# Stock Market Falls - Federal Reserve Steps In



## Ernie (Jul 22, 2007)

I know a lot of you may be sick to death of talk regarding the stock market, but some of us are watching it like the proverbial canary in the coal mine. I wanted to take a minute to share with you some thoughts.

The stock market falls and millions (if not billions) of imaginary dollars disappear. These dollars exist only in digital systems for they are not backed in gold or other goods. What didn't fall today was any individual's debt. So the Federal Reserve Bank stepped in to save the day by lowering the national interest rate. This, in effect, makes it more appealing for businesses and individuals to borrow money. It doesn't do anything else. It is simply a means for the Federal Reserve to try and wave a carrot in front of the consumer to get him to run a little faster on his earn-spend-earn-spend hamster wheel.

So let's talk for a moment about how the Federal Reserve Bank came about. It was created in 1913 by the Federal Reserve Act and lies in the hands of private individuals, not the government. By law, there are 7 members of the Federal Reserve's "Board of Governors" who control it without any government or citizen oversight. Who are these extremely powerful seven men who control our nation's money supply? Mostly economics professors and other men you've never heard of. The Fed's website lists 5 current members. Who are the other two shadowy figures? 

There's a lot of talk about what the Fed actually does, how it was created, and why. I don't know what to believe, but I do know this quote by the man who signed the Federal Reserve Act into law:

âI am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.â - President Woodrow Wilson, in response to his signing into law, the Federal Reserve Act in 1919.

I propose to you that this current downturn in the market is not unforeseen by these shadowy bankers, and through the mechanism of shorting-stocks, a lot of money was made today at the expense of regular investors. A market correction of this magnitude does not always leave a path of devastation in its wake, and the big, fat fish who lie in wait in dark crags and holes are having a feeding frenzy on the smaller fish today. 

Over the next few weeks, the market will rise slightly but will probably continue its downward trend for awhile longer. If the market crashes completely, it will scare away all of the little fish and the shadowy forces which control our monetary supply will find that Joe Citizen has closed up his wallet and left the store. The lid will be on the cookie jar and it will be placed out of reach. No, it's much better that the Fed be seen doing something about these events. 

Keep your eye on the market and your wallet in your pocket. This is going to be a very educational opportunity for those observant enough to watch it unfold.


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## TNHermit (Jul 14, 2005)

I'm far an away no financial whiz. But no mater what you do where is the money going to come from. I'm watching this too. My "year" has just started in retail. And we are off to a good start but that can all go away in a heart beat. I depend on consumer spending but there is way to much dependency on consumer spending since 911. We dodged that bullet by consumer spending but I don't know if we can do that again.
A lot of the subprime debt is owned by a lot of foreign people too. 
I'm to old to try and do something different and this was suppose to be My year!!


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## Ernie (Jul 22, 2007)

Well, consumer spending and income are what the powers to be need in order to keep us going. 

So here's the Federal Reserve in a nutshell ... 

The government cannot print money. Only the Federal Reserve Bank can (per the 1913 Federal Reserve Act). The FRB prints money at the government's request and then LOANS it to the government with interest (the Federal interest rate). The government then uses the Federal income tax to pay for a couple of government agencies (primarily the IRS) and to pay back the interest. 

So let's recap:

A bank owned by an unknown number of megawealthy private individuals is the sole issuer of official United States currency which is not backed in any way by any tangible asset. They type a magic number in their computer and POOF, that much money exists. They then loan that money to the government with interest, for which the government then collects an unconstitutional income tax from you and me to be used for the purposes of paying BACK that interest, plus the effort of providing the police organization by which that payback shall be enforced. 

A lot of you are wrapped up in concern about the subprime market, but I guarantee you it will be resolved. The same powers that are capable of pulling such a grand fraud on the American people since 1913 are not going to sit by and watch their sheep slaughtered when they expect to keep shearing us year after year indefinitely. There will be government intervention before massive numbers of people become jobless and homeless. The Creature from Jekyll Island must continue to be fed. For that to happen, the vast majority of Americans need to stay employed, stay housed, and keep earning an income for the government to tax. The feudal lord does not want his serfs being driven off their land.


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## charles burns (Mar 21, 2006)

So, er ...why did Woodrow Wilson sign it then?

And what's the difference between a regular investor and a big fat fish investor given the inferral the former are good guys and the latter evil.

That Joe Citizen has a wallet to keep shut speaks volumes. That regular investors are worrying about the money they didn't quite need so stashed away speaks volumes.

I know nothing about global economics (naw, really?) but I see no economic hardship anywhere and I see jobs available everywhere.

I see people falling over themselves to buy the latest XBox for a child old enough to be working, I see people turning away from the TV only to upgrade to a Home Theatre with digital plasma and surround sound. They aren't all putting it on a credit card. We may like to think they are so we can watch them get theirs when it all falls apart but they are paying for it with money they have and I see nothing falling apart.

This is the way we live. Economies go up and down. The down is relative, in this country we ride the down smiling.


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## Ernie (Jul 22, 2007)

Don't know why he signed it ... maybe he got fooled. I like to think he got fooled, instead of thinking he was a willing pawn of those scumbags, but that may not be realistic.

Well, I consider a regular investor to be some of those folks with 401k plans, savings of some sort that are invested, or they're just dabbling here and there. Those trickles of money seem to always find their way into the big fish's dirty little hands, to confuse the metaphor further. The big fish are the hedge fund managers, and banks that speculate with investor money. Did you realize that many companies actually make more money investing their assets in the stock and bond markets than they do actually selling products?

I see some economic hardship, but mostly in my travels to the big cities where actual manufacturing used to take place. What I see most commonly is a whole lot of fear.


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## charles burns (Mar 21, 2006)

Money doesn't find it's way mysteriously into the hands of big players - it's put there willingly. By people who want a return on it. An investor is an investor is an investor.

I think there's more fear of depression than depression.


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## charisma (Nov 13, 2007)

charles burns said:


> I know nothing about global economics (naw, really?) but I see no economic hardship anywhere and I see jobs available everywhere.
> 
> I see people falling over themselves to buy the latest XBox for a child old enough to be working, I see people turning away from the TV only to upgrade to a Home Theatre with digital plasma and surround sound. They aren't all putting it on a credit card. We may like to think they are so we can watch them get theirs when it all falls apart but they are paying for it with money they have and I see nothing falling apart.


Hm. So the fact that unemployment rose in December (by .3%) means nothing? A lack of employment is certainly happening somewhere. Maybe you just aren't looking for it.

And as for the latter of your comments, I'm surprised. The vast majority of consumer spending going on right now is done on credit cards. Now, perhaps a portion of those balances are paid off immediately by people who have the cash, but another (decent sized) portion of folks are living far beyond their means. All of the major credit card companies have seen dramatic increases in the number of accounts they have in delinquency. If everyone is buying with cash, or with money that they "have", then why are there so many folks with past due credit card bills?

For years now, American's have gradually moved from the mentality of the WWII generation (buy with cash, and only buy what you can afford now) to, pay with credit and buy whatever you want. It's obvious and its pretty doggone widespread. Perhaps you just happen to know folks wise enough to be content with living within their own means.


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## Kazahleenah (Nov 3, 2004)

charles burns said:


> I know nothing about global economics (naw, really?) but I see no economic hardship anywhere and I see jobs available everywhere.



... so... a $7.00/hr job can support a mother and two kids now? Daycare is at least half that takehome pay... so.... Monthly take home... $800.00 (or so)... after daycare... $425.00. Yes... jobs are available ... they sure are.

Kaza


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## elkhound (May 30, 2006)

Kazahleenah said:


> ... so... a $7.00/hr job can support a mother and two kids now? Daycare is at least half that takehome pay... so.... Monthly take home... $800.00 (or so)... after daycare... $425.00. Yes... jobs are available ... they sure are.
> 
> Kaza



exactly kaza........people jsut dont get it.here in my area in the last 14 to 18 months there has been 1,000 's of jobs lost and some gone forever.in fact the largest and highest paid employees here at local truck plant will be layingg off 850 to 1200 this week.also in a more than 100 miles area of the oldest and most famous furniture makers...well...they are all gone.its over....those companys now buy it from china and resale it.one furniture company laid off over 550 people.they made low pay ....but at least hey had a job.its like a ghost town here.


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## NoClue (Jan 22, 2007)

I always say I'm not going to get into these discussions, but I always do...

First, the Federal Reserve system is heavily supervised both by Congress and the President. The Chairman of the Federal Reserve and the board of Governors are presidential appointees who serve a term and then are periodically re-affirmed or are replaced at the discretion of the President (and the Senate). The Federal Reserve is private only in the same sense that the US Postal Service is.

Beneath the Federal Reserve Chairman and the Board of Governors are Regional Federal Reserve Banks - these aren't consumer banks that you can go and open a checking account it; The Open Market Committee - also chaired by Bernanke, The member banks (the ones you open a savings account in); then various smaller committees.

Prior to the Federal Reserve, we used some form of metal currency or paper certificates redeemable for metal - most of the time, except during war. The term Greenback originates from the Civil War era, and was (arguably) the US's first experiment with fiat currency. Bankers hated the greenback, but the common people generally liked it. An attempt was made to permanently adopt the Greenback, but it failed.

It's worth considering how paper money came into being. Basically, it came about because it allowed banks to distribute more money than they actually had in their vaults - based on the premise that most of the time, most people left most of their money in the bank. The banks paid and collected 'usage fees' we refer to as interest. The Government was involved in the process mostly by standardizing the unit of currency, the type and purity of the metal involved, etc. Later, the government began to regulate the ratio of notes to metal that a bank was allowed to issue. This is known as 'Fractional Reserve Banking'.

This system worked reasonably well under normal conditions, but it also has inherent flaws: Most obviously, it only works as long as most people leave most of their money (metal) in the bank most of the time - if every one tries to claim their metal at the same time, the bank runs out and closes, leaving some people with nothing but fancy toilet paper - of course, the banks and bankers and their friends (the rich) got to claim their metal first and in those days, bankers were held in the same esteem that we hold lawyers today.

A less obvious restriction of this system, and one that kept this country on the back burners of the world scene until the 20th century is that the amount of money that you can circulate is a function of the amount of metal you currently own and the fractional reserve limit (historically as low as 20% metal to 80% leverage). This makes sense on the microeconomic level, but doesn't hold up so well at the macro level. That is, on a personal level we handle lack of funds by living hand-to-mouth for a while, but on a regional level say, the results are magnified by the number of people affected and the result was systemic poverty generally followed by crime and exploitation. For the first half of US history - until around the 1880's the whole country suffered from this - manifestly as a lack of currency.

A simplified example: Let's say you live in a village surrounded by water. During the spring flood, the water washes out the bridges, floods the homes, etc. then recedes. As a village, the first priority may be to rebuild the bridge while as a person your first priority is to rebuild your home, shop, crop seeds. Regardless, there's only a fixed amount of metal in the village and a fixed amount of paper representing that metal and it isn't enough to do both. People do what they can do though but the result is now that all of the metal has been spent - now there's no metal and thus no currency in the entire village. The bank has to close because without currency it can't operate; Stores have to close, because without currency, they can't buy goods and people can't buy goods from them. Craftsmen suffer because no one can buy their goods, and thus they can't buy food.

But wait, you say, they can barter! That's true, on a local level, but is less practical when outside help is needed, say doctors to combat the cholera that resulted from the flood. This may seem overly simplistic, but there are many examples of such occurrence is history - for example, the Dark Ages were greatly prolonged by raiders such as the Vikings carting off all portable wealth and destroying any incremental progress made since the last raid.

A more realistic example has to do with the government. The government, of course, is a net consumer of wealth. Regardless of whether the government is small or large, it requires wealth to operate and it acquires that wealth through taxation, fees, fines, levies, tariffs, etc. A 'good' government confines its expenditures to the amount of income it receives and maybe sets a little aside. But then there are emergencies - invasions, meteor strikes, etc. The government is implicitly or explicitly obligated to respond to these events but whatever its response, wealth is required. Traditionally, the governmentâs response to these crises was (often forcible) confiscation of private wealth.

At the macro level, the system is further complicated by the fact that there is trade between nations as well as individuals. Implicitly, under this system, goods were exchanged for either metal or other goods. The ideal situation for a nation to be in was to send out more goods than it took in, thus to have an increasing supply of metal. It was quickly discovered though, that too much metal in one place was almost as bad as too little. It becomes imperative under such a system for governments to strictly regulate the flow of goods in and out of its territories. Tariffs tend to be extremely high and protectionist.

Conveniently rarely mentioned by advocates of Gold is that inflation is just as possible in their system as it is under any other. Look at Spain in the 16th Century after having plundered the New World or Alaska and California during their respective Gold Rushes, and the results are much harder to control â Booms lead almost uncontrollably to inflation which leads almost uncontrollably to Crashes which last until the next Boom.


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## NoClue (Jan 22, 2007)

Americaâs early fiscal and economic policy was primarily the work of Alexander Hamilton, who rather than a capitalist, was actually a mercantilist (more or less espousing the system described above). Mercantilism believed that the amount of wealth in the world was fixed and the role of nations was to ensure that they controlled, at a minimum, âtheir shareâ of the pie. The history of American economics is the history of a nationâs move from mercantilism to capitalism.

Capitalism is not completely incompatible with mercantilism â it is more of an abstraction of the principles of mercantilism. One of the primary distinctions of capitalism from the previous system however, is the nature of the pie. Mercantilism holds that wealth is fixed, or zero-sum-gain. In order for one party to acquire wealth, it must obtain that wealth from another party â in order for one party to gain, someone else has to lose. Capitalism holds that wealth is potentially infinite, that is, that new wealth can be created.

Under capitalism, hard currency ceased to be the definition of wealth and instead became a leash. Essentially the problem was that while âwealthâ increased, the amount of currency was more or less fixed and therefore the exchange of wealth (goods and services) was hampered. This is why Central Banking and fiat currency were created and came to dominate world economics. Essentially, the role of the Federal Reserve is to ensure that there is a supply of currency adequate (plus or minus a little bit, depending on your bent) to facilitate the actual amount of economic activity going on in the country.

Gold still had/has a role to play. Until the 70âs or so and arguably still, it was the safety-net. âIf all else fails â we can go back to mercantilismâ. Under capitalism, anything could have value, but all value is theoretical until it actually changes hands. The only exception to this was, theoretically Gold. People started asking though: why is gold any different from any other commodity? There are only arbitrary answers to this. In the end, it had to be admitted that, like any other commodity, gold only had value because people thought it did, and in the world of commodities it was among the least useful.

What really killed the gold standard - or at least the Bretton Woods version of it (the agreements set up at the end of WWII that lasted until the Nixon Administration), was deficit spending and socially progressive government. As governments began to expand their services into socially progressive programs, and as growing populations began to expect and demand these services, governments began consuming more and more of their per capita wealth. European Governments, which are generally far more socially progressive than the US, covered these costs by dropping their overseas interest (reducing the population that needed to be cared for) and increasing their taxes. They received further assistance in that the US provided the bulk of their defenses.

The US took a different strategy. The period immediately following WWII was, by any objective standard, the Golden Age of American economics. Unemployment was almost non-existent and we were far and away a net exporter of goods, probably (I donât know the numbers) the worldâs largest exporter and were rolling in dough. As the fifties turned into the sixties, and in turn the seventies, the nature of these exports changed however from finished goods to raw materials. Then the goods made with the raw materials were sold back to us. If it isnât obvious, finished goods are always worth more than raw materials â so that even though we were still exporting, we were starting to bleed money.

Later, as our sources of raw materials began to dry up, or as we realized that we were killing the golden goose of our environment with industrial by-products, or that we were cutting our own throats, these exports declined, but we still continued to increasingly import and consume the finished goods. Now there was less trade income at the same time that the government appetite for wealth was increasing (ironically, the decrease in trade volume increased the need for government services). Add to that the cost of a HUGE military presence around the world and the Viet Nam warâ¦ Something had to give.

Americans have always hated taxes, and in relative terms, we pay very low taxes. Rather than ---- off the American people (when murmurs of revolution were already in the air) by taxing the crap out of them, it was decided to just borrow the money.

This might have been Okay, if we had tried to pay off the debt, or used the money to fix the cause of the problem (expand our manufacturing base; reduce our military expenditures; all around reduction of spending, and/or increasing taxes). We didnât do any of those things, just kept on spending and borrowing more money and spending and borrowing money to pay off the money that we borrowed before.

No longer is the dollar truly a measure of wealth, but instead a measure of indebtedness but its doom isnât mandatory. The dollar currently represents government activity more than economic activity, and that is the nature of the impending crisis. The US still has enough economic activity to sustain itself, and if it were to restore its manufacturing base during this time of flux, could rebound as strong as ever.

What will it take? That depends on what your tolerance for pain is. First, we have to stop, as a nation, hemorrhaging money: we have to stop borrowing, stop spending, start paying off our debts, and start spending our money at home instead of abroad. This wonât be fun, and it will hurt the poor â who depend on the government dole far more than the rich. Iâve always believed though, that government intervention was only ever needed where Christian charity had failed. 

As a country, this means we may have to give up our leadership role (if we still have one). It means we have to accept individual responsibility as well as collective responsibility by taking care of ourselves, then helping out our communities. It means buying domestic goods first and probably going without if a domestic version isnât available. It means not asking for any help you can do without, and asking your neighbor before you ask the government. It may mean higher taxes, but it definitely means hold government officials responsible for their actions â not just at election time, but all the time. It means writing letters, making phone calls, starting or signing recall petitions and generally being a pain in the butt to anyone in public office.

Thatâs all I have to say about that.


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## mightybooboo (Feb 10, 2004)

Gold and Silver is money.

The rest is a fraud by international Bankers.

Simple as that.


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## jerzeygurl (Jan 21, 2005)

i believe wilson was willing 

the jekyll island book is a good place to start.


last couple of dow tanks the fed released more money

weinmar germany comes to mind, one needs to know where ones wheel barrow is at all times...


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## jerzeygurl (Jan 21, 2005)

fed was created to prevent depressions, yet promptly cause the great one...(also caused by lending money for folks to play in the stock market, then sudenly recalling those loans, oops can't pay,oh well....stocks plummeted, then the elect few who werent playing with small change bought up all the devalued stocks....)

rosevelt slaughtered pigs to help with the slump in hog prices, dumped them in a ditch while people were lined up in soup kitchens....

usda census...puhleezuh

really not rambling, just connecting dots.....


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## Aintlifegrand (Jun 3, 2005)

I was just reading a comparison on the Weinmar and our current situation.. eerily similar..that's for sure.


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## jerzeygurl (Jan 21, 2005)

yes it is

if we print it they will spend it....


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## Spinner (Jul 19, 2003)

Ernie said:


> I know a lot of you may be sick to death of talk regarding the stock market, but some of us are watching it like the proverbial canary in the coal mine.


People were tired of hearing it in 1929 and many quit listening. They had heard the predictions for so long that they no longer believed there was any danger. They thought this great country was invincable and could never stumble. They stuck their head in the sand and pretended everything was fine and dandy. They were shocked when the crash arrived much the same as many will be when it happens again.


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## Karen (Apr 17, 2002)

NoClue said:


> First, the Federal Reserve system is heavily supervised both by Congress and the President. The Chairman of the Federal Reserve and the board of Governors are presidential appointees who serve a term and then are periodically re-affirmed or are replaced at the discretion of the President (and the Senate). The Federal Reserve is private only in the same sense that the US Postal Service is.


Well thank goodness!!!! Doesn't that just make us feel a lot safer?


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## Ernie (Jul 22, 2007)

Except it's untrue, Karen. The Federal Reserve board of governors is appointed by the President. Go look at their names on the website. It's a bunch of people you've never heard of, and not even all of them are listed.

Yet the Federal Reserve is a private bank, owned by who knows who. It's private and privileged information. You can't even get it through a FOIA request. They are a private entity not responsive to the government or private citizens. Who actually has ownership in the Fed? It could be Bank of America, Lloyd's of London, Walmart, or even a handful of rich Saudi Arabians. Wouldn't that explain a lot?

Have you seen the Fed's charter? No, of course you haven't because it's not public. We can only guess what's in it, but I bet you those economic professors who are appointed to the board of governors don't have any real power. 

Tell me this ... why is it, in days where an email squabble between two vice presidents at a Wall Street trading firm, or the salary paid to an executive at NASDAQ become public knowledge and put in the news ... have we NEVER heard of the slightest dissent or incongruity within the board of governors of the Fed? Are they just all incredibly congenial people who get along really well with each other, or is it more likely they are figureheads told to show up, sit down in an office, and shut up? Occasionally they will trot out Bernanke to make some statement or explain something with the proper amount of spin, the same as they did with Greenspan, but I've never seen a more obvious tool.


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## GrannyCarol (Mar 23, 2005)

Ernie - there is one thing about your evaluation of this situation that concerns me. What if the "big fish" find it profitable in terms of economic control for there to be a stock market crash? I'm thinking that part of their goals are political, not just to be rich and powerful. After all, the more political control, the easier to be rich and powerful and the safer that power is. In that case, it may well benefit them to have a serious stock market crash to put pressure on the people to want a more restrictive, socialist government to "protect" them. However, those "big fish" in the shadows already have their fingers in picking who runs that government. You've got to be aligned with those powers to even have a chance of running. All of our top candidates are there because of that alignment. The only one that interests me is strangely totally ignored and put down by the main stream media. Gee, have to wonder why he isn't a serious candidate? Many of the people in this country like him a lot! So, who doesn't?

Anyway, I would not be surprised at all to see this country undergo a serious economic crash which will change the way we do business. Cashless? Not unlikely, the ads for that are already overwhelming. If it is easy for the rich and powerful to control the money supply when we are using paper money, how easy will it be when we are using electronic money? How far is THAT from real currency and wealth? All of your assets will be electronic bits and bytes, none of it will really be in your hands, even as nearly worthless paper money!


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## mightybooboo (Feb 10, 2004)

GrannyCarol said:


> Anyway, I would not be surprised at all to see this country undergo a serious economic crash which will change the way we do business. Cashless? Not unlikely, the ads for that are already overwhelming. If it is easy for the rich and powerful to control the money supply when we are using paper money, how easy will it be when we are using electronic money? How far is THAT from real currency and wealth? All of your assets will be electronic bits and bytes, none of it will really be in your hands, even as nearly worthless paper money!


Yep.Complete and total ownership of YOU.
Cashless society will do just that,and its coming.
Sheep will gobble it up..."How Convenient!,just wave my hand chip and its done!" or "I have nothing to hide"

Yep,the









will eat it up.


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## Ohio Rusty (Jan 18, 2008)

I don't have any wealth .... no stocks, T-bills, T-bonds, junk bonds no investments in land in africa or the middle east. Nor am I co owner in a large corporation or a professional sports team. I'm just Mr. average Joe Blow in America wanting to feed my family and keep my roof over my head. If everything came crashing down ....I probably wouldn't even notice it as I don't have have millions or billions invested in anything to lose. I understand why rich and greedy people are worried, my only concern is if the seeds I saved from last year are going to sprout and grow OK ...... I'm not worried about food as where I live, I can kill a deer a day if I need to and I have stuff both canned and bought ..... I've seen lots of strange and bad things over the last 35 years come and go .... I've weathered them all A-ok and came out as good as ever .... This economy thing is just another no biggy deal thing ..... It will pass also .... It will be alot like a bad case of gas for many americans ....
Ohio Rusty


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## charles burns (Mar 21, 2006)

Charisma - this country has an enviable unemployment rate. I'm sure there are people losing jobs all over the country and it's no consolation to them that the country as a whole has a very respectable rate of unemployment, but it does. 

Also, credit cards are not evil, nor is debt necessarily. The cash purchase of a home is for most people out of the question. It's reasonable to borrow a hundred thousand dollars to buy a home when you can predict your earnings over the course of your life to a sum that will repay the mortgage comfortably.

Similarly with credit cards, it's reasonable to have a thousand dollars riding temporarily on a credit card if you can confidently see your income covering it. It's debt that is within your means. Lots of people carry debt, people in debt aren't by definition irresponsible and greedy, only irresponsible, greedy people are.

The WWII generation paid with cash because other than each individual retail stores policy on credit there was no other option. Credit cards weren't introduced until 1950.

Kazaleenah - a job that pays $7.50 per hour is a job. That someone can't afford to work because no job pays enough to pay someone else to look after their children is another thing entirely. By your logic a job that pays $30.00 per hour is no job for someone who wants to pay a five thousand dollar per month mortgage note.

Starting pay at the Big Mac and the home of the Whopper and at gas stations is $10.00 per hour here, many with a sign on bonus. The jobs aren't filled for the same reasons you give - that being, it's not enough money.

What this country lacks in job availability it more than makes up for in personal opportunity.


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## NoClue (Jan 22, 2007)

To wit, I've had an entry level position open at $10.50/hr for three months. Invariably, this position leads to a full time position within six-months. I've only had three people even apply for the job. 

The only real requirement is that you have to impress me that you are interested in technology, attentive to detail, and capable of working as a team member.


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## charisma (Nov 13, 2007)

charles burns said:


> Charisma - this country has an enviable unemployment rate. I'm sure there are people losing jobs all over the country and it's no consolation to them that the country as a whole has a very respectable rate of unemployment, but it does.
> 
> Also, credit cards are not evil, nor is debt necessarily. The cash purchase of a home is for most people out of the question. It's reasonable to borrow a hundred thousand dollars to buy a home when you can predict your earnings over the course of your life to a sum that will repay the mortgage comfortably.
> 
> ...


By saying that there has been an increase in unemployment isn't to say that we don't have an enviable employment rate. I fully realize that, market wise, the United States is really not such a bad place to look for work (particularly when you consider the unemployment rates in some countries overseas). However, my point was that, as with the drop in the stock market, the sub-prime crisis, the credit crunch, and the other things that are currently going on, it seems reasonable (at least to me) to at least consider the possiblility of rising unemployment, and to look at it as yet another sign of an ailing economy.

I also realize that credit cards weren't being used until the 50's. Notice though, that I didn't say that the people of the 1940's bought on credit. I said the WWII generation-- meaning those of the "greatest generation" who, even though there were credit cards post-WWII, still tried to maintain the mindset of buying and living within your means, never overextending yourself. It's the state of mind I was referring to, of an entire generation, rather than referring to a particular time frame. Sociologically speaking, the anti-debt mindset of the WWII generation is reasonable and rational, considering that they were children during the Depression-- they saw others loose everything and they were determined to never let that happen to them. However, their children (baby boomers) and those after them, didn't grow up with the same knowlege and experience. Most people my age (I'm in my 20s) have never experienced the rigors of a true bear market--- as far as we can remember, everything has been peachy keen (barring a few economic slumps here and there). That kind of mindset does not exactly lend itself to the principles of frugality, saving, and buying only what you can afford.

Sure debt itself isn't bad (never said it was), and yet, you insist on the idea of "reasonable debt". As I said before, I'm not talking about reasonable debt. I fully realise that there are people who put things on credit that their income is well able to pay for. It is obcious that these people are not greedy or irresponsible. There are also people who buy reasonable homes, homes that they are able to afford and will be able to pay off after a 20 or 30 year period. What I was saying is that, sadly, there seems to be a growing number of Americans who, for whatever reason be it a sense of entitlement or simple ingnorance regarding finances, insist on overextending themselves, racking up thousends in debts on credit cards, and buying unreasonably expensive homes (compared to their income) using ARM mortgages. These are the people to whom I am referring, those loosing their homes due to ARM resetting, who couldn't afford the house in the first place, but signed the papers because, quite simply, "they wanted it".


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## Deacon Mike (May 23, 2007)

Ernie said:


> So let's talk for a moment about how the Federal Reserve Bank came about. It was created in 1913 by the Federal Reserve Act and lies in the hands of private individuals, not the government. By law, there are 7 members of the Federal Reserve's "Board of Governors" who control it without any government or citizen oversight. Who are these extremely powerful seven men who control our nation's money supply? Mostly economics professors and other men you've never heard of. The Fed's website lists 5 current members. Who are the other two shadowy figures? .


The Fed is a quasi-government organization. The reason the Fed has no oversite is to remove it from political manipulation. The "other two shadowy figures" are open positions. Mark W. Olson resigned in June 06 and Susan S. Bies resigned in March of 07. Neither has yet been replaced.

Like me ask you this. Who's the mayor of San Diego? Who the CEO of Motorola? Answer: People I've never heard of. The fact that the Fed is run be economists the "you've never heard of" is the most meaningless thing you've posted. How many economists have you heard of? This garbage is just on the post to make the Fed same more "mysterious". 




Ernie said:


> I propose to you that this current downturn in the market is not unforeseen by these shadowy bankers, and through the mechanism of shorting-stocks, a lot of money was made today at the expense of regular investors. A market correction of this magnitude does not always leave a path of devastation in its wake, and the big, fat fish who lie in wait in dark crags and holes are having a feeding frenzy on the smaller fish today.


Who are the "shadowy bankers"? This borders on absurdity.



Ernie said:


> The government cannot print money. Only the Federal Reserve Bank can (per the 1913 Federal Reserve Act). The FRB prints money at the government's request and then LOANS it to the government with interest (the Federal interest rate). The government then uses the Federal income tax to pay for a couple of government agencies (primarily the IRS) and to pay back the interest.


This is backwards. The twelve Federal Reserve banks are responsible for issuing Federal Reserve notes, but they don't print currency themselves. They pay the Bureau of Printing and Engraving, a division of the U.S. Treasury, for the service. Estimates for the amount the Fed pays for printing each note vary from 2 cents to 6 cents. In 2003, about 8 billion notes were printed. The Fed purchased currency with a face value of $143 billion and then paid the U.S. Treasury $508 million. That amounts to about 6 cents per note and .3 cents per dollar printed.

The statements about The Fed loaning money to the Government and using the IRS to pay the interest are simply not true



Ernie said:


> A bank owned by an unknown number of megawealthy private individuals is the sole issuer of official United States currency which is not backed in any way by any tangible asset.


The Fed is owned by its member banks. According to the Federal Reserve Act, a Federal Reserve bank is a special type of corporation chartered by the Federal government. Shortly after the act was passed, the United States was divided into twelve districts and a Federal Reserve bank was organized in each district. National banks (private commercial banks chartered by the Federal government) were forced to join the Federal Reserve system. State chartered banks could join if they chose, though most did not. Any newly chartered national bank must still join the system and existing or new state chartered banks can still choose to join. 

One requirement of membership was for a bank to purchase stock in its district Federal Reserve bank. The amount purchased was fixed by the Act. Each member bank must purchase stock equal to 3% of its capital (net worth). The par value of the Federal Reserve stock was fixed by the Act at $100 per share. As a bank's net worth changes and deviates from the 3% requirement, its Federal Reserve bank issues it new shares or buys back excess shares â always at the $100 par value. If any bank joins the system, its district Federal Reserve bank issues new shares. If any member bank fails, its district Federal Reserve bank pays off the shares.

There is no market for Federal Reserve stock â its price remains at the par value of $100. It is impossible for the shareholders of Federal Reserve banks to earn capital gains or suffer capital losses on their stock.

Of course, stockholders in ordinary corporations can also hope for dividends. As the owners of the business, all profits belong to them. In most corporations, the board of directors decides if and when to pay dividends on common stock. But the Federal Reserve banks are different. The Federal Reserve Act fixes dividends at 6% per year.15 That is $6 per year per $100 share. Any additional earnings go to the U.S. Treasury.



Ernie said:


> They type a magic number in their computer and POOF, that much money exists.


That's how fiat currency works, and it's just like that in every major country in the world



Ernie said:


> They then loan that money to the government with interest,


No, they don't



Ernie said:


> for which the government then collects an unconstitutional income tax from you and me to be used for the purposes of paying BACK that interest, plus the effort of providing the police organization by which that payback shall be enforced.


Suggest you read the 16th amendment. I've got it here for you

Amendment XVI
(Ratified February 3, 1913)

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.



Ernie said:


> Did you realize that many companies actually make more money investing their assets in the stock and bond markets than they do actually selling products?


Aside from financial firms, name ONE.



Ernie said:


> Except it's untrue, Karen. The Federal Reserve board of governors is appointed by the President. Go look at their names on the website. It's a bunch of people you've never heard of, and not even all of them are listed.


Again, why does it matter the I haven't heard of them. Again, there are 2 open positions




Ernie said:


> Yet the Federal Reserve is a private bank, owned by who knows who. It's private and privileged information. You can't even get it through a FOIA request. They are a private entity not responsive to the government or private citizens. Who actually has ownership in the Fed? It could be Bank of America, Lloyd's of London, Walmart, or even a handful of rich Saudi Arabians. Wouldn't that explain a lot?


Again, the Fed is owned by it's member banks. Here are the member banks of the 5th district (Richmond)



Ernie said:


> Have you seen the Fed's charter? No, of course you haven't because it's not public. We can only guess what's in it, but I bet you those economic professors who are appointed to the board of governors don't have any real power.


Yes they have a great deal of power. This just smacks of economic paranoia. 



Ernie said:


> Tell me this ... why is it, in days where an email squabble between two vice presidents at a Wall Street trading firm, or the salary paid to an executive at NASDAQ become public knowledge and put in the news ... have we NEVER heard of the slightest dissent or incongruity within the board of governors of the Fed? Are they just all incredibly congenial people who get along really well with each other, or is it more likely they are figureheads told to show up, sit down in an office, and shut up? Occasionally they will trot out Bernanke to make some statement or explain something with the proper amount of spin, the same as they did with Greenspan, but I've never seen a more obvious tool.


The Fed keeps the disagreements to themselves. The FOMC release the minutes of their meetings to the public.

All in all, just a great deal in incorrect information about the Fed. Flat out wrong


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## GrannyCarol (Mar 23, 2005)

Speaking of the unemployment rate - how many of you are aware that it only measures those that are on unemployment, not those who have gone past that period and are truly without funds or jobs? Our published unemployment rate is not a true indicator of what percentage of our people are jobless. 

Also, I can see from my own children that getting $9 or $10 an hour is not enough to take care of a family. Our daughter lives with her brother, his wife and three little ones. Both our son and our daughter work at that level and they are able to live comfortably, but far from luxuriously. We're all glad that our DIL is able to stay home with the little ones and be a good mother to them. 

Another relative works at a $9 an hour job full time and just doesn't make enough - she owns her mobile home outright and has minimal expenses, but we all help her out some here and there or she wouldn't be making a go of it. Her only debt is a car payment for a car she bought before she lost her job (as a mortgage underwriter!) and owes more than it's worth on today. Had she kept her good job, she could have afforded the house she sold and the car easily. She was not fiscally irresponsible and lived well within her means, but she had to sell her house when the home mortgage business started really going bad a couple of years ago and she lost her good job (just before she was eligible for retirement benefits too!) 

The whole situation is not as straightforward as one would think. Just because someone is employed doesn't mean they can pay their bills (even reasonable ones) or keep their home. Our relative was fortunate to have some equity and to be able to sell before her home was repossessed. Unfortunately, one person working at $10 an hour full time may well find it very difficult to support themselves and even harder to feed a family.


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## NoClue (Jan 22, 2007)

You hear about disagreements all the time if you pay attention/watch enough CNBC. I have my own beefs with the Fed - namely that it has become politicized rather than being the technical organization that they were intended to be. Most of the disagreements have to do with most of the governors believing that we're being too lax with credit rates but being forces to ease them.

Most economists who are not part of the Austrian School, most notably Milton Friedman, believe that the Fed exacerbated the Great Depression buy keeping the money supply too tight. The Austrian School, along with the other sundry followers of Gold believe that they didn't tighten up enough.

Just because I don't believe in the Gold Standard doesn't mean I believe in infinite money or 'Bread and Circuses'. Although I believe it would be painful, I believe that the Fed should be tightening rather easing rates, or failing that, the cuts should be targeted towards the manufacturing base. Properly used, rate-adjustments act as shock absorbers - now days they've become political tools. As I said in my post above, the root cause of our problem is deficit spending.

I also see an economic crisis looming on the horizon, which in part is why I spend so much time on a survival and prep forum. My best guess however, is that the real crisis is about a year to two years out, although as it moves closer, my predictive tools and measures are harder and harder to make sense of - rather like trying to use a compass at the North Pole.


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## NoClue (Jan 22, 2007)

GrannyCarol said:


> Speaking of the unemployment rate - how many of you are aware that it only measures those that are on unemployment, not those who have gone past that period and are truly without funds or jobs? Our published unemployment rate is not a true indicator of what percentage of our people are jobless.
> 
> Also, I can see from my own children that getting $9 or $10 an hour is not enough to take care of a family. Our daughter lives with her brother, his wife and three little ones. Both our son and our daughter work at that level and they are able to live comfortably, but far from luxuriously. We're all glad that our DIL is able to stay home with the little ones and be a good mother to them.
> 
> ...


No real disagreement - just that your much more likely to make ends meet if you have A job rather than NO job.

In my case, the job I have open is aimed at a young person. When someone with a family etc. interview, I make a point of asking them about their support network, and if they understand what their pay is versus their cost. As the boss, it isn't in my best interest to have anyone working for me that SHOULD be somewhere else.


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## AngieM2 (May 10, 2002)

NoClue - that job, have you told the local state tech school about it? I bet the have someone/s that would like a chance at it.

Angie


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## Hip_Shot_Hanna (Apr 2, 2005)

the frightening thing is that the US GOV pays over 45% of it's income as interest on loans , .45 cents you pay in tax goes to pay interest , whether this crash stuffs the economy or not the national debt will , 
as for " it won't affect me " you are very wrong , the state and county taxes are the ones that will stuff you even if you don't pay income taxes , the bonds your county has to build a new school / whatever, has to be paid for, and you as a inhabitant of that county are the garentor of said loan , the hyperinflation coming will double or triple your property taxes , and there is where they have got you , dont or cant pay and it's a auction on the court house steps and the buyer will probably be the loan shark that lent the count money .


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## Deacon Mike (May 23, 2007)

Hip_Shot_Hanna said:


> the frightening thing is that the US GOV pays over 45% of it's income as interest on loans , .45 cents you pay in tax goes to pay interest , whether this crash stuffs the economy or not the national debt will ,


No, that's not true. Debt service is about 10% of all federal revenues (for FY2007)


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## NoClue (Jan 22, 2007)

Today, actually, I gave it to one of the three applicants


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## home~girl (Nov 26, 2005)

First off, let me start by saying although I don't post much, I read the forums with great interest and was really fascinated by this thread's explanation of what the Federal Reserve Bank is and how it got started. If I learned about this in school, I guess I forgot it.  I sort of had a vague idea before now, but this made it a little clearer. 

Could someone that knows please answer this for me... Given that the U.S. has the FBR, how do other countries work in comparison to the U.S.'s system that seems to be set up. Where does their money come from? Is it backed by anything? I hope this makes sense. If anyone could explain this in a simple way ( I find it hard to wrap my head around some of the more complex things, lol, I'd appreciate it. )


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## Deacon Mike (May 23, 2007)

home~girl said:


> First off, let me start by saying although I don't post much, I read the forums with great interest and was really fascinated by this thread's explanation of what the Federal Reserve Bank is and how it got started. If I learned about this in school, I guess I forgot it.  I sort of had a vague idea before now, but this made it a little clearer.
> 
> Could someone that knows please answer this for me... Given that the U.S. has the FBR, how do other countries work in comparison to the U.S.'s system that seems to be set up. Where does their money come from? Is it backed by anything? I hope this makes sense. If anyone could explain this in a simple way ( I find it hard to wrap my head around some of the more complex things, lol, I'd appreciate it. )


Almost all countries have some sort of central bank. Here is a list In addition, there is also the European Central Bank, which operates in the countries that use the Euro. All major central banks create money out of thin air. No major currency in the world is backed by gold or silver. All major central banks work to monitor and adjust their economies in a similiar fashion to the Fed, using interest rates and other tools to either attempt to slow or speed up economic growth. 

This is kind of a broad response to kind of a broad question. Feel free to ask more


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## jerzeygurl (Jan 21, 2005)

If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
-Thomas Jefferson


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## Ernie (Jul 22, 2007)

Deacon Mike said:


> No, that's not true. Debt service is about 10% of all federal revenues (for FY2007)


Can you post a source for that, Deacon? I'd like to use it for an article I'm writing.


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## Deacon Mike (May 23, 2007)

Ernie said:


> Can you post a source for that, Deacon? I'd like to use it for an article I'm writing.



It's Wiki, but there are links at the bottom of the page


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## Ernie (Jul 22, 2007)

Ah, dang. I can't use Wiki. While it's great for general learning about a topic, their informational truth standards are so low that editors generally will not accept it as documentation for any facts you list. It's just information submitted by who-knows-who, so you never can tell who posted the info. Sometimes it's someone who knows, and sometimes it's just some schmuck. 

I would assume that number would be listed in the published Federal Budget, however that's not easily found. They don't like you to have searchable electronic copies of that where you can easily browse and search. No, it's got to be difficult, the way they like all government to be conducted.


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## AngieM2 (May 10, 2002)

Ernie - what abou the links he mentioned at the bottom of the Wiki page?
Maybe those would be useable.

Angie


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## Ernie (Jul 22, 2007)

I'm still checking all those out.


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