Financial Markets

[Issachar]

Pumping liquidity was the right move. It keeps currency markets in check while we see the true magnitude of the issues facing the markets. I am NOT picking on ddg1263 here ... but his statement, quoted here, is typical of many, so I used it. It is NEVER a right move for a central bank to pump liquidity into anything. It is not even a right move to have a central bank.

Their pumping in bucks is the reason the economy is so fragile in the first place. More wrong cannot fix anything. Now, before I go too far here, I'd like to say that discussions of this sort are mostly just academic anyway. No matter if what is truly right is discovered in regards to making the economy sound, it won't be implemented. The reason we have a fiat system is so that the powers that be (well, that is what they think anyway. Wait until they meet God. :) ) can build their NWO. It is obvious that their intention is to bring down, as controlled as they can, the value of the dollar. Inflation has destroyed all economies in history. Inflation is a tool that is used to transfer the wealth of the masses into the hands of a few. I think we all know that here so I won't elaborate on that.

Cash is NOT where/how you want to store money. It is devaluing even while I type this. For now, gold and silver are good investments. One can find a gold coin or silver coin that is thousands of years old and it is worth a LOT today. One can find some paper money, even as recent as, say, the Civil War; i.e. confederate bills, and if they can find a collector somewhere, they may get a few bucks for it. Paper should not be used near an open flame. When economies get hot enough to catch on "fire", paper money burns up. Gold and silver are made more pure by the heat.

But there comes a day when even that will apparently be worthless, but I think it is after we are outta here ...

Ezekiel 7:
19 *They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.

But until then, like I said .. gold and silver coin from whenever will be valuable to men and therefore, can be traded.

Issachar

[Ibelieveinjesus]

This is nothing new by the FED, since last March when they stopped publishing the M3 money supply they have injected new money at abhout a 13% clip.

How do you figure that?

From: http://www.federalreserve.gov/releases/h6/hist/h6hist1.txt

M2, As per March 2007 was 7,171.6, at the end of June it was 7248.. When I do the math on that (((7248-7171.6)/7171.6)/3)*12.. I get an annualized rate of 4.2%...

When I look at March of last year...(((7248-6782)/6782)/15)*12 I get a rate of 5.5%...

-Ted

[Issachar]

Ibelieveinjesus, are you confusing M2 and M3?

Issachar

[anangel4u]

Some of those dollars pumped in the market compensate the investors.

Not all of those investors are American.

So then are we pumping in dollars to foriegners?

Bondage. Financial bondage.

[Issachar]

The US has been a debtor nation for a couple decades.

Proverbs 22:7 *¶The rich ruleth over the poor, and the borrower is servant to the lender.

This is also why Japan, China and Saudi Arabia have so much influence over US foreign policy and to some extent, at least in the case of Saudi Arabia, domestic policy also. (see/read: The American House of Saud - Emerson)

Issachar

[Ibelieveinjesus]

Ibelieveinjesus, are you confusing M2 and M3?

Issachar

Not at all, but as M3 is no longer calculated or published, I assume that the poster is referring to M2..

If he is not, and there is a private group that is tracking M3, I'd be curious to know who it is, and see a link...

-Ted

[Ibelieveinjesus]

Some of those dollars pumped in the market compensate the investors.

Not all of those investors are American.

So then are we pumping in dollars to foriegners?

Bondage. Financial bondage.

What the Fed did was use Repurchase Agreements to add some short term liquidity to the markets, and reassure the markets that they wouldn't allow a credit crunch..

The mechanism is this, the Fed buys securities from financial institutions for cash, the increase in cash to the financial institutions, raises their reserves, and allows them to loan more money (as the amount of money they can generally lend is constrained by a the reserve requirement)

The typical repo lasts 1-7 days, so the monetary shot in the arm is temporary.. The Fed isn't out there handing out money...

-Ted

[Issachar]

The mechanism is this, the Fed buys securities from financial institutions for cash, ... I would say, hold it right there. What "cash"? The FED is not a reserve. It has no cash. One cannot go down to the local federal reserve bank and deposit their money into an account. The only "cash" the FED has is made out of thin air. This is inflation. I was born in 1952. If one looks up the average price of auto's, houses, food, etc. at that time, it is easy to see that prices now are about 1,300 percent higher. No big deal if wages were in step with that but as we all know, they are not. If they were, there would have been no real need for the US to go to a fiat system of economy nor even have a central bank. In the sixties, Americans saved approximately 20 percent of their incomes. Today, the average is about a negative 2 percent. That is, they are using a lot more "money" to maintain the same standard of living. Proof that inflation is way ahead of wages. Again, this inflation, the key destroyer of economies thoughout history, is the fruit of a central bank. That is what they exist for.

We don't need a central bank to add short term liquidity except where the economy of a nation is controlled by a central bank. Fiat systems must always be propped which is why 100% of them have failed. It is intrinsic to such a system. In a standard based economy, the natural cycles of free market keep things in check. The "auto checker" has been disabled and replaced with the Federal Reserve Act of 1913.

Issachar

[Ibelieveinjesus]

I would say, hold it right there. What "cash"? The FED is not a reserve. It has no cash. One cannot go down to the local federal reserve bank and deposit their money into an account. The only "cash" the FED has is made out of thin air. This is inflation. I was born in 1952. If one looks up the average price of auto's, houses, food, etc. at that time, it is easy to see that prices now are about 1,300 percent higher. No big deal if wages were in step with that but as we all know, they are not. If they were, there would have been no real need for the US to go to a fiat system of economy nor even have a central bank. In the sixties, Americans saved approximately 20 percent of their incomes. Today, the average is about a negative 2 percent. That is, they are using a lot more "money" to maintain the same standard of living. Proof that inflation is way ahead of wages. Again, this inflation, the key destroyer of economies thoughout history, is the fruit of a central bank. That is what they exist for.

We don't need a central bank to add short term liquidity except where the economy of a nation is controlled by a central bank. Fiat systems must always be propped which is why 100% of them have failed. It is intrinsic to such a system. In a standard based economy, the natural cycles of free market keep things in check. The "auto checker" has been disabled and replaced with the Federal Reserve Act of 1913.

Issachar

I simply respectfully disagree with most of your assertions. Imho, inflation is currently under control, and except for brief periods, has been, and has been out paced by gains in personal income.. The following link might be of interest:

http://www.census.gov/prod/2004pubs/p60-226.pdf

It is somewhat dated, but I think the chart of page 11 makes my point.. to quote:

Compared with 1967, the first year
for which household income statistics
are available, real median
household income is up 30 percent,
as shown in Figure 1. Over
this period, median income tended
to rise and fall along with the business
cycle. Median income peaked
in 1999, was unchanged in 2000,
declined over the next 2 years (by
a cumulative 3.3 percent), and was
unchanged in 2003.

I'd think that as the economy has recovered after the brief recession in 2001-2002, that real personal income has continued to grow (don't have time to research that more now) .. but perhaps we will have to agree to disagree.. :)

-Ted

[Issachar]

I wish to be friends brother and we can agree to disagree ....

One of us, or both, will one day be hit up side the head with reality.

What do you think about my comments concerning price inflation between '52 and today and savings rate just 40 years ago vs. the negative rate today? All that while the standard of living has not actually changed. Charts are merely a graphical form of statistics. There is an interesting book available called "how to lie with statistics". :)

Issachar