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| Ron Paul Drops "Sound Money" And Endorses PRINTING! in forum [Market-Ticker]
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Bozonian
Posts: 19871
Incept: 2007-09-01
Saratoga Springs, New York
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He's not any worse than virtually all the others in fiscal shenanigans and Washington needs an outsider, monkey wrench thrown into its system.
And what he's talking about is by any other name, simply a U.S. treasury default on the bonds owned by the Federal Reserve. I thought the unpayable debt needed to be defaulted?
Granted a gold standard wouldn't solve anything, and in fact would make matters worse. Why? Because the super rich will just buy up all the gold and then we'd really be screwed. Backing currency with any specific, or limited type of asset makes "owning" the world possible by the few to the detriment of the many.
Lending money into existence on real world value created (property, services etc) is the way to go. It just has to be managed properly, at a minimum, Glass-Steagall separation of lenders and investment banks needs to be put back.
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Forget about blaming, fighting with, or crediting other people. The only real challenge in life, is with yourself. -- Me
Everything I write is my opinion and not to be considered proven fact. Nothing I write should be considered financial advice.
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Fraudster
Posts: 4171
Incept: 2011-05-10
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Karl I don't see how what he is saying is functionally any different from what we have now. Consider: a) Interest from the Fed is remitted back to the Treasury (less payment of dividends to shareholders -  to that); and b) Treasuries held by the Fed are rolled over basically for an indefinite period. Bottom line re: Ron Paul, I agree with you. The guy is a snake oil salesman.
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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
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Marketswork
Posts: 2320
Incept: 2009-02-27
Southern Oregon
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Ron Paul Resolution...2012
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William Wallace enters history when he assassinated William de Heselrig, the English High Sheriff of Lanark, in May 1297. Over 300 million guns and over 1 trillion rounds of ammo, 535 pricks are pushing the buttons of 300 million or more free gun owning people. --I don't like the odds for those pricks.
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Ktrosper
Posts: 1498
Incept: 2010-04-06
ft collins co
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Gen wrote..Destroying the bonds The Fed holds while leaving the "excess reserves" that are on deposit, which The Fed creates with a push of a button to pay for those bonds, is in fact exactly identical to unbacked emission of currency. He thinks we're too stupid to realize this...
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The unexamined life is not worth living.-Socrates
The only stable state is the one in which all men are equal before the law.-Aristotle
Liberty exists now in the spaces government has not yet chosen to occupy.-Doc Zero
I anticipate that 10 Dallas Cowboys Cheerleaders will blow me this evening.-K.D
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Searcy17
Posts: 103
Incept: 2011-05-17
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I think Jim Rogers is as smart as they come and he doesn't back a gold standard, says it has never worked, and won't ever work.
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Icanhasbailout
Posts: 9939
Incept: 2009-03-10
Imaginationland
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Maybe RP just moved into the "get it over with quickly" camp.
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Nanna
Posts: 5658
Incept: 2008-01-20
NY State
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If Paul was referring to the synthetic "asset backed" (which arguably are NOT asset backed) securities which the Fed took from the banks in exchange for Treasuries as those securities which should be expunged, I would agree with his position.
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"There are fluctuations in the market that don't mean anything."Ira Gluskin, February 14, 2012
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Jonsjon
Posts: 26
Incept: 2010-07-21
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I don't understand, isn't it what we have now?
QE = money printing? Confused.
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Moshe
Posts: 50
Incept: 2011-05-12
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Wait a minute.
"...while leaving the "excess reserves" that are on deposit..."
How do we know how he feels about that?
What has he said?
Has anyone asked?
I think this is premature, and I will withhold judgement until I have more information.
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Leicestersq
Posts: 221
Incept: 2009-10-12
UK
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Is printing of new money always and everywhere a bad thing? Clearly not.
When you play golf, the more clubs you have in the bag, the more situations you can deal with. The trick is not to use a driver on the green. If the monetary aggregates are declining due to deflation, you can use monetary printing to counteract a deflationary spiral. Used judiciously, new money issued by government can stimulate output and demand.
The question is, if this is done legally, will it solve any problems? Well clearly it can't on its own, you need a move towards fiscal balance to counteract the inflationary expectations it would raise, and that other bit isn't on the agenda.
If I were going to print, it would be to give to the Chinese for their lovely imports, until they drop their exchange rate peg. Hey, just keep on presenting new dollars to the bank if China until they get the message. Aside from that, don't dismiss printing as something that always leads to a set amount of inflation. That can happen, sure, but not always. It is always useful to have another club.
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Karlmarxghost
Posts: 4145
Incept: 2009-01-26
I'm Your Huckleberry
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Here is the way I am reading this, maybe I am wrong so correct me if I am. The FED pushes a button and creates $1.6 trillion dollars and gives it to the government and in return gets bonds with interest attached. We have two choices we can make in regards to the $1.6 billion dollar debt we have We can A) Pay the interest on the debt when they sell the bonds until maturity and then cover the debt also upon maturity hence taking the money out of the economy(although we never pay the debt upon maturity it just rolls over or we take on new debt to pay the old debt because we continually run deficits). End result is We pay a ton of interest but the debt still remains in the economy because we have a habit of rolling over our debt or issuing new debt to pay off old(which is why we owe $14 trillion dollars). What Ron Paul is proposing B) Is burning the bonds. Now this would mean no debt would pay paid back, that money would just sit in the economy hence the inflation. However we wouldnt be paying interest on the money it would be no different than really issuing our own interest free currency. Either option there is inflation because in both cases we don't pay off the debt, we just roll it over or issue new debt to pay for the old debt. The real difference I see here is one option you pay interest and the other you dont. Kucinich introduced a bill that both you and I Karl were cheering on that really was something similar and that is instead of having to borrow money into existence why not just spend it into existence interest free. It's our money right? So why do we have to pay interest on our own money? Ill take this a step even further, how did Andrew Jackson end the Second Bank of the United States? http://en.wikipedia.org/wiki/Bank_WarI still havent fully wrapped my head around this yet but I wouldnt be too quick to **** on it. There might be some good in here that you just dont see. What I would like to see is the banks reaction to such a notion. That will tell the real story. I think I get one more post for today so Ill be glad to respond because maybe there is something I am not seeing....
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My views are my view and mine alone. Karl or ticker forum does not endorse or necessarily agree with my views. DO not trade on my views or take them personally.
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Jkilkelly
Posts: 1628
Incept: 2007-07-20
Mercer Island WA
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How would the real bond market react to this move?
Instant sell off. Would have to - now the US is admitting it will not honor its debts without printing money.
So lower dollar, lower value of bonds - KABOOM
Meanwhile, thru the IMF, we will lecture the Greeks on the evils of defaulting on its obligations and force to sell its national treasures and assets to support even more sovereign debt. HUH?
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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist
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Mdm
Posts: 332
Incept: 2010-10-13
South Florida
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Quote:Maybe RP just moved into the "get it over with quickly" camp. While I agree this idea is completely the opposite of sound money and is hypocritical, the idea itself might not be that awful. All of this money was already borrowed by the government and in the economy. It's not like they are issuing additional currency that is not already in existence. Wouldn't the inflation effects of doing this be minimal because the money is already in the system? |
Moshe
Posts: 50
Incept: 2011-05-12
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To those who think this is a bad idea -
Are you saying you're OK with paying interest on your own money?
If not, propose a solution.(One better than this, that is.)
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Jkilkelly
Posts: 1628
Incept: 2007-07-20
Mercer Island WA
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Yes but who will buy the new debt that the government will now happily issue because the new room under the ceiling allows them to continue their crazy spending habits?
If allowed to sell freely on the non manipulated market, interest rates will rise dramatically.
But we can't afford real market interest rates because of the debt load. So back comes the Fed with another $1.6 Trillion money creation.
There is no discipline imposed with such a move NONE
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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist
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Wis/min
Posts: 5361
Incept: 2009-08-14
On the border
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In the end this is just more game playing to avoid dealing with the rampant overspending and excessive promises and find another way to cheat the debt limit.
It only kicks the can down the road a bit.
Is that what we really need?
There is no free lunch folks.
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Mdm
Posts: 332
Incept: 2010-10-13
South Florida
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Quote:There is no discipline imposed with such a move NONE This move is needed in addition to balancing the budget. I highly doubt RP was advocating continuing current spending levels given his libertarian leanings. |
Jkilkelly
Posts: 1628
Incept: 2007-07-20
Mercer Island WA
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RP just made a number of new buddies on the DEM side.
They are going to pop a boner on this one - wow wait a minute, we dont have to increase the debt limit but we can borrow another 1.6T - victory
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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist
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Bertdilbert
Posts: 2651
Incept: 2008-12-22
CA
Online
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Ron Paul just went from monetization of bonds to monetization of thin air...
heh, we also went from abolish the Fed to we need the Fed. I want to see Mish dodge this one.
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Bertdilbert
Posts: 2651
Incept: 2008-12-22
CA
Online
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Free **** Army is gonna love this.
The government can take all the credit card debt off everyone and WHOOSH, issue bonds to the Fed and cancel them! Mortgage payment? No problem! Obama gonna pay my mortgage! Send your mortgage to the Treasury which will issue bonds to the Fed! Whoosh! mortgage paid in full!
We need a cartoon: Ron Paul's face on a butter churn with Bernanke on churn duty!
As a result of today's revelation, I changed my siggy!
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Smacktle
Posts: 1358
Incept: 2009-01-20
Texas
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You want to believe in the guy, you want to believe in anybody! But there is nobody (that I can see).
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The faults of the burglar are the qualities of the financier.
- George Bernard Shaw
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Moshe
Posts: 50
Incept: 2011-05-12
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The hasbara brigade is out in full force.
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Bertdilbert
Posts: 2651
Incept: 2008-12-22
CA
Online
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Hey Karl, you would know better than me. How would this play into Ron Paul's suggestion?
"The validity of the public debt of the United States, authorized by law... shall not be questioned," reads the 14th Amendment."
Is Ron Paul suggesting that debt held by the Fed is not Valid debt? And by that token, is Ron violating the constitution of the United States? ROTFLMAO
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Bohemian
Posts: 9658
Incept: 2010-07-27
California
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Debt is a mathematical lie. RP hasn't figured it out yet. Maybe one of his friends will pass it on. I still support him over any other candidate. No one comes close on other issues, IMO. https://www.facebook.com/note.php?note_i....Quote:In a hyper simplified way, one can say that the hoax of the debt is a simple mathematical equation where two opposite factors cancel each other, just like |-10| = |+10|, whose result is 0. So, if you issue a credit in the amount equal to the debt, and giving it to people who might turn it to the State to repay its public debt, then the accounting problem would be solved in 2 minutes without creating inflation. Banks function and are based upon such stupid equation, and not on the accounting system of give and take, or in and out. The problem only occurs when banks hold both credit and debt, i.e. crating that phenomenon well known and denounced by Italian professor Giacinto Auriti of 200% usury by banks at the time of monetary creation. By the way, FIAT money isn't the problem at all as in all reality it would be a very solid and practical monetary system as advocated by both American author Bill Still, and Italian professor Giacinto Auriti. The problem isn't what backs up the money, but who owns it! The central issue in fact is monetary sovereignty. What I am trying to explain is the same concept expressed by Galileo saying “And yet it does move.” In the banking scenario you have a debt as result of a credit being issued or crated out of thin air, and the claim that they should cancel each other out, without creating inflation, of course! But that's not the case due a math trick. The problem of debt-money is that when money is created or issued, in reality only debt is created, and not real credit for the people. There fore, both sides of out equation are debt, because they are actually owned by the same person or institution. This is the mathematical fraud of public debt. In fact, right when a bank or any other credit institution lends out money, it creates that money writing it on its balance sheet as a profit, for the entire amount. That's the first 100% profit from lending. On top of this, the bank requires the repayment of such debt, plus taxes and interest, of course! Now, once we have understood this simple mechanism, the follow step is understanding our simple claim, which is that money should belong to the people, not to banks who create it on behalf of the people. In other words, we ask for monetary sovereignty, not for a gold standard or any other alternative currency. In our opinion, sound money isn't gold or silver, but PROPERTY! Money belongs to the people, as they create its purchasing power with their work, not to the banks which create money on behalf of the people. By the way, banks should not only crate money on behalf of the people, but especially for the people's best interest and not for their own greed and personal profit. We struggle for monetary sovereignty as that's the real core issue of all real democracies! A people without monetary sovereignty isn't free, but serf and slaves to those who own the money and especially the sole right to issue it. Specifically, we refer to the current banking fraud as seigniorage. To keep things in prospective, and on a very practical level so that they can actually work for us, the best way to solve our debt problem would be to abolish it, with proper mathematical understanding of my proposal by balancing the equation. Be careful here, I am not suggesting the same scenario as Argentina's recent events. However, we are proposing a complete debt moratorium, just as it is conceptualized by the biblical Jubilee, i.e. the cancellation of all debts on a solid mathematical ground and understanding. Let's try to further analyze this in a simple and clear manner. So, if my problem is debt, which of course is illegitimate in the first place because banks have appropriated the money at the time of issue, without redistributing or crediting it to the whole collectivity or people, then the solution is as simple as the theft that it has been committed. Furthermore, it is even mathematically possible. To cancel this debt, we just need to create the money needed to cancel it out, give it to the borrowers so that they can repay the lenders. This would not create any inflation at all because of that very same equation we have talked about right at the beginning of our discussion. Remember, |-10| = |+10|, whose result is 0? Now, at this point, if we can understand this very simple trick, we might as well opt out of wasting our time crediting this money to the debtors in order to repay their creditors. In fact, we may as well just cancel all debts, which is in all reality what the debt moratorium is all about. Just as a least common denominator in mathematics, we would achieve the same result and again, without creating any inflation. However, the only problem is that in reality the creditors, or lenders, don't want their money back! They don't need money because they can create all the money they want, anytime they want and out of thin air! What they really want is the POWER and the monopoly of creating money as with it, they can can control nations as if holding them slaves with a leash, the debt-leash or debt-money. Anyhow, I cannot spend too much time on such issue, because that is political in nature, not scientific at all! In fact, even with a debt moratorium we wouldn't have completely solved all our problems, unless we had addressed another important aspect of the matter, which is liquidity. As a matter of fact, even canceling the debts won't change the fact that there isn't enough money around to even spend, not just to pay off the debts. Lets look at Argentina more carefully in order to understand this a little better. After all, what banks are doing today in Greece, Spain, Portugal and Ireland is the same thing they did with Argentina and Italy will be the next. Argentina was disgustingly raped by bankers as what destroyed the Argentine market, and especially worn thousands and thousands of families, was not the cancellation of debts or debt moratorium because there has never been one. The problem was in fact the Argentine lack of liquidity, or money in the system. In fact, Banks have never re-released the credit that they created directly the people, in the form of what we call “Basic Income of Citizenship,” and that we strongly demand to our politicians and representatives. Therefor, all the credit created in Argentina was debt and because banks didn't give this credit to the people so that they could spend it into the system, they made it impossible, mathematically speaking, to pay off such debts. Then, when this debt has reached explosive levels, banks have used it as a pretext to completely drain the market, not granting any more credit. This is usury, and the Argentine debt, as well as any other national debt is just a scam, which willingly and deliberately killed the Argentine economy and the Argentinians! Usury is in fact a crime against humanity, before being even illegal. The one thing I insist really insist on is that, in reality, and mathematically of course, debt does not exist. There is only one cash flow that is unhealthy because the subject issuer also appropriates the value put in circulation. This is the real magic of the economy, is in the equation with which it works and is a purely mathematical fact not an opinion. The money has value because there are needs to satisfy. Now, if you had money but not goods, then it is obvious that if you didn't give up some of your money for the desired good, then you would create a depression, just like the one we are experiencing today. On the other hand though, it cannot last forever either, because bankers have the bad habit of not wanting to work, and therefore, even when they will have bought everything, then who is going to work it for them?
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"The politicians are put there to give you the idea you have freedom of choice. You don't. You have no choice; you have owners. They own you. They own everything." - George Carlin
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