Understanding The Federal Reserve - Khan Academy

[Broke Wave]

Tell me this. . . What reforms does the Fed need in your opinion?

And I can't say if we should have a gold standard or not. I do know that markets should be able to choose whatever it wants for money. If the market chooses gold, then so be it. The Constitution says that only gold and silver should be legal tender, I don't necessarily agree with that.

First off, the constitution doesn't say that breh. Lets just get that out of the way.


To address you point on reforms, I believe the private bankers should be kicked off and it should be a totally accountable government agency just like all the other stuff that people fund.

The market shouldn't be able to choose whatever it wants for money, that's stupidity. By that logic, the market should be able to choose what it wants for laws, or government. Money is part of the framework of society and it shouldn't be left up to "the market", which is usually private interests.

If you listen to Leyet's rant about the fed on the podcast, his general thesis about the reality-shaping power and plotting maliciousness of the fed was absurd.

When we were trying to tell him the fed wasn't sitting the plotting economic destruction, he said yes they are and there's a science to economics and they can control the economic system and create whatever outcome they want. My mic was fukked up but tried to cut across and tell him that econ is the softest science there is--it's called the dismal science for a reason--it's not physics, there are several competing theories and they are dependent upon the predicted rationale of millions of people.

Then after saying he understands this and knows it to be true, he responded to HHL4E's question about what economist or economic theory he would adhere to or agree with by saying "I don't know, I don't understand economics."

Yeah I called in and told him that there was ideology involved. I was pretending to be BKdagawd lol. But still, there's no guaranteed way to do anything, there are only certain things we know that have a cause and effect with regards to economics. The people who are in charge of the Fed and the other economic institutions around the world are neo-liberals to the nth degree, so they are not going to do what is malicious necessarily, but what they believe is correct.

 

[714562]

I'm asking are you the sohh poster known as Gedanken. He had good economics knowledge and a habit of sonning Meta Reign into oblivion.

Nah, I'm not him. But if that's what he did, then he must've been a good poster.

There are too many armchair experts out there who drink some internet conspiracy Kool-Aid and think they can talk down to people. There's a REASON why academia disregards certain crackpot bullshyt. And no, it's not because they're paid off.

 

[Robbie3000]

If you listen to Leyet's rant about the fed on the podcast, his general thesis about the reality-shaping power and plotting maliciousness of the fed was absurd.

When we were trying to tell him the fed wasn't sitting the plotting economic destruction, he said yes they are and there's a science to economics and they can control the economic system and create whatever outcome they want. My mic was fukked up but tried to cut across and tell him that econ is the softest science there is--it's called the dismal science for a reason--it's not physics, there are several competing theories and they are dependent upon the predicted rationale of millions of people.

Then after saying he understands this and knows it to be true, he responded to HHL4E's question about what economist or economic theory he would adhere to or agree with by saying "I don't know, I don't understand economics."

Yeah i remember hearing Leyet say Economics is a science and a few minutes later he claimed he didn't have a knowledge of economics with the reaction.

I even responded on the chatroom that Econ was a soft science.

Leyet actually inspired this thread because of all the wild shyt he was spitting on the podcast.

 

[Dusty Bake Activate]

Bar None, Robbie what do you think this thread being moved to the official podcast thread because it's a continuation of that conversation?

 

[Economics]

First off, the constitution doesn't say that breh. Lets just get that out of the way.


To address you point on reforms, I believe the private bankers should be kicked off and it should be a totally accountable government agency just like all the other stuff that people fund.

The market shouldn't be able to choose whatever it wants for money, that's stupidity. By that logic, the market should be able to choose what it wants for laws, or government. Money is part of the framework of society and it shouldn't be left up to "the market", which is usually private interests.





Yeah I called in and told him that there was ideology involved. I was pretending to be BKdagawd lol. But still, there's no guaranteed way to do anything, there are only certain things we know that have a cause and effect with regards to economics. The people who are in charge of the Fed and the other economic institutions around the world are neo-liberals to the nth degree, so they are not going to do what is malicious necessarily, but what they believe is correct.

Nah, I'm not him. But if that's what he did, then he must've been a good poster.

There are too many armchair experts out there who drink some internet conspiracy Kool-Aid and think they can talk down to people. There's a REASON why academia disregards certain crackpot bullshyt. And no, it's not because they're paid off.

working with people from the Dallas and Chicago Fed when they came to our uni for a brief stint on a project for the chairs, I can assure you a lot of people with economics- MAs and PhDs that got in the Fed had some classical school leanings but the majority (even from the Dallas one) were New-Keynesians or Saltwater school economists. I get the jist of your statement though. The people I'm referring to were for well regulated markets and protectionists policies, that isn't neo-liberal.

@mygod you dropped decent facts but only the bolded is a little off to me, they are (as in certain minority of economists) influenced/paid off indirectly by not having their papers published, or getting proper recommendations, or having a career at the Fed or in the financial economics field from upper management pressuring them to not talk about certain things or "fudge data sets". Any beginning PhD will tell you or you probably know if you don't have a certain amount of papers published by reputable journals then kiss tenure goodbye. So many economists that go into the fed that still want to teach do have to tow the line.

I know this because my first mentor from Japan that did a stint at the Fed let me know straight up not to question them if I were to pursue a career with them, he was going to recommend me to the Chicago one. He said that because he knew I had a penchant for always questioning stuff or general independence. You're on point with everything else though.

 

[daze23]

Bar None, Robbie what do you think this thread being moved to the official podcast thread because it's a continuation of that conversation?

I think the podcast thread should be more about the ins and outs of the podcast, and not the topics discussed. I mean if we move every thread on a topic that was covered in the podcast, that thread will become quite confusing

 

[Dusty Bake Activate]

Meta Reign, I can't say I've studied monetary policy as much as you, but I know that from discussing I subjects I am very knowledgeable and adept at (hard sciences; biology, evolution, climate change, medicine) and hearing your zany conspiracies about every violent event in the world being a false flag operation and poisons purposely added to the water supply, etc. that those logical fallacies you commit, misunderstandings of basic facts, and unwarranted paranoia carry over into your perceptions of economics, so I don't really place value in anything you say about it.

 

[Dusty Bake Activate]

I think the podcast thread should be more about the ins and outs of the podcast, and not the topics discussed. I mean if we move every thread on a topic that was covered in the podcast, that thread will become quite confusing

Yeah but you just registered yesterday after stubbornly clinging to sohh for the past two months, so your opinion isn't valid yet.

 

[Meta Reign]

They're paying the banks interest on excess reserves because rates are 0%. Banks have to have some kind of incentive to lend to other banks.

The Fed began paying interest on excess reserves as a means to control the Fed funds overnight market. The sheer volume liabilities on the balance sheet at the Fed has pushed interest rates effectively at zero. But an interest rate of zero is the same as holding cash, and therefore can lend strength to a liquidity trap.

To ensure overnight bank lending can earn a stable (albeit low) rate of return, the Fed institutes a (semi!) hard floor by paying interest on excess reserves, and a very hard ceiling known as the discount window. What then occurs in the Fed funds market is rather interesting. No depository institution with access to the overnight Fed funds market (ONFFM) and the discount window will lend at any rate higher than the discount window, because no bank would have the reason to borrow at a higher interest rate than what is offered at the discount window (which is 0.75%) and... no bank would have the desire to lend lower than the amount paid on excess reserves. Hence, we have what is known as a "channel - corridor" system.



...except it does. Because banks need to have some kind of incentive to lend to each other if they are to lend to other people.

Also, you don't know what prop trading is. I'm sorry. You just don't.



Cease fire on the fed, people. None (or very few) of you have the chops to discuss this with any meaningful insight.

HMMMMMMM. . . .

It's funny because NONE of your reasons are reasons cited by the head of the NY Fed.

Dudley Seeing Interest on Reserves as Tool of Choice Sparks New Fed Debate - Bloomberg

His logic for paying interest on excess reserves is so the economy does not ''overheat''. Which I think is complete bullsh!t and so do many others.

YOU'RE A MORON.

 

[Meta Reign]

Orly?



The Federal Reserve does not pay interest to member banks. It pays them a fixed 6% dividend based on the amount of stock they own. The banks can't really "sell" the stock to anyone either, so there's no profit to be had. There is no accumulating interest. After that paltry dividend is paid, the Fed takes any and all profit that it earns from its open market operations and sends it to the treasury.

So please, stop belittling people. You have no idea what you're talking about. I'll say it again: CEASE FIRE on this topic. You're not teaching anyone anything.

You're talking about the 12 member banks, dikkhead. I'm talking about the members of those member banks (the good old commercial ones, people use daily.) They are currently paying them .25% on excess reserves. SO SHUT THE FUKK UP!!!

 

[Meta Reign]

Meta Reign, I can't say I've studied monetary policy as much as you, but I know that from discussing I subjects I am very knowledgeable and adept at (hard sciences; biology, evolution, climate change, medicine) and hearing your zany conspiracies about every violent event in the world being a false flag operation and poisons purposely added to the water supply, etc. that those logical fallacies you commit, misunderstandings of basic facts, and unwarranted paranoia carry over into your perceptions of economics, so I don't really place value in anything you say about it.

Nothing you type matters to me. You should notice by now that I barely respond to your posts anymore.

 

[Nature Boy Ric Flair]

THE NATURE BOYS dikk IS NICKNAMED THE FEDERAL RESERVE AS I KEEP UNLOADING MONEY ON THE FACES OF WOMEN ACROSS THE WORLD WOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

 

[714562]

You're talking about the 12 member banks, dikkhead. I'm talking about the members of those member banks (the good old commercial ones, people use daily.) They are currently paying them .25% on excess reserves. SO SHUT THE FUKK UP!!!

A member bank is a private institution and owns stock in its regional Federal Reserve Bank. The 12 banks you're referring to are known as the "regional" or "district" federal reserve banks. They are not "member" banks.

The 6% dividend doesn't go to the regional branch banks, you fukking clown. That would be tantamount to the Fed paying dividends to itself. The 6% goes to the MEMBER BANKS -- the "members of members" that you so ignorantly identified.

I never said it went to the 12 regional banks. It goes to the member banks. And no, it's not my fault you don't know what a member bank is.

Also, I love how you compensate for your lack of knowledge with bigger and bigger letters. This is the internet. You can't shout me down with your aggressive stupidity. Just admit that you're not versed on the subject and stop beating your chest.

Sorry for fukking up your reality, breh.

Nothing you type matters to me. You should notice by now that I barely respond to your posts anymore.

Good man. Ignoring people who disagree with you is the way to go. That way, you never have to answer for the sheer stupidity of your opinions.

 

[HacksawJimThuggin]

highly recommend this book to all that are interested in the subject


http://www.amazon.com/The-Creature-Jekyll-Island-Federal/dp/0912986212

 

[Meta Reign]

A member bank is a private institution and owns stock in its regional Federal Reserve Bank. The 12 banks are known as the "regional" or "district" federal reserve banks. They are not "member" banks. The 6% dividend doesn't go to the regional branch banks, you fukking clown. That would be tantamount to the Fed paying dividends to itself.

I love how you compensate for your lack of knowledge with bigger and bigger letters. This is the internet. You can't shout me down.

OMG.

Are the ''member'' banks not being payed .25% on excess reserves right now? That's all I want you to answer. Because I see that you're one of these people who think irrelevant semantics make you smart. So just answer that question.

The ''Regional'' Banks are private too, btw.