Bank of England Paper shattering common misconcpetions

[DaveFagan]

A colloquial name given to the Working Group on Financial Markets. The Plunge Protection Team was created to make financial and economic recommendations to various sectors of the economy in times of economic turbulence.
It is probably a good idea to have a team ready to make recommendations in order to slow an extreme bull market.
only conspiracy theorist believe the other thing.


The U.S. Exchange Stabilization Fund was established at the Treasury Department by a provision in the Gold Reserve Act of January 31, 1934. 31 U.S.C. § 5117. It was intended as a response to Britain's Exchange Equalisation Account.[2] The fund began operations in April 1934, financed by $2 billion of the $2.8 billion paper profit the government realized from raising the price of gold to $35 an ounce from $20.67. The act authorized the ESF to use its capital to deal in gold and foreign exchange to stabilize the exchange value of the dollar. The ESF as originally designed was part of the executive branch not subject to legislative oversight.



You have that backwards. the value of gold is relative and is kinda independent of the dollar. there is an minor indirect link but people use gold as a hedge against inflation.
If there is weakness in the dollar then you will see gold rise, and then sometimes it will rise just on demand.

people short sell things all the time. It is a dangerous game but it can happen. Any transaction of that amount would have to be authorized by the SEC.
they kind of frown on those types of transactions.

Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But due to various loopholes in the rules and discrepancies between paper and electronic trading systems, naked shorting continues to happen.

Naked short selling is illegal so what you just described can't happen.

Please read the entire article

( The Hows and Whys of Gold Price Manipulation - PaulCraigRoberts.org )

"The Fed’s gold manipulation operation involves exerting forceful downward pressure on the price of gold by selling a massive amount of Comex gold futures, which are dropped like bombs either on the Comex floor during NY trading hours or via the Globex system. A recent example of this occurred on Monday, January 6, 2014. After rallying over $15 in the Asian and European markets, the price of gold suddenly plunged $35 at 10:14 a.m. In a space of less than 60 seconds, more than 12,000 contracts traded – equal to more than 10% of the day’s entire volume during the 23 hour trading period in which which gold futures trade. There was no apparent news or market event that would have triggered the sudden massive increase in Comex futures selling which caused the sudden steep drop in the price of gold. At the same time, no other securities market (other than silver) experienced any unusual price or volume movement. 12,000 contracts represents 1.2 million ounces of gold, an amount that exceeds by a factor of three the total amount of gold in Comex vaults that could be delivered to the buyers of these contracts.

This manipulation by the Fed involves the short-selling of uncovered Comex gold futures. “Uncovered” means that these are contracts that are sold without any underlying physical gold to deliver if the buyer on the other side decides to ask for delivery. This is also known as “naked short selling.” "

 

[mmi]

I would like to add that it is the Federal Reserve CORPORATION. That means it is subject to CORPORATE Law.

I would like to add that you are wrong. Only uninformed, RW nuts spread that nonsense. Show me a credible source that supports yer claim. You cannot.

The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks.

However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, paid to member banks at a maximum rate of 6 percent, determined in part by each member bank's total assets. — "Who owns the Federal Reserve?," Board of Governors of the Federal Reserve System, Apr 22, 2016​

it works the same way that FANNI and Freddie did. they were independent organizations that was subject to oversite by congress. the same goes for the fed.

You consider yerself a credible source, but I do not. The Fed is not a GSE. You are incorrect.

>>the majority of your posts are sloppy hard to read and frankly 99% of the time make no sense.

Yer judgement is of no value to me. You have demonstrated many times that you can't read or think to save yer life.

>>why are you stating something that we already know?

You didn't know it. You said that "at the end of the year it returns all of the money it made to the treasury." That's incorrect. It first pays all of its expenses.

>>what are you actually contributing again? nothing.

If nothing more, I'm correcting the crap you arrogantly post. You again have no idea what yer talking about.

 

[ludin]

Please read the entire articlehttp://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipulation/"The Fed’s gold manipulation operation involves exerting forceful downward pressure on the price of gold by selling a massive amount of Comex gold futures, which are dropped like bombs either on the Comex floor during NY trading hours or via the Globex system. A recent example of this occurred on Monday, January 6, 2014. After rallying over $15 in the Asian and European markets, the price of gold suddenly plunged $35 at 10:14 a.m. In a space of less than 60 seconds, more than 12,000 contracts traded – equal to more than 10% of the day’s entire volume during the 23 hour trading period in which which gold futures trade. There was no apparent news or market event that would have triggered the sudden massive increase in Comex futures selling which caused the sudden steep drop in the price of gold. At the same time, no other securities market (other than silver) experienced any unusual price or volume movement. 12,000 contracts represents 1.2 million ounces of gold, an amount that exceeds by a factor of three the total amount of gold in Comex vaults that could be delivered to the buyers of these contracts.This manipulation by the Fed involves the short-selling of uncovered Comex gold futures. “Uncovered” means that these are contracts that are sold without any underlying physical gold to deliver if the buyer on the other side decides to ask for delivery. This is also known as “naked short selling.” "

I have no reason to read conspiracy theorists.
Gold is a commodity the fed has no control over gold just as it doesn't have control over oil.
Gold's value is based on global value not the feds.

I know what a gold contracts are and there are a ton of people that actually trade in those contracts not just the fed.
however they keep pace in what gold is going to do. similar to the forex market.

that is not naked short selling naked short selling is illegal I already proved this so you either want to deal in facts or you made
up conspiracy nonsense which is it?

 

[ludin]

You consider yerself a credible source, but I do not. The Fed is not a GSE. You are incorrect.

Who does the Fed report to?
Who does the director of the Fed work for?
The fed absolutely while being independent is accountable to congress and in fact
couldn't even function without the treasury department.

Yer judgement is of no value to me. You have demonstrated many times that you can't read or think to save yer life.

Your projecting again.

You didn't know it. You said that "at the end of the year it returns all of the money it made to the treasury." That's incorrect. It first pays all of its expenses.

Your dishonesty knows no bounds as you have to hack peoples posts apart. we already know that your posts
are sloppy and pretty much incoherent.

as for that nothing I said was wrong. the fed returns the money it made to the treasury. while a generality it is in fact correct.
your attempt at gotcha is yet another failure of a post.

If nothing more, I'm correcting the crap you arrogantly post. You again have no idea what yer talking about.

Maybe you should correct your own posts before worrying about other people.

 

[Kushinator]

QE didn't do that. While Billions of dollars were spent none of the money actually entered into the markets. it was kept within the banking system itself.
the fed simply did an dollar for dollar asset exchange with banks.

none of it was actually used to pay on the debt or anything else.

This is referred to as pushing on a string. So while lower interest rates via the increase in available funds allowed the U.S. banking system a great deal of wiggle room, it didn't lead to an increase in total lending that typically accompanies a recovery.

Keynes (and Kalecki!!!!) already addressed this more than half a century ago. If the U.S. economy is to see growth north of 3%, a far greater level of deficit spending is necessary.

 

[mmi]

Who does the Fed report to? Who does the director of the Fed work for? The fed absolutely while being independent is accountable to congress and in fact couldn't even function without the treasury department.

You said the Fed is a GSE. Yer wrong.

>>Your dishonesty knows no bounds

Completely unsupported.

>>you have to hack peoples posts apart.

Mindless blather.

>>your posts are sloppy and pretty much incoherent.

Worthless nonsense. No examples provided.

>>nothing I said was wrong.

You said the Fed is a GSE. Yer wrong. You said the Fed gives all its income to the Treasury. Yer wrong.

>>your attempt at gotcha is yet another failure

I don't pay childish games like "Gotcha." If you don't like being corrected, stop posting falsehoods.

>>you should correct your own posts

Where?

 

[ludin]

This is referred to as pushing on a string. So while lower interest rates via the increase in available funds allowed the U.S. banking system a great deal of wiggle room, it didn't lead to an increase in total lending that typically accompanies a recovery.

Keynes (and Kalecki!!!!) already addressed this more than half a century ago. If the U.S. economy is to see growth north of 3%, a far greater level of deficit spending is necessary.

Keyes sick of hearing keye that government have to drive themselves into unstainable debt
To keep the economy going. It is simply false. The economy could exist without government.
It would strum right along. The only role government should play in the economy is as a ref.

To insure that markets and businesses are not being corrupt in their business dealings.

The government doesn't have to run a deficit to keep the economy running.
Government that constantly runs deficits is an irresponsible one.

The economy can grow just fine without deficits.

Deficits and debt take money out of the economy. It puts more of a burden on taxpayers and businesses.
Unless you are one of those people that think the government can just print money with 0 reprecussions.

 

[ludin]

You said the Fed is a GSE. Yer wrong.

Who established the fed or can you not answer that question like you can't the others?

 

[Critter7r]

Keyes sick of hearing keye that government have to drive themselves into unstainable debt
To keep the economy going. It is simply false. The economy could exist without government.
It would strum right along. The only role government should play in the economy is as a ref.

To insure that markets and businesses are not being corrupt in their business dealings.

The government doesn't have to run a deficit to keep the economy running.
Government that constantly runs deficits is an irresponsible one.

The economy can grow just fine without deficits.

Deficits and debt take money out of the economy. It puts more of a burden on taxpayers and businesses.
Unless you are one of those people that think the government can just print money with 0 reprecussions.

Most of what you said can be debated by both sides till the cows come home as to how much gov't involvement there should be in the economy.

But, deficits and debt do NOT take money out of the economy. A deficit, by definition, means that the gov't is putting more money INTO the economy by spending, than it is taking OUT of the economy by taxation.

Sent from my SM-G360V using Tapatalk

 

[ludin]

Most of what you said can be debated by both sides till the cows come home as to how much gov't involvement there should be in the economy.

But, deficits and debt do NOT take money out of the economy. A deficit, by definition, means that the gov't is putting more money INTO the economy by spending, than it is taking OUT of the economy by taxation.

Sent from my SM-G360V using Tapatalk

Deficits if not accounted for becomes debt. Debt has to be repaid the only way government
Collects money is through taxes. More debt is more pressure on the system to pay it.
As at some point taxes will have to be raised in order for that to occur.

Therefore money comes out of the system to pay the governments lack of fiscal responsibility.

they are simply robbing Peter to pay Paul. That over spending still has to be paid back.

 

[Absentglare]

Deficits if not accounted for becomes debt. Debt has to be repaid the only way government
Collects money is through taxes. More debt is more pressure on the system to pay it.
As at some point taxes will have to be raised in order for that to occur.

Therefore money comes out of the system to pay the governments lack of fiscal responsibility.

they are simply robbing Peter to pay Paul. That over spending still has to be paid back.

The government doesn't only pay debt service with money collected from taxes. That's why we don't need to be afraid of persistent deficits (which we've had for most of the past hundred years or so).

 

[ludin]

The government doesn't only pay debt service with money collected from taxes. That's why we don't need to be afraid of persistent deficits (which we've had for most of the past hundred years or so).

Yea I know they do the stupid thing and borrow more money to pay in the interest they have already done.
It is pretty much fiscal stupidity supreme.

Will entitlement programs and debt consume U.S. budget in 2025? | PolitiFact Virginia

The Cbo says otherwise.
Ol yea your one of those people that think we can just print money with 0 consequences.

 

[Absentglare]

Yea I know they do the stupid thing and borrow more money to pay in the interest they have already done.
It is pretty much fiscal stupidity supreme.

Will entitlement programs and debt consume U.S. budget in 2025? | PolitiFact Virginia

The Cbo says otherwise.
Ol yea your one of those people that think we can just print money with 0 consequences.

Not zero consequences, but we can deficit spend more without causing hyperinflation. You shouldn't have to misrepresent my view to respond to it, that should tell you something.

 

[mmi]

Who established the fed or can you not answer that question like you can't the others?

Yer not worth my time. Not even close. I will continue to taunt, mock, and ridicule RW morons, but I'm going to make a determined effort to otherwise … Ignore them.

I'm still waiting to hear about how the plow put everyone out of work.

 

[iguanaman]

Please read the entire articlehttp://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipulation/"The Fed’s gold manipulation operation involves exerting forceful downward pressure on the price of gold by selling a massive amount of Comex gold futures, which are dropped like bombs either on the Comex floor during NY trading hours or via the Globex system. A recent example of this occurred on Monday, January 6, 2014. After rallying over $15 in the Asian and European markets, the price of gold suddenly plunged $35 at 10:14 a.m. In a space of less than 60 seconds, more than 12,000 contracts traded – equal to more than 10% of the day’s entire volume during the 23 hour trading period in which which gold futures trade. There was no apparent news or market event that would have triggered the sudden massive increase in Comex futures selling which caused the sudden steep drop in the price of gold. At the same time, no other securities market (other than silver) experienced any unusual price or volume movement. 12,000 contracts represents 1.2 million ounces of gold, an amount that exceeds by a factor of three the total amount of gold in Comex vaults that could be delivered to the buyers of these contracts.This manipulation by the Fed involves the short-selling of uncovered Comex gold futures. “Uncovered” means that these are contracts that are sold without any underlying physical gold to deliver if the buyer on the other side decides to ask for delivery. This is also known as “naked short selling.” "

Gold is not money. It is a commodity like any other. All commodities and currencies are subject to manipulation but it is certainly not a Govt. conspiracy.. I assume you bet on gold and lost. Chalk it up to experience.

 

[JP Hochbaum]

It is "cognitive dissonance."
When you print, from thin air, more paper money without additional collaterol, the money is debased.

What do you consider to be collateral for a fiat currency?

 

[ludin]

Not zero consequences, but we can deficit spend more without causing hyperinflation. You shouldn't have to misrepresent my view to respond to it, that should tell you something.

https://www.stlouisfed.org/publicat...-deficits-and-interest-rates-what-is-the-link

The federal reserve disagrees with you.
no one mentioned hyperinflation that is a strawman.

the fact is it will cause inflation.
no one misreprested anything.

the fact is that more deficit and debt is bad for the long term health of the economy and the government.
I already posted where social spending and the national interest on the debt will consume the budget
by 2025.

which means borrowing more and more money required by the private sector to pay for the governments
fiscal insanity.

 

[DaveFagan]

What do you consider to be collateral for a fiat currency?

Only faith. Faith is another word for "confidence." I consider fiat currencies a "Confidence Game." If you operate a balanced budget, they are fine. If you abuse the confidence level, you are screwed. That is why on the cusp of a financial crisis the heads of the Fed, Treasury, Goldman Sachs, ex-Fed and Treasury heads, JPMorgan, et al show up on all prime time interview shows talking about their "confidence" in the policies of the Fed, Treasury. They are "confidence pumps," working the Mass Media mindbender machine to the max. Confidence is like the air that fills your car tires. It is what pumps up the "fiat currency." Full faith and credit, don't ya' know?

 

[JP Hochbaum]

Only faith. Faith is another word for "confidence." I consider fiat currencies a "Confidence Game." If you operate a balanced budget, they are fine. If you abuse the confidence level, you are screwed. That is why on the cusp of a financial crisis the heads of the Fed, Treasury, Goldman Sachs, ex-Fed and Treasury heads, JPMorgan, et al show up on all prime time interview shows talking about their "confidence" in the policies of the Fed, Treasury. They are "confidence pumps," working the Mass Media mindbender machine to the max. Confidence is like the air that fills your car tires. It is what pumps up the "fiat currency." Full faith and credit, don't ya' know?

"faith" is not collateral.

Dollars are traded for goods and services as collateral, not "faith".

So if more dollars are printed, you want more goods and services created to create more collateral (more things to buy/sell = more demand for that currency, which increases the value).

Using s subjective word like "faith" just isn't even in the realm of science or math or anything quantitative, no economist in their right mind would use that to measure the value for something.

 

[Absentglare]

https://www.stlouisfed.org/publicat...-deficits-and-interest-rates-what-is-the-link

The federal reserve disagrees with you.
no one mentioned hyperinflation that is a strawman.

the fact is it will cause inflation.
no one misreprested anything.

the fact is that more deficit and debt is bad for the long term health of the economy and the government.
I already posted where social spending and the national interest on the debt will consume the budget
by 2025.

which means borrowing more and more money required by the private sector to pay for the governments
fiscal insanity.

That doesn't disagree with me at all.

 

[JohnfrmClevelan]

That doesn't disagree with me at all.

That was another "here's a link proving what I claimed (but I'm hoping you don't read the link)" link. He does that a lot.

 

[DaveFagan]

"faith" is not collateral.

Dollars are traded for goods and services as collateral, not "faith".

So if more dollars are printed, you want more goods and services created to create more collateral (more things to buy/sell = more demand for that currency, which increases the value).

Using s subjective word like "faith" just isn't even in the realm of science or math or anything quantitative, no economist in their right mind would use that to measure the value for something.

The US Treasury provides a US Treasury Note/bond of 8 trillion dollars and the Federal Resrve prints 8 trillion dollars of Federal Reserve Notes. It used to be a competitive market for those US Treasuries, but now the Federal Reserve is the buyer, ergo we would owe the Federal Reserve Interest on 8 Trillion Dollars because savvy buyers are suspect of the ability to honor continuously growing debt. The "full faith and credit" debt is not a good or service. Helicopter money, don't ya' know? Perhaps if one could accumulate enough of those debts, they could purchase a National Park, eh? If you can overwhelm World currency markets with huge volumes of this money, you can buy up anything of real value around the World, and control many economies and perhaps prevent the collapse of the debt. or not?

 

[ludin]

The US Treasury provides a US Treasury Note/bond of 8 trillion dollars and the Federal Resrve prints 8 trillion dollars of Federal Reserve Notes.

Umm no. this is not correct. The US Treasury issues a note and it is the US mint that prints it. The Federal Reserve is only there for distribution processing.
However in the case it is a simple electronic transactions.

It used to be a competitive market for those US Treasuries, but now the Federal Reserve is the buyer, ergo we would owe the Federal Reserve Interest on 8 Trillion Dollars because savvy buyers are suspect of the ability to honor continuously growing debt. The "full faith and credit" debt is not a good or service. Helicopter money, don't ya' know? Perhaps if one could accumulate enough of those debts, they could purchase a National Park, eh? If you can overwhelm World currency markets with huge volumes of this money, you can buy up anything of real value around the World, and control many economies and perhaps prevent the collapse of the debt. or not?

More than the federal reserve buys US treasuries.
The treasury actually loans the money to the federal reserve.

The US dollar is backed by the power of the US economy.

 

[ludin]

That doesn't disagree with me at all.

sure it does. but you didn't read it.
deficits can cause inflation.

have a nice day. it was in the 1st or 2nd paragraph since you didn't read it.

 

[DaveFagan]

Umm no. this is not correct. The US Treasury issues a note and it is the US mint that prints it. The Federal Reserve is only there for distribution processing.
However in the case it is a simple electronic transactions.



More than the federal reserve buys US treasuries.
The treasury actually loans the money to the federal reserve.

The US dollar is backed by the power of the US economy.

So why does it say in big letters, FEDERAL RESERVE NOTE?
Power of the US Economy == "Full faith and credit" no collaterol