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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
 Posted - 02/18/2010 : 21:35:35
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Our currency overlords have announced that they are raising the Fed rate by .25%. They have also released the rumor (propaganda) that they will be removing liquidity.
How do you "un-make" money? I'm truly perplexed (maybe I'm not such a bright boy as I like to think ). But how do they do that? The only thing I can think of is that they raise the reserve requirements for member banks, which in effect lowers the capacity to create more fractional reserve loans. But isn't that a function of US law, rather that a discrestionary decision by the overlord thief FR banksters? Otherwise, some entity holds the newly created "money", and I can't imagine anyone willingly letting their "money" be destroyed.
I cannot find ANY plausible explanation of the means by which the FR can remove liquidity discussed ANYWHERE in the financial media. So I'm left to believe that they'll have the Sasquatch do the removing, or more aptly perhaps a Chubacabra, or a giant Vampire Squid. I doubt that Santa Claus would take the gig.
Further, if they can "un-make" money, doesn't that blow the cover (even more so than before), on the whole concept of fiat currency? Some unelected bunch of thieving F's can create and destroy "money" as they see fit?
???????
Buy Gold, Silver and Oil (and food, guns and ammo)!!!! Wheeeeee!! This investing stuff is easy!!!!
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Kurr
1000+ Penny Miser Member
2906 Posts |
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 02/18/2010 : 21:46:08
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Actually you described how to unmake money pretty well. Raise the reserve requirements for the banks and "poof" there goes a whole bunch of available cash.
Less effective ways/slower ways include printing less money to replace worn out bills. Stop printing money and the existing money wears out reducing the money supply. Circulating cash is just a small part of the overall money supply though.
Here is a good explanation
You must be logged in to see this link. |
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
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thogey
1000+ Penny Miser Member
USA
1617 Posts |
Posted - 02/18/2010 : 21:55:39
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quote:
Originally posted by Kurr
You must be logged in to see this link.
They no longer print this. Chicago Federal Reserve published it. Should help a bit.
Ya see. This is what's so frustrating and why nobody is qualified to cast an informed vote. This is a 50 page pdf file to explain a small part of how our money works!
I will print it out, staple it and lay it on top the toliet tank.
It should take about 10 sittings to read and understand.
Thanks again Kurr |
Come to the new and improved realcent: http://realcent.org
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Edited by - thogey on 02/18/2010 21:59:19 |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 02/18/2010 : 22:25:52
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Thanks Kurr, Jadedragon. Yet another example of how little control we have over our own destiny under a fiat system.
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Kurr
1000+ Penny Miser Member
2906 Posts |
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Ponce
Penny Hoarding Member
Cuba
630 Posts |
Posted - 02/18/2010 : 23:15:05
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What you will see in the future.....raising the interest will make it appear that the economy is rebounding and that the sun is out shinning once again, the market will start to go up because Wall Street is making a come back so that everyone should have confidence, once again, on the market......
What you will see with the above is only what floats above the water with out being able to see the real story under the sea.......all that all this will do is to squeezeeeeeee what little cash people have in order to feed the fat cats.
The less that you have the easier that it will be to control you because you will have to go to THEM in order to be able to survive.
For the future......think of yourself as being in a life boat for two months where all that you have with you will be all that you will have for those two months.....don't think of the government as your main supplyer but as a byproduct of your needs.
Byproduct = is not the word that I want but will have to do :(
Come to think about it.......when everything "appears" to be going veryyyyyyyy well President Obama will make a great announcement, what will it be? I don't know yet......but I do suspect. |
"If you don't hold it, you don't own it"...Ponce |
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AGgressive Metal
Administrator
USA
1937 Posts |
Posted - 02/18/2010 : 23:23:36
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If you aren't reading this blog yet, I'd start. Its written by an anonymous guy who is friends with a Asian trader who has serious insider knowledge of the London and Hong Kong gold markets (if that sounds sketchy, just read the background on the whole thing and how it started on the Kitco forum in the late 90s). Latest article addresses part of your question, D-Jack. Check it out: You must be logged in to see this link.
WARNING: the blog assumes a fair amount of financial knowledge on the part of the reader because of its author and intended audience. Don't be intimidated though, wikipedia is your friend! :) |
And he that hath lyberte ought to kepe hit wel / For nothyng is better than lyberte / For lyberte shold not be wel sold for alle the gold and syluer of all the world.
-Caxton's edition of Aesop's Fables, 1484 |
Edited by - AGgressive Metal on 02/18/2010 23:26:07 |
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Be Nice to BankTellers
Penny Sorter Member
USA
77 Posts |
Posted - 02/19/2010 : 23:10:37
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Money is removed from the system by selling the multitude of debt instruments the Fed and Treasury have been buying up, as well as selling equity interests in private firms. For example, the TALF, TARP, and mortgage obligations of Fannie and Freddie could be sold to the private sector. This would remove liquidity from the market. The equity infusions to the troubled financial institutions could likewise be sold once they was a viable option for these businesses to survive without the implicit (or explicit) government guarantee.
Note, I am not defending the actions that were taken, I am only explaining how I understand the process would work. The extra money the government had injected into the financial system was necessary because firms stopped lending to each other and the virtually unlimited money multiplier Wall Street had engineered was quickly succumbing to the "tyranny of the denominator." I would like to remind everyone that the notion of money multipliers in banking were once referred to as the "Goldsmith" rule because it was created by people who held gold.
What got us into trouble was very smart people who did not understand how risky their "riskless" arbitrage transactions really were. However, there is a riskless arbitrage opportunity available to all of us. We all know it. Get yours while the getting is still good. |
Grandpa always told me, "Back in 1964..." I listened.
Selling copper cents @ $2.50/lb. + shipping. |
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cptindy
Penny Hoarding Member
572 Posts |
Posted - 02/21/2010 : 17:07:26
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AGgressive Metal
Thanks for that link! |
"It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting"
" The average man doesn't want to be free. He wants to be safe."
H.L. Mencken
http://silver-news-today.com/ |
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So how do you "un-make" money?
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