# Federal Reserve Board Abolition Act...



## Banjo (Feb 5, 2009)

FEDERAL RESERVE BOARD ABOLITION ACT
Statement of Congressman Ron Paul before the US House of Representatives, February 3, 2009, introducing the The Federal Reserve Board Abolition Act, H.R. 833.

_____________________________________________________________

H.R. 833: To abolish the Board of Governors of the 
Federal Reserve System and the Federal reserve banks

_____________________________________________________________

Madame Speaker, I rise to introduce legislation to restore financial stability to America's economy by abolishing the Federal Reserve. Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve's inflationary policies. This represents a real, if hidden, tax imposed on the American people.

From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial "boom" followed by a recession or depression when the Fed-created bubble bursts.

With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America's exports or the low rate of savings should be enthusiastic supporters of this legislation.

Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.

Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.

In fact, Congress' constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation's founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true freemarket economy.

In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end to the manipulation of the money supply which erodes Americans' standard of living, enlarges big government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal Reserve.


SOURCE: http://www.house.gov/paul/

Go ahead....

Perhaps this should not be in the "Spiritual Discussions" section, but I am trying to get the information out there....

And I am skeered to go in to the Political forum.  I heard they were mean over there...


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## Banjo (Feb 5, 2009)

Peter Schiff of Euro Pacific Capital explained, “When the government spends, the money has to come from some-where. If the govern-ment doesn’t have a surplus, then it must come from taxes. If taxes don’t go up, then it must come from increased borrowing. If lenders won’t lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value of those already in circulation.”


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## gtparts (Feb 5, 2009)

> Perhaps this should not be in the "Spiritual Discussions" section, but I am trying to get the information out there....



Perhaps?????????


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## Jeffriesw (Feb 5, 2009)

Banjo said:


> Go ahead....
> 
> Perhaps this should not be in the "Spiritual Discussions" section, but I am trying to get the information out there....
> 
> And I am skeered to go in to the Political forum.  I heard they were mean over there...






Dont be skeered Banjo, I dip my toes in over there once in a while


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## ToLog (Feb 5, 2009)

Swamp Runner said:


> Dont be skeered Banjo, I dip my toes in over there once in a while




pretty spiritual sounds like?  wasn't ussery and related talked about in the Bible?  i know Judaism and Islam have thoughts on it. 

any reason we Christians shouldn't take a position on it?


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## Huntinfool (Feb 5, 2009)

Oh boy....here we go!




I know y'all are gonna find this hard to believe.  But I'm just gonna keep my trap shut on this one and let the lunacy speak for itself.


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## Banjo (Feb 5, 2009)

Huntinfool said:


> Oh boy....here we go!
> 
> 
> 
> ...



Huntin...Huntin....

I guess the current economic mess we are in doesn't speak loudly enough for you????  Fiat money DOESN'T work...and I don't need a finance degree to see it.  

I can even almost understand how printing money out of thin air creates inflation and devalues our dollar.  Flood the market with currency and it depreciates...right?  The Federal Reserve System is far from being a protector of the public....It is more like a cartel operating against public interest.  


The FED creates out of nothing an amount of brand new money...This new money flows into banks where it is used to pay off depositors.  Then it floods the economy which dilutes the value of ALL money...thus causing prices to rise.  So....the old paycheck doesn't stretch as far and we learn to get along with a little less....never even thinking about WHY this happens...

O.k.  so I have been reading again.


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## Banjo (Feb 5, 2009)

I have been reading The Creature from Jekyll Island.  I almost dropped the book when I read the following.  It was originally published in 1994:

"A pessimistic scenario of future events includes a banking crisis, followed by a government bailout and the eventual nationalization of all banks.  The final cost is staggering and is paid with money created by the Federal Reserve.  It is passed on to the public in the form of inflation.  Further inflation is caused by the continual expansion of welfare programs, socialized medicine, entitlement programs, and interest on the national debt.  The dollar is finally abandoned as the de facto currency of the world.  Trillions of dollars are sent back to the U.S.  by foreign investors to be converted as quickly as possible into tangible assets.  This causes even greater inflation than before.  So massive is the inflationary pressure that industry and commerce come to a halt.  Barter becomes the means of exchange.  America takes her place among the depressed nations of South America, Africa and Asia...mired together in economic equality.  Politicians seize upon the opportunity and offer bold reforms.  The reforms are more of exactly what created the problem in the first place...expanded governmental power, new regulatory agencies, and more restrictions on freedom.  But this time, the programs begin to take on an international flavor.  The American dollar is replaced by a new UN money, and the FRS becomes a branch operation of the IMF/World Bank...."

Anybody think we are heading this way???


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## fivesolas (Feb 5, 2009)

Banjo said:


> Huntin...Huntin....
> 
> I guess the current economic mess we are in doesn't speak loudly enough for you????  Fiat money DOESN'T work...and I don't need a finance degree to see it.
> 
> ...



You are correct in the devaluing of the dollar. It is a general principle in economics (even consensus in the different camps) that an increase in the money supply (printing new dollars) will lead to inflation. It is a devaluing of the dollar because the dollar has been dilluted. 

It's kind of like a company issuing new stock to shareholders and increasing the number of shares. If the earnings are limited, then you have to spread the earning out of all the outstanding shares. 

Printing new money dilutes the value of the dollar and hurts our purchasing power...it will take more dollars to purchase the same goods and services. a.k.a, prices will rise. 

What is affected by this? 

Fixed income investments such as money markets, savings rates, CDs, Treasury bills, bonds. 

If you have a bond and it has a 10-yr maturity and is paying you 5% so that you earn 5% a year and get your money back at the end of 10 years (you plan to hold to maturity) and inflation is 3% per year, then the value of your dollar is increasing by 2% a year. 

However, if in the same investment inflation increases 6% per year or more then you are losing 1% per year in purchasing power. 

What's the solution? 

Hedge yourself. It makes perfect sense to have a surplus of cash in this recession which is likely to deepen. But you ought not to have everything there. Look for investments that are natural hedges against inflation that still offer relative saftey. Consult your financial advisor. 

Yes, I am in the financial bizz. Have been for 8 years.


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## Banjo (Feb 5, 2009)

Wasn't it Osama bin Laden's goal to bankrupt the U.S....

How about borrowing money to finance a "War on Terror" that we can't win or afford?  We can borrow the money from China, then print it and repay them...right?

Didn't something similar happen to Russia when they fought a war they couldn't win or finance with Afghanistan?


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## Jeffriesw (Feb 5, 2009)

fivesolas said:


> You are correct in the devaluing of the dollar. It is a general principle in economics (even consensus in the different camps) that an increase in the money supply (printing new dollars) will lead to inflation. It is a devaluing of the dollar because the dollar has been dilluted.
> 
> It's kind of like a company issuing new stock to shareholders and increasing the number of shares. If the earnings are limited, then you have to spread the earning out of all the outstanding shares.
> 
> ...


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## Huntinfool (Feb 5, 2009)

Wow!  

I'm constantly amazed that people buy into anything that is in print.  I'm trying hard Banjo.  At least give me credit for my self control today!

How was Mario?


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## Banjo (Feb 5, 2009)

Huntinfool said:


> Wow!
> 
> I'm constantly amazed that people buy into anything that is in print.  I'm trying hard Banjo.  At least give me credit for my self control today!
> 
> How was Mario?




I don't buy into just anything...but some of what I am reading makes sense to me...some doesn't, but that could be due to my hair color, blonde.

Mario Karts was GREAT!  Rj and his wife are formidable opponents, but my girls can really give them a run for their fiat money .    I even was able to win second  place a few times, which is very good for me.  My children have been training me, so hopefully there have been some notable improvements in my video game skills...


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## rjcruiser (Feb 5, 2009)

Banjo said:


> I don't buy into just anything...but some of what I am reading makes sense to me...some doesn't, but that could be due to my hair color, blonde.
> 
> Mario Karts was GREAT!  Rj and his wife are formidable opponents, but my girls can really give them a run for their fiat money .    I even was able to win second  place a few times, which is very good for me.  My children have been training me, so hopefully there have been some notable improvements in my video game skills...



The problem is when you have limited knowledge or experience in finance or accounting, half truths make sense.  Kinda like an uneducated Christian.  They are easily swept away by heretics preaching some truth with a lot of error.

Yes...Banjo, your quote from the Creature from Jekyll Island makes a lot of sense.  But I don't see the ultimate demise of the US.  And you have to look at the country that holds the majority of US Debt...China.  China could bankrupt the US.  It could...but it won't.  Why not?  Who buys all of the things China makes?  If we aren't here to buy it, they won't have jobs for the billions of people in China.  That would be a revolution that Communist China can't afford to have.

But, inflation and hyper-inflation are probably going to happen.  The fed is trying to keep it from occuring, but when you have these trillion dollar deficits, you can't avoid it.

Oh...and btw, your daughters are very good at mariokart.  I must say, when you've got MarioKart 101 and Wii 302 as homeschooling subjects, it makes it hard for us public schoolers to compete.



			
				fivesolas said:
			
		

> It makes perfect sense to have a surplus of cash in this recession which is likely to deepen.



Why in the world would you want to have a surplus of cash when you've got hyper-inflation on the horizon

I'm not a huge commodity guy...don't like gold...don't like oil..I still think that they are over-inflated and costly to buy and sell.  But, real-estate is not a bad place to be right now.  The housing market will rebound...and prices are at historic lows.  It is possible to buy a rental unit and have the rent cash flow the property.  If you have multiple units, stagger the leases so that if hyper-inflation does occur, you've got the ability to increase the rents as the lease comes up for renewal.  Then you won't be stuck renting out a place for $1000 when the going market is $2000 for more than an avg of 6 mos...and that is worst case scenario.


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## Big10point (Feb 5, 2009)

I have heard that the Fed Res is actually owned by the big 12 banks....  and not an arm of our gov't... not sure if that is truth or not... but it seems to be.

http://www.lovethetruth.com/federal_reserve.htm

http://www.fame.org/NotableQuotes.asp

printing of our money, and our debt (Reference 4, 22). 

The individuals listed below owned banks which in turn owned shares in the FED. The banks listed below have significant control over the New York FED District, which controls the other 11 FED Districts. These banks also are partly foreign owned and control the New York FED District Bank.
(Reference 22) 

First National Bank of New York 
James Stillman 
National City Bank, New York 
Mary W. Harnman 
National Bank of Commerce, New York 
A.D. Jiullard 
Hanover National Bank, New York 
Jacob Schiff 
Chase National Bank, New York 
Thomas F. Ryan 
Paul Warburg 
William Rockefeller 
Levi P. Morton 
M.T. Pyne 
George F. Baker 
Percy Pyne 
Mrs. G.F. St. George 
J.W. Sterling 
Katherine St. George 
H.P. Davidson 
J.P. Morgan (Equitable Life/Mutual Life) 
Edith Brevour T. Baker 
(Reference 4 for above, Reference 22 has details, P. 92, 93, 96, 179)


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## Huntinfool (Feb 5, 2009)

God bless America. 











Mods,

PLEASE let this thread ride in here.  I know it's more political.  But I'm very interested in hearing what my spiritual friends have to say about stuff even if it's not directly spiritually related.

Oh, I need to put a few of these in here as well...


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## fivesolas (Feb 5, 2009)

> Why in the world would you want to have a surplus of cash when you've got hyper-inflation on the horizon
> 
> I'm not a huge commodity guy...don't like gold...don't like oil..I still think that they are over-inflated and costly to buy and sell. But, real-estate is not a bad place to be right now. The housing market will rebound...and prices are at historic lows. It is possible to buy a rental unit and have the rent cash flow the property. If you have multiple units, stagger the leases so that if hyper-inflation does occur, you've got the ability to increase the rents as the lease comes up for renewal. Then you won't be stuck renting out a place for $1000 when the going market is $2000 for more than an avg of 6 mos...and that is worst case scenario.



Real estate is a very good hedge. No doubt there. Real estate (rental), especially commercial real estate, is a natural hedge against inflation. But you need to be careful where you invest your money. The captial markets are still largely frozen. Not every real estate company that you could invest in leverage their properties the same way, and some overleveraged (80%+) and now those loans are being called and cannot be refinanced. Furthermore, some real estate companies used recourse financing to their own balance sheets! Just be careful. 

This all said, the best strategy in my opinion is diversification. Yes, your dollars will probably buy you less because of inflation. But sound financial planning tells you to keep 6-12 months of cash on hand for things like job loss, expenses over your budget, et. If possible, its better to have a bit more than normal in case of job loss. It will typically take you longer to find a job in a recession. 

Your rental property idea makes sense if your renters can afford your rent hikes. Remember, inflation is taking spending dollars out of their pockets, they are not getting pay raises like they used to, and may suffer a job loss. You may need to keep your rents lower or give concessions to keep your properties leased. In leasing residential you are tied directly into the recession. If you do it, make sure you get a value that makes sense to the rent you can recieve without counting too many birds in the bushes. Deal with "what is." 

Many real estate investors who want to purchase and manage their own properties are just not savvy enough to understand the markets and accurately predict cash flow and expenses. So typically they end up owning the property where the expenses of operations use up all the cash, and their upside is appreciation. 

I prefer to own investment real estate that provides a competitive income stream AFTER expenses and get some of my birds in hand. I'd rather just have one birdie or two in the bush, but have most of them in hand. 

-five


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## rjcruiser (Feb 5, 2009)

Huntinfool said:


> Oh, I need to put a few of these in here as well...



I thought you said you were going to bite your tongue


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## rjcruiser (Feb 5, 2009)

fivesolas said:


> Real estate is a very good hedge. No doubt there. Real estate (rental), especially commercial real estate, is a natural hedge against inflation. But you need to be careful where you invest your money. The captial markets are still largely frozen. Not every real estate company that you could invest in leverage their properties the same way, and some overleveraged (80%+) and now those loans are being called and cannot be refinanced. Furthermore, some real estate companies used recourse financing to their own balance sheets! Just be careful.



I'm not sure if I agree with the commercial real-estate thing.  Yup...it can be more stable than residential, but if the tenant leaves, it is much more difficult to fill.  Also, right now, small businesses are drying up like hooch and they are the ones that drive the market of commercial real-estate that individuals own.



			
				fivesolas said:
			
		

> This all said, the best strategy in my opinion is diversification. Yes, your dollars will probably buy you less because of inflation. But sound financial planning tells you to keep 6-12 months of cash on hand for things like job loss, expenses over your budget, et. If possible, its better to have a bit more than normal in case of job loss. It will typically take you longer to find a job in a recession.


6-12 mos?  I think that is way way way too conservative (and I'm a super duper conservative guy).  Especially when we've got a President who is committed to a $1.2Trillion deficit each year.  6 mos at most.  If you still want some extra comfort, get into some fairly liquid assets.  Something that you can liquidate in 3 mos time if you absolutely need to.  Also, if you start taking unemployment right away, you've got some income that is going to be coming in from the gooberment.



			
				fivesolas said:
			
		

> Your rental property idea makes sense if your renters can afford your rent hikes. Remember, inflation is taking spending dollars out of their pockets, they are not getting pay raises like they used to, and may suffer a job loss. You may need to keep your rents lower or give concessions to keep your properties leased. In leasing residential you are tied directly into the recession. If you do it, make sure you get a value that makes sense to the rent you can recieve without counting too many birds in the bushes. Deal with "what is."
> 
> Many real estate investors who want to purchase and manage their own properties are just not savvy enough to understand the markets and accurately predict cash flow and expenses. So typically they end up owning the property where the expenses of operations use up all the cash, and their upside is appreciation.



I agree that most are not savvy enough to manage their own portfolios as well as their own finances.  That is why we've gotten into this mess.  

Appreciation is a great thing and something that you can take to the bank.  However, one must realize that there are cycles in the Real-estate market and they are typically 7 years from peak to peak.  If you can't hold onto the place for 7 years, you can't afford it.  Never never never should someone take out the equity in a property to make it work.  Sure, it can work for the late night "buy my real-estate money making cds" crew, but it doesn't work for many in the real world.



			
				fivesolas said:
			
		

> I prefer to own investment real estate that provides a competitive income stream AFTER expenses and get some of my birds in hand.



Don't we all?

Right now, the housing market is in such a crunch that you can buy a house that will have a monthly payment (mortgage, interest & taxes) of roughly $700 and will garner rent of $1000.  That is $300 a month is cash flow plus the tax savings you'll have.


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## Big10point (Feb 5, 2009)

rjcruiser said:


> I'm not sure if I agree with the commercial real-estate thing.  Yup...it can be more .



Hey diller....  

you're right on about the biz's drying up... i was in B'ham last week seeing customers and could not get over the amount of businesses that were closed.... there were hundreds of biz's that had boards on the doors... the small business that needed loans on credit cant get to that money anymore and they cant make payroll many times...  its sad out there... having a job or successful business in this economy is a huge blessing....


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## Huntinfool (Feb 5, 2009)

What is all the talk about inflation?  Hyper-inflation?

Anybody want to know what the December 2007 to December 2008 rate of change was in the CPI (i.e. inflation)?

0.1%

The lowest rate of change since 1955.

The avg rate of change since 1990 (while we've been "printing fake money" and building huge deficits) is a whopping 2.6%/year.

Folks, RJ said it better than I could.  Financial knowledge is similar to biblical knowledge.  It's VERY easy to use partial truth and disguise it as truth...and then manipulate people.

There are a lot more things that determine whether inflation or hyper-inflation will occur than simply printing money.  It's just not that simple. 

RJ, I tried buddy.  I really tried to keep quiet.  I'm not going to get ugly about it.  But the Federal Reserve is not an evil, privately owned, minion of Satan.

No, it is not called for in the Constitution.  But there are many institutions that are not called for in the Constitution.  That, in itself does not make the "un-Constitutional".

I mean COME ON GUYS!!!!

Read Mr. Paul's idiotic statements.  Do you REALLY want stinking CONGRESS to "re-assert it's constitutional authority over monetary policy"?

Seriously???

You want to turn monetary policy over to a bunch of corrupt career politicians who know NOTHING about how economic systems work and know even less about private enterprise and monetary policy?  The same guys who are under the impression that spending another trillion will get us out of this mess?

That's the answer?  Seriously?

The Fed has NOT followed a long-term policy of "easy" money.  Monetary policy has been easy since 9/11 because we NEEDED to flood the economy with liquidity.  We are in this mess now, not because of easy monetary policy but because of a Congress who was so eager to pander to minority interests and those "less fortunate" that they FORCED the banking system to hand out money to anybody who asked for it even if they couldn't afford it.  Banks are in business to make money.  If you force them to do something that is dangerous....they will find a way to make money doing it.  It's called capitalism.

Monetary policy is a potentially dangerous animal and it needs to be run by people who understand the long-term implications of a decision and who do not consider the political ramifications.  

I get a little fired up about this.  Sorry.


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## fivesolas (Feb 5, 2009)

rjcruiser said:


> I'm not sure if I agree with the commercial real-estate thing.  Yup...it can be more stable than residential, but if the tenant leaves, it is much more difficult to fill.  Also, right now, small businesses are drying up like hooch and they are the ones that drive the market of commercial real-estate that individuals own.
> 
> 
> 6-12 mos?  I think that is way way way too conservative (and I'm a super duper conservative guy).  Especially when we've got a President who is committed to a $1.2Trillion deficit each year.  6 mos at most.  If you still want some extra comfort, get into some fairly liquid assets.  Something that you can liquidate in 3 mos time if you absolutely need to.  Also, if you start taking unemployment right away, you've got some income that is going to be coming in from the gooberment.
> ...



All right, time to take you to school. lol 

What you described in commercial real estate is suburban small office. I am talking about a broad market approach, retail, office, industrial, mult-family, with high credit quality companies and their key assets such headquarters, or distribution at ports of entry (airports, seaports, et). 

In the retail markets I stick with grocery stores, drug stores, and discounters like Wal-mart. 

As far as 6-12 months, it is NOT too conservative, but standard in financial planning. Most people don't do it though. Feel free to check my out in it, but it is standard financial planning. It was covered in my CFP class. 

So let me get this straight, your going to express concern of Obama's money printing business, but take his unemployment if you lose your job? 

Your real estate cycles are 7-10 years from peak to peak. But you have got understand you are dealing with the worst economic climate since the 80s, and possibly since the Great Depression. This residential cycle may NEVER come back to its highs. 

Now to your real estate example...

You suggest I can make $300/month in cash flow after the debt is serviced. That's $3600/year. 

What is the amount of equity in the investment? Let's assume that you can get a loan for 80% of value, so you have 20% equity. Let's assume you purchase a $200,000.00 home with $40,000 cash and the rest debt. 

Let's do the math....

$40,000 / $3600.00 = 9% yield on equity. 

But wait, we have not factored in ANY operating expenses for the property except the debt service. 

How much of your $300 in income net debt service are you going to allocate for expenses. Basically, a capital reserve...assuming you didn't fund a reserve on the purchase? $100? $150? 

At 150 a month feeding a reserve you end up setting aside 1800/year. Maybe you think that's enough...

So now your birds in your hands = 4.5% return on your equity. Maybe that's what you actually make barring some unforeseen call in the night expense...

So if you wanted to be conservative...maybe 3%? And when I talked with folks who have managed property, its really little to nothing they are making in income. They are focused on appreciation. 

There are plenty of other vehicles out there to use in order to invest in real estate, make 5-6% a year or better, manage nothing, buy higher-end discounted real estate of better quality, and still capture appreciation. 

And since I already have a job....lol 

-five


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## fivesolas (Feb 5, 2009)

> Anybody want to know what the December 2007 to December 2008 rate of change was in the CPI (i.e. inflation)?
> 
> 0.1%



We are looking ahead, not back. Hindsight is 20/20. lol


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## Huntinfool (Feb 5, 2009)

But 2008 was clearly the beginning of a recession, meaning that we were already in it.

Hyper-inflation will not occur....ever.  Higher-inflation is a possibility.  But it will cycle back around with the economy.  We are not an economy in a bubble.  It is literally a world economy and EVERYBODY has a stake in our currency.


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## fivesolas (Feb 5, 2009)

Huntinfool said:


> But 2008 was clearly the beginning of a recession, meaning that we were already in it.
> 
> Hyper-inflation will not occur....ever.  Higher-inflation is a possibility.  But it will cycle back around with the economy.  We are not an economy in a bubble.  It is literally a world economy and EVERYBODY has a stake in our currency.



Hyper-inflation may or may not occur. High inflation is highly probable with an increase in the money supply. It should be expected and planned for. Which is why too much money in cash won't be the best plan. But I still believe we all should be holding on to more cash than we normally do. 

And yes, this recession is global.

I believe unless liquidity is restored to the markets the US will head into a depression.


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## Huntinfool (Feb 5, 2009)

Why are you under the impression that there is a higher than normal increase in MS coming?

MS is not completely under the control of the Fed.

We are getting off topic though.  The thread is about the validity of the Fed as an institution.


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## Free Willie (Feb 5, 2009)

I'm not a rocket surgeon but I can tell you that it is not all gloom and doom as everyone sees. My business is up. All of my clients are reporting that last year was a great year and this one is looking better. 

I mean, come on. Maybe we are looking at this the wrong way. I think what we are seeing is a correction in the economy that is going to get better soon. The big problem I have seen is that the Democrats have written laws that allow people to obtain mortgages who should have NEVER, EVER gotten financing. Sorry people, but life isn't fair and some people get to be homeowners and some will always be renters. Some get Mercedes and BMW's and some get Hyundais and Kias. It's just the way it works. If you want fair, then you need to be a carney.

The economy is gonna be just fine and so is the dollar.


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## fivesolas (Feb 5, 2009)

Huntinfool said:


> Why are you under the impression that there is a higher than normal increase in MS coming?
> 
> MS is not completely under the control of the Fed.
> 
> We are getting off topic though.  The thread is about the validity of the Fed as an institution.



The economic stimulus will increase the money supply.


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## fivesolas (Feb 5, 2009)

Free Willie said:


> I'm not a rocket surgeon but I can tell you that it is not all gloom and doom as everyone sees. My business is up. All of my clients are reporting that last year was a great year and this one is looking better.
> 
> I mean, come on. Maybe we are looking at this the wrong way. I think what we are seeing is a correction in the economy that is going to get better soon. The big problem I have seen is that the Democrats have written laws that allow people to obtain mortgages who should have NEVER, EVER gotten financing. Sorry people, but life isn't fair and some people get to be homeowners and some will always be renters. Some get Mercedes and BMW's and some get Hyundais and Kias. It's just the way it works. If you want fair, then you need to be a carney.
> 
> The economy is gonna be just fine and so is the dollar.



We lost 500,000 jobs in January. I am glad your business is up. Most businesses are suffering and cutting jobs. We are in a recession that may worsen. 

No, its not all doom and gloom. But we are in a very bad economy right now.


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## Huntinfool (Feb 5, 2009)

fivesolas said:


> The economic stimulus will increase the money supply.



Over a period of years.....and not by a trillion dollars.

It's not like they are going to fly a helicopter over the U.S. and drop a trillion dollars.


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## Banjo (Feb 5, 2009)

I am back from violin lessons...O.k.  The Federal Reserve is NOT PART of the government.  It was named that to fool most people into thinking that it was....The basic plan for the FRS was drafted at a secret meeting at the private resort of J.P. Morgan.  This occurred in November of 1910, on the island of Jekyll Island.

Those who attended represented the great financial institutions of Wall Street and some from Europe as well.  These rival factions of the banking community joined forces...had the public known, they may have suspected that the bankers were plotting an agreement in restraint of trade...which is what they were doing.  

They wanted 5 things:

1.  to stop the growing competition from the nation's newer banks
2.  to obtain a franchise to create money out of nothing for the purpose of lending
3.  to gain control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs
4.  to convince Congress that the purpose was to protect the public.
5.  to get the taxpayer to pick up the cartel's inevitable losses

It was realized that the bankers would have to partner with politicians and that the structure of the cartel would have to be a central bank.  

CENTRAL BANKS are never a good idea...Andrew Jackson fought to keep the Central Bank:

Andrew Jackson opposed the national bank and abolished it because:
it is unconstitutional;
it concentrated an excessive amount of the nation's financial strength into a single institution;
it exposed the government to control by "foreign interests";
it exercised too much control over members of Congress;
it favors Northeastern states over Southern and Western states.
Andrew Jackson knew that a Central bank improved the fortunes of an "elite circle" of commercial and industrial bankers at the expense of hard working Americans. He was proven right, when during his administration, the U.S. Government was, for the first, and so far the only time, debt free.



> You want to turn monetary policy over to a bunch of corrupt career politicians who know NOTHING about how economic systems work and know even less about private enterprise and monetary policy? The same guys who are under the impression that spending another trillion will get us out of this mess?



Are corrupt politicians any worse than corrupt private citizens and foreign investors?


----------



## Huntinfool (Feb 5, 2009)

Banjo said:


> Are corrupt politicians any worse than corrupt private citizens and foreign investors?



YES....by a wide margin.  No one will come arrest a corrupt politician for breaking the law.

They'll just make him President.


----------



## Banjo (Feb 5, 2009)

> Oh...and btw, your daughters are very good at mariokart. I must say, when you've got MarioKart 101 and Wii 302 as homeschooling subjects, it makes it hard for us public schoolers to compete.



What can I say...I want to make sure my children excel at the things that are really important life skills, like MarioKarts...


----------



## rjcruiser (Feb 5, 2009)

Huntinfool said:


> Over a period of years.....and not by a trillion dollars.
> 
> It's not like they are going to fly a helicopter over the U.S. and drop a trillion dollars.



I will say, there is a lot of thoughts about the level of inflation in the future....and a lot has to do with what happens over the next month or two.  If this $1.1 Trillion pork bill doesn't get spent and the fed doesn't start handing out money for free, we won't have it.  

If the conservatives step up like they are starting to and the public realizes what Obama really wants to do, we won't have it.

However, if we start running the presses, we could be in for some interesting ride.

And I agree with you on the fact that we don't want Congress running the fed.  No Banjo, that is not the key to keeping the economy going.  How can the congress run something that they have already shown they have no clue on?  And as far as returning back to the gold standard...there is way to much money in circulation to do that.


----------



## Double Barrel BB (Feb 5, 2009)

Banjo said:


> What can I say...I want to make sure my children excel at the things that are really important life skills, like MarioKarts...


 

Playing video games has been proven to improve hand eye coordination...

DB BB


----------



## Banjo (Feb 5, 2009)

Huntinfool said:


> YES....by a wide margin.  No one will come arrest a corrupt politician for breaking the law.
> 
> They'll just make him President.



At least Congress would be under public scrutiny...As it is now, most people think the government owns the Federal Reserve.

http://www.eclipptv.com/viewVideo.p...on_Paul_on_CNN___Audit_the_Federal_Reserve___


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## rjcruiser (Feb 5, 2009)

fivesolas said:


> Now to your real estate example...
> 
> You suggest I can make $300/month in cash flow after the debt is serviced. That's $3600/year.
> 
> ...



I'll correct a few things for you.

Try $100,000 home.  Then it is an 18% annual yield.

50% for expenses?  That is a bit high, but I'll continue on in your example.  So now, the rate is 9% return.

Then, you've not factored in any of the tax advantages.  Set up an LLC and you can deduct many many things.  So yes, to the IRS...no money has been made.  But in reality, you've got cash coming in every month.

Plus, you've left out appreciation.  Sure...don't bank on it, but it is there.  And then, stick to the 20 year or 30 year mortgage and in 30 years, your rate of return sky-rockets.

Again, you have to be careful.  Buy high or sucking out cash with refi's and owner financing can lead to tough times.  But right now, there are lots of deals out there and with a small bit of cash, you can make lots of money.


----------



## rjcruiser (Feb 5, 2009)

Banjo said:


> At least Congress would be under public scrutiny...As it is now, most people think the government owns the Federal Reserve.
> 
> http://www.eclipptv.com/viewVideo.p...on_Paul_on_CNN___Audit_the_Federal_Reserve___



I'll play along.

So who owns it then?


----------



## fivesolas (Feb 5, 2009)

rjcruiser said:


> I'll correct a few things for you.
> 
> Try $100,000 home.  Then it is an 18% annual yield.
> 
> ...



You can't change the LTV and double your numbers man! Any mortgage today is going to want 20% down. So in a $100,000 example, you put $20,000.00 down. What are you buying in a home for 100k? Not much. So I would dispute the rent numbers. 

I think the bottom line is you are probably looking at something that will actually net you 5-7%. I understand depreciation. If you accelarate the depreciation you might be able to got to 60-70% or more in the beginning. So a tax-equiv could be pretty high. 

And then the appreciation. What is our time horizon? Your not suggesting 30 years I hope. Let's suppose we are dealing with a 10 year hold. What are we going to factor in as gain? What discount are we getting today? 20%? 30%? 40% 

I am one to underestimate. Let's call it...30%. 30% over 10 years is 3%/year, plus our income. Let's say we average around 5 %. Nothing wrong with 8% a year. But like I said, I already have a job. 

I can achieve similar expectation from larger real estate funds with a higher credit quality tenant, many of the expenses to run the property paid for by the tenant, professional managment, a larger pool of real estate so more diversification, and tax benefit to boot. 

I do this for a living rj. Residential rentals is apples and commercial is oranges. They have to be looked at separately. 

-five


----------



## Huntinfool (Feb 5, 2009)

fivesolas said:


> I do this for a living rj.



A lot of us "do this for a living"....and there are a lot of really bad financial professionals out there giving a lot of really bad advice.  A degree and a title does not make an expert.

Let's just say we all have a lot to learn.


----------



## rjcruiser (Feb 5, 2009)

fivesolas said:


> You can't change the LTV and double your numbers man! Any mortgage today is going to want 20% down. So in a $100,000 example, you put $20,000.00 down. What are you buying in a home for 100k? Not much. So I would dispute the rent numbers.


You need to do a little more research on your properties then...because I know of houses being purchased for less than $100k that are bringing in monthly rents of atleast $1k.  If you don't care about the neighborhood, you can even get $25k homes, put $10-15k in them and rent them for $750-$800/mo.




			
				fivesolas said:
			
		

> And then the appreciation. What is our time horizon? Your not suggesting 30 years I hope. Let's suppose we are dealing with a 10 year hold. What are we going to factor in as gain? What discount are we getting today? 20%? 30%? 40%
> 
> I am one to underestimate. Let's call it...30%. 30% over 10 years is 3%/year, plus our income. Let's say we average around 5 %. Nothing wrong with 8% a year. But like I said, I already have a job.


10 years is a minimum...the longer the better.  The longer you hold real-estate, the better the return.  As your amortization schedule goes along, you start to pay more principle and less interest.  And 3% per year?  Guess it depends on where the property is located.



			
				fivesolas said:
			
		

> I can achieve similar expectation from larger real estate funds with a higher credit quality tenant, many of the expenses to run the property paid for by the tenant, professional managment, a larger pool of real estate so more diversification, and tax benefit to boot.
> 
> I do this for a living rj. Residential rentals is apples and commercial is oranges. They have to be looked at separately.



I agree, they have to be looked at seperately.  Both have their positives and both have their negatives....so far, you've only pointed out the negatives of residential real estate and only pointed out the positives of commercial.


----------



## fivesolas (Feb 5, 2009)

rjcruiser said:


> You need to do a little more research on your properties then...because I know of houses being purchased for less than $100k that are bringing in monthly rents of atleast $1k.  If you don't care about the neighborhood, you can even get $25k homes, put $10-15k in them and rent them for $750-$800/mo.
> 
> 
> 
> ...



I think the residential markets are a long recovery, and prefer to recycle my captial every 5-8 years. In other words, I don't like to hold something for too, too long unless it makes sense. 

I actually care about credit quality. I feel far more comfortable with AT&T home office property than Bubba Gump in a double wide. lol 

But there is money to made in both. I prefer the least risky road.


----------



## Double Barrel BB (Feb 5, 2009)

This is ...

Anybody interested in a house in the Monticello/Jackson/Covington area?

Would make a really good rental house...

Our house is up for sale... I know BAD TIMING!

We just put a contract on a house in South Georgia, Claxton area, and we are only having to come up with 5% down... we are moving this June

Again, I have a 3 br/2 bath, 2 story, about 1400 sq ft, in a sub-division known as Turtle Cove with amenities such as:

9 hole golf course
Swimming pool
Tennis Courts
Club House
3 Beaches on Lake Jackson
3 Boat Ramp access to Lake Jackson

Our house is about 1/4 mile from the lake....

Any takers???  It is priced at: $109,900 and that is $8,000 below tax value, because of this housing crisis... knew I should have sold it about 2 years ago....

DB BB


----------



## fivesolas (Feb 5, 2009)

Huntinfool said:


> A lot of us "do this for a living"....and there are a lot of really bad financial professionals out there giving a lot of really bad advice.  A degree and a title does not make an expert.
> 
> Let's just say we all have a lot to learn.



There are a lot of bad non-professionals, mechanics, nurses, doctors, contruction workers, et. et. et. 

There are good and bad in every industry. My views expressed on these boards are based on my experience and the thoughts of those I know in my industry who have been at it for 40+ years and have a remarkble record of success. 

But I agree, I always have something I can learn.


----------



## fivesolas (Feb 5, 2009)

Double Barrel BB said:


> This is ...
> 
> Anybody interested in a house in the Monticello/Jackson/Covington area?
> 
> ...



I am not looking for a home, but yours sounds nice. Sorry for your troubles. May the Lord give you a buyer.


----------



## Double Barrel BB (Feb 5, 2009)

fivesolas said:


> I am not looking for a home, but yours sounds nice. Sorry for your troubles. May the Lord give you a buyer.


 

Thanks Five!

The Lord will send a buyer in His time...

The good thing is that we will actually be able to afford both homes... I just don't want to have two...

I have a few people interested in Renting, but wanted to see if it would sell first...

DB BB


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## Huntinfool (Feb 5, 2009)

For every view with experience to back it up, there is an equally experienced opposite view.


----------



## fivesolas (Feb 5, 2009)

Huntinfool said:


> For every view with experience to back it up, there is an equally experienced opposite view.



May the Lord bless you.


----------



## rjcruiser (Feb 5, 2009)

Double Barrel BB said:


> Thanks Five!
> 
> The Lord will send a buyer in His time...
> 
> ...



Managing a rental from a couple hours away can be a tough thing to do.

Pray you find a buyer as well....and glad to hear that your thing down in Claxton is working out for you and the family.


----------



## rjcruiser (Feb 5, 2009)

Huntinfool said:


> For every view with experience to back it up, there is an equally experienced opposite view.



Isn't that the second law of Thermodynamics?

For every action, there is an equal and opposite reaction

Now...how to get this thread back on a spiritual discussion........


Hmmm.....hmmmm....hmmmm....hmmmmm....

Nope...no way possible.  This has just been a political thread/investment thread from the get go.


----------



## Huntinfool (Feb 5, 2009)




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## Double Barrel BB (Feb 6, 2009)

rjcruiser said:


> Managing a rental from a couple hours away can be a tough thing to do.
> 
> Pray you find a buyer as well....and glad to hear that your thing down in Claxton is working out for you and the family.


 
Thanks RJ... Sure I can't interest you in a 2nd home?  

Just kidding... I would probably go with a manager to manage the property since I couldn't just drop everything and come up if something was needing to be repaired... Not sure yet what we are going to do...




rjcruiser said:


> Isn't that the second law of Thermodynamics?
> 
> For every action, there is an equal and opposite reaction
> 
> ...


 

Actually I think that is the Netwon's 3rd law of Motion...

The 2nd Law of Thermodynamics is:

http://www.allaboutscience.org/second-law-of-thermodynamics.htm

*Second Law of Thermodynamics - The Laws of Heat Power*
The Second Law of Thermodynamics is one of three Laws of Thermodynamics. The term "thermodynamics" comes from two root words: "thermo," meaning heat, and "dynamic," meaning power. Thus, the Laws of Thermodynamics are the Laws of "Heat Power." As far as we can tell, these Laws are absolute. All things in the observable universe are affected by and obey the Laws of Thermodynamics. 

The First Law of Thermodynamics, commonly known as the Law of Conservation of Matter, states that matter/energy cannot be created nor can it be destroyed. The quantity of matter/energy remains the same. It can change from solid to liquid to gas to plasma and back again, but the total amount of matter/energy in the universe remains constant. 

*Second Law of Thermodynamics - Increased Entropy*
The Second Law of Thermodynamics is commonly known as the Law of Increased Entropy. While quantity remains the same (First Law), the quality of matter/energy deteriorates gradually over time. How so? Usable energy is inevitably used for productivity, growth and repair. In the process, usable energy is converted into unusable energy. Thus, usable energy is irretrievably lost in the form of unusable energy. 

"Entropy" is defined as a measure of unusable energy within a closed or isolated system (the universe for example). As usable energy decreases and unusable energy increases, "entropy" increases. Entropy is also a gauge of randomness or chaos within a closed system. As usable energy is irretrievably lost, disorganization, randomness and chaos increase. 
*Second Law of Thermodynamics - In the Beginning...*
The implications of the Second Law of Thermodynamics are considerable. The universe is constantly losing usable energy and never gaining. We logically conclude the universe is not eternal. The universe had a finite beginning -- the moment at which it was at "zero entropy" (its most ordered possible state). Like a wind-up clock, the universe is winding down, as if at one point it was fully wound up and has been winding down ever since. The question is who wound up the clock? 

The theological implications are obvious. NASA Astronomer Robert Jastrow commented on these implications when he said, "Theologians generally are delighted with the proof that the universe had a beginning, but astronomers are curiously upset. It turns out that the scientist behaves the way the rest of us do when our beliefs are in conflict with the evidence." (Robert Jastrow, _God and the Astronomers_, 1978, p. 16.) 

Jastrow went on to say, "For the scientist who has lived by his faith in the power of reason, the story ends like a bad dream. He has scaled the mountains of ignorance; he is about to conquer the highest peak; as he pulls himself over the final rock, he is greeted by a band of theologians who have been sitting there for centuries." (_God and the Astronomers_, p. 116.) It seems the Cosmic Egg that was the birth of our universe logically requires a Cosmic Chicken... 

Class dismissed...

DB BB


----------



## gtparts (Feb 6, 2009)

Double Barrel BB said:


> Thanks RJ... Sure I can't interest you in a 2nd home?
> 
> Just kidding... I would probably go with a manager to manage the property since I couldn't just drop everything and come up if something was needing to be repaired... Not sure yet what we are going to do...
> 
> ...



Seems the universe continues to expand and not only that , but accelerating as it expands. Science still can't provide all the answers and, therefore, makes for an inferior "god" for those who place their faith in such idolatry.


Peace.


----------



## rjcruiser (Feb 6, 2009)

Double Barrel BB said:


> Thanks RJ... Sure I can't interest you in a 2nd home?
> 
> Just kidding... I would probably go with a manager to manage the property since I couldn't just drop everything and come up if something was needing to be repaired... Not sure yet what we are going to do...



 but hey, this whole thread has been off topic.
DB,
A lot depends on who you get to rent the place out....and no, you don't need a property manager to repair things at the drop of a hat.  Having a good person to do HVAC and plumbing are your two areas of biggest concern.  Then, if you trust those two people, you can have the renter call them directly if they have any issues.  (Have the renter pay the first $50 of every repair to keep them from calling the plumber over a plugged toilet or to keep them from calling an electrician to change a lightbulb).

But, it is hard to inspect the property and make sure that the renters are keeping the curb appeal to the standard it needs to be in.  PM me if you want to discuss further.

Typically management companies will take 25-35% of the monthly rent...which really hurts the profitability.  Hope you sell


----------



## celticfisherman (Feb 6, 2009)

I am all for abolishing the FED mainly because Andrew Jackson was right and we don't need a national bank.

Next just put term limits on the politicians ALL OF THEM! And make it to where they cannot exempt themselves from laws.

Then simply shoot the ones we catch taking bribes and doing crooked deals.

That will pretty much take care of the whole thing right there... They should be terrified of us. Not the other way around.


----------



## Huntinfool (Feb 6, 2009)

celticfisherman said:


> I am all for abolishing the FED mainly because Andrew Jackson was right and we don't need a national bank..



...and what would be your suggestion for replacing the Fed and the policies that it's responsible for?  You can't just post "awe...we don't need that old Fed" and not have a solution in mind!

The rest of your post I'm right there with ya one bud!


----------



## ToLog (Feb 6, 2009)

Huntinfool;3160361
The rest of your post I'm right there with ya one bud!:cool:[/QUOTE said:
			
		

> at least two questions come to mind.   if nearly everyone we speak with feels that way, then why aren't there meaningful change?
> 
> and the other question, is if we don't have the Fed, who is going to establish interest rates?   ....and as a corollary, what should the interest rates be?
> 
> i mean, they're not making loans, so interest rates should be sky-high, shouldn't it, but it's not.   sorry, three questions, i guess.


----------



## celticfisherman (Feb 6, 2009)

Huntinfool said:


> ...and what would be your suggestion for replacing the Fed and the policies that it's responsible for?  You can't just post "awe...we don't need that old Fed" and not have a solution in mind!
> 
> The rest of your post I'm right there with ya one bud!



Congress should control it not pass it off to another entity that have no control over. I mean a 7yr term for FED CHair. And he is not approved either I don't think...

But in reality I think the market should and would do a better job of controlling interest rates rather than Bernneke or someone like him "reading tea leaves".

But our money supply has got to be brought under control and we should not be able to just "print money" we can't go back to the gold std but dadgumit something has to be better than this mess we have now.


----------



## celticfisherman (Feb 6, 2009)

roothog said:


> at least two questions come to mind.   if nearly everyone we speak with feels that way, then why aren't there meaningful change?
> 
> and the other question, is if we don't have the Fed, who is going to establish interest rates?   ....and as a corollary, what should the interest rates be?
> 
> i mean, they're not making loans, so interest rates should be sky-high, shouldn't it, but it's not.   sorry, three questions, i guess.



IMO interest rates are way to low. But even more important is we gave all these freaking banks money yet they are not injecting any of it into the economy.


----------



## rjcruiser (Feb 6, 2009)

celticfisherman said:


> IMO interest rates are way to low. But even more important is we gave all these freaking banks money yet they are not injecting any of it into the economy.



It isn't the banks fault.  They aren't going to loan the money to the same group of people that just screwed them over with bankruptcys.

If you've got good credit, you can get money from the bank.  You don't have good credit, or don't have a job...no loan.  The way it should have been all along.


----------



## celticfisherman (Feb 6, 2009)

rjcruiser said:


> It isn't the banks fault.  They aren't going to loan the money to the same group of people that just screwed them over with bankruptcys.
> 
> If you've got good credit, you can get money from the bank.  You don't have good credit, or don't have a job...no loan.  The way it should have been all along.



I agree with that BUT they aren't loaning money to businesses or people with good credit either. So where's the money going??? New jets and golden parachutes to reward the idiots who started this mess...


----------



## rjcruiser (Feb 6, 2009)

celticfisherman said:


> I agree with that BUT they aren't loaning money to businesses or people with good credit either. So where's the money going??? New jets and golden parachutes to reward the idiots who started this mess...



 You read too much of the AJC.

If you're a business that can show profit and you have assets to offset the risk, you can get a loan.

If you don't have any proof of income or nothing to show for what you have...no can do.

And it wasn't the banks fault...it was fannie mae and freddie mac.  The Countrywides had to start accepting mediocre loans just to keep up.

Reminds me a lot of MCI and AT&T/Bellsouth back 5-10 years ago.  MCI was rocking the numbers.  AT&T couldn't figure out how MCI was pulling in such strong numbers and big margins.  AT&T was getting killed in the market because they were being compared to MCI.  So...they cut jobs, they did whatever they could to try and get their numbers to match MCI....but they still couldn't do it.

Long story short, fraud was occurring at MCI and the numbers were juiced.  AT&T was making bad business decisions because of the fraud occurring somewhere else.  The market is an interesting place.  Good businesses can get crucified because of their association with other businesses in thier industry.  Again, this is a much deeper issue than what you or I can even attempt to fathom.

Oh..and no, I'm not a Bernanke fan either.


----------



## redneckcamo (Feb 6, 2009)

Banjo said:


> FEDERAL RESERVE BOARD ABOLITION ACT
> Statement of Congressman Ron Paul before the US House of Representatives, February 3, 2009, introducing the The Federal Reserve Board Abolition Act, H.R. 833.
> 
> _____________________________________________________________
> ...


----------



## Huntinfool (Feb 6, 2009)

celticfisherman said:


> Congress should control it not pass it off to another entity that have no control over. I mean a 7yr term for FED CHair. And he is not approved either I don't think...
> 
> But in reality I think the market should and would do a better job of controlling interest rates rather than Bernneke or someone like him "reading tea leaves".
> 
> But our money supply has got to be brought under control and we should not be able to just "print money" we can't go back to the gold std but dadgumit something has to be better than this mess we have now.



Do you know the reason it's a 7 year term?  It's so that the Fed chair doesn't have to be scared of what the President who appointed him will do to him should he decide to move contrary to the President's political agenda.  It's so that his term doesn't coincide with the person who appointed him.

It's a DARN good reason!

So, I'll ask this again.  Do you SERIOUSLY want Congress OF ALL PEOPLE to run monetary policy?  These are the guys who can't stop spending, have never seen a project they didn't want to throw money at and, if they DID have the keys to the printing presses they would give the order to "throw it into hyper-drive and let's see how much money this baby will REALLY crank out!".

Come on folks!  It's just a ridiculous idea!  The Fed is and always has been an extremely independant institution.  It was built for that purpose.  The Fed Chair is appointed so that he doesn't come out of a political process and so that he is no beholden to Congress for the decisions he makes.  

The way the system works now, somebody has to lend money to the banks.  They have proven that they are not able to regulate inter-bank lending on their own.  Somebody has to be the lender of last resort or we will see what a financial collapse REALLY looks like.  You ain't seen nothing yet!

IMO, we'd be better off if some of these companies had been allowed to collapse.  I agree with you in that regard.  The market should regulate who survives and, in the long run, we'll all be better for it.


----------



## celticfisherman (Feb 6, 2009)

Huntinfool said:


> Do you know the reason it's a 7 year term?  It's so that the Fed chair doesn't have to be scared of what the President who appointed him will do to him should he decide to move contrary to the President's political agenda.  It's so that his term doesn't coincide with the person who appointed him.
> 
> It's a DARN good reason!
> 
> ...



Out of 233 yrs we have had a fed for around 60 or so maybe a tad longer. 

It's not always been anything. And they should not have the power they do. Not unelected officials. PERIOD.


----------



## rjcruiser (Feb 6, 2009)

celticfisherman said:


> Out of 233 yrs we have had a fed for around 60 or so maybe a tad longer.
> 
> It's not always been anything. And they should not have the power they do. Not unelected officials. PERIOD.



Yup...I can see it now.

Al Sharpton as the elected fed chairman.

Hmmm...does that mean we need to elect supreme court justices as well?

Chief Justice Jesse Jackson


----------



## Huntinfool (Feb 6, 2009)

celticfisherman said:


> Out of 233 yrs we have had a fed for around 60 or so maybe a tad longer.
> 
> It's not always been anything. And they should not have the power they do. Not unelected officials. PERIOD.



And we've been an isolationist economy for most of those 233 years.  It is not a rational to think of our economy in a bubble anymore.


----------



## Huntinfool (Feb 6, 2009)

rjcruiser said:


> Yup...I can see it now.
> 
> Al Sharpton as the elected fed chairman.
> 
> ...



THANK YOU!  Somebody is actually thinking on this subject!

Folks there ARE positions in which elected officials are WAY more dangerous than those appointed.  It's just the truth.  And Fed Chair is one of those positions.

Think about Bubba down the street trying to figure out who to vote for to run the most important bank in the world.

Heck you don't even have to imagine it.  Look what the American people JUST DID in the Presidency!


----------



## celticfisherman (Feb 6, 2009)

rjcruiser said:


> Yup...I can see it now.
> 
> Al Sharpton as the elected fed chairman.
> 
> ...



RJ- You ain't right.

I don't want the schmucks there. Much less have to vote for them...


----------



## celticfisherman (Feb 6, 2009)

Huntinfool said:


> And we've been an isolationist economy for most of those 233 years.  It is not a rational to think of our economy in a bubble anymore.



Way to miss a point. Did you see it when it went by???

Not saying bubble and trust me I don't think that way. Never have. I live in a business world far more complex than most ever see. Stuff coming from Union, non union, communist countries, tarrifs, oil, you can't imagine it.

But I do know what makes sense and if you think our current system is you have far more faith in the inherent intelligence and goodness of mankind than I do.


----------



## rjcruiser (Feb 6, 2009)

celticfisherman said:


> I live in a business world far more complex than most ever see. Stuff coming from Union, non union, communist countries, tarrifs, oil, you can't imagine it.
> 
> But I do know what makes sense .



Not just picking on you, but.....



Boy...we all think we are all experts don't we


----------



## celticfisherman (Feb 6, 2009)

rjcruiser said:


> Not just picking on you, but.....
> 
> 
> 
> Boy...we all think we are all experts don't we



The problem with America today is so few agree with me...


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## rjcruiser (Feb 6, 2009)

celticfisherman said:


> The problem with America today is so few agree with me...



So what does that tell you about your expert opinion





Honestly, I love this thread.  We've got an expert here that works in the most complex business world and we've got someone with 8 actual years of experience and over 40 years of other's experience.  We've got a person with two houses that are hours from eachother...a stay at home mom who homeschools their kids and kicks butt at Mariokart...a huntin fool...and then me, a guy who is just trying to figure out how to scrape enough money together for a hunting lease this next year

If we had it figured out....I think we'd be a little bit better off than having a day job and spending all day on Woody's.


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## Banjo (Feb 6, 2009)

I'mmmm  baccckkkk....and still reading.

Our total money supply is backed by NOTHING but debt.  If everyone paid back all that was borrowed, there would be NO MONEY left in existence....not one penny in circulation.  

In 1941 Marriner Eccles was the Governor of the Federal Reserve System.  He had to testify in front of the House Committee on Banking and Currency.  They were trying to obtain information regarding the ROLE OF THE FEDERAL RESERVE IN CREATING CONDITIONS THAT LED TO THE DEPRESSION OF THE 1930's.  The following is a verbatim exchange:

When asked how the FED got the money to purchase two billion dollars worth of government bonds in 1933...here is the answer:

Eccles:  We created it.
Patman:  Out of what?
Eccles:  Out of the right to issue credit money.
Patman:  And there is nothing behind it, is there, except our government's credit?
Eccles:  That is what our money system is.  If there were no debts in our money system, there wouldn't be any money.

UNBELIEVABLE...we have an entire monetary system based on unbiblical principles.  What about fair balances and measures...what about usury???

Our money in America is based on debt....The Federal Reserve System is not interested in seeing a reduction in deb...

This from the Federal Reserve Bank of Philadelphia:

"A large and growing number of analysts, on the other hand, now regard the national debt as something useful, if not an actual blessing...(They believe) the national debt need not be reduced at all."

The Federal Reserve Bank of Chicago adds:  "Debt...public and private is here to stay.  It plays an essential role in economic processes...What is required is not the abolition of debt, but its prudent use and intelligent management."


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## Banjo (Feb 6, 2009)

> a stay at home mom who homeschools their kids..



I would like it better if this read:

a homeschool mother of three who is also an expert Mariokart contender...


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## rjcruiser (Feb 6, 2009)

Banjo said:


> I would like it better if this read:
> 
> a homeschool mother of three who is also an expert Mariokart contender...



Fixed it for ya.


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## Huntinfool (Feb 6, 2009)

Actually....our total MS is back by nothing but....well....by nothing!



"If everyone paid back all that was borrowed, there would be NO MONEY left in existence....not one penny in circulation. "


Which is EXACTLY why deficits don't matter.  They will never EVER be paid back.  The only thing that matters is whether the United States continues to be considered credit worthy.  And since we buy everything and manufacture a lot of it....nobody wants to tell their sugar daddy that he ain't go no credit with them.


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## rjcruiser (Feb 6, 2009)

Banjo said:


> I'mmmm  baccckkkk....and still reading.
> 
> Our total money supply is backed by NOTHING but debt.  If everyone paid back all that was borrowed, there would be NO MONEY left in existence....not one penny in circulation.
> 
> ...




That is why consumer confidence is sooo important and why Obama coming out and saying we are in a desperate almost depression is sooooo stupid.  The man is a monetary moron.  But...I'll keep moving.

Okay...let me ask you this.  Do you think that the bank really has all your money there?  No of course not.  Most of it is on paper.  If everyone went to the bank and tried to get their money out, the banking system would collapse.  Just like what happened in the '30s.  That is why the govt created the fdic.  People have faith in govt that they will be able to insure that money.

Is it right?  Not sure.  Does it work?  Yup.


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## Banjo (Feb 6, 2009)

rjcruiser said:


> Fixed it for ya.





I appreciate that....


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## Huntinfool (Feb 6, 2009)

celticfisherman said:


> Way to miss a point. Did you see it when it went by???
> 
> Not saying bubble and trust me I don't think that way. Never have. I live in a business world far more complex than most ever see. Stuff coming from Union, non union, communist countries, tarrifs, oil, you can't imagine it.
> 
> But I do know what makes sense and if you think our current system is you have far more faith in the inherent intelligence and goodness of mankind than I do.



So why are you under the impression that what we did as a country 233 years ago will work in today's world?

Here's a quote from a famous economist who will remain nameless....but it's appropriate to this discussion.

"When the facts change, I change my mind.  What do you do, sir?"


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## celticfisherman (Feb 6, 2009)

rjcruiser said:


> So what does that tell you about your expert opinion
> 
> 
> 
> ...



I didn't say the most. I said more than most... Baptists........ sshshshshsh....

Just depends on who we are talking about. Jack Welch has a more complex world. Ghandi at the magic mart doesn't... It's all in perspective...


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## celticfisherman (Feb 6, 2009)

Huntinfool said:


> So why are you under the impression that what we did as a country 233 years ago will work in today's world?
> 
> Here's a quote from a famous economist who will remain nameless....but it's appropriate to this discussion.
> 
> "When the facts change, I change my mind.  What do you do, sir?"



My point was we moved away from a national bank from a reason. We got back to it because we were suckers. Go look at the freedom thread.

This is not a matter of free trade and such. Which has nothing to do with the FED anyway...


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## rjcruiser (Feb 6, 2009)

celticfisherman said:


> Just depends on who we are talking about. Jack Welch has a more complex world. Ghandi at the magic mart doesn't... It's all in perspective...



And look who we elected president


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## Banjo (Feb 6, 2009)

> Okay...let me ask you this. Do you think that the bank really has all your money there? No of course not. Most of it is on paper. If everyone went to the bank and tried to get their money out, the banking system would collapse. Just like what happened in the '30s. That is why the govt created the fdic. People have faith in govt that they will be able to insure that money.



I think I get this...Isn't it called fractional reserve banking....

I also understand that if you or I were to operate that way, it would be illegal.

The FDIC is not a true insurance program...and there is reason to believe that it actually increases the likelihood that bank failures will occur.

Three options to bailing out an insolvent bank:

1.  payoff....paying off the insured depositors and then letting the bank fall to the mercy of the liquidators
2.  sell off:  larger bank buys smaller....FDIC takes over bad loans and supplies the money to pay back insured depositors
3.  bailout...EVERYONE..insured or not is FULLY protected.  

The large banks get the bailouts....Their uninsured accounts are paid by the FDIC, adn the cost of that benefit is passed to the smaller banks and to the TAXPAYER.


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## celticfisherman (Feb 6, 2009)

rjcruiser said:


> And look who we elected president



You really want to go there??? Man you really like to  don't you? 

My dog Fancy has more sense than our president and the speaker of the house combined. At least she contributes a squirrel to the pot every once in a while...


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## rjcruiser (Feb 6, 2009)

Banjo said:


> I also understand that if you or I were to operate that way, it would be illegal.


There are a lot of things that the govt can do that you and I can't do.  Get used to it.



			
				Banjo said:
			
		

> The large banks get the bailouts....Their uninsured accounts are paid by the FDIC, adn the cost of that benefit is passed to the smaller banks and to the TAXPAYER.



Don't really agree with you on that, but it is semantics.  The bailout money was to give the larger banks more cash...so that they could operate.  It just bought people time....not really insurance...and their have been some big banks that have failed...ie Washington Mutual.  They were my bank..but fortunately, I've got my millions spread in multiple accounts, so I was covered.


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## rjcruiser (Feb 6, 2009)

celticfisherman said:


> You really want to go there??? Man you really like to  don't you?



I guess....its friday and its 5 o'clock and I'm about to leave and not return until monday @ 8.  Figure I'm like the drive-bys.  Take a couple of cheap shots and run for the hills


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## celticfisherman (Feb 6, 2009)

rjcruiser said:


> There are a lot of things that the govt can do that you and I can't do.  Get used to it.
> 
> 
> 
> Don't really agree with you on that, but it is semantics.  The bailout money was to give the larger banks more cash...so that they could operate.  It just bought people time....not really insurance...and their have been some big banks that have failed...ie Washington Mutual.  They were my bank..but fortunately, I've got my millions spread in multiple accounts, so I was covered.



I hear you. I was wise enough to spread my million among a lot of accts. Now unfortunately I can't remember where...


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