New Fed Chairman - Tilted Forum Project Discussion Community

dy156 · 11-13-2005, 09:23 PM

Bush has nominated another White House advisor for a powerful position. Unlike Miers, from what I have read Ben Bernanke is extremely well qualified to serve as chairman of the Federal Reserve Board as successor to Alan Greenspan. Degrees from Harvard, MIT, Princeton economics prof. that has served as a governor on the Fed Reserve Board before. He has been compared to Roberts for his impeccable credentials.

He was the one who warned loudly last year about the similarities between the economy then and that before the great depression, and about the possibility of deflation. I don't know if he was just wrong, or if the rise in oil prices unexpectedly changed the economic equation.

He also has said that he wants more transparency in reserve board policy, and so not everyone will be forced to hang on his every word, because he wants to set inflation targets and goals.

I didn't know whether to start a thread here or in Tilted Finance about this, but was a bit disappointed not to find one already.

What do y'all think? Maybe the fact that there is no comment on this topic is a good sign. I think it may be a positive lasting legacy for Bush, though it was not a bold nomination - but a good one. Still, he will likely be the second most powerful man in the world for a long time to come, and I think that even if he is great, the nomination is still good discussion fodder.

pan6467 · 11-13-2005, 09:27 PM

I think that this may have been Bush's only true good lasting move in his term.

host · 11-13-2005, 10:12 PM

Quote:

Originally Posted by dy156

Bush has nominated another White House advisor for a powerful position. Unlike Miers, from what I have read Ben Bernanke is extremely well qualified to serve as chairman of the Federal Reserve Board as successor to Alan Greenspan.....

......What do y'all think? Maybe the fact that there is no comment on this topic is a good sign. I think it may be a positive lasting legacy for Bush, though it was not a bold nomination - but a good one. Still, he will likely be the second most powerful man in the world for a long time to come, and I think that even if he is great, the nomination is still good discussion fodder.

Repeat after me....Bush is not capable of making an important appointment that will be to the benefit of the majority of Americans. The first quote; from the FED last thursday, dispenses with the naive notion of "transparency". Bernanke's speech, exactly three years ago, branded him with the nickname, "printing press".

Since that speech, we've accrued more than $1.5 trillion in new federal debt, and last month, the trade deficit was $66 billion, or on an annual pace of $792 billion. Only 14 percent of Californians earn enough to purchase an average priced, California home, and rising interest rates continue to erode that number. Interest rates rise to attract foreign buyers of U.S. Treasury bonds, and aid in slowing the erosion of dollar value. The gold price that Bernanke referenced at $300/oz three years aog, is now $465/oz. $30bbl oil of 2002 is now close to $60bbl. American wages have not risen.

Bernanke can take some credit in battling deflation, but the problem is that deflation was not the correct problem to battle. Since the inception of the Fed in 1913, the dollar has lost 97 percent of it's pre-Fed value. Just like ole Brownie, Greenspan, Bernanke, and for that matter, Bush....are doin' a heckofa job!

Anyone who studies the history and demise of all fiat currencies, knows the truth about Bernanke's priorities.
Bush and Bernanke, intentionally or inadvertently, will bankrupt and impoverish most of us. Look forward to inflation, collapse induced deflation in housing, wages, stocks, and most other assets held by average Americans,
followed by the mother of all inflations, the final implosion of the spending power of the U.S. dollar....but not necessarily in that order, over the nextt five to eight years.

Quote:

http://www.federalreserve.gov/releases/h6/discm3.htm
Release Date: November 10, 2005
Discontinuance of M3

On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

Quote:

http://www.freemarketnews.com/WorldNews.asp?nid=2055
WHY M3 BECAME A LIABILITY FOR THE FED

Sunday, November 13, 2005 - FreeMarketNews.com

"On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release."

If an increase in the money supply is the cause of a rise in the general price level than M3 is an important measure of price inflation simply because it is considered to be the broadest measure of money and, hence, the best measure of price inflation. With M3 crossing the 10 trillion dollar level the Fed has decided to stop publication of this important data. The Fed by nature is an inflation machine built to support limitless spending by the government. Yet the Fed also enjoys the reputation of being an inflation fighter. In order to protect its image the Fed has found it necessary to cease publication of M3 data. The information provided by M3, coupled with the 1-Year Treasury Constant Maturity Rate, can allow anyone with a spreadsheet to track the rate of inflation and real interest rates. The following chart illustrates this point. -AOL chat, Yoshaviah
<a href="http://members.aol.com/gparrishjr/m3_inflation.html">Click Here For The Full Story</a>

Quote:

http://www.federalreserve.gov/boardd...21/default.htm
Remarks by Governor Ben S. Bernanke
Before the National Economists Club, Washington, D.C.
November 21, 2002

Deflation: Making Sure "It" Doesn't Happen Here

Curing Deflation (About 45 percent down from top of page)

.......The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior).8 Normally, money is injected into the economy through asset purchases by the Federal Reserve. To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys. Alternatively, the Fed could find other ways of injecting money into the system--for example, by making low-interest-rate loans to banks or cooperating with the fiscal authorities. Each method of adding money to the economy has advantages and drawbacks, both technical and economic. One important concern in practice is that calibrating the economic effects of nonstandard means of injecting money may be difficult, given our relative lack of experience with such policies. Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation. ........

Can any informed observer not agree that the FED has certainly gone on, after Bernanke's "printing press" speech, to "print money and distribute it willy-nilly"? The early 2000 stock market "bubble" was handily morphed into the current realty, or housing "bubble". This "willy-nilly" policy has only postponed the inevitable, undermined the stability of the currency to a crisis state, and made it nearly impossible for a stable economic future in the U.S.

samcol · 11-14-2005, 05:42 AM

Quote:

Originally Posted by host

Anyone who studies the history and demise of all fiat currencies, knows the truth about Bernanke's priorities.
Bush and Bernanke, intentionally or inadvertently, will bankrupt and impoverish most of us. Look forward to inflation, collapse induced deflation in housing, wages, stocks, and most other assets held by average Americans,
followed by the mother of all inflations, the final implosion of the spending power of the U.S. dollar....but not necessarily in that order, over the nextt five to eight years.

Can any informed observer not agree that the FED has certainly gone on, after Bernanke's "printing press" speech, to "print money and distribute it willy-nilly"? The early 2000 stock market "bubble" was handily morphed into the current realty, or housing "bubble". This "willy-nilly" policy has only postponed the inevitable, undermined the stability of the currency to a crisis state, and made it nearly impossible for a stable economic future in the U.S.

I'm glad there are others who understand that the FED literally prints more money when the government needs it. To me this seems like the number 1 economic problem facing the US.

As long as this guy is more of the same, then we are in trouble. There's no sign of him doing anything about the fiat currency. I think your prediction of 5 to 8 years before another collapse is pretty accurate.

Sty · 11-14-2005, 06:31 PM

http://www.federalreserve.gov/releases/h6/discm3.htm

Of course now is the time for Federal Reserve to discontinue publishing the information how much money they actually print... nice move.

11-13-2005, 09:23 PM	#1 (permalink)
dy156 cookie Location: in the backwoods	New Fed Chairman Bush has nominated another White House advisor for a powerful position. Unlike Miers, from what I have read Ben Bernanke is extremely well qualified to serve as chairman of the Federal Reserve Board as successor to Alan Greenspan. Degrees from Harvard, MIT, Princeton economics prof. that has served as a governor on the Fed Reserve Board before. He has been compared to Roberts for his impeccable credentials. He was the one who warned loudly last year about the similarities between the economy then and that before the great depression, and about the possibility of deflation. I don't know if he was just wrong, or if the rise in oil prices unexpectedly changed the economic equation. He also has said that he wants more transparency in reserve board policy, and so not everyone will be forced to hang on his every word, because he wants to set inflation targets and goals. I didn't know whether to start a thread here or in Tilted Finance about this, but was a bit disappointed not to find one already. What do y'all think? Maybe the fact that there is no comment on this topic is a good sign. I think it may be a positive lasting legacy for Bush, though it was not a bold nomination - but a good one. Still, he will likely be the second most powerful man in the world for a long time to come, and I think that even if he is great, the nomination is still good discussion fodder.

11-13-2005, 09:27 PM	#2 (permalink)
pan6467 Lennonite Priest Location: Mansfield, Ohio USA	I think that this may have been Bush's only true good lasting move in his term. __________________ I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

11-14-2005, 06:31 PM	#5 (permalink)
Sty Patron Administrator Location: Tôkyô, Japan	http://www.federalreserve.gov/releases/h6/discm3.htm Of course now is the time for Federal Reserve to discontinue publishing the information how much money they actually print... nice move. __________________ br, Sty I route, therefore you exist