Milton Friedman says that the purpose of the federal reserve is to provide cash when there is a run on the banks. This is part of a 10 hour series which can …
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Milton Friedman: The Purpose of the Federal Reserve
how can a defliation be a bad thing ?
@TeaParty1776 Ok I see, so basically the disparity between Friedman and the
Austrians is that Friedman believed that properly controlling the money
supply could eliminate the disequilibrium period? Whether or not that could
work remains to be seen
Your comment made me laugh. The imagery of a system being so well run that
it shuts itself down, with a "sorry" no less, is humorous to say the least.
And too true.
The FDIC can't provide liquidity during a crisis.
The FDIC money belongs to the banks. It's a cost of business. Without that
cost, they'd be free to pay more on deposits, charge less on loans or pay
higher dividends. Of course no insurance could very well shrink the amount
of deposits and raise the cost of loans. Where did Friedman call for
eliminating one or the other? What time in the video?
@jimmyrtle Huge amounts of Fed "money" are all over the world and dont get
removed. The "money" of other nations pyramids on this, increasing the
destructiveness of inflation. A European bank crash will ripple out to us.
Govt is not magic. Real goods must be produced by the market. The
authorities are corrupt.
@chapsroc Sorry chapsroc, you have not done your research. If you had, then
you would know that MF did not believe in artificially stimulating
consumption or devaluing the dollar. You would also know that the dollar is
the world reserve currency because other countries devalue their currencies
even more than dollar. Many countries have also wrongly created
institutions like the IMF by which they stick together with money. However,
MF was against all of this
I don't see why deflation is bad, if the money in peoples pockets grew in
value, would this not increase aggregate demand in general if people
decided to over-consume instead of save. Even if they decided to save then
this would have resulted in lower interest rates which would have spurred
investment. What is so bad about people being able to buy more with less.
I think so too, unfortunately when a currency is collapsing nobody lends
because the interest rates would be absurdly high due to the devaluation of
the dollars. if i loan out 100 dollars and you have to give me the
principle plus 5 percent interest at the end of the year, but during the
year, there was 6 percent inflation, i lost money.
Why do u even agree with Milton Friedman? this is the same guy who's been
around consulting presidents and bankers (especially goldman sachs) and
mainly responsible for why we are in the economic crysis that we are.
Doesn't that disturb you? Give the movie Zeitgeist: addendum a chance and
come back later.. heck, even the movie "the Corporation" will do.
72 butthurt Austrianfags 🙂
@jimmyrtle "The paper currencies will not survive too much longer. Most
governments now owe as much or more than the annual GDPs of their nations
(typically far more, under GAAP accounting). But the total liabilities in
the system are much larger. Even worse, in the formal and shadow banking
system, derivative [derivative from inflation] exposure is estimated to be
more than 700 trillion dollars." [Keith Weiner, online, Gold Bonds:
Averting Financial Armageddon] Govt is destroying production.
If you don't mind, I'll return to this conversation when the dollar will
have the value of a toilet paper. In the meantime I have three words for
everyone: SUPPORT RON PAUL – the hope of free men.
@chapsroc This post contradicts the absurd claim that selflessness causes a
harmonious, peaceful society of good will. This mindless zombie is ready to
kill to protect the depravity of sacrifice. Say hello to Hitler.
@TeaParty1776 I think we're on the same page now. I just think that a lot
of advocates of competing currencies say that deflation is a good thing. I
don't think it's that bad, but I don't see it as good simply because prices
decreases. MF was right in his concept of how money functions but wrong in
feeling early on that a central bank was the only way to do. But he was
actually very open to the idea of competing currencies as it turns out.
@chapsroc The Assn. of Conspiracies has delegated me to advise that public
discussion of conspiracies will bring serious repercussions. What good is a
conspiracy if its publicly known. A really effective conspiracy is not even
known by its members, who believe that they are working alone. If anyone
from the Federal Dept of Suppressing Conspiracies asks, tell them that
there are no conspiracies, never have been and never will be because
conspiracies are metaphysically impossible. Or so they say.
The FDIC guarantees are irrelevant. Value of the dollar and all other fiat
currencies is heading towards zero. Eventually entire system will collapse
and "paper" money will mean nothing. That won't hurt me since I have all my
savings in precious metals but it is wrong and should be stopped. Money are
supposed to be storing value. Inflation is immoral because it is stealing
purchasing power from citizens. Fractional reserve banking is harmful now
and was harmful then.
There was fractional reserve banking before the Fed while we had gold and
silver backed currency. Customer money is still safe with the current
system.
@chapsroc I'm sorry to say that you simply haven't followed MF as much as I
have. MF had a video series called Free to Choose in which he invited the
Fed Chairman and criticized his policies. It is very possible to have money
supply growth without a bank, because you don't have to lend money to
increase growth. Btw, MF never worked for Reagan, but just so you know,
under Reagan, we had Paul Volker as chairman. Volker actually did not
expand credit, so it wasn't much of a problem during that time
@chapsroc Kill the greedy kulaks, eh comrade? My types? You mean the people
who can read? LOL! Hold your breath, the gold standard is coming back any
minute.
@TeaParty1776 If everyone goes to the government and exchanges each dollar
bill for 2 dollars, that results in 100% inflation but no change in
purchasing power. That doesn't involve stealing money from anybody.
@sasapienza Bankers are an enslaved pipeline for govt inflation.
@chapsroc Quasi-slavery has existed for most people for most of history and
yet, curiously enough, so has grinding poverty. The cause of production is
man's mind, freed from govt. China has sufficient capitalism to create the
wealth sold to us. Before that, their communism produced up to 34-67
million murders, acc/to the NYT. But now Chinese Keynsianism is destroying
their wealth and they, like Japan, will fail to overtake the US.
@TeaParty1776 No you are thinking about a credit bubble in which the
government lends money to people. If we all got two dollars in exchange for
one dollar, we would not be able to afford anything more. That's the idea
behind eliminating inflation and deflation. If you match the money supply
with growth, prices stay the same by definition. Right now, prices go up
because the money supply has gone way beyond growth. With gold, prices go
down (same purchasing power so NBD but not ideal).
@chapsroc Just exactly how is living w/the constant fear of arrest selfish?
The lifestyle of most criminals is nasty, brutish and short, with no
rational self-esteem, no future, a painful past and socializing w/other
losers because honest people would spot their constant dishonesty. Your
conventional "selfishness" is an infant's perspective of mindless,
short-range, physical sensations. The basic moral virtues: rationality,
productiveness, independence, integrity, honesty , justice and pride.
@nefariousgunslinger The point is you are making "illogical" and racist
"conclusions" based on alleged facts. At least in 2012 there was a
estimated 13,348,000 Jews. You are perpetuating "HATE" against all Jewish
people based on less than 1% of the Jewish population.
Well look into it and read up on it. I will check out those gold backed
checking accounts, sounds interesting :). Do they gain value as the gold
spot goes up?
@chapsroc Is your lack of logic and your arbitrary claims part of a
conspiracy to confuse people? Are they hiding conspiracies from us? Or the
lack of conspiracy? Yes, thats it. They are conspiring to convince us that
there are conspiracies. I have written this alone ,with no conspiracy. At
least, thats my story and Im sticking to it. Unless they torture me. Or
unless this post was composed under threat of torture, which, if it
happened, no one will ever know. Except the conspirators. Sssshhhh!
@johnsurs22 Deflation is the needed correction to inflation. See Mises'
Human Action and Brian Simpson's Money, Banking & The Business Cycle.
example from history when there was a goldstandard combined with 100 %
reserve banking please ?
@chapsroc Real money? Is the money in my bank account real? Is the money I
borrow from the bank real? Please explain further.
You want to get rid of the FDIC? It's funded by the banks.
@chapsroc Making money is a moral obligation to selfishly benefit one's own
life. Evading this this with selflessness is evil.
Why would banks take deposits if they can't lend them? The purpose of the
deposits is to fund loans. Get it?
Fed at the time did not understand the dangers of deflation, guess they
read too many Austrian school books
Ron Paul talks about legalizing competing currencies, not creating a new
fed or just abolishing the old fed. If commodity backed currencies were
legalized then the federal reserve would cease to exist.
You have to love the astounding theoretical ignorance of Friedman.
Corporations loved this guy, and they openly marketed him in the 80's
through Ronald Reagan which was more of a figure head then actually
president. I never trust businessmen or bankers.
@chapsroc With $2 trillion in deposits, BoA cannot lend out $20 trillion.
They can loan less than $2 trillion, not multiples.
@chapsroc I think you need to do more research on what Friedman actually
believed in with regard to money supply. He didn't suggest controlling
anything. He advocated constant growth of money supply which has no effect
on purchasing power, so I don't know what you're complaining about. Also,
supply side economics does not refer to money supply; it refers to actual
production supply.
Or actually, I'll do it tomorrow, I'm tired… It's 3:46am where I'm at.
@chapsroc Reagan's small increase in capitalism was the basic cause. China
did aid in circulating our fiat money. However, our fiat money & bank
accounts shifted our economy to excessive consumption relative to
production. Ie, disequilibrium, which has grown. Imagine a man lifting a
bulky CRT TV, shifting his center of gravity and having no habit of walking
like that. Oops! Whoops!
@chapsroc American Indians were slightly more advanced than the Stone Age,
with no private property, no concept of an individual person or individual
rights; the tribe, rather than reality, as the framework for their
primitive ,short-range reasoning, and warfare as the normal method of
getting material values, including slaves. They had no right to forcibly
stop the advance of the rational, individual rights culture of Western
civilization. They benefited greatly from it.
If the Government were to increase taxes by 100% would you blame capitalism
when businesses failed? Of course not, that wouldn't make sense. If the Fed
were to increase the money supply by 200% so all business' savings are cut
in half would it be true capitalism? By the same token, no. The Federal
reserve, by nature, is government subsidized control over the businesses
ability to save. In America we're so busy with freedom to consume that
we've forgotten freedom to save is equally important
@TeaParty1776 Well you seem to have all the answers. Peace.
Economic trends can be identified & predicted. Their beginnings and ends
cannot be predicted because man has free will. The refusal to sacrifice is
not greed because Individuals own their own lives free and clear with no
obligations except for their chosen actions. Selfish people are not
withholding something owed to others. Civilization requires the recognition
that man is morally free of man, that each man is a moral end in himself to
himself. No one is another person's moral end.