On Wed, Sep 08, 2004 at 09:43:09PM -0400, John Pedersen wrote:
> Paul M Foster wrote:
> >On Tue, Sep 07, 2004 at 05:37:18PM -0400, Bryan J. Smith wrote:
> >
> ><snip>
> >
> >>>Bankers and corporate elites get richer, everybody else loses.
> >>
> >>Agreed. The monopoly the Federal Reserve has had on the amount of cash
> >>in this country is at the heart.
> >
> >
> >I'll disagree here. The key to any economy is productivity. The Fed can
> >act as a brake or a stimulus, but producitivity is what drives any
> >economy. The problem in this society is that too much of the wealth
> >vests in the hands of too few _who produce too little_.
>
> I sort of agree with you, but don't be too quick to dismiss the
> effects of monetary policy set by the Fed. The Fed has lots of ways
> of creating money, and does so in astronomical amounts. Why do you
> think you can buy a house full of furniture with no interest and no
> payments for a year. Keep on shopping! That's the only thing that is
> keeping the economy going, so that "pundits" can claim the economy is
> doing well. (Apparently the definition of "economy" == number of
> people shopping)
>
I don't disagree that monetary policy can affect the economy. But it's
productivity that's the key. And people shopping is a byproduct of a
productive economy. The cornerstone of economies is the creation of
saleable items and the exchange of those items for something else
considered valuable (in our case, money). Buying and selling are simply
the opposite sides of the same coin. More of both means a healthy
economy. And right now, we _do_ have a healthy economy. The problem is
that the press is absolutely insistent on running it down, so there is
this impression that it's sickly
> As a shorthand, we say that they are printing money like crazy, but
> they have various mechanisms, like changing marginal rates, etc.
>
Yes, this is government sleight of hand. It's twiddling the money supply
and interest rates rather than changing tax policy and other such
actions to actually gun the economy.
<snip>
> Lemme give you a prediction. Some day, I would say within five years,
> China will take over Taiwan, by force, which the US, once upon a time,
> swore they would never let happen. The Chinese leaders will make one
> phone call, saying that if the US interferes, they will destroy the US
> currency, virtually overnight. And the US will stand back and let
> Taiwan go.
>
You could be right. There's a movie that's frightening in a similar way,
called "Rollover". Kris Kristofferson and Jane Fonda. Except in this
one, the Arabs are the ones holding all the US money. Scared the crap
out of me the first time I saw it.
While I think tariffs are a bad idea, this is one of the problems I see
with a "global" economy. The more interconnected we are with other
nations for our goods and services, the more we are at the mercy of
whatever policies they choose to enforce. We should drill in ANWAR,
build a refinery a month, and make all the tree huggers live in the
forest without electricity.
Paul
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