Political Forum
     

Go Back   Political Forum > General Political Chat > Current Events


Reply
 
Thread Tools Display Modes
  #1 (permalink)  
Old 01-19-2006, 06:52 PM
viper910 viper910 is offline
Sr. Correspondent
 
Join Date: Sep 2005
Location: Florida
Posts: 517
viper910 is on a distinguished road
Credits: 3,687
Default Federal Reserve

Can somebody please give me a review of macro-economics, Bernanke, the Federal Reserve, and Interest rates
__________________
"There is nothing wrong with America that can't be cured by what's right with America" William Jefferson Clinton
Reply With Quote
Sponsored Links
Red Cross - Donate Today    Save the Rainforest
  #2 (permalink)  
Old 01-19-2006, 07:43 PM
raytri's Avatar
raytri raytri is online now
Site Moderator
Guru
 
Join Date: Jun 2004
Location: Minnesota
Age: 42
Posts: 20,119
usa us minnesota
raytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond repute
Credits: 128,540
Default dgdgdg

Quote:
Originally Posted by viper910";p=&quot View Post
Can somebody please give me a review of macro-economics, Bernanke, the Federal Reserve, and Interest rates
Macroeconomics is a pretty big subject. But here's what I think you're looking for:

Bernanke is the Fed chairman, making him first among equals with the the other board members.

Low interest rates make borrowing cheap, fueling economic expansion but also inflation.

High interest rates make borrowing expensive, slowing economic expansion as well as inflation.

Theory says you cut rates to stimulate growth and then, when the economy begins expanding, you raise rates to keep it from overheating.

The Fed board, led by Bernanke, sets two key interest rates: the rate at which it lends money to banks, and the rate at which banks lend money to each other (I think I got that right). Those rates serve as pegs for other rates, such as the prime rate.

Thus the Fed exerts indirect but powerful control over the nation's interest rates. (Another major influence is the interest paid by various Treasury bills and bonds, which are established at auction).

The Fed's tools are pretty crude, which is why they're usually pretty deliberative about raising or lowering rates.
__________________
Man up.
Reply With Quote
  #3 (permalink)  
Old 01-20-2006, 04:31 AM
stekim's Avatar
stekim stekim is offline
Guru
 
Join Date: Aug 2004
Posts: 16,884
vanuatu
stekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond reputestekim has a reputation beyond repute
Credits: 65,676
Default You really need to be more specific.

I studied it for years and still get confused. What specifically do you need to know?

Raytri left out one thing about the Fed: They also seek to control the expansion and retraction of the amount of money in circulation.
__________________
Some days it's not even worth chewing through the restraints.
Reply With Quote
  #4 (permalink)  
Old 01-20-2006, 05:38 AM
apotropoxy apotropoxy is offline
Guru
 
Join Date: Jul 2005
Posts: 3,483
apotropoxy is on a distinguished road
Credits: 17,076
Default Aura

The Federal Reserve was created in the yearly years of the 20th century in response to an enormous financial crisis. JP Morgan came within a whisker of effectively cornering the gold market and the USA (and the world) used the metal as the monetary standard. Had Morgan succeeded, he would have been able to control our economy, budget outcomes, spending priorities etc. The USA needed an independent entity to regulate monetary policy. Years later we made another smart move.The USA finally was able to remove itself from the gold standard altogether.
Reply With Quote
  #5 (permalink)  
Old 01-20-2006, 07:48 AM
Ikari's Avatar
Ikari Ikari is offline
Commentator
 
Join Date: Jul 2004
Location: Colorado
Posts: 943
Ikari is on a distinguished road
Credits: 6,903
Default .

Instead, they set up a system in which our economy is controlled by a group of private bankers. These bankers print and regulate the value of our currency, it's a private bank with absolutely no congressional oversight. The President gets to select the head of the reserve; but Congress was granted the power to print and regulate our money and no one else. Our fiat currency is not in our control, we are at the whim of the Chair of the Federal reserve. Our fiat currency is backed by nothing other than the fact that the Reserve can pump out more if need be. The Reserve completely control inflation/deflation, so in essence the most important thing in the country, our economy and currency, are controlled by a private bank.


"If the American people ever allow the banking system to control their money, first by inflation, then by deflation; their children will one day wake up homeless on the continent their fathers conquered." - Thomas Jefferson
__________________
WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH
Reply With Quote
  #6 (permalink)  
Old 01-20-2006, 07:53 AM
raytri's Avatar
raytri raytri is online now
Site Moderator
Guru
 
Join Date: Jun 2004
Location: Minnesota
Age: 42
Posts: 20,119
usa us minnesota
raytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond reputeraytri has a reputation beyond repute
Credits: 128,540
Default dgdg

Whatever the philosophical issues, history seems to show that we're far better off *with* a Federal Reserve than without one. Otherwise Citicorp would be setting interest rates.
__________________
Man up.
Reply With Quote
  #7 (permalink)  
Old 01-20-2006, 08:48 AM
Ikari's Avatar
Ikari Ikari is offline
Commentator
 
Join Date: Jul 2004
Location: Colorado
Posts: 943
Ikari is on a distinguished road
Credits: 6,903
Default .

There can be logical arguments for the removal of metal backed currency. But there are no logical arguments that exist for allowing a private bank to control the printing and regulating the value of our currency. That is Congress's job, they must do it, they can't give it away. You could still have a Federal Reserve, but it would truly have to be a Federal institution, owned by Congress and held directly under their control.
__________________
WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH
Reply With Quote
  #8 (permalink)  
Old 01-20-2006, 09:14 AM
lopey lopey is offline
Correspondent
 
Join Date: May 2004
Posts: 245
lopey will become famous soon enough
Credits: 1,381
Default avaav

Right. The Federal Reserve is one of the biggest breaches of the constitution ever perpetrated against the american people.
Reply With Quote
  #9 (permalink)  
Old 01-20-2006, 09:14 AM
ForceoftheTruth's Avatar
ForceoftheTruth ForceoftheTruth is offline
Guru
 
Join Date: Oct 2005
Location: Oregon
Posts: 8,855
ForceoftheTruth is on a distinguished road
Credits: 41,945
Default .

I disagree. If Congress controlled what the Federal Reserve currently controls, our money supply and loan rates would be controlled by partisan politics. The Federal Reserve is independent for a reason. However, it does have a basic problem. Our money should be printed based on direct demand for the dollar and interest rates should be dictated solely by demand for loans. While the Federal Reserve takes these things into consideration, it is not forced to follow them, and it always delays the natural response of the free market. If there were a way of making interest rates and the money supply directly and immediately responsive to market forces only, I would support it, but I have not heard of any such system that is practicable.
__________________
"I am a Tory Anarchist. I should like every one to go about doing just as he pleased- short of altering any of the things to which I have grown accustomed." (Max Beerbohm)
Reply With Quote
  #10 (permalink)  
Old 01-20-2006, 09:14 AM
lopey lopey is offline
Correspondent
 
Join Date: May 2004
Posts: 245
lopey will become famous soon enough
Credits: 1,381
Default avaav

Right. The Federal Reserve is one of the biggest breaches of the constitution ever perpetrated against the american people.
Reply With Quote
Reply

Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off
Forum Jump

Sponsored Links

All times are GMT -8. The time now is 06:34 AM.


Powered by vBulletin® Version 3.7.1
Copyright ©2000 - 2010, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0
Template-Modifikationen durch TMS
vBCredits v1.3 ©2007 by Darkwaltz4
Advertisement System V2.1 By   Branden