. * For example, the discovery and exploitation of large gold reserves near present-day Johannesburg at the end of the nineteenth century was responsible for a four percentage point per year shift in the worldwide rate of inflation--from a deflation of roughly two percent per year before 1896 to an inflation of roughly two percent per year after 1896. * In the election of 1896, William Jennings Bryan's Democrats called for free coinage of silver as a way to end the then-current deflation and stop the transfer of wealth away from indebted farmers. The concurrent gold discoveries in South Africa changed the rate of drift of the price level, and accomplished more than the writers of the Democratic platform could have dreamed, without any change in the U.S. coinage. * Thus any political factors that interrupted the pace of gold mining would have major effects on the long-run trend of the price level--send us into an era of slow deflation, with high unemployment. Conversely, significant advances in gold mining technology could provide a significant boost to the average rate of inflation over decades. * Under the gold standard, the average rate of inflation or deflation over decades ceases to be under the control of the government or the central bank, and becomes the result of the balance between growing world production and the pace of gold mining. Why Do Some Still Advocate a Gold Standard? * A belief that governments and central banks should not control the average rate of inflation over decades, and that the world will be better off if the long-run drift of the price level is determined "automatically." * A belief that bondholders and investors will be reassured by a government committed to a gold standard, will be confident that inflation rates will be low, and so will bid down nominal interest rates. * Of course, if you do not trust a central bank to keep inflation low, why should you trust it to remain on the gold standard for generations? This large hole in the supposed case for a gold standard is not addressed. * Failure to recognize the role played by the gold standard in amplifying and propagating the Great Depression. * Failure to recognize that the international monetary system functions best when the burden-of-adjustment is spread between balance-of-payments "surplus" and "deficit" countries, rather than being loaded exclusively onto "deficit" countries. * Failure to recognize how gold convertibility increases the likelihood of a run on the currency, and thus amplifies recessions.

http://www.j-bradford-delong.net/Po...ldstandard.html

November 2007

Market Traders cheering on Ron Paul during his questioning of Fed Chairman Ben Bernanke




Ron Paul Schools Ben Bernanke

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