Inflation

hanimmal said:

Should keep reading it.

https://www.federalreserve.gov/aboutthefed/section16.htm

2. Application for notes by Federal Reserve banks
Any Federal Reserve bank may make application to the local Federal Reserve agent for such amount of the Federal Reserve notes hereinbefore provided for as it may require. Such application shall be accompanied with a tender to the local Federal Reserve agent of collateral in amount equal to the sum of the Federal Reserve notes thus applied for and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills of exchange, or acceptances acquired under section 10A, 10B, 13, or 13A of this Act, or bills of exchange endorsed by a member bank of any Federal Reserve district and purchased under the provisions of section 14 of this Act, or bankers' acceptances purchased under the provisions of said section 14, or gold certificates, or Special Drawing Right certificates, or any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof, or assets that Federal Reserve banks may purchase or hold under section 14 of this Act or any other asset of a Federal reserve bank. In no event shall such collateral security be less than the amount of Federal Reserve notes applied for. The Federal Reserve agent shall each day notify the Board of Governors of the Federal Reserve System of all issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to which he is accredited. The said Board of Governors of the Federal Reserve System may at any time call upon a Federal Reserve bank for additional security to protect the Federal Reserve notes issued to it. Collateral shall not be required for Federal Reserve notes which are held in the vaults of, or are otherwise held by or on behalf of, Federal Reserve banks.

[12 USC 412. As amended by the acts of Sept. 7, 1916 (39 Stat. 754); June 21, 1917 (40 Stat. 236); Feb. 27, 1932 (47 Stat. 57); Feb. 3, 1933 (47 Stat. 794); Jan. 30, 1934 (48 Stat. 33; March 6, 1934 (48 Stat. 991); June 30, 1941 (55 Stat. 395); May 25, 1943 (57 Stat. 85); June 12, 1945 (59 Stat. 237); June 19, 1968 (82 Stat. 189); Nov. 10, 1978 (92 Stat. 3672); March 31, 1980 (94 Stat. 140); Dec. 6, 1999 (113 Stat. 163; and Oct. 28, 2003 (117 Stat. 1193).]

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Ok so awesome. I bolded another part on the end that's relevant.
"The Federal Reserve agent shall each day notify the Board of Governors of the Federal Reserve System of all issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to which he is accredited. The said Board of Governors of the Federal Reserve System may at any time call upon a Federal Reserve bank for additional security to protect the Federal Reserve notes issued to it. Collateral shall not be required for Federal Reserve notes which are held in the vaults of, or are otherwise held by or on behalf of, Federal Reserve banks"

Hi, I'm Australian. Inflation has increased far more than 5%. A lot of things are like double the cost (ie diesel and cabbages/veg). Others remain a similar cost.

Best thing you can do to deal with inflation is buy bitcoin. Come at me. Let's compare bank balances. I was homeless 5 years ago, now own my own home, nice truck etc. Don't have to do shit but fill my res every week and get drunk. Was a lifelong welfare recipient. Now I'm paying for 3 of them every year (not complaining, I hope they have facial tattoos and genital piercings.)

Edit: as someone who has never voted or been political, is very clear to see that Biden is a child groper and the main cause of the US's situation. Not sure how anyone can support the guy. Oh yeah, there is the whole tanking economy etc, but mostly just sniffing children's hair is why I detest the guy. Plus the whole laptop thing with his son and how that was censored from all social media. Very lame.

TrichDaddy said:

Hi, I'm Australian. Inflation has increased far more than 5%. A lot of things are like double the cost (ie diesel and cabbages/veg). Others remain a similar cost.

Best thing you can do to deal with inflation is buy bitcoin. Come at me. Let's compare bank balances. I was homeless 5 years ago, now own my own home, nice truck etc. Don't have to do shit but fill my res every week and get drunk. Was a lifelong welfare recipient. Now I'm paying for 3 of them every year (not complaining, I hope they have facial tattoos and genital piercings.)

Edit: as someone who has never voted or been political, is very clear to see that Biden is a child groper and the main cause of the US's situation. Not sure how anyone can support the guy. Oh yeah, there is the whole tanking economy etc, but mostly just sniffing children's hair is why I detest the guy. Plus the whole laptop thing with his son and how that was censored from all social media. Very lame.

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Who is Australia's prime minister? I've heard the name but simply don't find it important enough to remember.

But, thanks for the financial advice. So many millionaires posting on RUI. I always get my investment advice here.

ActionianJacksonian said:

Ok so awesome. I bolded another part on the end that's relevant.
"The Federal Reserve agent shall each day notify the Board of Governors of the Federal Reserve System of all issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to which he is accredited. The said Board of Governors of the Federal Reserve System may at any time call upon a Federal Reserve bank for additional security to protect the Federal Reserve notes issued to it. Collateral shall not be required for Federal Reserve notes which are held in the vaults of, or are otherwise held by or on behalf of, Federal Reserve banks"

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Yes. it's clear that you don't understand. That's the thing about dumb people. They can never understand people who are smarter than they are. But we can understand you. Your frustration comes from the grace we give you to speak your mind and you seem to think we should actually do the dumb things you say.

We quietly snicker when you say something cute.

TrichDaddy said:

Edit: as someone who has never voted or been political, is very clear to see

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You want make trouble for moose and squirrel

Ever felt inflation ON WEEEEEED??!

Any other country? Thats a huge call aint it? Is that because of his proxy war?

If Biden could please get the US stock market back on track that would be great. It effects the rest of the world ya know.

Money only has fictional value of gold in interest hence the monetary system is flawed by design and can't do anything else but fail.

The only reason it's not worse than it is comes from devaluation of currencies and conversion rates. Nothing has real value. Nixon put the final nail in the coffin and there's no turning back.

Wastei said:

Money only has fictional value of gold in interest hence the monetary system is flawed by design and can't do anything else but fail.

The only reason it's not worse than it is comes from devaluation of currencies and conversion rates. Nothing has real value. Nixon put the final nail in the coffin and there's no turning back.

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Of cause there's turning back. The world uses US currency due to stability. If it cannot be stable then the world will switch to what is. It was once the British Pound for eg.

ActionianJacksonian said:

So that's the way the Fed and Congress sells it in their cartoons (ever seen that one?) But the reality is that a new deposit of $100 is held as 10% reserve and $900 is therefore available to lend, thus creating new, healthy productive currency in the form of digital credits.

We all know this is true without even studying the matter because none of us have ever been denied a loan for lack of deposits.

"Well your credit score is 1000 and you make $10k per week but we can't swing a $100k loan right now solely because 90% of our deposits are already out on loan."

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Yeah the trolls, youtube cartoons, and bullshit political cons acting like economists (Von Misses) like to pretend this is reality, it is not.

If a bank was to do this, take say $100 and lend out $900. As soon as the person removed any money to say pay bills, that bank would then be bankrupted. This is the confusion that conspiracy theorists use to trick people into believing their lies about our banking system. With a $100 deposit, the bank can only lend $90.

This really is the same shit that was going around during the Tea Party nonsense to try to confuse people into not trusting our financial system. It was wrong then, and it is wrong now.
https://www.rollitup.org/t/quick-look-into-how-the-banking-system-works.293473/post-3674110

ActionianJacksonian said:

Right so I never said they did. I said you and I do when we take out the loans and the bank merely facilitates the loan. Congress is theoretically acting on mine and your behalf in the same manner and Treasury simply prints the notes with the proper seals, ink ect.

So I essentially said what Title 12 states about the world reserve currency: that the issuing authority is the Board of Governors.

So for example, since the Fed is the issuing authority this is why we didn't just hear that Treasury just raised the interest rates.

In fact, Treasury currency in Title 31 may not bear interest.

This is also why we don't hear that the Treasury has executed such other elastic tools as Quantitative Easing, because Treasury is not the issuing authority. It's pretty simple stuff.




So, according to the Encyclopedia of Banking and Finance 9th edition...elastic currency is simply what we know ours to be:

"Currency which can be expanded or contracted based on commercial needs."

Elasticity is secured by basing the volume of circulating currency on the volume of credit. Currently, the currency is a bill for a Dollar in the form of an elastic bank note. A Bill of Credit. The issuing authority is the Board of Governors. This note has 900% Elasticity as I described because it is what is held as a 10% reserve.

So the currency expands as business expands in just the way I described, in the form of loans.

No business is shipping goods with capital for example. The truck driver uses a loan in the form of a company credit card for fuel right?

So then, simply trying to kind of lump what I'm telling you into the "conspiracy theory" relm is easily demonstrably false because literally anyone on earth has access to our Statutes at Large codified online in a searchable US Code and its all current right there at your fingertips. So like you can verify when I say what Fed and Treasury has authority to issue easily in sections that are only a paragraph. Like I can't grasp how that could possibly be a conspiracy theory when is so easily fact checked in like 90 seconds.

It's not like back in the day when we had to physically visit a Federal Repository and read print. Although most of that is also scanned in as pdf.



Ok so no, I'm not saying that. I'm saying inflation is simply an increase in the total supply of currency for whatever reason.

I think you are confusing inflation with price increases that can come with inflation especially if wages and salaries don't increase proportionately.

Other supply/demand issues that are not inflation can affect prices also like gasoline. Refineries are over 90% capacity and demand is exceeding domestic supply. The price increases here really hasn't much to do with inflation so much as regs on new refineries and lack of domestic crude supply going to refineries already at near capacity. Like ordering a refinery to make more when they're already at peak capacity isn't really going to help as much as say, allowing more refineries.

But who would invest in one? It takes like 10 years to see a return and the stated goal is to do away with petroleum fuels in 5-10 years so there's market speculation also contributing to price increases which has nothing to do with inflation.




So printing and engraving is Treasury. So you're technically correct that they produce physical currency. But the issuing authority is not Treasury for world reserve currency bills.

To see the currency that Treasury actually has authority to issue you need to look in Title 31, sections 5111 and 5115.

The notes in 5115 for example are not elastic, and currently are fixed in the amount of 300 million.

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I really think you are just confusing yourself with all the rest of your post. If you are thinking that banks are lending $900 for every $100 deposited, it is worth taking a step back to figure out the part you are missing.

Lucky Luke said:

Of cause there's turning back. The world uses US currency due to stability. If it cannot be stable then the world will switch to what is. It was once the British Pound for eg.

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I think they already let it go to far out of control. Nobody can stop a tidal wave set in motion. I'm afraid we repeat and recreate the same problems all over again. The system is based on war since the second world war and humans will always pay by giving their lives to a system that's supposed to protect them.

Recession is coming and we see countries preparing for a global war. I hope I'm wrong but history tells me otherwise.

TrichDaddy said:

Hi, I'm Australian. Inflation has increased far more than 5%. A lot of things are like double the cost (ie diesel and cabbages/veg). Others remain a similar cost.

Best thing you can do to deal with inflation is buy bitcoin. Come at me. Let's compare bank balances. I was homeless 5 years ago, now own my own home, nice truck etc. Don't have to do shit but fill my res every week and get drunk. Was a lifelong welfare recipient. Now I'm paying for 3 of them every year (not complaining, I hope they have facial tattoos and genital piercings.)

Edit: as someone who has never voted or been political, is very clear to see that Biden is a child groper and the main cause of the US's situation. Not sure how anyone can support the guy. Oh yeah, there is the whole tanking economy etc, but mostly just sniffing children's hair is why I detest the guy. Plus the whole laptop thing with his son and how that was censored from all social media. Very lame.

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Glad everything is peachy down under. Is it Biden’s fault you’re paying $8 for a head of lettuce?

Anyway,

Wastei said:

I think they already let it go to far out of control. Nobody can stop a tidal wave set in motion. I'm afraid we repeat and recreate the same problems all over again. The system is based on war since the second world war and humans will always pay by giving their lives to a system that's supposed to protect them.

Recession is coming and we see countries preparing for a global war. I hope I'm wrong but history tells me otherwise.

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This type of soothsaying goes into the 'even a broken clock is right twice a day' category for me.

With all the nonstop spam about the few categories that are being inflated by a handful of bad actors and long seen environmental changes due in large part to humanities inability to stop burning everything in sight, who knows, people might scare themselves into a economic contraction.

But the steady 400k-ish a month job gains we have seen since Biden took office, and all the other very positive economic indicators like wage growth, a recession is not inevitable in the near term. And as for war, murderous dictators like Putin are going to do what they do. It just makes sense to be ready for him (and his other dictator allies) to pull a Hitler (like Putin is currently doing in Ukraine, which is causing the vast majority of today's economic harm).

Wastei said:

I think they already let it go to far out of control. Nobody can stop a tidal wave set in motion. I'm afraid we repeat and recreate the same problems all over again. The system is based on war since the second world war and humans will always pay by giving their lives to a system that's supposed to protect them.

Recession is coming and we see countries preparing for a global war. I hope I'm wrong but history tells me otherwise.

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snicker

TrichDaddy said:

Hi, I'm Australian. Inflation has increased far more than 5%. A lot of things are like double the cost (ie diesel and cabbages/veg). Others remain a similar cost.

Best thing you can do to deal with inflation is buy bitcoin. Come at me. Let's compare bank balances. I was homeless 5 years ago, now own my own home, nice truck etc. Don't have to do shit but fill my res every week and get drunk. Was a lifelong welfare recipient. Now I'm paying for 3 of them every year (not complaining, I hope they have facial tattoos and genital piercings.)

Edit: as someone who has never voted or been political, is very clear to see that Biden is a child groper and the main cause of the US's situation. Not sure how anyone can support the guy. Oh yeah, there is the whole tanking economy etc, but mostly just sniffing children's hair is why I detest the guy. Plus the whole laptop thing with his son and how that was censored from all social media. Very lame.

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Are you joking? I think it's going to 15K maybe lower.

hanimmal said:

Yeah the trolls, youtube cartoons, and bullshit political cons acting like economists (Von Misses) like to pretend this is reality, it is not.

If a bank was to do this, take say $100 and lend out $900. As soon as the person removed any money to say pay bills, that bank would then be bankrupted. This is the confusion that conspiracy theorists use to trick people into believing their lies about our banking system. With a $100 deposit, the bank can only lend $90.

This really is the same shit that was going around during the Tea Party nonsense to try to confuse people into not trusting our financial system. It was wrong then, and it is wrong now.
https://www.rollitup.org/t/quick-look-into-how-the-banking-system-works.293473/post-3674110View attachment 5150959

I really think you are just confusing yourself with all the rest of your post. If you are thinking that banks are lending $900 for every $100 deposited, it is worth taking a step back to figure out the part you are missing.

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Ok, so the cartoon I was referencing wad mad by the Fed. It was of little consequence really I just remember seeing it long ago and it describes exact what you describe. 10% reserve means 10 deposit so loan 9.

So that's right, like you're not wrong. It just helps my mind to think inversely of it which is the same.

The key part you aren't getting here is that the money supply is figured on total deposits and circulation.

You deposit 10 in a bank. There's 10 in the vault and 10 in your account and 10 less in circulation.
All balanced, no new supply.

I come to your bank and borrow 9 because I can't afford grip tape for my board so I go buy some with the loan.

So at this point you still have 10 on deposit in your account right? You have demanded no withdrawal. And I have put 9 in circulation right?

So the original 10 deposit plus the new 9 in circulation has become now 19 in money supply. You and I helped create 9 new units in the supply of currency facilitated by the bank vetting us both right?

So the skateboard shop I got the grip tape from deposits that 9 I got on loan from your deposit in their bank.

Now, someone borrows 8 from that deposit for a gallon of gas in California. So there's 8 new units in circulation that didn't exist before the loan because the depositors account still says 9 even though the vault only retains 90 cents.

And this goes on 7, 6, 5, ect. until your original 10 deposit facilitates 100 in new circulation/deposits that didn't exist before your deposit.

So I just presented this kind of inversely, but it's still the same. 10% of 100 is 10 like you say which is 90% Elasticity for that specific transaction but when you deposit the 90% over and over and over you see the initial deposit ends up having 900% Elasticity. It's all the same, you're not technically wrong. It's just better to look at the big picture really because it's much simpler.

But thinking the currency supply can't expand beyond deposits is just a logic error, not a technical one.

So if the currency supply could not expand beyond deposits then you would be dealing with and using instruments (bills, notes, ect.) we would call non-negotiable. Basically, you would be on a gold or a bitcoin standard. So are you like a gold bug? Lots of that going around lately and it's totally understandable when dealing with inflation. The currency we use as the world reserve currency is not non-negotiable for this very reason, the ability to expand and contract.

So you said you studied this so let's just reiterate how the money supply is totaled. It's deposits + circulation.

So the way you describe is only true if your original deposit of 10 only has demand withdrawal of 1 after I borrow 9 for griptape. But that's just not the case, your original 10 is always available to withdraw in full.

And BTW depositors demanding withdrawals beyond a banks liquidity forcing them to sell off securities or whatever at a loss happens a lot. They're basically insolvent by nature. It's what we call a bailout where the Fed creates reserve deposits through open market operations to deal with insolvencies quickly exactly as you described in your first sentences.

So that's a tiny bit more complicated because that is dealing with the collateral you bolded earlier mostly but it's the same in that it creates new currency that didn't exist before.

So the collateral must be as you bolded in a 1:1 ratio for currency created. Mostly this collateral is provided by our Congress on our behalf for the greater good. The collateral in whatever form, treasuries, bonds, sdr's or whatever are obligations of The United States and they are simply printed as easily as the currency.

You and I are bonding these obligations via endorsement with every transaction. This bond is the full faith and credit of The United States.

I think this is sort of important to grasp because you and I have levied this on the entire world and we sold it to them on the promise that the currency was as good as gold, that is, non-negotiable; which was basically a big fat lie.

Lucky Luke said:

Of cause there's turning back. The world uses US currency due to stability. If it cannot be stable then the world will switch to what is. It was once the British Pound for eg.

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Exactly. We just watched this play out with Russian oil. Notice Russia is doing better finacially and us not so much.

ActionianJacksonian said:

Exactly. We just watched this play out with Russian oil. Notice Russia is doing better finacially and us not so much.

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Nope, they are fucked and know it, soon Russia will start falling apart economically, they used their oil money to modernize with western technology, the modern Russia you see in videos was bought from the west and so are the spare parts from cars to planes and trains. Ukraine has lot's of Gas and oil and can supply Europe. Inflation and gas prices are the same all over the world, it's not Biden's fault, it's Putin's fault. Have no worries though cause ole Joe is gonna fuck him real good, he stuck his neck out and we are gonna chop the fucking thing off.

It's kinda a funny that Trump and Putin are going down at around the same time, since they were joined at the hip anyway.

xtsho said:

Are you joking? I think it's going to 15K maybe lower.

View attachment 5151086

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Man someone posted some shitty meme with Jake Paul on it giving financial advice. Literally two days later I saw the story the dude put all his money it bitcoin and is now broke.

hanimmal said:

Yeah the trolls, youtube cartoons, and bullshit political cons acting like economists (Von Misses) like to pretend this is reality, it is not.

If a bank was to do this, take say $100 and lend out $900. As soon as the person removed any money to say pay bills, that bank would then be bankrupted. This is the confusion that conspiracy theorists use to trick people into believing their lies about our banking system. With a $100 deposit, the bank can only lend $90.

This really is the same shit that was going around during the Tea Party nonsense to try to confuse people into not trusting our financial system. It was wrong then, and it is wrong now.
https://www.rollitup.org/t/quick-look-into-how-the-banking-system-works.293473/post-3674110View attachment 5150959

I really think you are just confusing yourself with all the rest of your post. If you are thinking that banks are lending $900 for every $100 deposited, it is worth taking a step back to figure out the part you are missing.

Click to expand...

Glad you are trying to have that convo.