Peter Schiff Explains Quantitative Easing And Why You Are Screwed

reply to post by Jean Paul Zodeaux


Well alright, what would you like here? Examples of currencies that have survived as fiat, well the Pound Sterling has done so since 1931, and the old phrase "sound as the Pound" still does prove true today. This is due to aggressive and strategic valuation of the Pound over time, be it pegged against the Dollar or floating as it does today.

As for my asserting that Anarchy is a bad form of social union, one only as to look at the state of affairs in Somalia to see that it fails to provide a reasonable standard of living, quality of life or basis for progress compared to a governmental system.

Furthermore it has been proposed that the institution of a strong centralized government tends towards dictatorship. Again I will use the example of my United Kingdom as a protest to this. We have seen our union go from a strict Monarchy to a much more liberal Parliamentary system over time since unification of England, Wales, Scotland and (Northern) Ireland. The same can be said for Germany after re-unification, and it is proving true in the European Union as a whole. We have seen rights for the individual and representation increase as we become more unified instead of decrease.

reply to post by ProjectJimmy

As for my asserting that Anarchy is a bad form of social union, one only as to look at the state of affairs in Somalia to see that it fails to provide a reasonable standard of living, quality of life or basis for progress compared to a governmental system.

So you highlight the one example where Anarchy failed, in which one could argue it really isn't an Anarchic society in the first place considering Anarchy entails "no rulers", and there are certainly rulers....yet you just ignore all the other examples where Anarchy was successful throughout history en.wikipedia.org...

I love your simplistic, childish understanding for what Anarchy is. It really shines as an example for the typical person who's mind has been rubbed against a cheese grater by the state.

The only reason Jimmy is in here whining is because he knows the epic wealth redistribution programs that take money from the middle class and hand it to bankers and welfare cases would be shut down under the gold standard.

That is the only reason he is whining.

Found the video. Had to use google, could not find the post here. So here we go-

Found it here-Gold and Silver Investment

PART 1


PART 2

reply to post by SpectreDC


You are using a very different form of Anarchism than the others here, specifically Anarchistic Communism as opposed to Anarchistic Capitalism. In your form, yes you are right, there are instances where it has worked for periods of time in select nations. Now Somalia is not at all an example of Anarchistic Communism and perhaps that is where it fails.

The form of Anarchism you bring up, I have much less of an issue with. I still believe it to be a system that cannot be applied directly to a large nation, (hundreds of millions of people,) but as there is no historical evidence to support or dispute that it is simply a matter of my opinion and not something that can be quantitatively regarded. Instead a sociological or philosophical approach would be needed to put together the ideas of a true leaderless society with a social base and communal goal set. It would make for an interesting debate and one I would be much more perceptive to changing my opinion on actually.

As to respond to the point that I simply do not want a gold standard simply because it would end the "wealth redistribution" that some believe is happening today, I will simply put forward my initial point: Large holders of gold assets would become astronomically wealthy at the sufferance of everyone else. That is a major form of wealth redistribution as well.

To say also that I want more wealth in the hands of bankers and such is also false, I am a Socialist, I want the majority of the wealth to be centrally located in a strong middle-class that contains the vast majority of the population. I do not support bailouts to wealthy individuals or the transferring of assets to them at the detriment of anyone else.

In fact I support taxing the hell out of the very wealthy, and using their funds to provide services and benefits to the rest of the economic classes. This is also a form of wealth redistribution, I am well aware of that. However it is precisely the opposite of the form that I am being accused of wanting.

reply to post by ProjectJimmy


The use of fiat currency and fractional reserve banking inherently propagates wealth to those you supposedly want to take it away from.

So you are arguing the exact opposite of what you espouse.

Cognitive Dissonance. Or better analogy would be false conclusions.

Control and regulation always leads to the big bad businesses you think is the root of all evil.

Also, using the redistribution model that so many call for, causes exactly what you attempt to thwart.

You continue to chase your tail.

Also, control of markets by the governments or any entity causes the misappropriation of resources.

I do not understand how people cannot see the obvious. It has been shown time after time.

Originally posted by saltheart foamfollower
reply to post by ProjectJimmy

 

The use of fiat currency and fractional reserve banking inherently propagates wealth to those you supposedly want to take it away from.

So you are arguing the exact opposite of what you espouse.

Cognitive Dissonance. Or better analogy would be false conclusions.

Control and regulation always leads to the big bad businesses you think is the root of all evil.

Also, using the redistribution model that so many call for, causes exactly what you attempt to thwart.

You continue to chase your tail.

Also, control of markets by the governments or any entity causes the misappropriation of resources.

I do not understand how people cannot see the obvious. It has been shown time after time.

Control and regulation do not always help the corporations. The policies of your President Theodore Roosevelt did exactly the opposite and were targeted to protect the individual consumer from harmful business practices.

Government, when used judiciously and with an eye directly to helping the constituent is an effective means of keeping corporate power in check. The matter is that it can also be used for quite the opposite too. In my opinion it is not a matter of if there should be a government, but what the government's priorities and focuses are.

Ending monopolistic practices, creating competition, and giving workers fair treatment are all things that should be viewed as noble goals in governmental economic policy. Offices in the US government such as the EPA, FDA and ICC can all have positive or negative impacts upon the individual and the corporation.

Government is a tool, not inherently good or evil, like a hammer it can be used to create and destroy. The primary and most important issue as I see it involves making sure that the mechanism of government is used to benefit the citizens. In order to do this in the United States I believe that there needs to be and end of things such as soft-money contributions, a set and defined term limit for all offices elected by the people and an end to corporate lobbying.

There should never be a question of conflict of interest for a politician because politicians should not be able to be bought and sold by corporate interests. The Federal Reserve System, I contend is another tool, but it has to be taken back by the citizens and act as their servant first.

Remember, the banks that are members of the Fed do not own it. It is a bank, not a co-op, and one that is wholly contained within the "for the people by the people" US government. There are people in the Fed that seem to have forgotten this too, and now act as though the banks control the money market.

The mindset has to change, not the mechanism.

reply to post by ProjectJimmy

Well alright, what would you like here? Examples of currencies that have survived as fiat, well the Pound Sterling has done so since 1931, and the old phrase "sound as the Pound" still does prove true today.

Pointing to the Pound Sterling is not "examples of currency that have survived fiat", but is, in fact, just one example, and only so if it is true that the Pound Sterling has indeed survived as a fiat currency. There are signs that destruction of Britain's currency is imminent. Consider this article posted in FXSTREET.COM:

Britain's Inflationary Debt Spiral:

Over the coming years we will witness the systematic destruction of the British currency as witnessed through the inflation and commodity / asset price data as the Inflation Mega-trend starts to unfold following the asset price destruction induced Deflation of 2008 into early 2009.

...

The people of Britain are being hoodwinked by the politicians and inept mainstream media into thinking that money printing is a free lunch, there is no such thing as a free lunch, printing hundreds of billions out of thin air is akin to running a fiat currency ponzi scheme, the price of which is paid by the holders of existing currency i.e. investors, bond holders and savers who are hit by the double whammy of -

...

The consequences are INFLATIONARY, inflation means RISING CONSUMER PRICES which in the UK means rising RPI and CPI indices. Inflation rises as more fiat currency chases a limited supply of commodities, goods and services, more so in a stagnating economy which over time sees diminishing output, it is only that at the present that the consequences of debt deleveraging is MASKING the building inflationary forces that will let rip with a vengeance which we are already witnessing in the commodities markets as many markets such as gold and crude oil have doubled from the Post September 2008 lows.

Or consider this editorial: Fiat Money in Death Throes:

The situation is no better in the United Kingdom, another important country expecting a change of guards, which could take the initiative to put a peaceful end to the regime of irredeemable currency now in its death throes. Rather than initiating a national debate on the utter failure of the present financial system which was supposed to end bank runs, deflations and depressions, serial bankruptcies and unemployment for once and all, and on the return to sound money and sound book-keeping, Her Majesty’s Loyal Opposition is plotting a course how to cure the collapse of bad debt with the injection of more bad debt.

While this editorial written by Antal E. Fekete of the San Francisco School of Economics is mainly about fiat currency in the U.S. it is worth quoting this remark made by Fekete:

A government can take total control of the people either by the use of military force, or by the use of irredeemable currency. The former is readily understood, while the latter is a subtle national drug that is not generally recognized as such. Rather, it is readily embraced by its victims. For these and similar reasons irredeemable currency is the favorite device of modern governments that want to bring people under total control. Indeed, it enables the government to succeed in controlling the masses while, at the same time, earning their approval and even their enthusiastic support. Irredeemable currency must be seen as the habit-forming drug that the government uses to intoxicate people. Under this intoxication people will want more and more national spending, more and more government control, and more and more debt.

Consider this from the London Evening Standard titled; To get Britain back on its feet, we must kick this addiction to debt, which hardly sounds like a ringing endorsement of the Pound Sterling:

The New Year is a time for resolutions. So here's one for the whole country. Let us kick Britain's addiction to debt. Let our Government live within its means. And let us seek to pass on to our children a better world, not a more indebted one.

The first step, like in any addiction, is to be honest about the problem. Britain faces a debt crisis. As a country, we have been living for too long on borrowed time and too much borrowed money - other people's money.

For ten years, Labour Britain enjoyed a huge, unsustainable boom fuelled by the money we borrowed from the rest of the world.

As sound as the Pound?

Far from creating the right defences, the system of financial regulation he, (Gordon Brown), created allowed the greatest banking crisis of our lifetimes to develop under his very nose. He didn't fix the roof when the sun was shining. In light of subsequent events, history will treat his Chancellorship as one of the most disastrous and misguided of the modern era.

(Parenthetical explanation added)

What's that sound? Ker-Plop! If the Sterling Pound is so sound then how do you explain this:

Sterling: Weak pound sees pension income for overseas Britons drop by £220 a month

Sterling's decline against the euro will have a devastating impact on the pensions paid to British expatriate pensioners as they are fixed in pounds.

or this:

Pound Sinks on Weak U.K. GDP

The pound dropped 1.6% against the dollar after an unexpected drop in gross domestic product in the United Kingdom, raising concerns about the possibility of further quantitative-easing measures.

Or how about this clever bit of disingenuous propaganda from Mervyn King as quoted in The Times:

Sterling slumped to its lowest level in more than five months this morning after Mervyn King, the Governor of the Bank of England, appeared to back a weak UK currency.

Speaking to The Journal, a newspaper covering the North East of England, Mr King said that the significant decline in the value of sterling in recent months “will be helpful” to rebalance Britain’s economy by helping to boost exports.

Consider this editorial from The Taipei Times:

Fears abound that a weak British pound may get even weaker

Could the British government’s plan to borrow and spend its way out of a recession lead to a run on the pound?

George Osborne, the Conservative Party’s spokesman on such matters, warned of just such an outcome this month, and Business Secretary Peter Mandelson accused him of being “reckless and irresponsible.” In the last few days, Osborne again accused British Prime Minister Gordon Brown of driving Britain toward bankruptcy, but he avoided any mention of what one of the biggest borrowing surges in British history might do to its already fragile currency.

In response to Mervyn King's prediction that a weak Sterling Pound would bolster exports, here is a bit of news from earlier this month:

Weak sterling fails to bolster exports

Exchange rates not providing the necessary boost required to develop a manufacturing heavy UK economy.

www.economy-news.co.uk...

Online Forex:

Pound Sterling drops after weak growth data The British pound also experienced increased resistance on Monday after the first quarter of UK economic data was worse than previously expected. There are many indications now that the recession been worse than expected and economic growth lower then earlier estimated.

UK inflation way over target level The country’s inflation in recent months is now 3.7%, significantly above the Bank of Englands target level of 2%. Britain could be forced to raise interest rates relatively soon, as MPC member Andrew Sentance already voted for. But Mr. Archer at the Bank of England believes inflation is on a downward trend and believe rates will be kept at 0.5% throughout 2010 and well into in 2011. How credible is the new government and how well will they keep Britain’s a currency? If the BOE will not to curb inflation in the near future you can expect the British pound to decrease significantly.

And consider this:

Weak Pound Sterling causes continued market concern

Last year, during a six-month period between March 10th and August 5th, the Pound Sterling appreciated against the world’s major currencies by a whopping +25%, its strongest performance in such a short period of time since 1985. Over the past six months, however, the Pound Sterling has fallen mightily again.

Two months into 2010, both the Pound Sterling and the Euro have taken a severe battering. Among the twelve major currencies that the TREND Currency Corner monitors, they are in fact the two worst performing currencies so far this year, with the Euro having fallen -4.0% on average and the Pound Sterling down -3.5%.

What's that sound? Sound as the Pound? It sounds to me that the Pound is taking quite a pounding.

reply to post by ProjectJimmy


Control and regulation always helps big business.

ALWAYS.

Total control over the monetary system by the private cartel of commercial banks you call the Federal Reserve has sucked untold trillions of dollars out of the middle class and handed it to bankers and bureaucrats.

The Fed has NEVER helped the little guy.

The Fed has NEVER improved working conditions for the middle class.

The Fed has NEVER obeyed its mandate to maintain full employment AND maintain flat prices.

i'm a top currenct account trader....and the title of this thread stands...in my mind.....regardless of what we could do.....biblical prophecy is in effect....evil has us for a short while, then....
now we get squat! qe will send the market up, after a fast drop
but we will get a drop-off. i deal with the japanese intervention, like last thursday...they are merely helping the usd...
get ready for a drop to 7300 in the dow, then it's a buy

Originally posted by GBP/JPY
i'm a top currenct account trader....and the title of this thread stands...in my mind.....regardless of what we could do.....biblical prophecy is in effect....evil has us for a short while, then....
now we get squat! qe will send the market up, after a fast drop
but we will get a drop-off. i deal with the japanese intervention, like last thursday...they are merely helping the usd...
get ready for a drop to 7300 in the dow, then it's a buy

Dude they are TOTALLY propping up the dollar!

I totally agree with you.

The whole thing is staged.

The Japanese people get screwed in the butt so their export industry can continue to pump out cheap products for the American sloths.

reply to post by Jean Paul Zodeaux


Hey you said that every fiat currency fails, I've pointed out that the Pound Stirling hasn't, so you come back at me that it won't last? Sorry but future predictions are not part of history.

Besides the Pound has been through quite a bit, World War II, the end of the empire, decimal day, competition from the Euro, and PM Thatcher. Britain is still here and the pound is only increasing in use as a reserve currency, that shows quite a bit of international trust in our fiat currency.

Meth1, I never said you have to like my ideas or agree with me, but if you're going to call me out, at least get them right.

Addition: You also claim that the Fed is a private cartel of banks, prove this to be so because that is not how it works. As I said, member banks have no ownership in the Fed. Get your facts straight.

reply to post by ProjectJimmy


The Pound along with the Dollar are going the way of the dodo.

I thought Peter was pretty clear in explaining the ass-backwards moves of the bond and currency markets now, but I guess you missed it.

reply to post by ProjectJimmy

Hey you said that every fiat currency fails, I've pointed out that the Pound Stirling hasn't, so you come back at me that it won't last? Sorry but future predictions are not part of history.

The articles I supplied reporting on the weakened Pound Sterling are a part of history and refute your claim that the Pound is "sound". You have offered up as "examples" one single nation that has a fiat currency that isn't even close to a model of success regarding fiat currency, contrasted by the multitude of historical fiat currencies I pointed to that have undeniably and irrefutably failed, and you want to get smug? Okay.

Besides the Pound has been through quite a bit, World War II, the end of the empire, decimal day, competition from the Euro, and PM Thatcher. Britain is still here and the pound is only increasing in use as a reserve currency, that shows quite a bit of international trust in our fiat currency.

Uh-huh. Again, you simply just make these claims and offer nothing at all to support the claims. Here are some hard facts about Britain's Sterling Pound as reserve currency:

The United Kingdom's pound sterling was the primary reserve currency of much of the world in the 18th and 19th centuries. The dire economic cost of fighting the First and Second World Wars, the increasing dominance of the USA in world economics (and, importantly, the establishment of the U.S. Federal Reserve System in 1913) as well as economic weakness in the UK at various intervals during the second half of the 20th century resulted in Sterling losing its status as the world's most reserved currency.

Since mid-2006 it is the third most widely held reserve currency, having seen a resurgence in popularity in recent years, but growing from about 2.5% to just below 5% of all currency reserves. Analysts say this resurgence is caused by carry-trade investors considering the pound as a stable high-yield proxy to the Euro.

en.wikipedia.org...

The phrase "stable high yield" is an interesting example of doublespeak given the financial definition of high yield:

In finance, a high yield bond (non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below investment grade at the time of purchase. These bonds have a higher risk of default or other adverse credit events, but typically pay higher yields than better quality bonds in order to make them attractive to investors.

www.hedgefund-index.com...

Your one single example is not truly an example of a fiat currency that has survived for any real length of time, and your mistake of pointing to the Pound as a reserve currency only brings up the historical fact that when the Pound Sterling was backed by gold it was far stronger than it is today, and indeed was then the primary reserve currency in the world, today only being the third most widely used reserve currency below The U.S. that in 2009 represented 62.2 % of the world's reserve currency, and below the Euro that in that same year represented 27.3% of the world's currency, compared to Britain's meager 4.3%. A very distant third is hardly a ringing endorsement of the Pound Sterling.

Addition: You also claim that the Fed is a private cartel of banks, prove this to be so because that is not how it works. As I said, member banks have no ownership in the Fed. Get your facts straight.

According to the Board of Governors, the Federal Reserve is independent within government because "its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government." However, its authority is derived from the U.S. Congress and is subject to congressional oversight. Additionally, the members of the Board of Governors, including its chairman and vice-chairman, are chosen by the President and confirmed by Congress. The government also exercises some control over the Federal Reserve by appointing and setting the salaries of the system's highest-level employees. Thus the Federal Reserve has both private and public aspects.

en.wikipedia.org...

That is the standard information regarding the Federal Reserve. Now consider the facts held by 9th Circuit of Appeals in the matter of Lewis v. United States, 680 F.2d 1239 (1982):

On July 27, 1979, appellant John Lewis was injured by a vehicle owned and operated by the Los Angeles branch of the Federal Reserve Bank of San Francisco. Lewis brought this action in district court alleging jurisdiction under the Federal Tort Claims Act (the Act), 28 U.S.C. § 1346(b). The United States moved to dismiss for lack of subject matter jurisdiction. The district court dismissed, holding that the Federal Reserve Bank is not a federal agency within the meaning of the Act and that the court therefore lacked subject matter jurisdiction. We affirm.

In enacting the Federal Tort Claims Act, Congress provided a limited waiver of the sovereign immunity of the United States for certain torts of federal employees. United States v. Orleans, 425 U.S. 807, 813, 96 S.Ct. 1971, 1975, 48 L.Ed.2d 390 (1976). Specifically, the Act creates liability for injuries "caused by the negligent or wrongful act or omission" of an employee of any federal agency acting within the scope of his office or employment. 28 U.S.C. §§ 1346(b), 2671. "Federal agency" is defined as:

the executive departments, the military departments, independent establishments of the United States, and corporations acting primarily as instrumentalities of the United States, but does not include any contractors with the United States.

28 U.S.C. § 2671. The liability of the United States for the negligence of a Federal Reserve Bank employee depends, therefore, on whether the Bank is a federal agency under § 2671.

There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act, but the critical factor is the existence of federal government control over the "detailed physical performance" and "day to day operation" of that entity.

Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purposes of the FTCA, but are independent, privately owned and locally controlled corporations.

cases.justia.com...

These are the facts, and a point of law.

All this Talk of Gold & Silver ... what about Lead.


He who has the Most Lead.... will Control and set the standards for those with the so called precious metals ie. gold and silver.

reply to post by ProjectJimmy


Do it the way the Euro did. Do not completely back the dollar with gold but back a percentage of it. Perhaps 10%, This would act like an anchor, but it would not force the Fed to buy trillions upon trillions of dollars worth of gold. The Euro is 3% backed by the way.

reply to post by ProjectJimmy


90% of all forms of Anarchy fall under what one would call "Social Anarchy".

Anarcho-capitalism in all honesty is a bizarre concept that is practically redundant depending on how you define "free market" and "capitalism". In the end it's really just Anarchy with a focus on the free market rather than a social form of economics and ultimately, pretty much pointless to even differentiate. Plenty of forms of Anarchy that I would call social anarchy even still has a free market, as contradictory as that may seem, such as social libertarianism and the like.

And again on Somalia, if you want to define that # hole as some form of political system it is best to be called an OMNINARCHY rather than an ANARCHY. In an Anarchy, no one individual can be a ruler with mass authority. In Somalia, if you have lots of guys who will listen to you and you have lots of guns, you have become a ruler and you have gained authority.

Originally posted by ProjectJimmy
In my opinion it is not a matter of if there should be a government, but what the government's priorities and focuses are.

Well I would hope you think there should be a government. Because unless you're Tarzan, living alone, without any other humans....you have government.

reply to post by spoonbender


Does that prove that turning lead into gold is possible?

reply to post by SpectreDC


I would say socialist anarchy is an oxymoron because of how they view property rights.

Anarcho-capitalism is the only type of anarchy that makes logical sense.

Under socialist anarchy, property is considered a shared resource owned by all, where under anarcho-capitalism, property is acquired through homesteading, first application of labor, or purchase from someone else.

Socialist anarchy necessarily requires a violent enforcement agency of collectivist property rights that resides above the individual, where anarcho-capitalism does not.

Since this makes no logical sense, I have to consider socialist anarchy an oxymoron. Socialist anarchy can work under a voluntary system within the confines of a commune, however the commune would have no right to exercise authority over property that it is not using for its own ends.

Should a commune attempt to seize property that it has not rightfully homesteaded, the individual property owners under attack would be justified in resisting that seizure attempt.