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It really seems to me that there are two principle motivations: rhetorical dominance, and a desire for reasoned consensus. In the first, “winning” is the primary goal. Typically, the tactics used are derision, partial and decontextualized use of facts, and repetition. The growth that happens in the use of such rhetoric is in the direction of conformity or exclusion. You have to pick sides, since there is no movement in the direction of compromise.

In the second, it will optimally begin with a shared goal, say world peace. It will then define that goal, such that you know when you have reached it. It will then discuss methods by which that aim can be achieved. This is where genuine difference can be a factor in generating an optimal solution, since varied perspectives tend, in aggregate, to scope out various pathways well, determine their relative merits and dangers, and include differing factual accounts of present reality, which can be researched and debated.

As I have argued elsewhere, the transition from liberal to leftist, and from reasoned debate to rhetorical duels, happens when you NO LONGER CARE about the actual consequences of your actions.

Take the issue of race, for example. It would seem to me that the shared goal would be the thriving of the African American (among others) community within the United States. Success would be defined as full employment in jobs which pay reasonably well, educational attainments on par with everyone else, rates of criminality on par with everyone else, and rates of family success and failure on par with everyone else.

Patently, none of those outcomes have been achieved in the last 50 years. Rather, what we have seen–as a direct result of leftist policies–is an eradication of most good jobs from inner cities, exceedingly high failure rates in high school, rates of crime that are astronomical, and the virtually complete eradication of the nuclear family in the inner cities.

These are problems, and to claim otherwise is to show a cynical disregard for the suffering that underlies these facts.

Is anything solved by calling anyone who suggests these might be problems a racist? Is it helpful for comfortable white suburbanites to spend enormous energies figuring out who the “racists” are, and dedicating NO serious thought to how we might address these problems?

If you look at Al Sharpton, or Jesse Jackson, or Jerry Wright, you aren’t looking at people trying to solve the problem: they ARE the problem. They act as if the African American community HAS to rely on them, and on the government programs they get funded, and that they should play NO role, as individuals, in trying to solve these problems.

This is bullshit. Until leftists got that community addicted to getting money for nothing, all of those communities–take Harlem as an example–were growing in wealth, serious about education, and dedicated to the nuclear family and church. Their streets were not crime ridden, and they had self respect that did not come from some preacher telling them “black is beautiful”. They had self respect because they EARNED it.

It is not conservatives who are polarizing. We want government to do nothing but not get in our way. It is the LEFT who has a political interest in permanent dependency.

If you look at Greece, today, what you see is that they are failing because they thought that public sector jobs were sustainable. They thought the credit cards would last forever. Yet ALL public sector expense and all government money that is handed out represents a current or future tax. As such, it represents a drag on the only jobs that are SUSTAINABLE, which are those in the private sector.

To be clear, if you borrow money to fund such programs, they are inflationary, and inflation is a regressive tax that takes from the poor and gives to the rich. If you take the money in actual taxes, you provoke the flight of capital, which is what has happened in so many large urban areas. New York actually, in effect, went broke, in much the same way Greece is today. Detroit is a “failed state”.

I see clear parallels between the actions of the IMF and the actions of the Left in the so-called “War on Poverty”. What you do is take a group of people who are maybe not doing great, but who are growing, and give them money with no strings attached. If you do it in the developing world, you give it to the government. They then take that money and promise their nation the moon and the stars. Everyone is getting rich, at least those who are connected. Whatever business ventures they had, they give up, since the money is so easy. This derails private enterprise in a big way.

One day, the money runs out. All the private infrastructure that had been there, is gone. And people are addicted, as fully as if the substance were crack cocaine. They want more, more, more. So they get more, in exchange for some part of their personal or national sovereignty. They now DEPEND on that supply of money, they can’t imagine living without it.

How else can you explain people thinking Barack Obama was going to pay their mortgage, or that all healthcare was now free? Many generations have been taught that the way to get ahead is to trust people like Jesse Jackson, who would FIGHT for them. But how much can they get? You can only draw out without paying in so long.

The IMF says it is for development, but it simply props up dictators, and facilitates corruption and the flight of capital from the industrialized democracies to the developing world.

The Democrats say they want to help African Americans, but all they seem able to propose are programs that don’t work, and larger social aid packages.

Clearly, if we want to develop the world, we need to loan to enterpreneurs and capitalists. Clearly, if we want to develop the inner cities, we need to do the same.

What I think would work would be, first, educational vouchers, such that the parents of the children can pick the schools their kids go to. Schools need to be developed that brook no violence or disrespect, and which enforce discipline, and the self respect and self possession that goes with it. Graduates of such schools can be enrolled in a microloan database, such that business start-up ventures can be funded by private capital.

When you say to someone “go create something”, good things flow. When you say to people “do as I say”, you disempower them. The irony is thick that leftists think that it empowers anyone to presume to speak for them.

I have faith that most people, if you expect them to succeed, will. I likewise think that if you expect people to fail, they will likewise often accomodate you.

All of these problems can be solved, but you must begin with the goal in mind, not a preoccupation with “message management”. If your sole focus is on how these things are TALKED about–not end results–you are complicit in the pain you claim motivates you; you are not compassionate: you are a self important bully.

It is worth exploring a bit how banks work, for those unfamiliar with it. As I understand the matter, all banks are required by law to keep in reserve a certain amount of “hard” currency. That amount is determined by the Federal Reserve. This is interesting, since no one at the Fed answers to Congress directly, yet they directly control the cost of our money.

Be that as it may, if you deposit $100 at your bank, they have to keep $10 of that in reserve, and can loan the rest. What actually seems to happen, though, is they keep your $100, and loan $900 against it. That $900 comes out of thin air. Their “reserves” are actually the only hard currency they have. They may own securities, which count in my mind as money, but the loans they make do not.

When I go to the bank to take out, say, a home mortgage, the bank writes the seller of the house a check, say for $100,000. What happens is they put that loan down on both sides of the ledger, as both a debit and a credit. It is a liability, and an asset. It is a liability, since they wrote the check, and since they have to keep $10,000 around (in the vault or deposited at the Fed) to “secure” it. It is an asset, since the borrower signed a promissory note–a mortgage, if my legal terminology is right–to pay the money back. It is money owed the bank.

If the borrower defaults, even though most of the money was created from thin air, it still shows as a debt owed. This is how the accounting is done, I’m sure per some formalized system of accounting. Thus, too many defaults, and you go bankrupt, even though you don’t actually owe the money to anyone, since you created most of it. This is logical, since otherwise banks could just loan money to anyone, and just make it vanish if the borrower defaults through the same feat of magic by which the loan was created. This would be massively inflationary. The vulnerability to bankruptcy for bankers is, then, a partial check on what is still a bad system.

If the system were fair, anyone could create money, but that isn’t the case. You have to get a charter, and presumably mass a certain quantity of actual assets. In most cases, this is likely the personal assets of those who create the bank in the first place. Those assets are “real”, and in my proposed solution to our monetary problems they would of course be paid in full for those.

We would simply wipe clean both the liability and the asset sides of the ledger for loans which were based on “unreal” money. It would seem reasonable, as well, that to the extent real money was in the loan, that that part would be retained.

What is at issue is the long term viability of a system in which loans are used as collateral for futher loans, and in which the whole thing is underwritten by the taxpayers–not just here, but in almost all industrialized nations–but the profits, when they occur are private.

That will have to do for now. Things to do. I will add to this over the next few days.

Facebook isn’t working, so I’m posting this here. It’s a response to some comments made there.

Well, we may not see eye to eye on the inflation issue. As I see it, money can flow in different quantities to different places, but never alter in total quantity unless more is “printed”. As an example, just picture that there were only 1 million dollar bill in existence. You can pay $500,000 for a coke, but that does not cause any more bills to come into existence. Most of the “bubbles” are financed, which means money was made from nothing, and was hence inflationary. I literally think automobiles should cost $500.

As far as the role of government, once you realize that the greatest current existential threat to our national sovereignty is the on-going assault on our money supply–as enabled by the Fed and the IMF–then you realize that PROTECTING it is one of our most pressing national security issues, and thus a role properly assumed by the Federal government, and implemented by the States.

As far as mining gold, I am not against that at all. I am proposing two types of gold: gold we say is SPECIAL, and normal gold. SPECIAL gold sits in State vaults, and is worth EXACTLY as much as was paid for it. Normal gold is mined and used and traded on open markets like it always has been, as bullion, jewelry, and any other form it might take.

Bottom line, though, I see no more pressing national security matter than sorting this thing out. Once you sort through the details, you see why George Soros does what he does. People get bored with these details, which is how and why this assault–not just on our own sovereignty, but that of all other nations as well–has been able to continue for so long, and enjoy so much success.

I am going to quote Dumbledore and say “This is one of my more brilliant ideas–and between you and I that is saying something.” Now the obvious caveat applies that I am perhaps being stupid with confidence, but I think this will work:

A few posts back I posted some ideas on how to abolish the Fed. We need to apply this to the whole world. Let me explain.

One thing I was wondering about, was what happens with loans banks made. Main Street Savings and Loan loaned John Smith $250,000 to build a house, and collects say $2,500 a month on it. It’s not in default. It’s fine and a source of profit. It shows as both an asset and a liability on the books. If it goes into default, it shows only as a liability, which in enough quantities will either bring the bank down, or get it a bailout, depending on the size of the bank.

Here is my proposal: those loans are forgiven. They are marked paid in full. Now wait, you say, how is that not socialism or Communism. How is that not a patent abrogation of the right private property. Simple: THAT BANK NEVER HAD THAT MONEY TO BEGIN WITH. They loan money they haven’t earned. That’s how inflation happens in the first place. You can’t steal something somebody never earned. Frankly, they stole it from us in the first place, using the coercive police power of the State.

What do they keep? Their REAL assets, which is that money they hold at the Fed, or in their vaults. They get that cash, and can then make loans on that. Most of the employees at most of the banks in the country lose their jobs, but most of the home mortgages and other DEBTS disappear, freeing up an ENORMOUS amount of cash. The Federal debt disappears, since most of it was created through money manipulation, too. The creditors are paid. The carpenters and plumbers who worked on, say, the Federal Reserve building have all been paid. Nobody who made anything gets stiffed.

But what about foreign creditors? What about the Chinese? Here’s where it gets interesting. What we have to understand is THEY HAVE A CENTRAL BANK TOO. Much of the money they “gave” us was undervalued, for two reasons: one, they print money to fund the on-going expansion of their State; and two they artificially undervalue the yuan–I call them Mao’s, since as I understand it his picture is on them–to increase the amount of goods a dollar will buy.

We give them an ultimatum: switch to our gold backed system, or we default. Now, they can dump their dollars, and cause mass inflation. Provided we have this system already in the works, we can manage inflation, since it won’t matter what a dollar actually buys once we switch to a static currency. Maybe it takes $50 to buy a Coke: we shrug, raise wages, and deal with it. Bit of pain in the middle, but permanent freedom.

And if they play with us, they do the same thing. They switch to a static currency–which will still be the yuan, and under their “control”–and money is now real.

Same thing with Europe. They all have central banks, that have abused them the way the Fed has here. Greece’s debts are forgiven, and she has to behave in the future, which obviously would include not paying the huge benefits she has been paying. Austerity is forced on them, but without their debts.

So much horror has happened in the last century. Surely at some point the thugs who preach peace and freedom can, on balance, realize they have been speaking for and acting as Nazis, and let go.

One added thought: to keep gold speculators from making too much money from nothing, we could actually state something like: in the next month we will switch to gold, silver, or platinum, and pay whatever the rate is AT THAT MOMENT. There is no reason to use this as a wealth transfer mechanism between those who don’t have money and those who do.

Or we could simply say: we will pay X plus 10% for gold, where X is what the investor can prove they paid. That might work best. They make money–they already had X, so they would have needed to get reimbursed anyway, and they are thereby incented to sell–and we get the gold without a huge transfer of wealth.

A golden age ensues. Again, I may be missing something, but I think this will work.

Consider the following shocking claims:

Every day the Federal Reserve exists, we work a bit harder, and earn a bit less.

Since the Fed is a key backer of the IMF and World Bank, every day the Federal Reserve exists, we lose a bit of our national sovereignty, move closer to global currency, and move closer to global government.

If the Fed did not exist, our actual purchasing power would be 5 times or more what it is today.

If the Fed did not exist, we would have little or no national debt, and would instead be a nation of savers.

Coming to these conclusions made my jaw drop, but they appear unassailable.

Consider our productivity gains in the last century. Can we not suppose at a bare minimum a 3% annual improvement? That every year, we make 3% more with the same resources and same effort? This seems low, but reasonable. Why don’t we live better? Our grandparents had houses. They had savings. They may not have gone out to eat every night, but they didn’t go hungry. Most of them had a car. They lived much like we do, and owned what they had.

Today, we are a nation of debtors, that by and large own nothing, have no savings, and will be paying the company store all of our lives, as will our children and grandchildren. Our collected debt just for the national government is $12 trillion–some $40,000 per person–and climbing steadily. How is this possible?

It is inflation that took this wealth from us. Now, we are told 3% or so inflation every year is “normal”. It isn’t. It is completely unnecessary. It is a gash below the surface of the water that is slowly sinking the boat of our economy. It is the direct result of the Federal Reserve.

What is inflation? It is an inflation—increase–of the money supply. Whenever more dollars are “printed”, they decrease the value of every other dollar in existence. There is no way for inflation to occur unless more money is created.

How is this done?

Primarily by writing checks that are backed by nothing. You read that right. The Fed can, for example, buy securities in any amount it likes, with no money. It could write a $1 trillion check if it wanted to. It could write a $10 trillion check. There are no limits, although those things would have immediate inflationary consequences, and shine a light on them they have spent nearly a century avoiding. When you read some nation, like Zimbabwe, is enduring massive inflation, what has happened is somebody had a night on the town by writing themselves checks based on nothing.

The Fed can “loan” money in any amount it wants, backed by nothing. As an example, when Bear Stearns first got in trouble, the Fed bought billions of dollars of mortgage backed securities, since nobody else wanted to. They write the check, against which Bear Stearns cashes checks, and thus the money is created out of nothing. In our digital age, obviously physical, cash money is relatively unimportant, but as inflation increases, they do consistently need to print more.

How does this hurt us? Consider the following thought experiment. Let us put on one side of a table a dollar bill, that stands in for all the dollars in existence–in banks, wallets, and coded as 0’s and 1’s in computers around the world. Let us put on the other side a teacup, that stands for all the material goods in existence, the cars, houses, highways, electronics, watches, and actual teacups.

Common sense tells us that if we are making more stuff with the same amount of effort, that the price of that stuff ought to be dropping. Yes, we add bells and whistles to cars, and houses seem to be getting bigger, but not to the tune of the 3% per year I am here positing. What should be happening is that for every dollar, we get—for simplicities sake—TWO teacups. Material wealth should be inflating, while the dollar stays constant. Why is this not happening?

What is happening is a second dollar is being placed next to ours. This dollar was created out of nothing. It did not exist, then through a feat of accounting magic, suddenly it did. The person who got this dollar—a large commercial bank on Wall Street, nine times out of ten—now has purchasing power with it, despite having done nothing to earn it. Our wealth—our actual purchasing power—has thus been diluted. It has gone to build a house on Long Island sound, or lined the pocket of an African dictator, or facilitated the expansion of the Federal Government.

The game is not keeping up with the Consumer Price Index. This is a fool’s game. Prices on everything should be DROPPING. We should be working 10 hours a week and living as well as we are currently. We should have, for that reason, full employment, and no poverty. This is what a purely Capitalistic system, based on real money, would have won for us. There would be no need for our current conflict between the Left and the Right, at least over anti-poverty programs. We are fighting over crumbs.

To be clear, we have done this experiment: in the 19th Century, after Jackson broke the Second Bank of the US, purchasing power increased substantially. What cost a dollar in 1800 could be had for 66 cents in 1900, despite the fact that wages remained the same or increased. It was, by and large, a time of steady economic expansion. This is what happens without a Central Bank. Given the HUGE strides we have made in the 20th and 21st centuries in technology, that effect should have been multiplied many times over, probably exponentially.

This fact is so large it is missed. Economists spend so much of their time trying to use complex formulas that relate employment, inflation, productivity and the like that they miss the forest for the trees. Economists nearly ALWAYS miss what OUGHT to have been, but wasn’t. They fail either to see the big picture, or the long haul, usually both. You can always help the few at the expense of the many, or the present at the cost of the future. That doesn’t take any brainpower. We have, at this very moment, a Nobel Prize winning economist writing regular pieces for the New York Times, in which he argues we can borrow our way into prosperity, and that increasing the costs of our healthcare will lower the costs of our healthcare.

It gets worse: the International Monetary Fund and World Bank do what the Fed does, but internationally. They loan, in effect, money they don’t have to developing nations. Curiously, they don’t loan it to CAPITALISTS, which is what one would expect if increasing wealth were the goal. In the limited experiments which have been tried, microloan programs work exceedingly well to fund economic growth, and larger loans to startups ought to work yet better. This would be the actual path to world economic development.

Instead what happens is they loan money to GOVERNMENTS, in what amount to New Deal sorts of public works projects that generate no sustainable jobs, no new business, and quite often economic impoverishment, since the projects yield debts with no corresponding business profits. It’s the equivalent internationally to what was done to Detroit: you get people addicted to easy money, ruin what businesses already exist, then withdraw most of the money, and make them beg for the rest. It works great for those at the top–the Mugabes, and the Detroit City Halls–but creates great suffering for those it was supposed to help.

The principle architect of the IMF and World Bank—Assistant Secretary of the Treasure Harry Dexter White—was unambiguously an agent of the Soviet empire. We have the wire intercepts. There is no doubt about this. What would his game have been?

Simple: ruin American money through inflationary dilution, support the development of dictatorships in the Third World, discourage actual Capitalism, and set the stage for a global government to be administered by the UN, and controlled by the Soviets. If this sounds ridiculous, consider that that was in fact the stated goal of the Soviets, and that the conference in San Francisco that created the UN was itself chaired by another Soviet agent, Alger Hiss–whose title was Secretary General at the meeting–who in fact went to jail for espionage later. Again, the Venona wire intercepts—in addition to the physical evidence that put him in jail–permit no doubt as to his loyalties.

Now, this was not the goal of the founders of the Federal Reserve. What they wanted was simply to keep financial power on Wall Street, to make money from nothing, and to have some mechanism by which to pass bad loans off to taxpayers, all of which they got. Yet, history is clear that any concentration of power can be turned in any direction, once it is in place. A bad king can replace a good king. Our Wall Street bankers want continued economic growth, since they get a percentage of everything that is done. They have no desire to see the system go down in flames. Yet, if other people push the situation far enough, collapse is inevitable. They have set us up to fall.

Look at our current situation. What is the debt Obama is rapidly amassing doing? Setting the stage for a collapse of our currency, economic disaster, and correspondingly desperate circumstances in which calls for a global currency—to “solve” the problem—will look reasonable. To cede our money is to cede our sovereignty. If you doubt that, look at Europe today, and the trouble the Greeks are causing everyone else. If the Chinese dumped all the dollars they hold tomorrow, the value of our money would disappear almost overnight. That would kill their exports–so they are unlikely to do it–but the fact remains we are in a very, very precarious position, AND IT IS GETTING WORSE DAILY.

Here is what we need to do: the moderate Left (those who don’t oppose profit, per se) and the Right need to put aside our differences, and realize that if we had a real currency–one in which money could not be created at the whim of an unelected elite–all the problems of development would disappear. This problem is not just an American problem, but truly a global problem. Every nation on the planet is affected in a negative way by the status quo.

The Fed hurts everyone but the very rich, here and abroad. Leftists already hate the rich, so they should be supportive of ending it.

Conservatives hate anything that curtails our liberty, and the Fed definitely does that. It answers to no one but the “club” of bankers who run it in their own interest. There are no elections where We the People can apply pressure, and no rules by which Congress can insert its voice. It is literally an agency that is damaging our democracy, about which we can do nothing but get rid of it. It started with a Congressional charter, and can be ended the same way.

As far as details, here is one concrete proposal: http://moderatesunited.blogspot.com/2010/05/abolishing-fed.html

And to be clear, the supposed “financial reform” bill will actually play to the hands of the very banks it purports to regulate, by supporting the process by which we the taxpayers clean up the messes created by bankers who have no incentive not to take large risks. They keep the money when they win, and get us to pay when they lose. This is the worst possible situation for everyone BUT the bankers.

ALL AMERICANS HAVE A VITAL STAKE IN THIS ISSUE, UPON WHICH OUR VERY FUTURE AS A DEMOCRATIC REPUBLIC DEPENDS. Please forward this link to everyone you can think of who even possibly might read it, particularly any friends you may have on the political left.

The way I understand stocks to work, is a company needs capital. It offers to sell part of the company to investors. Investors buy up pieces of paper–literal or virtual–for whatever the market will bear when the initial sale is going on. They go public at $15, then maybe it climbs to $30, maybe it drops to $5. You collect whatever money is invested, and that is now operating capital. In exchange for buying your stock, you periodically pay dividends.

Once the stock is sold once, it becomes a commodity in its own right. You may have bought it for $15, but now you the investor try to sell it for $20 and pocket the difference. This part of our market is, in my view, irrational and should be abolished.

Here is my reasoning: if buying low and selling high is the objective, then psychology enters the picture in addition to business fundamentals, and disrupts consideration of the actual value and performance of the company. What intrudes instead are guesses as to what everyone else will guess. What evolve in short order are synchronizing signals, that indicate buy or sell, not for intrinsic business reasons, but because they allow you better to predict what everyone else will do. It’s like a group of people on a boat at sea. They all rush to one side of the boat, then to the other, and the whole thing is never really in balance.

Concrete examples: layoffs used to signal buy. You saw “layoff”, and you knew everyone else would buy, and if your particular software was faster than someone elses, you could hit the float before it peaked, and sell before it dropped, pocketing the difference. This is stupid.

What it does is make good companies underfunded, and crappy companies that market well overfunded, until they go bankrupt after making fortunes they still keep, at least in part.

The bottom line is NOBODY IS MAKING ANYTHING. There is no business value to this, other than that it sucks money away from groups that are less predatory. Yes, stocks go up in time, but so does inflation. I don’t have the facts, but one could speculate–accurately in all likelihood–that most of the gains in the market over the last 100 years have to do with inflation. Stocks, like everything else, should not rise in value; what should happen is they pay better and more frequent dividends. At least, that is my belief for now.

My proposed solution is that all companies that want to go public determine the price of their stocks, based on how much money they want to raise. That, then, is the price. What will vary thereafter is how many are created. Say they need to raise $1 million. They offer to issue up to 200,000 $5 stock certificates. If they sell them all, then they get their money. Investors make money on the investment through dividends, which well run companies will pay more of, and poorly run companies less.

In effect, I am proposing converting stock issues to something like bond sales, except that you get variable “interest”, and voting rights. When you sell the stock, the price is still $5. That may seem contrary to free enterprise principles, but what we are wanting is stability that is not skewed in favor of the very rich. You can still buy or sell as you choose, and companies can still attract capital for expansion.

Particularly if we eliminate easy money, business fundamentals will have to be observed. Capital can still be raised, but the ridiculous fluctuations of the market–which self evidently can be influenced EASILY by large enough traders–go away.

Actually, let me dilate on that last point. If you own large parts of some stock, say Proctor and Gamble, if you sell enough of them at once, you can start a freefall. You short the stock, then sell your shares, and Wall Street being what it is, the fall will continue for some period of time. If you need to, you can partner with someone who sell short, and you then dump the stocks.

This sort of thing used to be routine on Wall Street. A group of men would literally sit around with brandy and cigars, and pick a stock, any stock. One would buy some, then another, then another. They would pay off a journalist to write something positive about the stock, which would appear credible since the price was climbing, so others would jump on. At some point, they would all sell, returning the stocks to something close to what they should have been valued, and in effect pocketing the money of everyone who bought late.

Again, this is wealth redistribution. Banking and securities laws have made it much harder, but far from impossible. The system is prone to corruption, serves no useful purpose in the manufacture of concrete things, and should be abolished in the way I suggested.

I have been wondering about this. Most of the “money” created, of course, is digital. It is an entry in a ledger. But obviously real money is out there too.

The best description I have found to date is here, from the Fed’s website. Go to page 34.

The way our system works is banks have to keep a certain amount of “real” money in reserve. They can either hold it in cash in their vault, or deposit it with the Federal Reserve. I think that amount is 10%, but varying required withholding is a basic feature of this cartel, where competition in that regard is formally forbidden under penalty of law.

What I think they can do is convert their reserves at the Fed to actual cash. They are also required by law–by the Fed–to keep a certain amount of cash in their vault. Obviously, that amount is not as high as the total reserves they are supposed to have.

So banks just place orders, that are filled regionally, and the cash is delivered in armored cars by men with guns. There are printing presses operated by the Fed, and paid for by interest and transaction fees system members pay. That part is interesting, too: the Fed is not tax-payer supported. If it were, funding could be cut, which would allow political pressure to be brought on it.

According to their own site, the “need” for cash grows over time, which is a function of inflation they create. Printing more physical cash, though, is a very unimportant means of this.

The other part of that table that I am still working on is what appears to be out and out accounting deception. Here is the actual text:

The amount of currency demanded tends to grow over time, in part ref lecting increases in nominal spending as the economy grows. Consequently, an increasing volume of balances would be extinguished,
and the federal funds rate would rise, if the Federal Reserve did not offset the contraction in balances by purchasing securities. Indeed, the expansion of Federal Reserve notes is the primary reason that the Federal Reserve’s holdings of securities grow over time.

What I think they are saying is that as inflation happens, money buys less, so people ask for more. If, they say, they did not inject money into the system so as to make sure there was enough, the cost of money between banks–the Federal Funds Rate, which is a means by which banks needing short term loans can get them from other banks in the system–would rise.

This appears to be bullshit. What is actually happening is the Fed buys securities, say Bear Stearns securities, for cash they don’t have. They literally just write a check, and as long as everyone agrees it was money, it will clear. This process is inflationary, since it creates money. On the back end, then, due to inflation, more people ask for cash, since the amount they hold is up, and the banks have to keep a percentage of that. So there is a relation, but as usual it is exactly backwards.

These people–well educated, wealthy, no doubt in many cases urbane, and certainly intelligent–are defrauding the American people right before our eyes. I have long ceased to wonder how people who knowingly do evil sleep at night. That is only a problem if you have a conscience. If you have no moral decency, you suffer no moral scruples, and you sleep just fine. Short of that, if you can just learn to lie to yourself, to convince yourself the bullshit you are peddling is solid gold, you can get much the same effect. People like that can and do wake up, though. We need them right now.

Consider this: the distinguishing economic characteristics of socialism are income redistribution, and centralized planning. Marx’s argument, in part, was that the chaos of free markets needed to be tamed, and central planning instituted. All vital industries, like energy production, railways, ship-building, and agriculture, were to be overseen by the State. Needless to say, this doesn’t work, since it fails to account for local information. Basically what happens is the systematic and inevitable exit of otherwise available information, which makes production irrational and inefficient.

To my point here, though, the Federal Reserve is in fact a means by which wealth is redistributed from ordinary Americans to the rich, and it utilizes central planning in the production of MONEY. How much to lend, to who, at what interest rate: one would think Congress could provide input on such large decisions; one would think voters would somehow be able to influence it; but we don’t and can’t. Such is the nature of the Beast.

As I pondered this, our actual inflation has been WORSE than 2,000% since 1913, if you consider that what SHOULD have been happening is that the buying power of the dollar was increasing. Thus, to the measurably lost value of the dollar must be added the increases in value that did not occur. Let us posit that the value of the dollar SHOULD have been increasing 3% per year, and instead decreased 3%. That is a 6% swing.

We should be working 20 hours a week and living well on that. We have been horribly, horribly misled. We should never forget that there is evil in this world, and it takes many forms.

I was drawing something the other day–a cowhorn trumpet I have had for many years–and noticed that I had stopped thinking. This is rare for most people, and unheard of for me. I chatter to myself all day every day.

I just stopped and looked at the wordlessness in my brain, and found it interesting and somewhat pleasurable. It felt like there was the possibility of opening a door there somewhere, that I had entered a room that was not well lit, but from which further progress was possible.

Given that the point of meditation in many traditions–notably Yoga, unless I am much mistaken–is to stop thinking, I would submit this might be a way forward that I have not yet seen proposed. Obviously, this is an effect of transitioning to the right brain, but surely meditation does the same thing?

One could simply alternate drawing, and contemplating the thoughtless space, trying to maintain it as long as possible.