The 'Fed'

[Eric]

I've been studying the markets again recently and have come to the realization that our centralized bank, the central planner of our monetary policy known as The Federal Reserve is up to some very strange activities.  "Creating liquidity", "quantitative easing", "monetizing debt", these are all fancy ways of saying that they are printing more money.  In fact they are printing money in order for the US government to pay it's debt.  On the 'free market' side of things, gold is at an all time high, the dollar is dropping in relation to other national currencies, and yet the stock market is holding steady at a somewhat recovered level.  But will it hold?  Nationwide unemployment is growing, real estate continues to tumble and what will happen next?  Are we on the verge of the next Great Depression?  Or worse?

 

Nobel prize winning economist and NYT columnist Paul Krugman insists we are on sound footing and none of what I just described matters.  For almost a decade I hung on Krugman's every word.  Now I realize that was mostly because he, like me apposed everything Bush did.  But now he's cheerleading what I believe to be the makings of huge disaster.  And I remind myself that he is employed by the same newspaper that was a part of the pre-war propaganda machine.  While he may not be "The man behind the curtain", he and many others like him are helping to hold up that curtain.  Are we about to see that curtain come crashing down with the fool(s) at the Fed standing about dumbfounded trying desperately to pull levers and push buttons just to keep the facade in place?  

 

Permaculture will become all the more important as these events unfold.  Throw out your TV and protect your internet! God bless, and keep on growing!

-Eric Gibian

[Chad Hellwinckel]

 

Hey Eric, you'd like this...

http://www.youtube.com/watch?v=a6OQzH07u0U

[Frank Callo]

The amount of "virtual money" is an index of how far we have wandered from the actual value inhearent in the material conditions of the world.

[Frank Callo]

I have been watching such events with some interest for some time now.  I think the real take home message is that value must be related to actually material circumstances.  So, for example, the worth of a house is a product of 1.) the materials it is made of, 2.) the level of craft involved in its manufacture, 3.) the number of people it can reasonably shelter.  All other considerations are "added value" based in human ideas of what they hope its value is, ideas usually rooted in perverse fantasies.  The entire monetary system is looked into the same problem and will remain so until we begin to realize that value is not a free floating thing but relates to the material conditions of the natural world.

[Eric]

And yes, Chad you're right.  Energy is a huge issue.  It will/is exacerbating inflation.  Declining supply with increasing demand, simple economics.  But the average person doesn't realize, this won't just mean $5 at the pump.  We live in a world created by, encapsulated in, paved over with, and maintained by petrol.  Everything will be much more expensive, even without the Fed's inflationary policy.  I'm struggling desperately down here to get a little neighborhood vegetable garden club going.  People don't get it for the most part.  But maybe the silver lining is that they will be forced to get it.  They will come out of their homes, turn off their TV's, meet their neighbors, let their kids play together outside, while they dig in the dirt and do as man has done for thousands of years to ensure his perpetuity and security on this planet.

[Eric]

You're right, they're trying to keep the 'machine' going.  Although printing money typically causes inflation, erosion of savings, and devaluation of the currency.  It's known as the hidden tax.  Do too much and you risk causing a literal collapse of the dollar.  (see Weimar Republic hyperinflation, among other examples).  It's a very slippery slope.  Unfortunately at this point I think there's no other possible outcome.  Congress just kicked the can down the road again with their latest budget.  They won't raise taxes on the rich or poor and they won't cut spending.  All they want is to pacify their respective voter bases and keep the machine going.  Chad, it seems you and I have switched positions.  I never had a dire outlook.  Not with any real reason for predicting total collapse.  But now I think I see it pretty clearly.  Unless there is some drastic miracle change, and I hope there is, I think the powers that be will collapse our currency and god only knows what will happen next.  Maybe it will be for the good.  It all depends on the reaction of the people.  Check out the Kymatica video on bbc5.tv or talismanicidols.org.  If we react out of fear we are doomed to tyranny but if we react out of hope and love we will create a brighter future.  

-Keep on growing!

[Chad Hellwinckel]

Because of the evaporation of alot of 'virtual money'...loans...and loans on loans...that happened with the financial collapse, our money supply shrank. The fed would have to print ALOT of money to make up for the money that has evaporated over the last two years.  I think if you want to keep the economy up, printing money's not such a bad thing.  They're trying to avoid the dreaded "deflation"...which I think we may have even with the printing presses rolling.  We'll see what happens. People seem to be pretty optimistic on the economy.  I must say, I am surprised by the resiliency of the global economic machine....and I've readjusted my once dire outlook...that we would have a fast crash into chaos.  I now think that the big economy will keep on ticking...rich will remain rich...poor will remain poor. The middle class will become poorer.  I think energy is still the big player...and its increased cost will make permaculture type designs/ideas/local economies more practical.  There is a good side to the machine continuing for awhile longer.... It will allow time for adjustment to more efficient, tight, cycled, and local systems. And the motivation will be the slow creep of poverty for the majority.