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Thread: Central Banking and the US and China, Oh My!

  1. #21
    Senior Member jyng1's Avatar
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    Quote Originally Posted by mara View Post
    No
    Dude, I never watch your videos. If you want to say the profits from the fed aren't returned to the Federal Government, you'll have to explain why.

    If you're trying to say the banks are gaming the system... speculators nearly sent the UK broke several times when the pound was backed by gold and forced it into years of austerity. If you hadn't noticed you can now travel overseas with more than 50.
    Last edited by jyng1; 08-25-2018 at 10:14 PM.

  2. #22
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    I thought commies hated trickle down economics. The rich and large corporations benefit from central banking as they get to spend the money first from all the big loans as the effects later 'trickle down' to everyone else in the form of inflation. With modern productivity gains from things like the internet, robotics, and communications....common people should be massively wealthy. But the reality....real wages have not increased since the 70s? Wow, and it surprisingly correlates with the end of the Bretton Woods agreement. How did they do this? They taught you the CPI was really inflation and not what it actually is which, is an increase in the money supply. Oh but there's more. They've fudged the way CPI is calculated on multiple occasions. How you say? By saying that consumers change their spending habits...for instance if the price of steak is too high...the consumer will buy hot dogs instead....and on and on. Inflation is what they SAY it is. All a huge fucking scam to siphon off the wealth of the middle class and put it in the pockets of the elite.

    In 1964 the minimum wage was 5 silver quarters. The melt value of that silver today is $15.55. There's your 15 dollar an hour minimum wage! But no let's mandate it by the Feds and disrupt the GD economy even more when it has nothing to do with greed. It's the money!

    Pretending like the banks don't benefit outrageously from this system is the dumbass ill-informed comment of the century. Of course they benefit! How you say? They loan money out they don't even have through fractional reserve lending!?!?!?! Are you really this stupid? And all the fraud covered and insured by Joe taxpayer and the FDIC.

    If you had a grain suppository where you stored your grain and, the suppository just started loaning out the grain to other people you would be fucking livid when you went to collect your grain and it wasn't there. The difference? You can't print grain! This would be fraud but in money it is perfectly acceptable

    Interest rates need to be determined by the market supply and demand for money...not by a centralized authority.

  3. #23
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    Quote Originally Posted by Johnny View Post
    . The Fed alone has an ARMY of PhD economists and subject matter experts to gather economic data, keep watch on the US and world economy, and devise models with which to analyzer and predict its actions and the actions of other banks and economies...and they STILL struggle to avoid fucking up incessantly.
    what makes you so sure that the fed doesn't intend to 'fuck up incessantly'?

    they make credit plentiful and then restrict the money supply thereby leaving homeowners and small business owners high and dry so that they can swoop and scoop up the assets

    its a con game

  4. #24
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    having a central bank was the fifth plank of karl marx's communist manifesto:

    5. Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.

    Journalist James Corbett digs into the fed:

    Century of Enslavement: The History of The Federal Reserve


  5. #25
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    Court Rules Federal Reserve is Privately Owned
    Case Reveals Fed's Status as a Private Institution

    Below are excerpts from a court case proving the Federal Reserve system's status. As you will see, the court ruled that the Federal Reserve Banks are "independent, privately owned and locally controlled corporations", and there is not sufficient "federal government control over 'detailed physical performance' and 'day to day operation'" of the Federal Reserve Bank for it to be considered a federal agency:

    Lewis v. United States, 680 F.2d 1239 (1982)
    John L. Lewis, Plaintiff/Appellant,
    v.
    United States of America, Defendant/Appellee.

    No. 80-5905
    United States Court of Appeals, Ninth Circuit.
    Submitted March 2, 1982.
    Decided April 19, 1982.
    As Amended June 24, 1982.

    Plaintiff, who was injured by vehicle owned and operated by a federal reserve bank, brought action alleging jurisdiction under the Federal Tort Claims Act. The United States District Court for the Central District of California, David W. Williams, J., dismissed holding that federal reserve bank was not a federal agency within meaning of Act and that the court therefore lacked subject-matter jurisdiction. Appeal was taken. The Court of Appeals, Poole, Circuit Judge, held that federal reserve banks are not federal instrumentalities for purposes of the Act, but are independent, privately owned and locally controlled corporations.

    Affirmed.

    1. United States

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

    2. United States

    Federal reserve banks are not federal instrumentalities for purposes of a Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations in light of fact that direct supervision and control of each bank is exercised by board of directors, federal reserve banks, though heavily regulated, are locally controlled by their member banks, banks are listed neither as "wholly owned" government corporations nor as "mixed ownership" corporations; federal reserve banks receive no appropriated funds from Congress and the banks are empowered to sue and be sued in their own names. . . .

    3. United States

    Under the Federal Tort Claims Act, federal liability is narrowly based on traditional agency principles and does not necessarily lie when a tortfeasor simply works for an entity, like the Reserve Bank, which performs important activities for the government. . . .

    4. Taxation

    The Reserve Banks are deemed to be federal instrumentalities for purposes of immunity from state taxation.

    5. States Taxation

    Tests for determining whether an entity is federal instrumentality for purposes of protection from state or local action or taxation, is very broad: whether entity performs important governmental function.

    --------------

    Lafayette L. Blair, Compton, Cal., for plaintiff/appellant.

    James R. Sullivan, Asst. U.S. Atty., Los Angeles, Cal., argued, for defendant/appellee; Andrea Sheridan Ordin, U.S. Atty., Los Angeles, Cal., on brief.

    Appeal from the United States District Court for the Central District of California.

    Before Poole and Boochever, Circuit Judges, and Soloman, District Judge. (The Honorable Gus J. Solomon, Senior District Judge for the District of Oregon, sitting by designation)

    Poole, Circuit Judge:

    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 Clains Act (the Act), 28 U.S.C. Sect. 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. . . . 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. . . . "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. Sect. 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 Sect. 2671.

    [1,2] 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. . . . Other factors courts have considered include whether the entity is an independent corporation . . ., whether the government is involved in the entity's finances. . . ., and whether the mission of the entity furthers the policy of the United States, . . . 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 purpose of the FTCA, but are independent, privately owned and locally controlled corporations.

    Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two thirds of each Bank's nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors. 12 U.S.C. Sect. 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. Sect. 341, and appoint officers to implement and supervise daily Bank activities. These activites include collecting and clearing checks, making advances to private and commercial entities, holding reserves for member banks, discounting the notes of member banks, and buying and selling securities on the open market. See 12 U.S.C. Sub-Sect. 341-361.

    Each Bank is statutorily empowered to conduct these activites without day to day direction from the federal government. Thus, for example, the interest rates on advances to member banks, individuals, partnerships, and corporations are set by each Reserve Bank and their decisions regarding the purchase and sale of securities are likewise independently made.

    It is evident from the legislative history of the Federal Reserve Act that Congress did not intend to give the federal government direction over the daily operation of the Reserve Banks:

    It is proposed that the Government shall retain sufficient power over
    the reserve banks to enable it to exercise a direct authority when
    necessary to do so, but that it shall in no way attempt to carry on
    through its own mechanism the routine operations and banking which
    require detailed knowledge of local and individual credit and which
    determine the funds of the community in any given instance. In other
    words, the reserve-bank plan retains to the Government power over the
    exercise of the broader banking functions, while it leaves to
    individuals and privately owned institutions the actual direction of
    routine.

    H.R. Report No. 69 Cong. 1st Sess. 18-19 (1913).

    The fact that the Federal Reserve Board regulates the Reserve Banks does not make them federal agencies under the Act. In United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976), the Supreme Court held that a community action agency was not a federal agency or instrumentality for purposes of the Act, even though the agency was organized under federal regulations and heavily funded by the federal government. Because the agency's day to day operation was not supervised by the federal government, but by local officials, the Court refused to extend federal tort liability for the negligence of the agency's employees. Similarly, the Federal Reserve Banks, though heavily regulated, are locally controlled by their member banks. Unlike typical federal agencies, each bank is empowered to hire and fire employees at will. Bank employees do not participate in the Civil Service Retirement System. They are covered by worker's compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act. Employees travelling on Bank business are not subject to federal travel regulations and do not receive government employee discounts on lodging and services.

    The Banks are listed neither as "wholly owned" government corporations under 31 U.S.C. Sect. 846 nor as "mixed ownership" corporations under 31 U.S.C. Sect. 856, a factor considered is Pearl v. United States, 230 F.2d 243 (10th Cir. 1956), which held that the Civil Air Patrol is not a federal agency under the Act. Closely resembling the status of the Federal Reserve Bank, the Civil Air Patrol is a non-profit, federally chartered corporation organized to serve the public welfare. But because Congress' control over the Civil Air Patrol is limited and the corporation is not designated as a wholly owned or mixed ownership government corporation under 31 U.S.C. Sub-Sect. 846 and 856, the court concluded that the corporation is a non-governmental, independent entity, not covered under the Act.

    Additionally, Reserve Banks, as privately owned entities, receive no appropriated funds from Congress. . . .

    Finally, the Banks are empowered to sue and be sued in their own name. 12 U.S.C. Sect. 341. They carry their own liability insurance and typically process and handle their own claims. In the past, the Banks have defended against tort claims directly, through private counsel, not government attorneys . . ., and they have never been required to settle tort claims under the administrative procedure of 28 U.S.C. Sect. 2672. The waiver of sovereign immunity contained in the Act would therefore appear to be inapposite to the Banks who have not historically claimed or received general immunity from judicial process.

    [3] The Reserve Banks have properly been held to be federal instrumentalities for some purposes. In United States v. Hollingshead, 672 F.2d 751 (9th Cir. 1982), this court held that a Federal Reserve Bank employee who was responsible for recommending expenditure of federal funds was a "public official" under the Federal Bribery Statute. That statute broadly defines public official to include any person acting "for or on behalf of the Government." . . . The test for determining status as a public official turns on whether there is "substantial federal involvement" in the defendant's activities. United States v. Hollingshead, 672 F.2d at 754. In contrast, under the FTCA, federal liability is narrowly based on traditional agency principles and does not necessarily lie when the tortfeasor simply works for an entity, like the Reserve Banks, which perform important activities for the government.

    [4, 5] The Reserve Banks are deemed to be federal instrumentalities for purposes of immunity from state taxation. . . . The test for determining whether an entity is a federal instrumentality for purposes of protection from state or local action or taxation, however, is very broad: whether the entity performs an important governmental function. . . . The Reserve Banks, which further the nation's fiscal policy, clearly perform an important governmental function.

    Performance of an important governmental function, however, is but a single factor and not determinative in tort claims actions. . . . State taxation has traditionally been viewed as a greater obstacle to an entity's ability to perform federal functions than exposure to judicial process; therefore tax immunity is liberally applied. . . . Federal tort liability, however, is based on traditional agency principles and thus depends upon the principal's ability to control the actions of his agent, and not simply upon whether the entity performs an important governmental function. . . .

    Brinks Inc. v. Board of Governors of the Federal Reserve System, 466 F.Supp. 116 (D.D.C.1979), held that a Federal Reserve Bank is a federal instrumentality for purposes of the Service Contract Act, 41 U.S.C. Sect. 351. Citing Federal Reserve Bank of Boston and Federal Reserve Bank of Minneapolis, the court applied the "important governmental function" test and concluded that the term "Federal Government" in the Service Contract Act must be "liberally construed to effectuate the Act's humanitarian purpose of providing minimum wage and fringe benefit protection to individuals performing contracts with the federal government." Id. 288 Mich. at 120, 284 N.W.2d 667.

    Such a liberal construction of the term "federal agency" for purposes of the Act is unwarranted. Unlike in Brinks, plaintiffs are not without a forum in which to seek a remedy, for they may bring an appropriate state tort claim directly against the Bank; and if successful, their prospects of recovery are bright since the institutions are both highly solvent and amply insured.

    For these reasons we hold that the Reserve Banks are not federal agencies for purposes of the Federal Tort Claims Act and we affirm the judgement of the district court.

    AFFIRMED.

    It is clear from this that in some circumstances, the Federal Reserve Bank can be considered a government "instrumentality", but cannot be considered a "federal agency", because the term carries with it the assumption that the federal government has direct oversight over what the Fed does. Of course it does not, because most people who know about this subject know that the Fed is "politically independent."

    The only area where one might disagree with the judge's decision is where he states that the Fed furthers the federal government's fiscal policy, and therefore performs an important governmental function. While we would like to think that the federal government and the Fed work cooperatively with each other, and they may on occasion, the Fed is by no means required to do so. One example is where Rep. Wright Patman, Chairman of the House Banking Committee, said in the Congressional Record back in the '60s, that depending on the temperament of the Fed's Chairman, sometimes the Fed worked with the government's fiscal policy, and other times either went in the complete opposite direction, or threatens to do so in order to influence policy.

    The common claim that the Fed is accountable to the government, because it is required to report to Congress on its activities annually, is incorrect. The reports to Congress mean little unless what the Chairman reports can be verified by complete records. From its founding to this day, the Fed has never undergone a complete independent audit. Congress time after time has requested that the Fed voluntarily submit to a complete audit, and every time, it refuses.

    Those in the know about the Fed, realize that it does keep certain records secret. The soon-to-be-former Chairman of the House Banking Committee, Henry Gonzales, has spoken on record repeatedly about how the Fed at one point says it does not have certain requested records, and then it is found through investigation that it in fact does have those records, or at least used to. It would appear that the Fed Chairman can say anything he wants to to Congress, and they'll have to accept what he says, because verification of what he says is not always possible.
    http://www.save-a-patriot.org/files/view/frcourt.html

  6. #26
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    This Is How The “Everything Bubble” Will End
    By PatriotRising -
    November 30, 2018

    I think there’s a very high chance of a stock market crash of historic proportions before the end of Trump’s first term.

    That’s because the Federal Reserve’s current rate-hiking cycle, which started in 2015, is set to pop “the everything bubble.”

    I’ll explain how this could all play out in a moment. But first, you need to know how the Fed creates the boom-bust cycle…

    To start, the Fed encourages malinvestment by suppressing interest rates lower than their natural levels. This leads companies to invest in plants, equipment, and other capital assets that only appear profitable because borrowing money is cheap.

    This, in turn, leads to misallocated capital – and eventually, economic loss when interest rates rise, making previously economic investments uneconomic.

    Think of this dynamic like a variable rate mortgage. Artificially low interest rates encourage individual home buyers to take out mortgages. If interest rates stay low, they can make the payments and maintain the illusion of solvency.

    But once interest rates rise, the mortgage interest payments adjust higher, making them less and less affordable until, eventually, the borrower defaults.

    In short, bubbles are inflated when easy money from low interest rates floods into a certain asset.

    Rate hikes do the opposite. They suck money out of the economy and pop the bubbles created from low rates.
    It Almost Always Ends in a Crisis

    Almost every Fed rate-hiking cycle ends in a crisis. Sometimes it starts abroad, but it always filters back to U.S. markets.

    Specifically, 16 of the last 19 times the Fed started a series of interest rate hikes, some sort of crisis that tanked the stock market followed. That’s around 84% of the time.

    You can see some of the more prominent examples in the chart below.

    Let’s walk through a few of the major crises…

    • 1929 Wall Street Crash

    Throughout the 1920s, the Federal Reserve’s easy money policies helped create an enormous stock market bubble.

    In August 1929, the Fed raised interest rates and effectively ended the easy credit.

    Only a few months later, the bubble burst on Black Tuesday. The Dow lost over 12% that day. It was the most devastating stock market crash in the U.S. up to that point. It also signaled the beginning of the Great Depression.

    Between 1929 and 1932, the stock market went on to lose 86% of its value.

    • 1987 Stock Market Crash

    In February 1987, the Fed decided to tighten by withdrawing liquidity from the market. This pushed interest rates up.

    They continued to tighten until the “Black Monday” crash in October of that year, when the S&P 500 lost 33% of its value.

    At that point, the Fed quickly reversed its course and started easing again. It was the Chairman of the Federal Reserve Alan Greenspan’s first – but not last – bungled attempt to raise interest rates.

    • Asia Crisis and LTCM Collapse

    A similar pattern played out in the mid-1990s. Emerging markets – which had borrowed from foreigners during a period of relatively low interest rates – found themselves in big trouble once Greenspan’s Fed started to raise rates.

    This time, the crisis started in Asia, spread to Russia, and then finally hit the U.S., where markets fell over 20%.

    Long-Term Capital Management (LTCM) was a large U.S. hedge fund. It had borrowed heavily to invest in Russia and the affected Asian countries. It soon found itself insolvent. For the Fed, however, its size meant the fund was “too big to fail.” Eventually, LTCM was bailed out.

    • Tech Bubble

    Greenspan’s next rate-hike cycle helped to puncture the tech bubble (which he’d helped inflate with easy money). After the tech bubble burst, the S&P 500 was cut in half.

    • Subprime Meltdown and the 2008 Financial Crisis

    The end of the tech bubble caused an economic downturn. Alan Greenspan’s Fed responded by dramatically lowering interest rates. This new, easy money ended up flowing into the housing market.

    Then in 2004, the Fed embarked on another rate-hiking cycle. The higher interest rates made it impossible for many Americans to service their mortgage debts. Mortgage debts were widely securitized and sold to large financial institutions.

    When the underlying mortgages started to go south, so did these mortgage-backed securities, and so did the financial institutions that held them.

    It created a cascading crisis that nearly collapsed the global financial system. The S&P 500 fell by over 56%.

    • 2018: The “Everything Bubble”

    I think another crisis is imminent…

    As you probably know, the Fed responded to the 2008 financial crisis with unprecedented amounts of easy money.

    Think of the trillions of dollars in money printing programs – euphemistically called quantitative easing (QE) 1, 2, and 3.

    At the same time, the Fed effectively took interest rates to zero, the lowest they’ve been in the entire history of the U.S.

    Allegedly, the Fed did this all to save the economy. In reality, it has created enormous and unprecedented economic distortions and misallocations of capital. And it’s all going to be flushed out.

    In other words, the Fed’s response to the last crisis sowed the seeds for an even bigger crisis.

    The trillions of dollars the Fed “printed” created not just a housing bubble or a tech bubble, but an “everything bubble.”

    The Fed took interest rates to zero in 2008. It held them there until December 2015 – nearly seven years.

    For perspective, the Fed inflated the housing bubble with about two years of 1% interest rates. So it’s hard to fathom how much it distorted the economy with seven years of 0% interest rates.
    The Fed Will Pop This Bubble, Too

    Since December 2015, the Fed has been steadily raising rates, roughly 0.25% per quarter.

    I think this rate-hike cycle is going to pop the “everything bubble.” And I see multiple warning signs that this pop is imminent.

    • Warning Sign No. 1 – Emerging Markets Are Flashing Red

    Earlier this year, the Turkish lira lost over 40% of its value. The Argentine peso tanked a similar amount.

    These currency crises could foreshadow a coming crisis in the U.S., much in the same way the Asian financial crisis/Russian debt default did in the late 1990s.

    • Warning Sign No. 2 – Unsustainable Economic Expansion

    Trillions of dollars in easy money have fueled the second-longest economic expansion in U.S. history, as measured by GDP. If it’s sustained until July 2019, it will become the longest in U.S. history.

    In other words, by historical standards, the current economic expansion will likely end before the next presidential election.

    • Warning Sign No. 3 – The Longest Bull Market Yet

    Earlier this year, the U.S. stock market broke the all-time record for the longest bull market in history. The market has been rising for nearly a decade straight without a 20% correction.

    Meanwhile, stock market valuations are nearing their highest levels in all of history.

    The S&P 500’s CAPE ratio, for example, is now the second-highest it’s ever been. (A high CAPE ratio means stocks are expensive.) The only time it was higher was right before the tech bubble burst.

    Every time stock valuations have approached these nosebleed levels, a major crash has followed.
    Preparing for the Pop

    The U.S. economy and stock market are overdue for a recession and correction by any historical standard, regardless of what the Fed does.

    But when you add in the Fed’s current rate-hiking cycle – the same catalyst for previous bubble pops – the likelihood of a stock market crash of historic proportions, before the end of Trump’s first term, is very high.

    That’s why investors should prepare now. One way to do that is by shorting the market. That means betting the market will fall.

    Keep in mind, I’m not in the habit of making “doomsday” predictions. Simply put, the Fed has warped the economy far more drastically than it did in the 1920s, during the tech or housing bubbles, or during any other period in history.

    I expect the resulting stock market crash to be that much bigger.
    http://patriotrising.com/this-is-how...bble-will-end/

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