birdwatcher

Thanks for looking it up. So what does that mean? Does it mean that the Fed bought $38 billion dollars worth of mortgages, and now if people default on them, they will default to the federal gvmt, and they will own the homes? Or what? I am not sure, my financial savvy is not good enough to really understand it.

I have been thinking about the interstate commerce question (should congress be able to regulate that?), and I don't really have an answer for you. If I come up with some thoughts, I will let you know. It seems that the present law is allowing us to live in a much more uniform country than it would be otherwise possible or likely.

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It all boils down to printing $38B. Watch for dollar doing down against other currencies.

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Все-таки, можно напечатать 38 миллиардов и купить на них не MBS, а чего попроще.

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Не, нужно было дать денег правильным друганам.

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Thanks. NPR said that without that monetary influx, our monetary supply would "freeze up". If they are right and the situation was that dire, i would certainly expect some loss of value in the dollar, sounds like we are mismanaging our financial system.

I should add that all my posts about this subject are questions rather than statements, I have a very vague understanding of how our monetary / financial system works.

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glocka.livejournal.com

> I have a very vague understanding of how our monetary / financial system works.

No magic here: Fractional Reserve Banking (http://www.lewrockwell.com/rothbard/frb.html)

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Thanks!

This filled in a few holes. IT's a prejudiced text, but it does have lots of substance as well. I had 2 semesters of college economics, so I have a vague idea as I mentioned before, but when the banking gets really complex, I get confused.

It was interesting to see how FDIC really works... would another solution be breaking in out gold bullion? I guess that would create gold inflation, though.

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glocka.livejournal.com

Inflation == injection of more of the same.

So, to create inflation of gold, gold sould be added to circulation. Not as easy task as to print paper money (or manipulate records in database).
When ruling elite wants to prevent enevitable collapse of the paper money based economy, it can allow gold as currency in some limited fasion, for example, "золотой чеpвонец" at one point in Russian history.

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The most concise and readable explanation of monetary systems, past and present, can be found in Rothbard's What has the government done to our money? (http://www.mises.org/money.asp)

It's a thin book, won't take more than a day to read.

(The excerpt from it does seem prejudiced, but only because it relies on things well established in previous text).

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спасибо, я ознакомлюсь и отпишусь. У меня может занять время прочитать, мы путешествуем.

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mi-b.livejournal.com

which currencies?

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Euro and yen, mostly. Chinese are going to thinking harder about dropping yuan-dollar peg, too.

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mi-b.livejournal.com

вы бы, прежде чем предсказывать, выяснили, что-ли, в Гугле, кто больше ликвидности впрыснул - ECB или Federal Reserve ;)

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I'm not talking about longer-term, just the short-term effects.

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mi-b.livejournal.com

так и я про события последней недели ;)

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capka3m.livejournal.com

This means they used my tax money to buy shit on purpose.

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Технически, не ваши налоговые взносы, а часть вашего богатства, которую вы разместили в доллары.

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capka3m.livejournal.com

True. They only used my tax money (paying for their operations) to come up with this brilliant idea :)

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Заседают они, похоже, тоже на свои кровные. As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress (http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm), and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

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capka3m.livejournal.com

> The Federal Reserve's income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. Other sources of income are the interest on foreign currency investments held by the System; fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations; and interest on loans to depository institutions (the rate on which is the so-called discount rate). After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.

Wow. So, looks like it is funded by the tax levied on all the US$ holders... It prints dollars and derives interest from investing the little extra it printed for itself. Nice racket :)

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