Why End The Fed?

Replace the fed with nothing! Let the free market determine the money! No math involved : )

 

The Fed caused it in the first place.

 

What's to know? They manipulate the money supply. End of story.

 

The Federal Reserve manipulates the money supply. It's really no more complex than that. How long it takes? That is dependent upon a number of factors.

"Full employment" and "over employment" are just arbitrary jargon. Only free markets can accurately determine the optimal employment rate.

 

I completely agree with the sentiments you've made. Unfortunately, most are apathetic, even those who have a decent understanding of what's happening. People tend to be complacent until things get really bad, then they act surprised. If you don't get a raise in a year during inflation, you will effectively be making less by the end of that year.

 

Central banking is a form of controlling the economy.

 

The process takes around two years. You can follow option 1 (Decrease inflation) or option 2 (increase inflation). This is how the fed operates and these are the steps between the open market operation to the change in inflation rate. And NO. MOST people have absolutly no idea of how the fed works to include MOST if not almost all, in this forum!

1. The fed changes its interest rate targets and conducts open market operations to change the federal funds rate. option 1 (Federal Funds Rate Up)option 2 (Federal Funds Rate Down)

2. The same day other short term interest rates change and so does the exchange rate. 1 (Short term interst rate/exchange rate rise) 2 (falls)

3. A few weeks to a few months after the FOMC meeting, the quantity of money and supply of loanable funds changes. 1 (The quantity of money and supply of loanable funds decrease) 2 (increase)

4. The quantity of monay and the supply of loanable funds changes the long term real interest rate. 1 (The long term interest rate rises) 2 (falls)

5. Up to a year after the FOMC meeting consumption, investment, and net exports change which changes ... 1 (C I X decrease) 2 (Increase)

6. Aggrigate demand changes. 1. Aggrigate demand decreases) 2. (Increases)

7. The change of the federal funds rate has ripple effectsthat change real GDP. 1. (Real GDP growth rate decreases) 2. (Increases)

8. About two years after the FOMC meeting the inflation rate changes. 1. (Inflation rate decreases) 2. (increases)

 

You can follow option 1 (decrease inflation rate) or option 2 (increase inflation rate). I will give yo time to process this and then I will talk about emplyment. But I am tired of giving economics lessons to people who assume that they know how the process works.

1. The fed changes its interest rate targets and conducts open market operations to change the federal funds rate. option 1 (Federal Funds Rate Up)option 2 (Federal Funds Rate Down)

2. The same day other short term interest rates change and so does the exchange rate. 1 (Short term interst rate/exchange rate rise) 2 (falls)

3. A few weeks to a few months after the FOMC meeting, the quantity of money and supply of loanable funds changes. 1 (The quantity of money and supply of loanable funds decrease) 2 (increase)

4. The quantity of monay and the supply of loanable funds changes the long term real interest rate. 1 (The long term interest rate rises) 2 (falls)

5. Up to a year after the FOMC meeting consumption, investment, and net exports change which changes ... 1 (C I X decrease) 2 (Increase)

6. Aggrigate demand changes. 1. Aggrigate demand decreases) 2. (Increases)

7. The change of the federal funds rate has ripple effectsthat change real GDP. 1. (Real GDP growth rate decreases) 2. (Increases)

8. About two years after the FOMC meeting the inflation rate changes. 1. (Inflation rate decreases) 2. (increases)

 

Put your money where your theory is then. If you can accurately predict the timing and extent of inflation, you should be a billionaire in no time.

 

Did you come here to debate or regurgitate your macro textbook?

 

But then you would need a free market. So until we have that we cant exactly scrap the fed. Havent I said this allready?

 

The federal reserve openly posts its federal funds rate and target inflation rates. Its no secrete. And its not a theory. Its a proven economic fact of a chain of events after an open market operation. Actually, its our monetary policy.

 

Okay, go make billions then. Call up a hedge fund and tell them you can predict the inflation rate. You'll be flying in a private jet by the end of the business day.

 

Youre right we don't have a free market in money...........we have the fed.......so we get rid of it and shazam, no more central banking money manipulation. Oof. That was hard.

 

Anything is better than letting a bunch of parasites wrap their greedy little lips around the spigot.

 

What are you talking about. Friedman was against the Fed and that video is him explaining why the Fed doesn't work.

/thread

 

the fed makes adjustments on a daily bacis. Plus this unprecedented quantitative easing (Yet another thing I hope not to explain to those who dont know how the fed operates) makes inflation increasingly hard to predict because in some ways it contradicts the end goal. Your right. If I couls predict inflation I could be on a private jet tomarrow. However, the fed acts on alot of assumptions based on mathematics and economic models that are nothing more than predictions. For example, how the hell do you predict the full employment/natural unemployment level? Well, in the end its just a prediction.

 

He explained why the feds inaction caused the great depression. Freidman knows the fed works. He just doesent trust the people who are making it work. He wants the market in charge of the process. Unfounantly his economic models and theories arent proven. Thats because no one has tried them yet. (edit) I'm speaking of the wrong video. And I agree with your observation. Read the op again.

 

Making the market in charge of the process requires an end to the central banking system. Sound money and the market require no central bank. And you have it backwards, the Fed caused the Great Depression through its actions.

 

How do you get rid of the fed in the welfare and social security era? It is impossible. You must have a free market first!

 

Even Freidman says the fed failed to stop the great depression because of its descision not to open up the gold reserves to account for the increase of money demanded.

 

He is exactly right. They did fail to stop it. They also caused it by creating a credit bubble commonly known as the "roaring 20s"....a bubble that eventually popped. But don't worry. Ben Bernanke says they're sorry about that and they won't do it again. They've learned from their mistakes, that's why the economy is so good right now. LMAO!

 

I know exactly how the Fed operates. I took macro in college two years ago. I barely studied and I aced every exam. My professor was a career Fed employee. Do not presume that just because I disagree with you I must be ignorant.

But you cannot predict the inflation rate, which means your initial line of questioning concerning the lag between open market operations and the inflation rate were based upon - how did you put it? - facts not in evidence...

Their predictions are based upon mathematics in the same way that astrology is. I mean, you have to know how many days are in a solar year to study astrology, right?

It's like you're making my argument for me!

This is precisely my point. It cannot be accurately determined by anything besides the free market. Central planning is a failure.

 

Simple, really. You have the Congress repeal the Federal Reserve Act.

 

look below. Its your question. The word "it" in your post refers the the housing boom and bust. Therfore your assumption is that the fed created the housing boom and bust. However, you made no attempt to prove your accusation implied in your question. Your question assumes a fact not in evidence. Therefore it is unanswerable until that fact is proven and admitted in to descussion. You have failed to do so. No one in evading anything but you. And who knows, you may be right. I'm begging you to give me something to work with yet you refuse to do it. How did the fed create the housing boom and bust. I thought is was all congressional social engeneering. If you dont have anything different then you cannot ask such a question. Your assumeing a fact not in evedence.