The American Dream

AJ let the charter for the Bank of the US to lapse since he knew the Rothchild's Bank would be the forerunner to the Federal Reserve; that it would be destructive and hold too much power and that it would only serve the privileged elite at the expense of the working class. There's plenty online documenting that.

He was right to be worried because following the War of 1812, Congress chartered the Second Bank of the United States (the First Bank?s charter had expired in 1811). Inflation had run rampant during the war, and the Bank was created to stabilize the economy. However the Bank ultimately made matters worse by printing paper money and increasing lending to banks and businesses. This led to a boom of economic prosperity in the late 1810s that crashed with the Panic of 1819.

As far as the Depression we all know and talk about, there's plenty of opinions, including a paper written by Nobel Prize winner Milton Friedman and Anna Jacobson Scwart: A Monetary History of the United States, 1867-1960. They they argued that the Depression was far from inevitable, but brought about by an "inept" Federal Reserve.

I can find hundreds, but here's another one: THE FEDS DEPRESSION AND THE BIRTH OF THE NEW DEAL
Excerpt: "The same Federal Reserve caused the Great Depression when its wise men made a series of cumulative mistakes that contracted the money supply by one-third and wiped out purchasing power in an unprecedented fashion."

One only has to look at the pattern of booms and lending, who made money by scooping up businesses and property at pennies to the dollar, to realize the corruption that having an entity, which isn't even a government agency, connected to Banks with such unyielding power can be wrought.

You shudder to think what would happen without the FEDS now? We wouldn't be in this mess had they not kept rates so low for so long to encourage a lending bubble, and without the FEDS lackeys, like Greenspan, spewing lies about there not being any real estate bubble.

Historical Error 26: A Bogus Quotation from Milton Friedman on the Federal Reserve Deliberately Causing the Great Depression

I happen to disagree with the good doctor. It is not the first time I disagreed with a PHD.

The chart in the link debunks his claim. The Fed actually expanded the money supply.

Milton Friedman, professor of economics at the University of Chicago and winner of a Nobel Prize in economics, stated:

Historical Error 26: A Bogus Quotation from Milton Friedman on the Federal Reserve Deliberately Causing the Great Depression

I happen to disagree with the good doctor. It is not the first time I disagreed with a PHD.

The chart in the link debunks his claim. The Fed actually expanded the money supply.

Milton Friedman, professor of economics at the University of Chicago and winner of a Nobel Prize in economics, stated:

The Federal Reserve definitely caused the Great Depression by contracting the amount of currency in circulation by one-third from 1929 to 1933. [Web of Debt, p. 146]

------------------------------------------------------------------

If we had not a mechanism to provide liquidity during the credit crisis of 2008, I shudder to think what would have happened...I always will. (my comment, not Friedman's)




​

Well, bogus quote or not, I do not have the time to research it, Friedman still believed that the FEDS were the cause of the Depression. This is from a speech made by Bernanke and no one call bogus on it since it is printed directly on the FEDS web site. You stated you could not find one claim at all that anyone thought the FEDS were responsible, well, I provided it to you. Whether you want to argue with a Nobel Prize winner and Ben Bernanke, well, that's your prerogative.

From Bernanke's speech (and there is much more proving his theory:

"Friedman and Schwartz take the unusually severe and protracted U.S. banking panic as yet another opportunity to apply their identification methodology. Their argument, in short, is that under institutional arrangements that existed before the establishment of the Federal Reserve, bank failures of the scale of those in 1929-33 would not have occurred, even in an economic downturn as severe as that in the Depression. For doctrinal and institutional reasons to be detailed in a moment, however, the extraordinary spate of bank failures did occur and led in turn to the massive extinction of bank deposits and an abnormally large decline in the stock of money. Because the decline in money induced by bank panics would not have occurred under previous regimes, Friedman and Schwartz argued, it can be treated as partially exogenous and thus a potential cause of the extraordinary declines in output and prices that followed."

Then, at the end of the speech on Friedman's 90th birthday, Bernanke says:
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.
Best wishes for your next ninety years"

Historical Error 26: A Bogus Quotation from Milton Friedman on the Federal Reserve Deliberately Causing the Great Depression

I happen to disagree with the good doctor. It is not the first time I disagreed with a PHD.

The chart in the link debunks his claim. The Fed actually expanded the money supply.

Milton Friedman, professor of economics at the University of Chicago and winner of a Nobel Prize in economics, stated:

The Federal Reserve definitely caused the Great Depression by contracting the amount of currency in circulation by one-third from 1929 to 1933. [Web of Debt, p. 146]

------------------------------------------------------------------

If we had not a mechanism to provide liquidity during the credit crisis of 2008, I shudder to think what would have happened...I always will. (my comment, not Friedman's)




​

It's always interesting to see how different perspectives interpret the same information (words, stats, ideas) differently.

For instance, despite Webster's deeply conjoined definitions of money and currency, I personally focus on 'currency' as more broadly encompassing than 'money'. So in reading the above, it's fascinating to me the way these two words get batted back & forth between authors as if they are eternally interchangeable and exchangeable.

Sometimes money & currency align and are interchangeable. At other particular junctures in time, expanded money supplies appear directly related to shrinkage of currency values. That is a tipping-point when 'currency' is forced to begin a transformation / redefinition of it's value basis into a broader spectrum including innovation, sweat, room&board, information, or whatever personal hoo-hoo-woo-woo gets one thru 'the night'.

BUT... that's just my perspective and probably poorly described at that.

Well, bogus quote or not, I do not have the time to research it, Friedman still believed that the FEDS were the cause of the Depression.

Here is another Noble Prize winner:

M2 did not plunge because the Fed sharply reduced monetary base, although there were occasions in later life when Friedman asserted that it did.
The point is that the Fed?s sin was passivity. What the economy really needed was more activism.


Great Depression blogging - NYTimes.com

It's always interesting to see how different perspectives interpret the same information (words, stats, ideas) differently. .

What's also interesting is that the so called bogus quote comes from an argument that comes from an investors web selling wealth building strategies. Not only is he a wealth adviser, he seems to think he is an economist as well. But, what is even funnier, is he prints another quote that he validates which pretty much sums up Friedman's position. Then uses a graph, that is not very specific and extremely basic, to argue his point, when Friedman studied the Depression extensively.

In any event, you accused me of not backing my assertions with facts and I provided them to you.
Many people do not realize that the Federal Reserve Bank (FEDS) is not a government agency and doesn't answer to anyone. They are simply audited by Congress for airs so that the sheeple think it is regulated. Greenspan even admits it in an interview:

"Well, first of all, the Federal Reserve is an independent agency, and that means, basically, that there is no other agency of government which can overrule actions that we take. So long as that is in place and there is no evidence that the administration or the Congress or anybody else is requesting that we do things other than what we think is the appropriate thing, then what the relationships are don't, frankly, matter.

Doesn't anyone have a problem with this or see the room for corruption when Banks are running your economy and not your government?

Through its ill-fated acquisition of Countrywide Financial, B. of A. remains essentially a mortgage bank and not a very healthy one.

Chief Executive Brian Moynihan urged shareholders to stay patient, suggesting the worst is behind the company. His statement is more of a wish than a tangible fact. B. of A. must deal not only with its existing portfolio but also a $32 billion mountain of nonperforming loans, much of which includes foreclosure cases across the U.S. market.

Moreover B. of A. has little wiggle room in its credit loss provision to offset future losses. In 2010, B. of. A. released nearly $5 billion from those reserves ? roughly half of its 2010 profit excluding the write-downs and other charges.

B. of A.?s capital position is actually stronger than it was a year ago, but as the fourth-quarter results suggest, betting its mortgage portfolio will hold the line on losses remains a gamble.

For Bank of America, crisis isn?t over MarketWatch First Take - MarketWatch

Not quite ready for prime time.

If we had not a mechanism to provide liquidity during the credit crisis of 2008, I shudder to think what would have happened...I always will. (my comment, not Friedman's)

​

We can't have failure in a free market? All heaven and no hell? How can currency manipulation and "free market" intervention be thought of as a strong, stable, honest and legitimate economy? I shudder to think how much worse the correction is going to be after the Fed continues to double-down on top of these increasingly bad bets.

It saves face in the short term, but if you live below sea level the water will eventually find it's way over the dikes.

When an economy is built upon a growth mandate, many complex forces come to play in that arena. They manifest themselves in the form of fraud in order to leverage ahead of the inherent inflation built into such a system. It forces people to gamble. When that risk is rampant in the very institutions meant to protect and guide us, the answer isn't more of the same.

Volumes of history will be written on these puppets and cheerleaders.


"We will not have any more crashes in our time." - John Maynard Keynes (1927)


"There will be no interruption of our permanent prosperity." ? Myron E. Forbes, President, Pierce Arrow Motor Car Co. (January 12, 1928)


"There is no cause to worry. The high tide of prosperity will continue." - Andrew W. Mellon, Secretary of the Treasury. (September 1929)


"There may be a recession in stock prices, but not anything in the nature of a crash." - Irving Fisher, Leading U.S. Economist, New York Times (Sept. 5, 1929)


"Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board." - New York Times (October 14, 1929)



"This crash is not going to have much effect on business." - Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago (October 24, 1929)


"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices." - Goodbody and Company Market-letter Quoted in The New York Times (Friday, October 25, 1929)


"Financial storm definitely passed." - Bernard Baruch, cablegram to Winston Churchill (November 15, 1929)


"The Government's business is in sound condition." - Andrew W. Mellon, Secretary of the Treasury (December 5, 1929)


"President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days." Washington Dispatch (March 8, 1930)

?Gentleman, you have come sixty days too late. The depression is over.? - Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery (June 1930)

"The worst is over without a doubt." James J. Davis Secretary of Labor (June 29, 1930)


"We have hit bottom and are on the upswing." - James J. Davis, Secretary of Labor (September 12, 1930)


"The country is not in good condition." - Calvin Coolidge (January 20, 1931)


"The depression has ended." - Dr. Julius Klein, Assistant Secretary of Commerce (June 9, 1931)


"In other periods of depression, it has always been possible to see some things which were solid and upon which you could base hope, but as I look about, I now see nothing to give ground to hope-nothing of man." - Former President Calvin Coolidge, (1933)

Stunner: Gold Standard Fully Supported By... Alan Greenspan!? | zero hedge


Stunner: Gold Standard Fully Supported By... Alan Greenspan!?

You read that right. After such establishment "luminaries" as World Bank president Robert Zoellick, Warren Buffett's father Howard, Jim Grant, and, most recently, Kansas Fed president Thomas Hoenig, all voiced their support for a return to a gold standard, the most recent addition to the motley group of contrite voodoo shamans is none othe than the man who is singlehandedly responsible for America's addiction to cheap toxic credit, who spawned such destroyers of the middle class as the current Chaircreature, and who currently is the chief advisor in John Paulson's crusade to gobble up every ounce of deliverable physical in the world: former Fed Chairman - Alan Greenspan! In an interview with Fox Business, the man who refuses to go away into that good night: "We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity... There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard." And a further stunner: Greenspan himself wonders if we really need a central bank. Now our only question: why couldn't the maestro speak as clearly and coherently during his tenure which resulted in our current near-terminal financial state. And as a reminder, courtesy of Dylan Grice, if and when we do get a return to a gold standard there would be a need to reindex the monetary base to a real time equivalent price of gold, putting the price of the precious metal at about $6,300: "The US owns nearly 263m troy ounces of gold (the world's biggest holder) while the Fed's monetary base is $1.7 trillion. So the price of gold at which the US dollars would be fully gold-backed is currently around $6,300." And here you have people worried about day trading volatility...

Well, bogus quote or not, I do not have the time to research it, Friedman still believed that the FEDS were the cause of the Depression. This is from a speech made by Bernanke and no one call bogus on it since it is printed directly on the FEDS web site. You stated you could not find one claim at all that anyone thought the FEDS were responsible, well, I provided it to you. Whether you want to argue with a Nobel Prize winner and Ben Bernanke, well, that's your prerogative.

From Bernanke's speech (and there is much more proving his theory:

"Friedman and Schwartz take the unusually severe and protracted U.S. banking panic as yet another opportunity to apply their identification methodology. Their argument, in short, is that under institutional arrangements that existed before the establishment of the Federal Reserve, bank failures of the scale of those in 1929-33 would not have occurred, even in an economic downturn as severe as that in the Depression. For doctrinal and institutional reasons to be detailed in a moment, however, the extraordinary spate of bank failures did occur and led in turn to the massive extinction of bank deposits and an abnormally large decline in the stock of money. Because the decline in money induced by bank panics would not have occurred under previous regimes, Friedman and Schwartz argued, it can be treated as partially exogenous and thus a potential cause of the extraordinary declines in output and prices that followed."

Then, at the end of the speech on Friedman's 90th birthday, Bernanke says:
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.
Best wishes for your next ninety years"

ben is referencing the fed's failure to act

For Bank of America, crisis isn?t over MarketWatch First Take - MarketWatch

Not quite ready for prime time.

boa was forced to consume countrywide....huge revelation

What's also interesting is that the so called bogus quote comes from an argument that comes from an investors web selling wealth building strategies. Not only is he a wealth adviser, he seems to think he is an economist as well. But, what is even funnier, is he prints another quote that he validates which pretty much sums up Friedman's position. Then uses a graph, that is not very specific and extremely basic, to argue his point, when Friedman studied the Depression extensively.

In any event, you accused me of not backing my assertions with facts and I provided them to you.
Many people do not realize that the Federal Reserve Bank (FEDS) is not a government agency and doesn't answer to anyone. They are simply audited by Congress for airs so that the sheeple think it is regulated. Greenspan even admits it in an interview:

"Well, first of all, the Federal Reserve is an independent agency, and that means, basically, that there is no other agency of government which can overrule actions that we take. So long as that is in place and there is no evidence that the administration or the Congress or anybody else is requesting that we do things other than what we think is the appropriate thing, then what the relationships are don't, frankly, matter.

Doesn't anyone have a problem with this or see the room for corruption when Banks are running your economy and not your government?

​

i, for one, do not want monetary policy subjected to the shifting winds of politics. an independent fed free of frank,paul, mccain,pelosi is a preferable fate for our country.

i, for one, do not want monetary policy subjected to the shifting winds of politics. an independent fed free of frank,paul, mccain,pelosi is a preferable fate for our country.

Those checks and balances of the three branches of our government are quite pesky aren't they.

i, for one, do not want monetary policy subjected to the shifting winds of politics. an independent fed free of frank,paul, mccain,pelosi is a preferable fate for our country.

Why even have one at all? The markets would correct themselves. The likes of Pelosi and McCain are already involved politically because they are spending money we do not have, especially had it been tied all along to the gold standard. It's all a farce that the FEDS act independent of political printing presses. When I meant government, I meant We, the People operating monetarily the way we should be constitutionally.

Today's macro news:

Russia Imposes Inflation-Driven Price Controls: Will Use Price Caps On "Socially Important" Commodities | zero hedge

Russia To Increase Gold Holdings By 13% In 2011, Will Buy 100 Tonnes Of Gold Each Year | zero hedge




And somewhere between the macro and micro is the mythical BOA/Countrywide being sued, again, over "massive mortgage fraud."

Insurance Companies Sue Bank Of America Over "Massive Mortgage Fraud", Find 91% Of Securitized Loans Are Misrepresented | zero hedge

Why even have one at all? The markets would correct themselves. The likes of Pelosi and McCain are already involved politically because they are spending money we do not have, especially had it been tied all along to the gold standard. It's all a farce that the FEDS act independent of political printing presses. When I meant government, I meant We, the People operating monetarily the way we should be constitutionally.

i believe the fed's actions, as an independent entity, relevant to this downturn, have been quite masterful at averting chaos. the legislative/executive branch can reign in spending only when term limits are in place, and the supreme court decision to allow unlimited corporate contributions is reversed.

First Tunisia rioting and revolution over inflation, unemployment and food prices. If Egypt goes, watch out. Historic times we are witnessing. Maybe that's redundant but anyway...

Breaking: President's son and family 'have fled to the UK'



Breaking: President's son and family 'have fled to the UK' - National Foreign Policy | Examiner.com

the legislative/executive branch can reign in spending only when term limits are in place, and the supreme court decision to allow unlimited corporate contributions is reversed.

+1

I haven't posted much about the details of the gold/silver markets because I didn't want to confuse the issue of investment vs economics, but in the PM market they are one in the same.

Just as the POMO/bailout/stock market operations are confusing and difficult to follow, so are the gold/silver markets. They are the yin to the dollar yang. Precious Metals are centered around the LBMA (London Bullion Market) and the Comex (Commodity Exchange) in NYC.

This is where the metal meets the road and electronic trickery fails. This is where futures contracts are settled supposedly with physical metals for those who stand for delivery at the end of the month. Now they allow settlement in cash, against it's bylaws, but in light of the fact they don't physically have the metal to cover, rules are made to be broken.

It's also where the CFTC (US Commodity Futures Trading Commission) continues to raise margins for longs (3x in the last 6 weeks) but allows JPM (an arm of the Fed) and Blythe Masters to short silver at a ratio of 100:1. That's 100 short contracts for every 1oz. of silver available. This is what we call naked shorting. Something that is illegal in equities but "allowable" in commodities because it's in our national interest or something. In the same way, we allow our government to artificially prop up our markets, we allow them to suppress the precious metals market. Why would they be so interested in suppressing something which doesn't matter? Can they hold back the forces of nature on two fronts?

Anyway, there have been strange movements in the Comex for the past two months. As we approach options expiration on 1/27 they are getting wilder. There are rumors flying that sovereign funds are going to stand for silver delivery in March. This is why there are massive raids occurring in the paper markets and Comex vaults.

JPM is in an all-out assault against the paper silver price, while trying to buy up every available physical ounce of silver on the planet so they can try to prepare for the February rise into March.

This is where gold and silver differ from all the rest. There is a paper AND a physical market. This asset class is actually obtainable and can expose a naked paper market for the currency-manipulated sham that it is. Let's see what happens starting in the beginning of February. If correct, we could see silver approaching $40/oz by March 1. Anything less and the Comex could be forced into a commercial failure which would domino into the LBMA, the Bank of England and the US government.

I don't see this happening, but that is where this road leads. Let's see how it plays out. If you don't have any metal, this next week would be an excellent time to start IMHO.

Keep up with daily Comex action with Harvey Organ's blog...

Harvey Organ's - The Daily Gold & Silver Report

I also enjoy Turd Ferguson's blog for all the Comex action in laymans terms. (Turd Ferguson was the name the Burt Reynolds character chose for the SNL Jeopardy! skit just in case you were wondering.)

Along The Watchtower


Stay tuned!

Ascent of Money - PBS feature

Sunday night I watched this Niall Ferguson PBS feature on the history of money. Rewatched it tonight online and learned even more.
Here's the link


Watch the two-hour THE ASCENT OF MONEY | Ascent of Money