Keynesian Economics

Originally Posted by mame

No way bro. The first link is an opinion piece and the second is outdated. The most up to date data(which I've already linked to, from FRED) has real wages at about the same level as in 2009. That isnt a decline.

You are right, wages are the same, they just don't buy as much.

Originally Posted by NoDrama

The Fed doesn't set interest rates, they can only control them so far with the FOMC. At this point there is no policy they can undertake to keep the bond vigilantes from smelling blood, they are spent and have shot their last wad (With a twist).

I'm actually in the process of figuring out just how much interest rates have been manipulated... Believe it or not, there are some fundamentals that explain at least a portion of low rates if not a good chunk of it. Ill get back to you when I don't have to post through my phone and we can discuss it a bit at length (and the lady is asking me put my phone down anyway.. Eh).

Originally Posted by mame

I'm actually in the process of figuring out just how much interest rates have been manipulated... Believe it or not, there are some fundamentals that explain at least a portion of low rates if not a good chunk of it. Ill get back to you when I don't have to post through my phone and we can discuss it a bit at length (and the lady is asking me put my phone down anyway.. Eh).

$16 trillion in DIRECT manipulation, lets not forget all the other manipulation that goes on that makes it all possible.

Originally Posted by NoDrama

$16 trillion in DIRECT manipulation, lets not forget all the other manipulation that goes on that makes it all possible.

Well, our candidate may be pretty much done, but let's hope he can amass enough delegates to squeeze that full Fed audit out of Mittens.

Originally Posted by sync0s

Well, our candidate may be pretty much done, but let's hope he can amass enough delegates to squeeze that full Fed audit out of Mittens.

I expected RP to lose this nomination, but that doesn't mean he hasn't awakened a fire in some other person who WILL make the difference.
A full audit of the Fed? Never happen, it would just be another whitewash. I would also like to see a full physical accounting of every ounce of gold in Ft Knox, which I suspect has very little but its been nearly 70 years since the last one and you hear very few people concerned about it.

I think the fiat system of economic governance is completely wrong. The most important difference between commodity money, such as a proper gold standard, and ‘paper money’, such as our present fiat money system, is the elasticity of the money supply. In the former, money is essentially inelastic, in the latter it is perfectly elastic. Most economists would say that elasticity is a big advantage. It makes fiat money, if managed properly, superior as it allows the Fed to stabilize the economy.

My argument is that this is false, and that the opposite is true. The elasticity of the money supply in a fiat money system, and the constant expansion of the money supply under present arrangements in particular, systematically distorts relative prices, disorients economic actors and destabilizes the economy over time. Imbalances accumulate, which obstruct further growth and which will be countered with accelerated money injections, destabilizing the economy further. Elastic money is unnecessary, suboptimal, unstable, and ultimately unsustainable and history has shown that every fiat currency ever tried has failed miserably. Even a small 2% per year inflation rate eventually eviscerates the middle class as the heavy burden of taxes and unfunded wars causes market distortions, if you understand how exponents work it becomes quite obvious. The system must make enough money available each year to pay off the cash injection PLUS the interest due from the previous year. This guarantees inflation over the short, medium and long term, an ever widening ocean of constantly devaluing money.

Originally Posted by NoDrama

The Fed doesn't set interest rates, they can only control them so far with the FOMC. At this point there is no policy they can undertake to keep the bond vigilantes from smelling blood, they are spent and have shot their last wad (With a twist).

They set the rates on what they lend to banks. The discount rate is what I was getting at.

Originally Posted by NoDrama

You are right, wages are the same, they just don't buy as much.

Agreed. the important things to the average Joe, like food and gas have risen a lot higher than wages. The dollars purchasing power has dropped dramatically.