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Originally posted by Krypton Um, it is. It's called banks and governments, run by a relatively few. Whether there is a conspiracy to control the US dollar is a topic of debate. I am not saying that it is so, but obviously, I have my questions and speculation.

Hey Krypton, this is kind of off topic but is it just me or do you also see how some people on here are constantly (and repetitively) making emotional appeals (via derogatory slogans and buzzwords, etc.) that appear as though they are intended to marginalize those who are actively seeking the truth?

It seems as though the one(s) that are doing it seldom (if ever) have anything valuable to add but prefer to play "the ignorant antagonist" who's never satisfied with an answer or an explanation and who never even bothers to do any research of his/her own but who is always there to redicule you for whatever you might say, no matter how well articulated or researched your argument might be.

I just think that it's funny and perhaps even somewhat vindicating.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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Originally posted by Krypton Um, it is. It's called banks and governments, run by a relatively few. Whether there is a conspiracy to control the US dollar is a topic of debate. I am not saying that it is so, but obviously, I have my questions and speculation.

The relative worth of a (floated) currency is influenced by all kinds of economic indicators, which are all part of "the market". Nobody, not banks or governments have control. Yes, they can influence it, but its not like anyone can wake up one day and say "rightyo, let's devalue the dollar!". Each country that has a floated currency is influenced by all the economic issues in other countries. This idea that your dollar exists in a vacuum is absolute nonsense, as is any clandestine plot to devalue it.

Im just waiting for occrider (again) to come here and own your arse with real economics, rather than the juvenile thesis only you and trancer happen to see

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Originally posted by Trancer-X Hey Krypton, this is kind of off topic but is it just me or do you also see how some people on here are constantly (and repetitively) making emotional appeals (via derogatory slogans and buzzwords, etc.) that appear as though they are intended to marginalize those who are actively seeking the truth?

oooh, its captain hypocrite to the rescue!

nobody on here resorts to (misplaced) conceited arrogant commentary like our resident paranoid delusional hobo.

take this for example

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Yeah, and now in a time when men are trying to speak out in order to alert the rest of humanity that something portentous may have appeared on the horizon, you have a bunch of audacious mental midgets ridiculing what in all possibility could be an otherwise laudable and perhaps potentially lifesaving kind of clamour. Some of those ridiculer's are even on online message boards, hiding their feeble little minds behind engineering and other such utilitarian (IMO, but no less laudable in their own regard) types of degrees which have no bearing on the sociopolitical climate of this world. Where'd you say that you went to school again, Colonel, eLearners?

because for some reason, trancer feels a degree in civil engineering is not important when assessing buildings collapsing. funny that.

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Originally posted by Krypton "During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Telling the truth also becomes mandatory for those of us who haven't sold out, for those of us who still manage to live by a set of principles.

How the Fed lost control of money supply
By Axel Merk

The world is awash in money. This money has flown into all asset classes, from stocks to bonds, from real estate to commodities. In a world priced for perfection, should we enjoy the boom or prepare for a bust? Let us listen to Wall Street's adage and "follow the money".

After the tech bubble burst in 2000, policymakers in the US and Asia set a train in motion they have now lost control over. In an effort to preserve US consumer spending, the Federal Reserve lowered interest rates; the administration of President George W Bush lowered taxes, and Asian policymakers kept their currencies artificially weak to subsidize exports to American consumers.

These policies have led to one of the longest booms in consumer spending ever - US consumer growth has not been negative since the early 1990s. However, it is credit expansion, rather than increased purchasing power, that has fueled the growth.

Until about a year ago, consumers took advantage of abnormally low interest rates to print their own money by taking equity out of their homes. This source of money is drying up as home prices no longer rise and sub-prime lenders (those providing loans to financially weak consumers) are facing difficulties. More prudent homeowners have not yet been affected as they buy their homes based on longer-term interest rates; until December these interest rates stayed abnormally low.

But in recent weeks, these rates have ticked up significantly, and we may see the next and more severe round of pressure being exerted on the US housing market. In this phase, we will see monetary contraction: money that has subsidized not only the real-estate market but also consumer spending, stocks, bonds and commodities may dissipate.

Why is it that asset prices have continued to soar despite the stall in home prices? Consumers have not been the only source of money creation. Corporate America is creating its share of money as cash flow-positive businesses are piling up cash, but corporate executives prefer to invest abroad, providing only limited stimulus to the US money supply.

A massive source of money-supply growth is purely of a financial nature; it is volatility, or - better - the lack thereof. Volatility in major markets was at or near record lows last year. With volatility low, risk premiums are low; when risk premiums are low, investors have an incentive to employ more leverage and still be within their risk comfort zone. What may seem an abstract concept has propelled financial markets to the stratosphere.

Two groups that have been most aggressive at taking advantage of this are hedge funds and the issuers of credit derivatives. Take as an example a report from The Financial Times in December: the paper reported that Citadel Investment Group, a manager of hedge funds, had US$5.5 billion in interest expense on assets of only $13 billion. The hedge-fund group routinely borrows as much as $100 billion. Note that this is only the leverage visible on the financial reports; the instruments invested in may themselves carry yet further leverage.

The world of credit derivatives has also seen explosive growth. European Central Bank (ECB) president Jean-Claude Trichet at the World Economic Forum in Davos, Switzerland, warned that the explosion of credit derivatives is a risk to the stability of financial markets. Specifically, he complained that the market underprices its inherent risks.

With risk premiums at record lows, issuers of credit derivatives can borrow money at or near the Fed Funds rate. And that in turn means that we do not need the Fed to print money; anyone can. That is precisely what has been happening. However, the credit created is not without risks; more often than not, credit derivatives contain risks that only the issuer properly understands.

A year ago, the Fed stopped publishing M3, a broad measure of money supply. Just because you lose control of something doesn't mean you shouldn't monitor it anymore. Of the major central banks around the world, only the ECB takes an active interest in the money supply.

Why is it that the Fed doesn't intervene and try to stem excesses in the credit industry? We find the answer by circling back to the consumer. If the Fed were to do something about the spiraling credit expansion in the derivatives markets, the imposed tightening would quite likely hurt the consumer. Typically, a recession would not scare the Fed, but globalization has put the fear of deflation on Fed chairman Ben Bernanke's table. Tight credit could cause a collapse in the US housing market and in consumer spending; what has been a great boom would turn into a great bust.

The fear also spills over to the US dollar. As a result of the current-account deficit, foreigners must purchase in excess of $2 billion in dollar-denominated assets every single day, just to keep the dollar from falling. As the US economy slows, foreigners may be more inclined to invest some of their money elsewhere. The rising price of gold reflects that many investors believe that the Fed would rather see a continuation of monetary expansion than allow a severe contraction. Bernanke has also made it clear in his publications that he favors monetary stimulus at the expense of the dollar to mitigate hardship on the population at large.

Market forces will try to bring this credit expansion to a halt. While a crisis scenario with an imploding hedge fund causing ripple effects through the financial sector is possible and likely, we don't need a crisis for the party to end. What we need is increased volatility, which we have already seen in the commodities and bond markets. The equity and currency markets have also indicated that volatility may be on its way back.

As volatility increases, speculators are likely to pare down their leverage. In our assessment, the economic slowdown induced merely by an increase in volatility may be sufficient to encourage the Fed to ease monetary policy once again. Any easing in this context will, in our assessment, have negative implications for the dollar.

Axel Merk is manager of the Merk Hard Currency Fund, www.merkfund.com.

http://www.atimes.com/atimes/Global...y/IB08Dj01.html

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The relative worth of a (floated) currency is influenced by all kinds of economic indicators, which are all part of "the market". Nobody, not banks or governments have control. Yes, they can influence it, but its not like anyone can wake up one day and say "rightyo, let's devalue the dollar!". Each country that has a floated currency is influenced by all the economic issues in other countries. This idea that your dollar exists in a vacuum is absolute nonsense, as is any clandestine plot to devalue it.

Hmm, I guess you've never heard of George Soros...

{{{On Black Wednesday (September 16, 1992), Soros became immediately famous when he sold short more than $10 billion worth of pounds, profiting from the Bank of England's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the Bank of England was forced to withdraw the currency out of the European Exchange Rate Mechanism and to devalue the pound sterling, and Soros earned an estimated US$ 1.1 billion in the process. He was dubbed "the man who broke the Bank of England."

The Times October 26, 1992, Monday quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."

According to Steven Drobny,[9] Stanley Druckenmiller, who traded under Soros, originally saw the weakness in the pound. "Soros' contribution was pushing him to take a gigantic position," in accord with Druckenmiller's own research and instincts.

In 1997, during the Asian financial crisis, then Malaysian Prime Minister Mahathir bin Mohamad accused Soros of using the wealth under his control to punish ASEAN for welcoming Myanmar as a member. Later, he called Soros a moron.[10] Thai nationals have called Soros "an economic war criminal" who "sucks the blood from the people".}}}

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Im just waiting for occrider (again) to come here and own your arse with real economics, rather than the juvenile thesis only you and trancer happen to see

If you say so...

What occ has shown me is the important of a central banking authority. I don't want to get rid of the Federal Reserve. I want it to be nationalized as it should be.

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Originally posted by Krypton Hmm, I guess you've never heard of George Soros... {{{On Black Wednesday (September 16, 1992), Soros became immediately famous when he sold short more than $10 billion worth of pounds, profiting from the Bank of England's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency. Finally, the Bank of England was forced to withdraw the currency out of the European Exchange Rate Mechanism and to devalue the pound sterling, and Soros earned an estimated US$ 1.1 billion in the process. He was dubbed "the man who broke the Bank of England." The Times October 26, 1992, Monday quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell." According to Steven Drobny,[9] Stanley Druckenmiller, who traded under Soros, originally saw the weakness in the pound. "Soros' contribution was pushing him to take a gigantic position," in accord with Druckenmiller's own research and instincts. In 1997, during the Asian financial crisis, then Malaysian Prime Minister Mahathir bin Mohamad accused Soros of using the wealth under his control to punish ASEAN for welcoming Myanmar as a member. Later, he called Soros a moron.[10] Thai nationals have called Soros "an economic war criminal" who "sucks the blood from the people".}}}

yes, meaning, that someone's economic activities can influence the rate of the currency (like i said), not that anyone controls the currency.

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Originally posted by pkcRAISTLIN yes, meaning, that someone's economic activities can influence the rate of the currency (like i said), not that anyone controls the currency.

Dude, that is just one man. A bank doesn't have just the assets of one billionaire. Banks as a whole have the financial power of many billions of dollars worth of assets, INDIVIDUALLY, including what they loan each other!! Ever heard the terms "market movers" or "smart money"? These terms describe institutional investors, the ones who ultimately lead the market. Where they go, many many many people, and much money follows.

You do know inflation is caused by excessive amount of currency floating around right? The market isn't responsible for such occurances, sorry. Markets aren't as free as you may think they are. Freedom in capitalism also means one can wield the power of governments if you have enough money.

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Originally posted by Krypton Dude, that is just one man. A bank doesn't have just the assets of one billionaire. Banks as a whole have the financial power of many billions of dollars worth of assets, INDIVIDUALLY, including what they loan each other!! Ever heard the terms "market movers" or "smart money"? These terms describe institutional investors, the ones who ultimately lead the market. Where they go, many many many people, and much money follows.

the pound was having overvaluing issues before he did anything to influence it.

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The fundamental sterling problem in September 1992 was that the dollar was rapidly depreciating against the deutschmark. Tied as it was to the ERM, the pound was hence appreciating to unsustainable levels against the US currency. With a large proportion of British exports priced in dollars, a pound/dollar correction was well overdue. ERM membership was preventing this from happening. In anticipation of the inevitable dam-bursting, speculators hastened the process by borrowing pounds (and also lire) and selling them for DM, in the expectation of being able to repay the loan in devalued currency and to pocket the difference.

perhaps you could explain to me how soros did all that? indeed, if he is so powerful that currencies crumble in his wake, why hasn't he gone off again and made another billion at someone else's expense? soros was speculating on the value of the pound, that's how markets work. in this instance he was influential.

as for banks, well of course they are powerful. but you seem to think "banks" covers all banks whilst ignoring the fact that banks compete in the market against each other. they don't get together on the weekend and plan how to run the world ffs. hell, NAB recently lots hundreds of millions of dollars speculating on the currency- where was their all-conquering power?

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Freedom in capitalism also means one can wield the power of governments if you have enough money.

of course, i was never arguing that point. BUT, the fact is there are many many people with money and power and they all have different agendas. there isn't some nefarious "back room" where all the world's elite meet to agree upon a platform for world domination. capitalists are in competition with each other don't forget

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Originally posted by Krypton Dude, that is just one man. A bank doesn't have just the assets of one billionaire. Banks as a whole have the financial power of many billions of dollars worth of assets, INDIVIDUALLY, including what they loan each other!! Ever heard the terms "market movers" or "smart money"? These terms describe institutional investors, the ones who ultimately lead the market. Where they go, many many many people, and much money follows. You do know inflation is caused by excessive amount of currency floating around right? The market isn't responsible for such occurances, sorry. Markets aren't as free as you may think they are. Freedom in capitalism also means one can wield the power of governments if you have enough money.

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When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve’s attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves (e.g. printed money) into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain’s gold loss and avoid the political embarrassment of having to raise interest rates. The “Fed” succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930’s.” –Alan Greenspan, 1966

The Fed controls our fiat money supply through expansion and contraction.

We're printing billions of dollars a month just to keep our troops in Iraq while the Pentagon is already missing TRILLIONS. So where's all of that money coming from? The Fed.