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Catatonic
11-03-2009, 09:26 AM
Can you guess what he said? Here it is!

"It's a dumb idea being pushed by people who are completely ignorant of our monetary system.

Here are several reasons why it is stupid.

1. One of the Fed's main monetary policy tools is the setting of interest rates. It does this by manipulating the level of reserves in the banking system. Any audit that would constrain the Fed's ability to add to reserves would serverly hamper its ability to conduct monetary policy and that would be bad for the economy.

2. Under a free floating non-convertible currency system such as the one we currently have there is never an issue of "solvency," and solvency, ostensibly, is what the audit woiuld seek to determine. A currency issuing nation and its central bank "spend" by crediting bank accounts and there is no constraint on the ability to do this because there is no "backing" for the currency as would be the case under a gold standard or fixed exchange rate. Conducting an audit for solvency in a monetary regime where there can never be a solvency issue is nonsensical.

3. Last but not least: The Fed is required by law to turn over all its profits to the U.S. Treasury. No business in America and probably no business in the entire world is under such a confiscatory directive. If the Fed were allowed to keep its profits in the form of retained earnings--as nearly all businesses do--then its capital over the past 96 years would have grown into the tens of trillions. The question of solvency would be moot. "

Bruno
11-03-2009, 09:28 AM
He just insulted the intelligence of 300 members of the House and 30 members of the Senate. Nice work.

Catatonic
11-03-2009, 09:52 AM
I'm actually emailing him about this, how should I respond?

HOLLYWOOD
11-03-2009, 10:12 AM
What an Asshole. Here's the latest video Schiff vs. Norman:

YouTube - Peter Schiff Responds to Mike Norman with Don Harrold Part 1 (http://www.youtube.com/watch?v=NHWkXt1_oLg)

http://mikenormaneconomics.blogspot.com/2009/11/should-fed-be-audited.html

Tuesday, November 3, 2009

Should the Fed be audited? (http://mikenormaneconomics.blogspot.com/2009/11/should-fed-be-audited.html)



Yesterday a reader of my blog sent me an email asking my opinion as to whether or not the Fed should be audited. As many of you know, people like Ron Paul are pushing for a Fed audit. My response to the email is below.

It's a dumb idea being pushed by people who are completely ignorant of our monetary system.

Here are several reasons why it is stupid.

1. One of the Fed's main monetary policy tools is the setting of interest rates. It does this by manipulating the level of reserves in the banking system. Any audit that would constrain the Fed's ability to add to reserves would serverly hamper its ability to conduct monetary policy and that would be bad for the economy.

2. Under a free floating non-convertible currency system such as the one we currently have there is never an issue of "solvency," and solvency, ostensibly, is what the audit woiuld seek to determine. A currency issuing nation and its central bank "spend" by crediting bank accounts and there is no constraint on the ability to do this because there is no "backing" for the currency as would be the case under a gold standard or fixed exchange rate. Conducting an audit for solvency in a monetary regime where there can never be a solvency issue is nonsensical.

3. Last but not least: The Fed is required by law to turn over all its profits to the U.S. Treasury. No business in America and probably no business in the entire world is under such a confiscatory directive. If the Fed were allowed to keep its profits in the form of retained earnings--as nearly all businesses do--then its capital over the past 96 years would have grown into the tens of trillions. The question of solvency would be moot.

-Mike


Posted by Mike Norman at 6:42 AM (http://mikenormaneconomics.blogspot.com/2009/11/should-fed-be-audited.html) 0 comments (https://www.blogger.com/comment.g?blogID=2761684730989137546&postID=2186223441731717338) http://www.blogger.com/img/icon18_email.gif (http://www.blogger.com/email-post.g?blogID=2761684730989137546&postID=2186223441731717338)
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HOLLYWOOD
11-03-2009, 10:59 AM
Oh, I found this GEM... Fast forward to 2:20 if you're short on time... Mike Norman makes a complete ASS of himself challenging Peter Schiff on FOX Business.

YouTube - 12/31/2006 Peter Schiff On FOX Bulls And Bears/Cavuto (http://www.youtube.com/watch?v=60CLQse27p8&feature=related)

GunnyFreedom
11-03-2009, 11:23 AM
Oh, I found this GEM... Fast forward to 2:20 if you're short on time... Mike Norman makes a complete ASS of himself challenging Peter Schiff on FOX Business.

YouTube - 12/31/2006 Peter Schiff On FOX Bulls And Bears/Cavuto (http://www.youtube.com/watch?v=60CLQse27p8&feature=related)

Outstanding response! shared on fb

ctiger2
11-03-2009, 11:52 AM
Mike Norman is a dipshit to the Nth degree.

catdd
11-03-2009, 11:55 AM
Schiff turned out to be right and Norman made a complete fool out of himself. Now he wants people to think anything he says has any relevance? He's ruined his credibility more than once.

Catatonic
11-03-2009, 04:14 PM
Is anyone able to address the points he made specifically?

lester1/2jr
11-03-2009, 04:29 PM
lol norman basically hijacked the plot of Rose Wilder Lanes "the discovery of freedom" except he replaced the concept of "freedom" with "paper money". which is ridiculous because there was fiat money long before the 20th century!

freedom has nothing to do with going off the gold standard.

lester1/2jr
11-04-2009, 09:48 AM
. One of the Fed's main monetary policy tools is the setting of interest rates. It does this by manipulating the level of reserves in the banking system. Any audit that would constrain the Fed's ability to add to reserves would serverly hamper its ability to conduct monetary policy and that would be bad for the economy.

how would an audit hamper it's ability to conduct monetary policy?


Under a free floating non-convertible currency system such as the one we currently have there is never an issue of "solvency," and solvency, ostensibly, is what the audit woiuld seek to determine. A currency issuing nation and its central bank "spend" by crediting bank accounts and there is no constraint on the ability to do this because there is no "backing" for the currency as would be the case under a gold standard or fixed exchange rate. Conducting an audit for solvency in a monetary regime where there can never be a solvency issue is nonsensical.

so there should never be audits of anything? not having a gold standard doesn't mean you can't do things which are dangerous to the currency


3. Last but not least: The Fed is required by law to turn over all its profits to the U.S. Treasury. No business in America and probably no business in the entire world is under such a confiscatory directive. If the Fed were allowed to keep its profits in the form of retained earnings--as nearly all businesses do--then its capital over the past 96 years would have grown into the tens of trillions. The question of solvency would be moot. "

no business in the world has the comparative advantage that the fed does. DO you think if I held the spigot to all the worlds oil I could make a good bet on the price of oil? I bet I could

mconder
11-04-2009, 11:38 AM
In others words, there's no point because it's all a scam anyway. Thanks.

AJ Antimony
11-04-2009, 11:47 AM
I don't think he's actually read the bill because nowhere in the bill is Congress given the power to do anything with monetary policy. All they would do is look to see what the Fed did after the fact.

devil21
11-04-2009, 03:55 PM
Wasn't that douchebag posterized in the "Peter Schiff Was Right" video?

ScoutsHonor
11-04-2009, 04:25 PM
Is anyone able to address the points he made specifically?

My question also. :confused:

lester1/2jr
11-04-2009, 05:07 PM
why don't you guys give it a try?

devil21
11-04-2009, 05:56 PM
Can you guess what he said? Here it is!

"It's a dumb idea being pushed by people who are completely ignorant of our monetary system.

Translation: People that don't want the giant Ponzi scheme of theft to continue are against this. Therefore I will call them ignorant.



Here are several reasons why it is stupid.
Translation: Here are several sound bites that I picked up from Ben Bernanke. 95% of the people that hear them won't know whether Im telling the truth. But you know the old saying, if you can't beat them with facts then baffle them with bullshit.



1. One of the Fed's main monetary policy tools is the setting of interest rates. It does this by manipulating the level of reserves in the banking system. Any audit that would constrain the Fed's ability to add to reserves would serverly hamper its ability to conduct monetary policy and that would be bad for the economy.

The audit says nothing of auditing interest rates, plus the audits can only take place well after the interest rate is set. What he's arguing for is that the Fed needs to be able to bubble and bust the economy as it sees fit. Opening up the books even 6 months later can give people a heads up as to what the Fed is planning. That information currently is not released. It takes away the insider's (GS, JPM, GE, et al) advantage. The same people that Mike Norman depends on for a job.



2. Under a free floating non-convertible currency system such as the one we currently have there is never an issue of "solvency," and solvency, ostensibly, is what the audit woiuld seek to determine. A currency issuing nation and its central bank "spend" by crediting bank accounts and there is no constraint on the ability to do this because there is no "backing" for the currency as would be the case under a gold standard or fixed exchange rate. Conducting an audit for solvency in a monetary regime where there can never be a solvency issue is nonsensical.

I don't really follow his train of thought here. It sounds like he's saying that since the paper money and digital currency aren't backed by anything, then there's never a such thing as insolvency since it can be created out of nothing. ISN'T THAT THE PROBLEM?? Nevermind that insolvency does indeed happen when the paper and the digits are worthless when the trust is lost in them. What is insolvency if not a lack of money to spend? If no one wants dollars, then how do you spend them?

http://dictionary.reference.com/browse/insolvency

Financial Dictionary
Insolvency
When a company can no longer meet its debt obligations with another firm or institution.

Granted, any and all debts can be paid by printing more money. But after all the debts are paid, we cease to have ANY money whatsoever. His argument is confusing to me. I don't remember 1207 containing any language about insolvency anyway. We just want to know what the Fed is doing!



3. Last but not least: The Fed is required by law to turn over all its profits to the U.S. Treasury. No business in America and probably no business in the entire world is under such a confiscatory directive. If the Fed were allowed to keep its profits in the form of retained earnings--as nearly all businesses do--then its capital over the past 96 years would have grown into the tens of trillions. The question of solvency would be moot. "

Who, then, are we paying the interest on the national debt to? I'd like to see where in law this assertion is supported. We know that the Fed is NOT a gov't agency (this is another point where he tries to confuse the uneducated masses) and is privately owned, only with a federal charter. Therefore the money brought in through the federal income tax is not gov't property. I'd like to see where in law it is stated that the Fed must return all profit back to Treasury. Then I want to see the accounting supporting it! Oh wait, we can't see that (because it doesn't happen). 1207 would fix that little problem and that's why it can't be allowed to pass.

He ignores the other stated purposes for 1207 like revealing which foreign banks are getting wads of dollars at the expense of inflation of our savings. His arguments are weak, nevermind that there's no reason that our own central bank should be keeping so many secrets from the people that support it through use of the fiat money it creates.

Carole
11-04-2009, 06:26 PM
You really need to send that gem to Mr. Norman and let him defend himself. LOL

lester1/2jr
11-04-2009, 07:14 PM
nice