POP Quiz: The Federal Reserve Board has 3 mandated goals. What are they?

[dixiegrrrrl]

And how well do you think they have been met.?



Your answer here___________________________________________________________________

see below for FRB goals:
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the goals of
maximum employment,
stable prices,
and moderate long-term interest rates

What grade do we give Bernake????

[Turbineguy]

1. He's not doing all that badly

he's obviously frustrated with the idiot republicans who make everybody's life so difficult.

[dixiegrrrrl]

5. which of the 3 goals is being met????

Remember he began his term as Fed Head in 2006.

edited: hint: it is not employment..

"In the week ending September 3, the advance figure for seasonally adjusted initial claims was 414,000, an increase of 2,000 from the previous week's revised figure of 412,000.
The 4-week moving average was 414,750, an increase of 3,750 from the previous week's revised average of 411,000."

Note that the Gov't has once again REVISED the original figures, UPWARDS, as they do every month.

[OHdem10]

2. Control Inflation and maintain employment at a reasonable

rate. ( I think that rate is about 6%) Lower
would be nice but I think it has been established
between 5-6%)

[dixiegrrrrl]

6. Are you talking inflation at 6% or employment at 6%..??I am confused.

Or unemployment at 6%..?

At any rate, one has to define inflation.
There are several measurements used, the one you and I live with, which includes food and energy,
is the one that the Gov't /Bernanke does not count.

Shadow Government stats have inflation for 2010 at around 7.5%
http://www.shadowstats.com/

and real unemployment for 2011 at slightly above 24%.

[dtexdem]

3. Hmm, do you mean the real ones or the paper ones?

1. prop up the corporations
2. make the current administration look good
3. keep employment low enough to keep wages lower

There, I think that does it.

[dixiegrrrrl]

4. Well, I would say that answer deserves:

[zippytheplatypus]

7. according to Reagan & Milton Friedman..

Woah! You realise you are supposed to be liberals, right? That isn't what the Fed is supposed to do, that's how you destroy freedom! The Fed issues bonds, holds a portion of the nations gold & silver and acts as an independent entity apart from the government and commercial banks to provide market security. The FED CANNOT ACT AS THE LENDER OF LAST RESORT OR MANIPULATE INTEREST RATES. It's either capitalism with risk and crashes or its centrally planned command & control. There's no such thing as too big to fail but there sure as hell is too big to exist & JPMorgan & Goldman Sachs are exactly that.

Plus it is implicitly necessary in any free society for every central bank to be audited regularly & have full transparency. We must know what their gold & other real reserves are & what the Fed gives to who & when! Open up the books now!

They got no place whatsoever manipulating interest rates. The market does that, its called discovery. Capitalism is inherently dangerous & has to be regulated, not manipulated. Crashes & depressions WILL HAPPEN, YOU CAN'T STOP IT. Nothing will stop this depression, manipulation & shadow accounting & debt creation only postponed it & makes it worse. Jefferson, Franklin, Adams, Lincoln, Marx, Paine, Adam Smith, JFK, even Keynes all understood this, only Friedman jerked around with this & he should have known better looking at Germany after WWI. The Fed is an independent arbiter to prevent corruption, the Fed is not God. You can't get a little bit pregnant, period the end. Liberals especially need to understand how the Fed is diametrically opposed to everything you stand for. It's pure fascism. It looks like socialism but its fascism disguised.

[zippytheplatypus]

8. dont mistake this for right wing ideology. it isnt.

This isn't about political ideology, its where economic policy meets philosophy. Fed policy and scope defines to a huge extent our individual freedom. Our banking system was always pure market capitalism until Milton Friedman redefined it into a mixture of market theory and fascism. The Fed is a viable entity but has been warped horribly by Friedman, Greenspan & Bernanke along with others like Summers & Geithner. Anyone in America who wants to ever consider this a free country again has no option but to consider those who believe in Friedmanist theory and policy opposed to freedom in the most basic sense. They are interested only in acquiring power and subjegating the vast majority of Americans to endentured servitude with no human rights. It is the road to the totalitarian state, pure and simple. Anyone not attempting to become part of the elite ruling class, the 99.9% of us who want to be free must be opposed to the Federal Reserve at it exists today. I cannot express this strongly enough.

[Taitertots]

10. No, that is exactly what the FED does. It is explicitly written into the laws regulating the FED

It would be illegal for the FED to do anything but maintain stable prices, maximum employment, and moderate interest rates.

"The FED CANNOT ACT AS THE LENDER OF LAST RESORT OR MANIPULATE INTEREST RATES"
No, it does both of those things regularly and for good reason.

"Plus it is implicitly necessary in any free society for every central bank to be audited regularly & have full transparency. We must know what their gold & other real reserves are & what the Fed gives to who & when! Open up the books now!"
They don't do this because it would be insanely stupid to lend to troubled banks and publicly announce that they are in trouble. That would be intentionally causing them to collapse instead of aiding them.

"That isn't what the Fed is supposed to do, that's how you destroy freedom! "
Nothing in your post supports this statement. What is the mechanism by which we get from stable prices, maximum employment, and moderate interest rates to losing freedom?

[zippytheplatypus]

11. supply, demand and price discovery

Indirectly the bond issuances can help to curb hyperinflation but interest is determined by the market. If a bank fails the depositors are insured by the FDIC but if the institution fails due to bad decisions, overleveraging or bad management it must leave the marketplace to make space for a viable institution that takes its place responsibly. No one has a protected spot in any market, not ever. You prevent bank runs by proper regulation against misinformation and collusion. There is no lender of last resort for anyone ever. Natural and unforeseen disasters are what insurance is for.

Employment, interest rates & stable prices are completely dependent on having strong viable entities on both the supply and demand side & regulating markets intelligently with independent agencies which have power & real punishments. When monetary agencies like the Fed control prices & interest rates they have absolute control of the markets, they dictate who engages in what role, how much capital they have & they make arbitrary decisions with no recourse to anyone. Secrecy is absolute power along the lines of secret police. When you control money you control the entire society. The only guard against it is transparency & ability to recall officials. With fiat currency it is the most dangerous it could possibly be. If you don't understand the power of currency production I don't know how better to explain it. Try looking at Wikipedia, they have good material for the most part.

[Taitertots]

14. Relying on markets yields unfavorable results

I don't need to look it up on wikipedia, I went to college and got an economics degree. The Fed is legislatively mandated to maintain stable price levels, stable long term interest rates, and maximum stability in employment. The power of currency production is regulated, the Fed is regulated. Expectations of hyperinflation are not based on a reasonable interpretation of the situation.

The Fed regularly publishes papers about the actions they are going to take. Their is transparency with the exception of lending to troubled institutions. It makes no sense to loan to something while ensuring its destruction. They regularly publish papers about the actions the FOMC is going to take. Ben Benanke has published several papers. It is not a secret, you just need to look harder than wikipedia to find out about it.

I think there should be more regulation. The Fed doesn't get to make those decisions, it is up to the Federal Government. The Fed isn't allowed to make those decisions.

[zippytheplatypus]

12. mortgage v investment banking

I'm not going to go into the differences but you can find out easily enough. It's reprehensible that they have been merged and worse that IBs have been allowed to go public. Both instances create innate moral hazard and totally warp the mandates of the Fed forcing it into positions antithetical to the common good. Abandoning Glass-Steigel and Bretton-Woods change everything and destroy any sort of banking from working the way it was meant to. Privatizing profit while socializing losses is larceny and propegation of fascism, pure and simple. The modern Fed absolutely positively is a monolithic force against the notion of a free society.

[Taitertots]

15. The Fed can't reinstate Glass-Steigel

You have still done nothing to explain how any of the Fed's action are in any way infringing on any of your rights or freedom. "socializing losses" The Fed generates profits and gives it to the Federal government, it is billions of dollars a year. The Fed isn't losing money on these deals.

[zippytheplatypus]

17. if you do have an econ degree

And you really don't understand anything I'm proposing I would suggest two courses of action, both may be appropriate at this point. First get your money back because you need to be able to understand these very basic concepts and you don't. Second I would highly suggest you take some philosophy classes from a credible institution with an emphasis on the classics. That would provide you with conceptual knowledge I couldn't possibly provide here & would never try to.

If however you are merely arguing rhetoric and do understand every concept but choose to disagree with it Iclaiming that price setting is more efficient than traditional discovery then yes you are correct. Nazi Germany was incredibly efficient and more profitable than just about any nation ever. That does not mean that I want to follow that model in ideology or in execution, thank you but no thank you. Capitalism is not about efficiency at all costs. It is about fairness in competition, again transparency, traditional market dynamics & keeping corruption, collusion & oligopolies out of the market. I will gladly pay more for blue jeans union made in America. Not $350 but $60-70 is perfectly acceptable.$100 if the cotton is grown in America on a private sustainable cotton farm.

Finally here's two examples of how freedom is utterly betrayed. Real easy too already did one. First, I want to buy a pair of American blue jeans at a competitive price from a noncorporate independent store. Second, I want to take out an SBA Loan & open a hardware store with a small nursery and compete against Lowes & HD. THIS WOULD BE HOW YOU LOSE YOUR FREEDOM. LACK OF OPPORTUNITY TO COMPETE IN THE MARKET, EVERY MARKET BECAUSE OF A,SYSTEM WHICH PUTS TOO MUCH ADVANTAGE IN THE HANDS OF MONOPOLISTIC ENTITIES IS A LOSS OF FREEDOM. There is no capital available for startups to compete with the likes of Lowes, Walmart, JPMorgan, all of them and it is totally unamerican. What capital there is is completely predatory in nature and in no way is it interested in long term success of the small private entrepreneurs.

I'm not going around in circles and I am explaining myself. These are fundamental concepts and very important. If you want to discuss them with an open mind I'd love to but if you want to be obstinate and ridiculous with your argument when you know congress would reinstate GS rather than the Fed then you do it alone. Seriously, take a class if you don't get this & think everything is great. Or if you don't think anything should change go work at Wells Fargo. It's technically still a free country, kind of.

[Taitertots]

18. Everything you are saying is utter non-sense

It is not a matter of understanding it. I understand what you are saying, but it has no basis in reality.

"First, I want to buy a pair of American blue jeans at a competitive price from a noncorporate independent store"
That is not a freedom lost. I want tacos to cost $.05, but no one is violating my freedoms by being unable to supply it. How little are you prepared to work for to provide me with these jeans? How little will I have to pay you to set up this farm on your land?
"Second, I want to take out an SBA Loan & open a hardware store with a small nursery and compete against Lowes & HD."
You could never compete with them, so you shouldn't get a loan. Why should they give you money when you are going to fail?

Both your alleged freedom infringements are total non-sense. They are not legal rights, and not reasonable. Claiming those instances violate your freedom is not reasonable.

[zippytheplatypus]

19. some of us want capitalism

What basis do you have then for claiming to be a liberal in the first place? You're a proponent of oligopolies, unfair commerce, price fixing, centrally planned banking, multinational corporations and blight of the American worker, debt slavery, elitist socialization on the backs of the masses and fascist secretive control mechanisms. His exactly do you claim to be an American liberal? How are secret constant slush funds from the Fed to JPMorgan & Goldman Sachs good for the Democratic Party? You said yourself it is insane to publicize recapitalizing troubled banks as it would lead to their collapse. I'm saying every large bank is beyond troubled right now and is constantly being propped up by the Fed in secret at the detriment of every citizen of the United States. It is insane, it is fascism and it must stop. Who is Ben Bernanke to determine which banks deserve to be fed money in secret and which don't? I didn't vote for him & neither did you. I want to know what the hell he's doing and I want it recorded for history to judge. Supply and demand determine the marketplace, not the Fed.

I know you believe Friedmanism is viable, I know this is what you were taught. I'm a professor and I have these conversations all the time. I am not ignorant and I am not naive. I do not believe in neoclassical theory. I believe it is nothing but base manipulation and and totally doomed. You go ahead and think I'm naive just like all your contemporaries like Krugman. When you call my school naive my side calls you cowards who choose fraud over competition & market dynamics. I side with Schiff & Keene, history will be the judge.

[Taitertots]

21. Almost everything you are saying is not an accurate interpretation of reality

"Supply and demand determine the marketplace, not the Fed."
No, the results frequently make society worse off. You can want capitalism, I want a system that works.

The Fed's actions are not a secret at all. They regularly publish their actions, their reasoning behind those actions, and economic data which supports their actions.

"Who is Ben Bernanke to determine which banks deserve to be fed money in secret and which don't"
He is the head of the central bank, selected by the President. That is his job. Why don't you take it up with Obama if you have a problem with it.

[zippytheplatypus]

23. this system was adopted in the last 30 years

It is very different than it was in 1980. Everything I describe was the traditional role of the Fed before then. The most critical changes have occurred since 1996. How well is it working now compared to then? And the Fed stopped reporting in 2006 at the direction of Bernanke. He changed the rules less than six months into his term.

I don't understand how you can so vehemently defend something so new & bizarre in nature just because it happens to be the current incarnation. Do you not understand how fundamentally the institution has changed in the past thirty years or are you simply paralyzed by innate fear of change? I don't believe any rational informed individual could ever say this institution is working well, the wages of 90% of the People have either been frozen or in steady decline since 1980 to the lowest now anywhere in the industrialized world and artificially suppressed interest rates are fueling speculation and crushing savers. Where's the benefit here?

[Taitertots]

28. The interest rates should be suppressed because markets fail to produce satisfactory results

"And the Fed stopped reporting in 2006 at the direction of Bernanke"
The Fed reports what it is doing constantly. Or are you one of those M3 people upset for no reason because the Fed stopped collecting one piece of data that provides no useful information for making policy decisions?

" I don't believe any rational informed individual could ever say this institution is working well,"
We just got through the Bush/Republican caused depression with single digit inflation, unemployment, and low interest rates. Sounds like they are doing alright with the situation forced upon them by the Federal Government.

[zippytheplatypus]

20. while you are rebuking

I'd like a clear concise answer please these questions.

Why should investment banks be publicly traded? Why doesn't this create innate moral hazard?

Why were mortgage banks and investment banks allowed to merge?

What role do high speed trading servers have toward the betterment of society?

The traditional ratio of the silver price to gold is 18:1. Why has it been 40:1 roughly since 2008?

Does Goldman Sachs have an intrinsic right to do business? Who determines that and can it change?

Does the Treasury Department have the ability or authority to cancel the dollar and replace it with something else? Does the Fed have any say in this matter?

Do the People of the United States have a right to know what their capital reserves are?

Do foreign national banks have the right to demand physical delivery of gold reserves held in America?

Thank you very much, I am very interested in your views here.

[Taitertots]

22. Here it is

"Why should investment banks be publicly traded? Why doesn't this create innate moral hazard?"
They shouldn't be. The Federal government needs to regulate this. The Fed is legally unable to.

"Why were mortgage banks and investment banks allowed to merge?"
They shouldn't be. The Federal government needs to regulate this. The Fed is legally unable to.

"What role do high speed trading servers have toward the betterment of society?"
They have none. They exacerbate market fluctuations by jumping on fluctuations. The Federal government needs to regulate this. The Fed is legally unable to.

"The traditional ratio of the silver price to gold is 18:1. Why has it been 40:1 roughly since 2008?"
Because markets are at their core non-rational. Why did pre-2001 tech stocks have high p/e ratios? Why did houses sell for so high using the Case/schiller price index? Markets have repeatedly failed at asset valuation.

"Does Goldman Sachs have an intrinsic right to do business? Who determines that and can it change?"
Yes. Any regulation regarding this needs to come from the Federal Government.

"Does the Treasury Department have the ability or authority to cancel the dollar and replace it with something else? Does the Fed have any say in this matter?"
I'm not a constitutional law scholar. Should they? No. There is no reason to believe it would make anyone any better off.

"Do the People of the United States have a right to know what their capital reserves are? "
The Fed regularly publishes it's balance sheet.

"Do foreign national banks have the right to demand physical delivery of gold reserves held in America?"
They don't want to because they view co-operation with the Fed as beneficial to them.

[zippytheplatypus]

24. wow

Unreal.. I bet you went to Yale or some other likely institution of higher learning. You're serious? And you really think this is a rational liberal attitude? Who taught you all this?

[Taitertots]

27. I've got an economics degree from University of Michigan, where is your's from...

I guess you also have a reading comprehension problem with the terms you agreed to when you started posting. Posts calling other people out as non-liberals are strictly against DU rules. Stop violating the rules of our discussion board.

[zippytheplatypus]

25. if youre interested

Adam Smith would say something along these lines..

Never, this is failure of regulatory agencies and is pure moral hazard.

Again fundamental failure of regulators and the government to allow this. Theoretically sustainable in the short term only if kept private and not overly large institutions.

Anything with no benefit to society whatsoever cannot be allowed entry into the marketplace.

Once you understand cycles and market dynamics along with signs of manipulation and counterfeiting they are as predictable as a Swiss watch in the long term. Obvious manipulation considering the extended time frame.

No business is ever guaranteed a spot in the market ever. Any entity acting contrary to the greater good must be eliminated by reasonable competition or regulators acting on behalf of the market itself.

Absolutely and none whatsoever. The Fed is terminable at any time.

Absolutely. The capital reserves belong to the People.

Absolutely. It does not belong to us. We may charge a reasonable fee for delivery to an agreed secure destination. Nothing more.

This isn't hard when you get the garbage & fraud out of the way..

[Taitertots]

26. Who cares what Adam Smith would say, he died hundreds of years before modern markets existed

"Again fundamental failure of regulators and the government to allow this"
Exactly. Republicans have weakened regulations on the market. Which need to be in place because markets don't work in socially advantageous ways. Which means we need the Federal government to act, because it would be ILLEGAL for the Fed to do it. So why complain about the Fed when the Federal Government is the only body that could create said regulations?

Your posts are not based in reality. On one hand you are bemoaning lack of regulators and on the other complaining about manipulation. Regulators are manipulating markets with every action they take. You can't complain that markets will solve our problems when we both agree they yield unfavorable results. So much so that it requires strict regulation.

[dixiegrrrrl]

29. Amen to that.

[Taitertots]

9. They are all single digits, that is worth at least a B+ n/t

[Po_d Mainiac]

13. 3 Goals?.. That's easy!

1) Screw savers everywhichway but Sunday..(and gouge a couple extra orifices if needed)
2) Inflate equity markets
3) Buy toxic shit from TBTF banksters and lie about its value

Did I miss any?

[Yavin4]

16. You Forgot Number 4

Ensure outrageous banker bonuses at all costs no matter the condition of the economy nor the banking sytem. Even after a nuke holocaust, the bonuses must be generous and paid.

[bemildred]

30. 1) Serve the banks, 2) Protect the banks 3) Enrich the banks. nt