Re: Feedback (was Re: financial times article)

["Shalom Patrick Hamou" <shaen@xxxxxxxxxxxx>]

The Fact of the Matter is that credit distribution is discriminatory: Volume
and price varies with wealth or Capital. It is the essence of Capitalism.
What about a Company that would not sell to a blond because she is blond?

A Central Bank makes loans to Banks which make loans to wealthy people. When
these loans will be repaid with other loans.made the same way. In my world
it is called a gift.

So the central Bank is ripping off the poor to enrich the rich. This is
Capitalist system. It has nothing to do with free market economy. You could
have free market economy without Credit. Why money wouldn't be emitted to
Individuals: If a nation is comprised of 6.000.000 individuals and the CB
want to emit 600.000.000 Dollars it could give to every individual
regardless of who they are 100$.

All the more so that we have demonstrated that because of the leverage due
to Credit the standard deviation of revenues is increasing faster than the
mean and hence we assist to the inflation of the Long Term Asset Price
Bubble which will burst when we will get into the Liquidity Trap.

We will then, may be, get rid of Credit. Or maybe another Hitler will raise
to Power.

Regards,

Shalom Patrick Hamou

Because the Fed is making loans
----- Original Message -----
From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
To: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
Cc: <pkt@xxxxxxxxxxxxxxxx>
Sent: Sunday, September 24, 2000 5:46 AM
Subject: Re: Feedback (was Re: financial times article)


>
>
> Harry Veeder wrote:
>
> > If the Fed is owned by the America People, then the Fed as lender of
last
> > resort is lending The People's money rather than Greenspan & Company's
> > money.
>
> Populists thought that the Fed was owned by the American people, but
technically
> the Fed is owned by the American banks in the Federal Reserve system.  The
> populist elements in the movement to establish the Federal Reserve were
> outsmarted and betrayed.  See my posts on the history of the Fed.  The
Fed's
> power is enormous and this power has been politically endowed by Congress.
It
> is the power to create money on behalf of  the US government.  Now this
power is
> supposed to be used for the benefit of the nation, by the poeple , for the
> people and of the people.  But the traditional role of credit being
> imtermediated through banks has usurped the Fed's power for the benefit of
banks
> rather than the people.  Why should banks be able to borrow at Fed
discount
> rates and Fed fund rates while the rest of the economy must borrow at
prime
> rates or higher?  If Greenspan is apologizing for de facto deregulation,
let's
> have an arrangement where you and I can borrow from the Fed at discount
rate and
> FF rates as well.  More importantly, the Fed's unseen hand in the
allocation of
> credit has historically been anti-populist and anti-debtor. The legitimacy
of
> government's power to create money/credit is contingent on that power's
being
> used to promote financial and economic democracy.  The Fed is the only
> institution that still enjoys the right of taxation without
respresentation.
>
> > Therefore  a signifcant fraction (if not all) of the interest payments
> > ought to be distributed among the America People.
>
> The interest spread ganed by the Fed goes to the Tresaury, so it does in a
way
> goes to the people.
>
> > The market place is
> > not getting the vital FEEDBACK it needs due to the inappropriate
channeling
> > of interest payments into the Fed (or wherever they currently go.)
> >
>
> This is technical.  Payment account specialists would argue that the Fed's
> interest income reduces the Treasury's deficit account.  And as we all
know debt
> reduction does not have a neutral or fair redistributive impact on the
system.
>
> > This depends on a model of a Monetary Economy as two fundamental
interacting
> > entities -- The People and The Market Place. The Government ensures
> > effective monetary communication between the two.
> >
> > In fact I believe this applies to the entire globe, so that
> > all the interest money going into every CB ought to be pooled
> > and shared among the World's People.
> >
> > What do you think of this as an idea for global financial reform?
> >
>
> Central bankss' power to allocate credit should definitely be subject to
> political suppervision.
> In finance, the allocation (and availability of credit is key, which is
also
> expressed by interest rates set by CBs.)  Milkin went to jail for doing
exactly
> what the Fed does every day.  The Fed could not even stop banks in its
system
> from redlining minority populated urban districts. If we have a graduated
income
> tax rate, why not a graduated interest rate - higher rates for the higher
income
> or biggest assets.  But the reverse is fact.  Higher rates face the
financially
> weak.  No reform of national or global financial architecture can come
from
> CBs.  It is like asking the foxes to design a safer chicken coop.  The
result
> would be safer for the foxes but not the chickens.
>
> Henry C.K. Liu
>
>