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der Teufel wrote: ↑Mon Nov 26, 2018 5:16 pm Means Testing for Social Security and Medicare.
If you have assets or income, "you don't need the benefits" even though you probably paid in more than most.
Just another way of redistributing income.

I'm actually not talking about social security: that is its own can of worms.

The Fed primarily set money supply with reserve requirement and interest rates before the global financial crisis. It's a different world since 2009 because JPMC, BoA, probably Wells Fargo, and the big investment banks that didn't collapse were all insolvent.The Fed hid their worthless assets under the Fed by trading worthless loans for "reserves" that couldn't ever leave the Federal Reserve. Those reserves didn't cause inflation because they're locked away by capital requirements that these banks can't meet without them being....locked away. It's just a way to hide the facts that the banks are insolvent.

That didn't stop the Fed from dropping its interest rate to 0% or reserve requirements for Big Banks to 0. This produced an environment in which the entities that needed regular returns couldn't invest in bonds. It was a huge deal for the big state and private pension funds, whose already massive unfunded liabilities grew by huge strides in 2000 and 2008. They then had to make bets in the stock market and those bets are ongoing. If these bets fail in a bear market, then pension funds with 20-40% of the funds that they need assuming indefinite 7.5% growth will have no chance of meeting those obligations.

That could force the printing of money to save those pensioners, and that money WILL enter the market and cause inflation.

ScottDLS wrote: ↑Thu Nov 22, 2018 5:59 pm Great summary. In my opinion why QE didn’t work is because the market is still savvy even when there is tons of liquidity and super low rates. The problem is the regulatory drag of Dodd Frank and the Obama regulatory state resulted in very few investment opportunities even for low/no cost money. The only firms/investors that could take advantage of easy money to lever up, were big slow growth firms. There were few profitable opportunities in the “real” economy and as a result, the only people that made money were the big politically connected investment banks. They used financial engineering to take advantage of the excess liquidity. Small borrowers, investors, and home buyers were frozen out by poor job growth and limited opportunities.

The scary thing is....maybe that was QE working EXACTLY as intended? The crazy part is, none of this is hidden. FRED maintains great, easily configurable graphs of this in their website. The issue is that nobody even bothers to look. You can't see negative nominal interest rates and a money multiplier below 1 for YEARS and claim that things are okay.

It's funny and sad that you reference Roosevelt's gold confiscation orders. The thing is, the government didn't want the physical metal; it wanted the public to not have it, more specifically to hold little gold in comparison with Federal holdings. Roosevelt didn't want the gold; he wanted pricing power to inflate the dollar.

Why would he want that over metric kilotons of gold bullion? Because it's worth more. Your initial question is extremely valuable to anyone with the power to inflate the currency. You're not a dumb guy and you're obviously on the lookout for shenanigans, but you can't see it. There is no "next" Wide scale asset foreteiture because the current wide scale asset forfeiture works EXTREMELY well and flies directly over most folks' heads.

Inflation is theft for the wealthy few from the many by their partners /debtors in government. Inflation is not "helicopter money". Helicopter money is a thought experinent conceived by Friedman in the 1960s and only seriously considered in Japan in this decade, but it's how most folks think inflation works. Basically, the mental image is a banker emptying a briefcase of freshly printed twenties out the door of a chopper overflying a populated area. Everyone gets some cash all at once; maybe in practice it's done electronically, but the helicopter makes it simpler to envision.

This situation HAS NEVER OCCURRED and is not likely to ever come to pass. What actually happens is that the FOMC decides to inflate (generally in pursuit of full emoloyment based upon the Phillips Curve, which is its own mockery of reason) by monetizing debt. In the US the Fed can directly buy new debt from the Federal government with newly created money, but it can also print money to buy assets from private (very large) banks. Further, in extreme cases the big banks are simply given money* (the Fed printed about $2.7 trillion dollars, or 3.4x the 2007 extant amount, between 2008 and 2014; forget this extreme example for now).

Price discovery for the new value of a dollar is inefficient. This means that newly created dollars hold the same value as they did before the new dollars were created until the market prices in that tiny amount of inflation. As the new dollars work their way down the food chain to the plebians, the new, depreciated value is set by the market. The extra value extracted from the holders of the old dollars by the holders of the fresh new dollars is MASSIVE.

As these institutions are essentially all banks, they mostly loan the money out. It's fairly easy to imagine arbitrage when I can lend you a dollar that I know will soon be worth $0.99 when you still think that it's worth $1. The extra penny may be small, but when you multiply it by billions and add continuouly compounded interest in, the value expands rapidly.

*I mentioned direct crediting of reserves above. That's a special case, and while egregious, isn't what we're discussing here. That event wasn't inflation, as the new "money" is kept in the Fed and can't be lent out. Basically, the Fed bought worthless MBS products from the big banks at face value and paid for them with newly created "reserves" credited to the banks' accounts at the Fed. This was essentially a shell game, wherein the loans that will never be repaid on houses worth a fraction of the loan amounts were removed from the bank balance sheets and put on the Fed balance sheet. If you think that the Fed didn't want to be audited in 2008, guess how they feel with a nominal $3 trillion on their books that is worth maybe 10% of that?

So while you're looking around for the G-man sniffing around your gun safe or the IRS taking too much from your paycheck, wealth confiscation for the 0.01% has been ongoing and abetted by both political parties since 1971.