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Federal Reserve Bank

It Really Is Monopoly Money

Submitted by Roanman on Tue, 02/15/2011 - 16:31

 

We've been trying to understand "The Fed"

To be perfectly honest about it, we still don't even know what we don't even know.

But as usual, this has not prevented us from having an opinion.

 

Adjusted Monetary Base is that part of the money supply that is most liquid, that which is either in the hands of the public (in circulation) or in the commercial bank deposits held within the central banks reserves.

The first chart demonstrates the growth of the Adjusted Monetary Base since 1918 or so, 5 years after the creation of The Federal Reserve Bank.

America's third central bank by the way.

More on that latter.

 

 

 The second chart represents the purchasing power of One ($1.00) Dollar since the inception of The Federal Reserve Bank in 1913.

Click the chart below for some different looks at the same issue.

 

 

The following is taken directly from the Rules of Monopoly.

Don't believe me?  Just click.

 

 

 

It really is time to lose the Fed.

 

Reading on a Saturday Morning

Submitted by Roanman on Sat, 05/08/2010 - 09:38

 

To quote Richard Russell one more time,

 

 

 

 

 

 

 

He goes on to say something about denial, the NYSE, the administration, the Fed and clueless newspapers.

It all seemed redundant.

But then ...

He hits his stride.

 

 

 

 

And since we're on the subject of jokes .....

 

The Guidotti-Greenspan Rule

Submitted by Roanman on Mon, 04/05/2010 - 10:09

 

The Guidotti-Greenspan Rule

Named for Pablo Guidotti, former deputy minister of finance for Argentina (that bastion of resposibility in national financing), and Alan Greenspan, increasingly discredited former chairman of the Federal Reserve Board of the United States (that other bastion of responsibility in national financing)

States that a countries financial reserves should equal short-term external debt (one-year or less maturity), implying a ratio of reserves-to-short term debt of 1.

The rationale here, is that countries should have enough reserves to resist a massive withdrawal of short term foreign capital.

The U.S. holds gold, oil, and foreign currencies in reserve.

The U.S. has 8,133.5 metric tonnes of gold (supposedly, ain't nobody counted it in generations).

It is the world's largest holder (supposedly, ..... ).

That's 16,267,000 pounds (at the risk of redundancy ....... ).

At about $1,100 per oz. or $17,600 per pound, it's worth just under $300 billion (you know ..... ).

The U.S. strategic petroleum reserve shows a current total position of 725 million barrels of oil.

At about $80 per barrel, that's roughly $58 billion.

And according to the IMF, the U.S. has $136 billion in foreign currency reserves.

So altogether... that's around $500 billion of reserves.

Now, consider this .............

Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt.

That's not counting any additional deficit spending, maybe another $1.5 trillion ..... ish.

Add it up and you get $3.5 trillion ..... or so, a trillion here a trillion there, pretty soon you're talking about real money.

That would be about 30% of our entire GDP.

Where do you think that money is gonna come from?

They're gonna print it.

Or snatch your IRA.

If not both.

 

The above was taken almost in it's entirety (with the exception of the bitter and/or sarcastic comments usually written with type just about this big) from a Porter Stansbury article that was all over the place most of this past fall.

It appears here, here, here  and there, but originated here  (somewhere).

 

 

Reading on a Saturday Morning

Submitted by Roanman on Sat, 01/09/2010 - 10:06

 

Maybe that pesky "Global Warming " is a good thing.

"One culprit in December's disappointing jobs report was the unusually cold weather during the week that the Bureau of Labor Statistics did its counting." Phil Izzo, WSJ 1/9/09 

 

The next one is sort of new. The comment up until now has been that the Chinese are fed up and are looking at replacing the dollar as the world's reserve currency with a basket of currencies that includes Gold.

The fact that this quote comes out of the editorial section of the Wall Street Journal is pretty big.

Indeed, gold is viewed by central banks the world over as a unique reserve asset. Contrary to monetary assets denominated in national currencies, its status cannot be undermined by inflation in the issuing country, nor is it subject to repudiation or default.

Which suggests that perhaps it is time to make available to the American public the sort of insurance against dollar depreciation that monetary authorities have long sought for their own portfolios. For those citizens who've become skeptical of the Fed's ability to guarantee price stability in terms more meaningful than elementary CPI statistics—or who believe the bigger threat to their personal financial security lies in a potential repeat of the last debacle — why not provide a new class of Treasury obligations that would guarantee purchasing power of the dollar in terms of Gold?  Judy Shelton, WSJ 1/8/09

 

Two Thousand Billion?

That's Two Trillion

A trillion here, a trillion there, pretty soon you're talking about real money.

 

 

In the last decade gold has gained 292% against the US$, 181% against the Euro, 249% against the JY, 298% against the BP, 179% against the C$, and 182% against the A$

An ounce of gold today buys 62 ounces of silver.  Historically, it is 1:15.

 

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