abolish the FED

saturnz said:
it looks like it to me



you are suggesting that saving banks from bankruptcy saved jobs, thus placing some sort of importance on job safety
Click to expand...
No I didn't place any importance on it. I simply stated a fact. Whatever you read into that is your own business.
 
Really good video on central banks.


The Scene:
Interest is meant to represent the risk of lending money to someone else. Someone who has a steady job and a record of paying stuff on time is going to have less of a risk than a hobo on the street.

Enter in Coronachan and the whims of politicians with too much authority over people's lives:
Whatever your views on the virus or the lockdown, it represents a massive uncertainty.

What should happen
Massive increase in general risk, therefore interest rates should go up.

What happens instead:
Most central banks around the world drop interest rates.
 
konfab said:
What should happen
Massive increase in general risk, therefore interest rates should go up.

What happens instead:
Most central banks around the world drop interest rates.
Click to expand...

this was one of my original points, the monopolies that are central banks are not allowing market forces to determine how resources of allocated
 
rietrot said:
Money is supposed to lose value. That's how it works, it is a build in function not a flaw. That's why people invest their money and don't put it under their mattress.

Lol and wtf is a predatory loan. People should be adults and responsible for their own actions, if they took a loan they cannot pay it is their own fault.
Click to expand...

Well that is what happened. People were taken advantage of and given loans the bank KNEW they wouldn't be able to pay back. Did you not read what I wrote - some of those banks even bet against their OWN clients that they would not be able to repay. That is absurd!!

Yet they STILL lent out the money. If you offer people money will-nilly many will take it. As a supposedly responsible institution the bank is suppose to weigh up the pros and cons on giving out a loan. If you can't afford it you don't loan. Simple. They didn't they just gave out loans to whoever would take. Wholly irresponsible on their part. That lead to the collapse.
 
konfab said:
Really good video on central banks.


The Scene:
Interest is meant to represent the risk of lending money to someone else. Someone who has a steady job and a record of paying stuff on time is going to have less of a risk than a hobo on the street.

Enter in Coronachan and the whims of politicians with too much authority over people's lives:
Whatever your views on the virus or the lockdown, it represents a massive uncertainty.

What should happen
Massive increase in general risk, therefore interest rates should go up.

What happens instead:
Most central banks around the world drop interest rates.
Click to expand...
A sort of okay video on everything but central banks. I'm just past halfway maybe he'll still get to it.

I'll troll a little bit less now because this is a more reasonable argument.

More specific to the SARB.
The SARB isn't a for profit business. Most of their profits go to government. So they operate like a non profit, or almost independent SOE. Even though technically they are not.
Risk vs reward doesn't apply.
They have a strict mandate to just manage inflation and they do this by controlling the interest rate.
This prevents fast growth, because they put the brakes on in good times and then arguably that makes the dip less extreme aswell. It flattens the curve if you will of economic cycles.

Risk vs. Reward aspect fall to the commercial banks. Now the problem here is creditworthiness is mostly backwards looking. They check payment history/affordability, and that you have a steady income.
It's to difficult to speculate on future economic conditions and whether a specific person might have a job next year before they give a homeloan.

They have control over the interest rates they charge.(it is somewhat limited by the NCA) but they can mostly offer prime plus or minus whatever they want.

This way the central bank works as the currency issuer. There needs to be a price attached to it otherwise it is useless paper, so we have interest.
And setting the interest rate with a inflation goal in mind is certainly not the worst option.
Maybe just a low flat rate would be better, like always 1 or 2%
 
saturnz said:
this was one of my original points, the monopolies that are central banks are not allowing market forces to determine how resources of allocated
Click to expand...
Bs and BS.

Having it under government control wouldn't change much. Politicians would be worse and less consistent.

You can allocate your resources however you want.
 
rietrot said:
They have a strict mandate to just manage inflation and they do this by controlling the interest rate.
Click to expand...

according to the consitution they are supposed to protect the value of the currency, they have failed dismally

rietrot said:
Bs and BS.

Having it under government control wouldn't change much. Politicians would be worse and less consistent.

You can allocate your resources however you want.
Click to expand...

where did I say that the SARB under government control would change anything? your strawman is weak
 
rietrot said:
A sort of okay video on everything but central banks. I'm just past halfway maybe he'll still get to it.

I'll troll a little bit less now because this is a more reasonable argument.

More specific to the SARB.
The SARB isn't a for profit business. Most of their profits go to government. So they operate like a non profit, or almost independent SOE. Even though technically they are not.
Risk vs reward doesn't apply.
They have a strict mandate to just manage inflation and they do this by controlling the interest rate.
This prevents fast growth, because they put the brakes on in good times and then arguably that makes the dip less extreme aswell. It flattens the curve if you will of economic cycles.

Risk vs. Reward aspect fall to the commercial banks. Now the problem here is creditworthiness is mostly backwards looking. They check payment history/affordability, and that you have a steady income.
It's to difficult to speculate on future economic conditions and whether a specific person might have a job next year before they give a homeloan.

They have control over the interest rates they charge.(it is somewhat limited by the NCA) but they can mostly offer prime plus or minus whatever they want.

This way the central bank works as the currency issuer. There needs to be a price attached to it otherwise it is useless paper, so we have interest.
And setting the interest rate with a inflation goal in mind is certainly not the worst option.
Maybe just a low flat rate would be better, like always 1 or 2%
Click to expand...
SA's central bank is better than the fed because they are constitutionally bound to a specific mandate.

It is still central planning. Interest should go up when uncertainty increases.
 
konfab said:
SA's central bank is better than the fed because they are constitutionally bound to a specific mandate.

It is still central planning. Interest should go up when uncertainty increases.
Click to expand...

I agree it is central planning. But the solution to that is to let anyone issue their own currency and not dictate what is the official legal tender.

Many places do this somewhat with all the different point systems you get.

You can't measure "uncertainty" you need a measurable input to charge interest rates.

Next to law and order as a legitimate function of the state, money is probably next.
 
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