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There are some examples of money that werent good stores of value was rice or tobacco
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Friedman is a monetarist. But hes influenced by Adam Smith.
He believes the market will work itself out without govt intervention. But he was also a Central Banker so he believe monetary policies could correct financial problems
Its hard to say how much powerba govt should or shouldn't have. Maybe you are right that govt is puppet. But their job should be regulators
To what I've seen (yet to finish the book), Friedman is not for central banks, he tolerates them "because they are here, they might do something", but actually would prefered a life without. Yeah you are right. I confused Friedman w someone else |
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Friedman is a monetarist. But hes influenced by Adam Smith.
He believes the market will work itself out without govt intervention. But he was also a Central Banker so he believe monetary policies could correct financial problems
Its hard to say how much powerba govt should or shouldn't have. Maybe you are right that govt is puppet. But their job should be regulators
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I see, thanks for the information, I'm going to learn more about the system. This is really interesting, I never asked so much question on economy and the system since I started buying BTC, trying to understand why some people are or are not convinced about it. Uncharted territory for me... looking the coursera video  Banking is not easy to understand but that course is good because he covers some history you can understand why it has evolved to where we are today. He doesn't talk politics which is good. A lot of people think banks & govt are in bed together but I think its not like that. Govt is like parent that try to make rules but the banks (kids) keep getting into trouble. Then the parents have no choice but to bail them out. Some believe we should allow banks to fail and the small ones do fail. But when they get too big the failure would pull down the rest of economy. As a Central Banker, the moral thing to do is save the economy. Theres a reason why they let Lehman fall but saved AIG. I do think the legislators need to make greater restrictions on financial sector thru regulations. But its hard because after repeal of Glass-Steagal Act the commercial & investment banks became merged. People here criticize money creation & Federal Reserve System often. But I think the problems come more from the investment side of banking mores than the commercial side. |
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The FED is "owned" by private shareholder, why government gave the key to their freedom to private shareholder ? I don't get it.
Does other central bank like ECB are the same ?
From Wikipedia The Federal Reserve Banks issue shares of stock to member banks. However, owning Federal Reserve Bank stock is quite different from owning stock in a private company. The Federal Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the system. The stock may not be sold or traded or pledged as security for a loan; dividends are, by law, limited to 6% per year.[9] The dividends paid to member banks are considered partial compensation for the lack of interest paid on member banks' required reserves held at the Federal Reserve. By law, banks in the United States must maintain fractional reserves, most of which are kept on account at the Federal Reserve. Historically, the Federal Reserve did not pay interest on these funds. The Federal Reserve now has authority, granted by Congress in the Emergency Economic Stabilization Act (EESA) of 2008, to pay interest on these funds. -------- The Fed is designed to operate independent from Congress so that govt won't abuse printing of money. Its to protect the bankers from govt, but at the same time it can act as "lender of last resort" |
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I understand that from an economist point of view there is no concern about the politics, and central bank is doing its job.
But what I don't understand is : these people can freely choose where the will expend the currency.
This means that if for example a member of the board of the central bank is also member of the board of a commercial bank, then he has the power to kill its competitor by not providing currency to its competitor.
From the economist perpective, I understand that we turn a blind eye on that though.
What I don't understand is : are these people able to choose what sector, or what company, to stimulate or to kill by choosing where currency is spread, for some personal interest ?
Are you talking about TARP bailout? That was mostly Treasury but in the case of AIG, Federal Reserve was involved. The purpose of the Fed is not to make profit so there's no reason for them to kill any banks. It's more like the banks become insolvent so they need to get loans from somewhere. If other banks don't lend to them, they go to the Fed |
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Exactly what I was looking for thanks. I'll search about the background of these guys. By the way I follow the Economics of Money and Banking class on coursera. Amazing teacher. I was thinking about your question whether Central Banks act in the interest of banks or citizens. I think the answer is both because economics is intertwined In politics, some people might separate finance from other businesses. But it doesn't make sense to an economist. |
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I think I did not explained me well.
I'm not an expert, but know the theory behind the goal of the central bank. And I know how I can leverage the inflation to my advantage. (whether, there is inflation or deflation, it is just a matter of parameter for the well advised)
My question is : the people that controls the money supply hold more power than our own governments.
Who are they and how did they get the control ?
Is there anyway where I can find such information ? I want to know how these world impacting decisions are made.
Are you asking about history of central banking? I suggest a coursera.org class on economics of banking taught by Merhling of Columbia U |
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If these currencies are so valuable and doing so well then why is everyone poor? Answer me that.
Everyone isn't poor. The net worth of the world is estimated at $223 trillion. Sorry, you're right on the poor thing, not everyone is poor but most are. Oh and LOL you think that number is real, I'll try to explain it to you though if you're going to actually read my explanation, what's happened is that what I would call the 'real' net wealth is essentially being doubled or tripled through money printing so it's a bit like taking £100 and then printing more money until you have £1,000,000 oh look! I just became a millionaire! They go around telling all their friend and other countries and they actually buy into it. It's such a simple con that people fall for, but now everyone has realised what's going on and that people don't actually have products and services worth that much, fact is, to pick up that much net worth globally we'd have to either take up asteroid mining or take over Afghanistan completely and mine some giant holes in it to even come close to the numbers these central bankers have made up. If you're actually bothered about learning how the bond market and paper money works this video explains it perfectly: https://www.youtube.com/watch?v=iFDe5kUUyT0Hows that different than BTC being $580? |
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Adam Smith is very influential. So is Keynes, Marx, Hayek, Ricardo, Locke, Schumpeter, Friedman
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You got the relationship wrong.
Central banks provide banking services to commercial banks. Central banks were created to stabilize banking not as profit businesses
They are private but w govt oversight
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If banks fail, everybody gets hurt. The rich lose more BC they have more to begin w. Except they won't starve or go homeless like the poor. Its because every one pays same price for goods and services
If you have $10M and I have $100K. We both lose 50%. Who is in greater pain?
Greek debt is denominated in Euros, printing Greek currency won't help.
The point is to the OP is that you need money to be elastic in modern economies
What you fail to realise is that the wealthy do not store their wealth in FIAT currency, they store it in finite asset classes, art, wine, metals, property and land. The wealthy will lose...... 50% of their art? Is the interest rate going to take half a Monet? Like cut it in half? You will lose 50% of your wealth when your buying power is eroded by inflation, the wealthy will lose nothing. When the banks fail, the middle class will be butchered, the poor will still be poor and the wealthy will be wealthier than ever. True story bro. G x Oh, I missed the last bit, elastic money. 1. No, you don't. 2. We don't have elastic currency, where is the decrease in supply? by what mechanism have central banks applied hookes law to money? lolcatz bro, when you buying power has been erroded by 99% what are you even talking about elastic? currency is plastic, not elastic. The Monet loses value due to inflation --in relation to prices Banks destroy money when loans are paid off. Duh. Go read an economic s textbook |
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Say what you want about eBay. When you are trying to sell some shippable crap it works better than Craigslist & Amazon
I was hoping for a better solution between the two. A more free and open ebay type auction site. Honestly, I could see a layout such as the silkroad surpassing ebay in the next 20 years. But silkroad still charges fees. We need a marketplace that charges as LITTLE fees as possible... maybe a vendor one-time fee and then no "commission" fees Hosting servers aren't free. It's pretty expensive to host servers. Honestly, I was thinking a market place with maybe 1-2% of fees of the TOTAL sale. Say you're processing $10MM, that's at least 100-200k to pay for servers and such. That's pretty reasonable imho. Only if there is no back office. It might be something like Craigslist though A lot of small sellers run their business on EBay and they need some of EBay's tools Erm? What? Hosting an API / creating a webapp isn't that expensive. I mean, if you're doing say $10MM in sales, estimate each seller is only selling say $1000. That's only supporting 100k sellers. Say there's 900k buyers (just trying to make the numbers even). That's only 1 million hits, if the average size of each page is a few kilobytes, and the average time on the size is around 20 pages, that's still a very small imprint. Would cost maybe $10k to host the servers. The other 90-190k can go to the cost of employees (maybe 40-70 employees for this sort of operation). Edit: That's monthly figures by the way. I don't think business scale like that. You can look up eBay's 10-k and read there financials since they're public |
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instead of responding like an exposed nerve you really need to think about what he said because it's a brilliant observation. Its only brilliant to you because you don't know about economics. I never even said I disagreed w what he said. I only said he used the term "Ponzi scheme" incorrectly Then I explained why Bernanke probably had no choice but to do QE. Go back and read my posts |
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but Bank's loans,mortgage, stock advices, watching our back for us when we lose our debit card or when theres a fraud ... these are some good services from the bank we cannot neglect. right?
Loans and mortgages can be supported under the use of Bitcoins simply by signing an agreement such that an individual's assets can be used as collateral. No problems with 'banks' loaning people. The big thing I have is theft and fraud. Right now if you lose your wallet you lose everything and there is no recourse. No one offers any kind of insurance should it be lost or stolen. There isn't even a means to verify if coins have truly been stolen. Take a mortgage in BTC? You suicidal? Imagine buying a house when you believe prices will be deflationary while committing to interest. |
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Say what you want about eBay. When you are trying to sell some shippable crap it works better than Craigslist & Amazon
I was hoping for a better solution between the two. A more free and open ebay type auction site. Honestly, I could see a layout such as the silkroad surpassing ebay in the next 20 years. But silkroad still charges fees. We need a marketplace that charges as LITTLE fees as possible... maybe a vendor one-time fee and then no "commission" fees Hosting servers aren't free. It's pretty expensive to host servers. Honestly, I was thinking a market place with maybe 1-2% of fees of the TOTAL sale. Say you're processing $10MM, that's at least 100-200k to pay for servers and such. That's pretty reasonable imho. Only if there is no back office. It might be something like Craigslist though A lot of small sellers run their business on EBay and they need some of EBay's tools |
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Say what you want about eBay. When you are trying to sell some shippable crap it works better than Craigslist & Amazon
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