Bitcoin as a GET System

[hugolp]

Perhaps, but I doubt it.  Hyperinflation always and everywhere requires the willfull participation of those who control the printing presses. In every case that I can think of, that required that the political class have the authority to create new currency, and would do so for political reasons not economic reasons.

The IMF published a paper recently about the necessity of a global currency and speculated about how to make it work. One of the main arguments were the demise of the dollar and its possible collapse. So there you have a reason to make the dollar collapse.

In the US the  federal government does not control the Federal Reserve.  It's more like the other way around.  And since hyperinflation, once begun, is a death spiral; those who do have control over the monetary base have a vested interest in the continuance of the status quo.  To allow, or even risk, a hyperinflationary event would be so catastrophic to their personal fiefdoms that few would be willing to go along quietly, even if there was much to be gained politically.

The Board of Governors of the Federal Reserve (Bernanke and the rest of the gang) is nominated by the president and ratified by congress. If you say that the government is corrupt and benefits special interests I will agree with you (its a government...), but I dont see how someone can say that the Fed controls government when its the other way arround. You have to think that politicians benefit from the expansionary policies of the Fed, because they get to spend more than they would without the Fed.

Far more likely is an old fashioned deflationary Greater Depression, the great 'they' have less to lose that way.

Banks hate deflation. If they can avoid it they will. And they can, so I highly doubt we will see any meaningful price deflation.

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[MoonShadow]

The Board of Governors of the Federal Reserve (Bernanke and the rest of the gang) is nominated by the president and ratified by congress. If you say that the government is corrupt and benefits special interests I will agree with you (its a government...), but I dont see how someone can say that the Fed controls government when its the other way arround. You have to think that politicians benefit from the expansionary policies of the Fed, because they get to spend more than they would without the Fed.

The board is is nominated for 14 year terms, and they are just nominations.  The sitting board is not subject to the will of any branch of the US federal government in any official capacity, and they don't have to accept the president's nominations.  They don't have to worry about political backlash once appointed because they *will* out last the president that nominated them.  Also, no sitting president can ever get the chance to nominate a majority of the board.  The idea that the board of the Federal Reserve is subject to political control is a convient fiction.  I said that it's more like the other way around because the power to regulate the national currency is the power to destroy same, and that power is far greater than any of the branches of the federal government.  The only real power that the government has to check this is the power to revoke the charter of the Federal Reserve, and remove it's monopoly control of the currency.

This, of course, would destroy the currency in short order, but it would also destroy a large number of the legistlators' own personal fortunes.  So there is a strong incentive to not choose this 'nuclear option'.

[hugolp]

The board is is nominated for 14 year terms, and they are just nominations.  The sitting board is not subject to the will of any branch of the US federal government in any official capacity, and they don't have to accept the president's nominations.  They don't have to worry about political backlash once appointed because they *will* out last the president that nominated them.  Also, no sitting president can ever get the chance to nominate a majority of the board.  The idea that the board of the Federal Reserve is subject to political control is a convient fiction.  I said that it's more like the other way around because the power to regulate the national currency is the power to destroy same, and that power is far greater than any of the branches of the federal government.  The only real power that the government has to check this is the power to revoke the charter of the Federal Reserve, and remove it's monopoly control of the currency.

No, I am not saying that the Board of Governors does a good job or anything similar. I am just saying that the Board of Governors, the one who takes the decisions in the Fed, is a federal government agency. Supposedly, the system is the way you describe it so the members are independent. I dont believe that for a moment, but it is the justification. Having a independent or honest politician or bureaucrat with that level of power is an utopia, a lie. But the decisions about monetary policy are already taken by a federal government agency. That is what I wanted to say, not that it worked. If I could I would abolish the Fed, and put an end to the money monopoly.

This, of course, would destroy the currency in short order, but it would also destroy a large number of the legistlators' own personal fortunes.  So there is a strong incentive to not choose this 'nuclear option'.

I think that the real reason politicians support the central bank is because the central bank finances government and allows politicians to spend more than they could by direct taxation only.

[MoonShadow]

The board is is nominated for 14 year terms, and they are just nominations.  The sitting board is not subject to the will of any branch of the US federal government in any official capacity, and they don't have to accept the president's nominations.  They don't have to worry about political backlash once appointed because they *will* out last the president that nominated them.  Also, no sitting president can ever get the chance to nominate a majority of the board.  The idea that the board of the Federal Reserve is subject to political control is a convient fiction.  I said that it's more like the other way around because the power to regulate the national currency is the power to destroy same, and that power is far greater than any of the branches of the federal government.  The only real power that the government has to check this is the power to revoke the charter of the Federal Reserve, and remove it's monopoly control of the currency.

No, I am not saying that the Board of Governors does a good job or anything similar.

I didn't say anything about the quality of work of the board.  Nor did I take any such claim from any other post.

 I am just saying that the Board of Governors, the one who takes the decisions in the Fed, is a federal government agency.

No, it is not.  The Federal Reserve Bank is a privately founded bank with monopoly powers by virtue of a government charter.  This is comparable to the federal government hiring a private merc army for operations overseas a la Blackwater.  Government is the customer, and has sway, but does not make the executive decisions and was never designed to be able to influence those executive decisions to any large degree.

 Supposedly, the system is the way you describe it so the members are independent. I dont believe that for a moment, but it is the justification. Having a independent or honest politician or bureaucrat with that level of power is an utopia, a lie. But the decisions about monetary policy are already taken by a federal government agency. That is what I wanted to say, not that it worked. If I could I would abolish the Fed, and put an end to the money monopoly.

I think we agree upon the net effects and usefulness of the Fed, and only disagree upon which end is the tail and which is the dog.  Who controls whom is really a matter of degree.  In reality, neither is independent and neither is in command in any absolute sense.

This, of course, would destroy the currency in short order, but it would also destroy a large number of the legistlators' own personal fortunes.  So there is a strong incentive to not choose this 'nuclear option'.

I think that the real reason politicians support the central bank is because the central bank finances government and allows politicians to spend more than they could by direct taxation only.

Um, yes.  That's what I said.  How else do you think that a politician builds and maintains a personal fortune except by "taxation"?  (institutionalized theft)

[mizerydearia]

hyperinflation, from a political perspective rather than an economic perspective, could destabilize the united states towards decentralization, lead to the collapse of the federal reserve, incite riots against the dollar and fiat currency and capitalism in general, generate necessity-forced dependance on local and sustainable systems, and, as an antidote to apathy, contribute to a massive increase in collective awareness.

Thank you for that quote.

It sounds just ordinarily anti-social until you get to "contribute to a massive increase in collective awareness" then it gets implausible and silly. No offense to your roommate, it's just not my first trip to the enlightenment rodeo.  

From my roommate:

'ordinarily anti-social' suggests a complete misunderstanding, and a massive
increase in collective consciousness in no way implies 'enlightenment'.

to begin with, the problems inherent in the system make solutions to those
problems impossible within the framework of the system. therefore, for the
'economy' or anything else to 'get better', the inert baggage of corporatism and
the fractional reserve system must be cleared away somehow. the chaos and panic
that accompanies hyperinflation would do more, at once, to destabilize the
system, than any attempts to reform or curtail or deconstruct it from within.
one of the most significant obstacles to improvement of the status quo is a
pervasive attitude of apathy that the corporate empire entrenches (through
complacency, distractions, and exhausting workforce conditions, among other
things). hyperinflation could potentially "contribute to a massive increase in
collective awareness" in the sense that it would wake massive amounts of people
all at once out of their apathy-trance, presenting them with immediate
situations to address rather than persistent
disappointment/hopelessness/disillusion to try to ignore as they struggle to pay
for food and housing. for example, lonely individuals struggling to pay the rent
month after month, working 40+ hours a week, are not going to challenge the
system or initiate its deconstruction. a whole neighbourhood of people finding
empty grocery shelves, or finding that prices suddenly jumped 600%, are going to
be angry and lash out. "collective awareness" as i used it in my initial
statement refers specifically to BEING AWARE OF THE CURRENT PROBLEMS WE FACE, it
has nothing to do with flimsy fanciful notions of 'enlightenment' or theories of
qualitative states of mind.

[MoonShadow]

the chaos and panic
that accompanies hyperinflation would do more, at once, to destabilize the
system, than any attempts to reform or curtail or deconstruct it from within.

I can certainly agree with that statement, but one should be careful what you wish for.

[ichi]

I don't know where mizerydearia and roommate live, and here in the US of A, it's the Tea Party that'd be the big winner in that scenario.  If necessary, to save my ass, I could blend.  Hell, I'm an NRA member, and on Tea Party mailing lists.  And I'd hate myself for it.

[MoonShadow]

I don't know where mizerydearia and roommate live, and here in the US of A, it's the Tea Party that'd be the big winner in that scenario.  If necessary, to save my ass, I could blend.  Hell, I'm an NRA member, and on Tea Party mailing lists.  And I'd hate myself for it.

Why?  Where I live, the Tea Party is as libertarian as any random group that I have ever before seen.

[ichi]

NO !!!  The Tea Party is total astroturf.  They grew out of GGOOB, which was a tobacco-industry effort to block anti-smoking laws.  GGOOB became so popular (among it's target population, anyway) that many other industries demanded a piece.  Of course, corporations now have free speech (and spending) re the political process, and they of course buy politicians, but this is a nacent political party that's actually a covert corporate lobbying effort.

[Red]

From my roommate:

BEING AWARE OF THE CURRENT PROBLEMS WE FACE, it
has nothing to do with flimsy fanciful notions of 'enlightenment' or theories of
qualitative states of mind.

It's not that I don't find your roommate's argument coherent. It is just that I don't find it compelling. And I really have been to this rodeo a number of times.

Each new generation makes the same points with a slight variation on the enemy. It is like an internet chain letter. The "people are corporate sheep" argument really hit its stride in the 60's. Ironically, the few people who ended up changing anything did so by started their own corporations. Producing things is a mighty force for change.

But the key point he is trying to make is: People are not going to change anything to be more like I want, until things really start to suck. Therefore, wouldn't it be nice if things really sucked?

Well as it turns out, "No". Things wouldn't be better if they really sucked. That's the grown-up answer to the very common adolescent question. Yes, I've been an adolescent and I've raised adolescents. And yes I'm well aware that adolescence lasts well into the late 20's now.

But where he is wrong is that if you see a potential problem you really can fix it. Or maybe you can try and fail. But either way, don't expect people to care unless you actually fix one of THEIR problems.

That is the problem Obama is having. He keeps asking for people to be impressed with all the problems he sees that he is fixing.

[MoonShadow]

NO !!!  The Tea Party is total astroturf.  They grew out of GGOOB, which was a tobacco-industry effort to block anti-smoking laws.  GGOOB became so popular (among it's target population, anyway) that many other industries demanded a piece.  Of course, corporations now have free speech (and spending) re the political process, and they of course buy politicians, but this is a nacent political party that's actually a covert corporate lobbying effort.

The Tea Parties may have had an influx of Repubs since Obama's electoral victory, but they are not 'astroturf'.  They are a very real movement that had been going on for a couple of years before Fox News took notice.  I'm not really involved anymore, but during the GWB years the Tea Parties were small and ineffective, just like the Libertarian Party itself.  The Tea Parties took their name *directly* from the Boston Tea Party, and was not an acronym for "Taxed Enough Already" even though taxation was the theme even when libs were the *only* political ideology of the crowd.  The last one I attended was last year, and I would say that the mix was about 40% Republican, 40% libertarian and related flavors, 18% independents who had never really cared about politics before that year and 2% fiscally conservative Democrats.

If the Tea Parties near where you live are being funded by tobacco money, I can't speak to that.  Around here; however, I haven't heard anyone talk about corporate 'rights' in any capacity, and there is no evidence that the tobacco industry has any particular interests in the Tea Parties

[mizerydearia]

If the Tea Parties near where you live are being funded by tobacco money, I can't speak to that.  Around here; however, I haven't heard anyone talk about corporate 'rights' in any capacity, and there is no evidence that the tobacco industry has any particular interests in the Tea Parties

I would imagine that the tea industry wouldn't have any particular interest in tobacco parties either...unless there happened to be tea-flavored cigs/cloves or tobacco-flavored tea.   Then I imagine there would be quite a party.

[ichi]

Hey, creighto, no offense intended.  I'm sure that the Tea Party includes many good people with good ideas.  Hell, if it weren't for the rampant xenophobia and racism, I'd be one of them.  However, if you dig, what you'll find is the DCI Group -- founded by Thomas Synhorst, Douglas Goodyear and Timothy Hyde (all tied to RJR and the Republican Party).

[MoonShadow]

Hey, creighto, no offense intended.  I'm sure that the Tea Party includes many good people with good ideas.  Hell, if it weren't for the rampant xenophobia and racism, I'd be one of them.  However, if you dig, what you'll find is the DCI Group -- founded by Thomas Synhorst, Douglas Goodyear and Timothy Hyde (all tied to RJR and the Republican Party).

You've been listening to CBS and CNN too much.  The only racism that I have encountered around the Tea Parties was prejudice against the demographic that actually attends those gatherings.

I think that you need to do some research yourself.  The Tea Parties predate Obama's political career, and perhaps even my adulthood.

[ichi]

DCI Group was founded in 1997.

[Red]

I have to agree with Creighto. I haven't seen any racism and there is barely any organization.

There are however, may people who have long been frustrated. If you live in a red state the tea party's themes have been common conversation for decades. The general public is very late to the concept.

I'm sure that a "public affairs" company does lots of media and takes lots of credit for doing things. I don't know if DCI has been hired at any point along the way. But I know they didn't start the conversation or the parties. But some PA/PR/Media buyer did arrange some radio spots at some point. I'd be hugely surprised if RJR paid for them!

I can guarantee however this is completely astroturf. It is also pretty unsuccessful!
http://www.coffeepartyusa.com/

[ichi]

OK, there's no point in arguing.  By nature, I'm basically an anarchist 

I will take another look at them, though.

[hugolp]

creighto, yes we are discussing the exact tonality while we agree in the color. But for the sake of it:

No, it is not.  The Federal Reserve Bank is a privately founded bank with monopoly powers by virtue of a government charter.  This is comparable to the federal government hiring a private merc army for operations overseas a la Blackwater.  Government is the customer, and has sway, but does not make the executive decisions and was never designed to be able to influence those executive decisions to any large degree.

You could say that the Federal Reserve is a mixed thing:

- The local Federal Reserve branches are "private". And I use brackets because its not private in the common sense. The system has its unique government regulations, for example, the private banks that own the stocks can not sell them. So this "private" system does not operate under the market rules, and certain sentences have declared that they are not even private but a mix of private corporations and government entities, because of the unique regulations they have to obey. Also, bear in mind that the local Federal Reserve branches are not the ones that decide the Federal Reserve policy.

- The Board of Governors of the Federal Reserve (Bernanke and the rest) is a federal government agency. Wikipedia is not the best source, but hope its enough for this: http://en.wikipedia.org/wiki/Federal_Reserve_System#Board_of_Governors (or you can do your own research). The Board of Governors is the one that decides the Federal Reserve policy. The members of the Board of Governors are nominated by the president and ratified by congress. And yes, once they are nominated they are supposedly independent from political pressure. But its not true that the Fed is politically independent, f.e. Bernanke knows that to be re-elected again, he has to please the politicians.

So I think its very inaccurate to say that the Federal Reserve is a private institution. You could argue that its not a 100% government institution, that its a mixed thing between private and government, but still the government is the one holding control over the institution that sets the policy. If you want a more exact and legal approach, check this: http://mises.org/daily/4171

So I would say that the political system holds good power over the Federal Reserve. That is not to say that the corporate system does not benefit or controls the Federal Reserve. They do, but I think its mainly through the control they have over the political system.

[MoonShadow]

creighto, yes we are discussing the exact tonality while we agree in the color. But for the sake of it:

No, it is not.  The Federal Reserve Bank is a privately founded bank with monopoly powers by virtue of a government charter.  This is comparable to the federal government hiring a private merc army for operations overseas a la Blackwater.  Government is the customer, and has sway, but does not make the executive decisions and was never designed to be able to influence those executive decisions to any large degree.

You could say that the Federal Reserve is a mixed thing:

Well, yes.  It's a public/private arrangement.

 The members of the Board of Governors are nominated by the president and ratified by congress.

Yes, but the president can only nominate from within the ranks of the sitting board.  It's as false as the choice of voting for or against your local representative.  By the time the public gets a say, their choices are effectively reduced to only two people, both of whom are already parts of the political machine.  This is not similar to a Supreme court nomination.

And yes, once they are nominated they are supposedly independent from political pressure. But its not true that the Fed is politically independent, f.e. Bernanke knows that to be re-elected again, he has to please the politicians.

Only to a point.  If he were to fail to get renominated by the next president, he would *still* be a member of the board until his original 14 year term was up.  He may risk his position by upsetting the politicians, but not his paycheck.  This gets back to my comment about the tail wagging the dog.  The Senate *does not* have the power to affect the personal finances of the members of the board by *any* legal process; but the reverse is not true.  The decisions of the board can dramaticly affect the personal finances of the members of the Senate in the same way that they affect the entire nation times the size of their fortunes.  Who do you think has more power? 

So I would say that the political system holds good power over the Federal Reserve.

I think that is a fiction.

[hugolp]

Yes, but the president can only nominate from within the ranks of the sitting board.  It's as false as the choice of voting for or against your local representative.  By the time the public gets a say, their choices are effectively reduced to only two people, both of whom are already parts of the political machine.  This is not similar to a Supreme court nomination.

The president can only nominate to Chairman someone who is already part of the Board of Governors, correct. But all the members of the Board of Governors are previously nominated by the president and ratified by Congress... I am not discussing how great or bad this works. All I am saying is that there is no private entity involved in the process. Whatever the rules are, is a government issue.

The Board of Governors of the Federal Reserve is a federal government agency, and is the one setting the policy.

Only to a point.  If he were to fail to get renominated by the next president, he would *still* be a member of the board until his original 14 year term was up.  He may risk his position by upsetting the politicians, but not his paycheck.  This gets back to my comment about the tail wagging the dog.  The Senate *does not* have the power to affect the personal finances of the members of the board by *any* legal process; but the reverse is not true.  The decisions of the board can dramaticly affect the personal finances of the members of the Senate in the same way that they affect the entire nation times the size of their fortunes.  Who do you think has more power?

Take it to the extreme. The government created the Fed. If the politicians are not happy on how the Fed operates they could decide to change the law. Check Ron Paul recent Audit the Fed bill that had great support among congressman until it was taken down. The Fed knows that all its power, the monopoly on money, comes from the government. So its in its own interest to keep politicians happy.

That said the bill Audit the Fed failed because there was evident pressure on Congress to not audit the Fed. And that pressure did not come from Bernanke, but from banking power.

Again, I honestly think that saying that the Fed is a private institution is highly inaccurate. About who controls who... I think we might have slightly different suppositions on how that works. I think we can agree that banking power controls both.