While the question is up, no one has touched on the money in circulation. Trillions of the ‘new dollars’ from the last few years are just sitting there- wealthy institutions and individuals are hoarding, so the effect is as if they aren’t there at all. If they start throwing it around, that could cause inflation, no?
No, it doesn’t. U.S. currency has not been gold-backed since 1933.
It could happen. I think inflation should be higher than it is now, so I’d be okay with that. And if inflation got too high, the Federal Reserve has a number of tools to stomp on it. And I would be very surprised if the Fed would tolerate inflation at the levels I think it should be, so we’d probably get a Fed stomp pretty quickly.
That’s the whole dealio with the central bank; that can respond rapidly and effectively to changing economic circumstances. In this scenario you mention, the fed might do something something super slick like raise the inflation rate (currently the interest rate is fairly low - on a side note if you hear of something crazy like this goin down you better make a move that cute little rancher you been eyeballing before the mortgage rate goes to 10% (totally an 80’s thing)).
Kind of reminds me of a quote by McChesney something like “the job of the fed is to take the pouch bowl away just when the party is starting to get interesting”
Cite? (No, I’m not asking you to rephrase the claim. I wonder where you get your financial information and understanding.)
The US essentially went back on a gold standard (or a “gold exchange standard” if you like) under the Bretton Woods system from the end of WWII until 1971.
But, that does not mean one could exchange Federal Reserve notes for – or, if you prefer, demand redemption of them in – gold dollars or eagles at any bank or government office. One couldn’t.
The general public couldn’t, but foreign governments could. I also think certain banking/investment institutions could as well (but I may be misremembering). But I feel like we’re having a semantic issue. I don’t have a problem with making a distinction between the pre-1933 regime and Bretton Woods.
Zeitgeist
It’s a movie which should be available free online, possibly on youtube. Here is a wikipedia article: Zeitgeist (film series) - Wikipedia
It may be the second Zeitgeist movie that I got the info from, or both 1st and 2nd.
OK; I’m not overly surprised. Do you see what I’m driving at? I don’t want to sound rude or snarky, but your own link shows
I’m not going to watch the movie, but here’s the economic claims according the wiki article:
Ok, that’s some grade-A conspiracy crap right there. I mean there is so much to legitimately criticize the Federal Reserve over, that you don’t even have to make up conspiracies if you want to have at them.
Oh, and the Federal Income Tax was ratified by the 16th Amendment, so it ain’t illegal. And any sort of actual North American government would require a Constitutional Amendment (or admitting new states from Canada and Mexico, which we would know about if it were happening).
Cite?
(ETA: On the general theme “U.S. government helps Wall St. at expense of Main St.”, include me in. But I don’t see the FRB as culprit.)
Well, I think the Fed audit showed very clearly that there are a bunch of conflicts of interests going on at the Fed. The Fed is partly a regulatory agency, and a number of people at the Fed have financial stakes in the institutions they are supposed to be regulating.
Plus, the fact that Jamie Dimon was allowed to serve on the Fed after Chase exhibited numerous criminal financial behaviors is pretty eye-rolling.
Yes, we are technically inflating our currency. However, inflation is very low - bordering on deflation, which we really do not want (one is not the opposite of the other, and inflation has to get really bad before it becomes anywhere near as bad as even the most minor deflation). The list of countries “backed” by the US dollar is very slim. The main thing keeping us afloat is the fact that despite the miniscule return on investment, due to the low interest rates, people are still buying US bonds. That is, they see these bonds as a more solid investment than just holding onto the money, despite the fact that their interest rates are actually below inflation.
Well, if the government cannot borrow any money, it will probably go bankrupt, and this would cause a major economic collapse. However - there is no reason to believe that this will ever happen, because basically everywhere else in the world has a vested interest in the stability of the US Dollar and the US economy.
They’re not on the dollar.
This is pretty much predicted by modern Keynesian theory - that inflation is very difficult in a liquidity trap economy, and once those situations end, we will see inflation. However, the fed can deal with inflation, and it sure beats what we’ve got going on now.
:smack:
Ugh. Zeitgeist is a terrible source. It’s a poorly-researched piece of conspiracy crap that gets almost everything wrong straight from the get-go. I mean, you’d think that it espousing various 9/11 conspiracy theories would be a red flag, but apparently some people believe that crap. Its understanding of economics fails on a very basic level, its claims about Christianity are almost without fail false, and its full of the same conspiracy garbage we’ve all heard a million times. Citing Zeitgeist is like citing Loose Change, or the National Enquirer.
I watched zeitgeist before I took a couple of classes in Economics and studied the issues in much greater depth. If I remember right, zeitgeist gave what I now consider to be an incomplete picture of the situation and the functioning of the banking system. I remember the impression I got after watching zeitgeist that the banking system was designed to fleece the populace, and it sounded somewhat plausible. After studying economics in greater depth I got a much more complete picture that aligns much better with observable reality. To me zeitgeist is sort of the equivalent of the whole Acorn thing, creative selective reporting.
Which is why not raising the debt ceiling and paying off US debts, or even threatening to do so, as our Republican “friends” advocate, is such a very, very, very, very, very stupid idea.
That will not cause the US economic collapse want will cause it will be the trillions of trillions dollar debt and for past 20 years no president can fix the high unemployment problem.
The stock market, real estate, farmland, etc
Depends what you mean by economic collapse. Everyone is inflating their currency right now so it’s hard to say folks will give up on the dollar. What else will they hold? There will be another recession soon. When that happens watch out because the true believers of inflation are at the helm.
That is not what we mean by inflation.