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Credit: Too Important to Be Left to Private Banks

A gold standard is impossible for the same reasons as the U.S. was required to eliminate it (& our foreign trade deficit is now @7.4 trillion and compounding). Even Alan Greenspan understands the prerequisites of a gold standard (see WSJ Sept. 1st, 1981).

Wiping out the loan-sharks should be a priority, e.g., credit-card companies, pay-day loan shops, & more. Nationalize our money creating depository institutions now.

Governments are not more efficient, but I would welcome their slower and more deliberate pace, notwithstanding, the U.S. (because of it's unrestrained and unsustainable profligacy), will inevitably be forced to operate under a "command economy" (as Russia once did). Yes, capital controls are coming.

We have a managed currency system, not yet a fiat system. Fiat systems are dictated by the financing needs of the Federal Government. Our managed currency system is dictated by the impersonal needs of trade (there is no inflationary bias, just a shift out of bank deposits into & out of currency held by the non-bank public).

Again, the Fed, though intended to be an “independent” agency has, like the Supreme Court, “followed the elections”. We don't have captitalism, we have regulated capitalism. We live in a predatory society.

We have an “elastic” currency “aided and abetted” by “elastic” legislators. We have (CITIBANK's CEO), perennial Walter Wriston caricatures pressuring the House Committee on Financial Services & the U.S. Senate Committee on Banking, Housing, and Urban Affairs. We have literally, a conspiratorial organization that goes by the name of the American Bankers Association - with its well funded lobbyists (re: PAC money).

The Board of Governors is self-described as: “subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute” Even so, the Fed has been “connected at the hip” with Congressional allies, a la Greenspan (who the New York Times called a “three-card maestro”), & now Geithner, etc

The Fed’s research is politically coordinated, targeted to justify its monetary policy objectives - those that appease and accommodate the banking community. It’s as the university professor said: “innovate away from home”. Academic freedom has become the “barbarous relic”.

Remember that the great German poet and playwright Bertolt Brecht would have agreed, and once said it was "easier to rob (tax-payers et. al), by setting up a bank than by holding up (one)."

Blame the profit proclivities of the American Banker, their puppets, (and our silence), for our speculative orgy.

Keynesian Economics: Why Krugman and DeLong Need to Read More Carefully

Krugman thinks the "liquidity trap" is actually real.

But see Alfred Marshall: Money thus is truly a paradox - by wanting more, the public ends up with less, and by wanting less, it ends up with more. I.e. this phenomenon invalidates the so-called liquidity trap (the demand for money). Krugman's Nobel Price in Economics should be taken back and be replaced with the Nobel Prize in arrogance and ignorance.

Upside GDP Surprise: Misleading

yeah. time to buy

Economic Data Showing Signs of Negative Trends

The old saying that some people would lose money having tomorrows WSJ is right. But in forecasting, why do you vacillate between the seasonally-adjusted data, and the non-seasonally-adjusted data? Use only the "real" stuff.

The evidence of our economic health is not so elusive. It is incontrovertible. We've learned our catechisms.

Fed: The Credit Crisis' Impact on the Dollar

That's a description of the prudential, (fractional reserve), Euro-dollar market. The discovery that the E-D deposits global bankers created for borrowers, often did not result in any diminution of their U.S. dollar balances – the System was merely shifting balances within itself. That is, drafts drawn on E-D banks increasingly were deposited in other E-D banks (i.e., the carry trade).

California: Entering Inflationary Depression

The quirk is stagflation, business stagnation accompanied by inflation (i.e., the political economy). And as long as the exchange value of the dollar continues to decline, inflation, however defined, will prove intractable (e.g., energy dependence).

One of our founding fathers, Thomas Jefferson, said that we should "have a revolution every 20 years". But now we have passed the point of no return.

Chicago Fed Index Increase Suggests the Recession Is Over

Monetary flows (MVt), the proxy for real-growth bottoms in Nov. 2009. However monetary flows (the proxy for inflation) continues to be relentless, e.g., housing, gasoline, groceries, going up, while unemployment is also going up. I.e., this is stagflation, get used to it. Regardless. Buy & hold for the next 2 years.

The Treasury Is Right to Go Long

How so? With IORs the FED can support whatever the Treasury requires.

Chicago Fed Index Increase Suggests the Recession Is Over

No straight line! It's curving down now. We're still -.5 trillion real-gdp below 2qtr 2008.

How to Boost U.S. Exports

Correcting the current account balance, and trade deficit, is an absolutely daunting task:

The U.S. is a $7.4 trillion dollar debtor country (since 1985) and compounding.

The volume of foreign financing required to float new government debt issues each fiscal year now averages about 49%.

The U.S. imports approximately $335,992,800,000 of oil per year (@78/barrel) & 12.1 MMbd.

There were 700 foreign military bases, in 130 countries, employing more than 500,000 military personnel (2003 figures). But these numbers didn't include bases in Afghanistan, Iraq, Israel, Kuwait, Kyrgyzstan, Qatar, and Uzbekistan (this constitutes a correctable drain on the dollar - multilateral claims to foreigners).

Do We Really Need to Break Up the Banks?

You hit home. We necessarily have regulated capitalism. In today's world, the "member banks" buy their liqudity, instead of storing their liquidity. And the perversion is that from a system's standpoint, these "member banks" pay for what they already own, i.e., interest on their liabilities (which they created thru the process of fractional reserve banking).

The drive by the commercial bankers to expand their savings accounts has a totally irrational motivation, since it has meant, from a system's standpoint, competing for the opportunity to pay higher & higher interest rates, on deposits that already exist in the commercial banking system.

This shift from demand to time deposits, has converted spendable balances, into stagnant money. This transfer added nothing to the Gross National Product, and nothing will be added so long as the funds are held in the form of time deposits.

Shifts from transaction deposits, to time deposits, simply increases the aggregate costs to the banking system, and adds nothing to the system’s income.

But it does profit a particular bank, Citibank for example, to pioneer the introduction of a new financial instrument such as the negotiable CD (until their competitors catch up); and then all are losers.

The question is not whether net earnings on CD assets are greater than the cost of the CDs to the bank; the question is the effect on the total profitability of the banking system. This is not a zero sum game. One bank’s gain, is less than the losses sustained by other banks.

We have already discovered, too late, that money creation cannot be exposed to the forces of a free market. The money supply is not self regulatory. If private profit institutions are to be allowed the "sovereign right" to create money, they must be severely regulated in the management of both their assets and their liabilities.

The operations of commercial banks and all other involved institutions, cannot be fostered by deregulation. The operations of these institutions must be severely circumscribed and subject to rigorous and informed supervision.

Is the Fed Really Printing Money?

The M1 figure overstates the quantity of the means-of-payment money. This upward bias is the consequence of classifying Savings and Loan & Credit Union Deposits as commercial banks (but not Mutual Savings Bank deposits), as demand deposits, rather than inter-bank demand deposits. M1 thus includes both the Negotiable Order of Withdrawal (NOW) account balances, and the thrifts’ balances, in the commercial banks – again, a double counting of our means-of-payment money.

Monetary System Still Undergoing Stress Test - Cheat Sheets Supplied

"collapsed in response to Paul Volcker’s austerity" I'm suspicious of anyone calling Paul Volker austire. He's an idiot. I challenge anyone to dispute it.

"Stephen “There-is-no-exit” Roach" I said it first.

The Fed's Gordian Knot: Capacity Utilization, Oil and China

The beauty of bank debits, and fixed monetary lags, is the projection becomes ex-ante and not ex-post. If you know 3/4 of the monthly data, forecasting real-gdp and inflation (however measured), and then executing monetary policy for the next 1/4, wouldn't tax - even Paul Volcker.

Replace Ben Bernanke with Paul Volcker

You are obviously ignorant of Volckers record as Chairman of the Federal Reserve Board. He is a bad leader and an incompetent economist.