Milton Friedman vs. The Federal Reserve

This thread belongs here. It's about the same scam organization we discussed in another thread. This is a conspiracy that has been perpetrated on the American people since 1913.....and it was tried before that and an end was put to it by a smart and courageous president. Then Wilson got how much money to bring it back?

Milton Friedman is a brilliant scholar. A little background:

Milton Friedman (born July 31, 1912) is an American economist, known for his work on macroeconomics, microeconomics, economic history, statistics, and for his advocacy of laissez-faire capitalism. In Capitalism and Freedom (1962) he minimized the role of government in a free market in order to create political and social freedom. In 1976, he won the Nobel Prize for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy.[1] His television series Free to Choose aired on PBS in early 1980. It became a book, co-authored with his wife, Rose Friedman. The book was widely read, as were his columns for Newsweek magazine.

source: en.wikipedia.org...

In 1963, the University of Chicago economist had published with coauthor Anna J. Schwartz the magnum opus of his career. 'A monetary History of the United States, 1867 - 1960.' To professionals, Friedman's work was an awesome piece of scholarship, a dense tome that traced in meticulous detail the entire course of money, banking and U.S. monetary policy from Ulysses S. Grant to John F. Kennedy. To most politicians in Washington, Milton Friedman seemed just a figure with an odd obsession. He kept reappearing in academic and political forums, preaching the same profoundly conservative sermon: the Keynesian orthodoxy that had dominated economics for thirty years was wrong. Not just a little wrong, Friedman insisted, but totally, fundamentally disastrously wrong.

source: "Secrets of The Temple - How The Federal Reserve Runs The Country" by William Greider

Milton Friedman is a Nobel winner.

More from the book:

Milton Friedman...worried about inflation. He testified frequently before Congress and patiently instructed important committee chairmen on why they should worry too. At the time, it seemed an odd complaint, even cranky. The Consumer Price Index rose by modest increments each year, but never by as much as 2 percent through 1965. Wealthy bond investors might grumble when the inflation rate hit 1.5 percent, but the rest of the country was more impressed by the general prosperity. Friedman persisted, nevertheless, with his dire predictions.

"The FED's manipulation of the money supply, Friedman added, was consistently destabilizing and damaging."

"The seminal events that destroyed the old ideology were the Crash of 1929 and the Great Depression that followed......In the Great Depression, the American economy did not revive. Neither did the rest of the world's. Year after year, as the social misery deepened and massive unemployment stretched on for more than a decade, the popular faith in free markets was shattered.......This new idea - government's obligation to manage the economy - was legitimized by the national trauma of Depression, embraced both in public opinion and in scholarly theory.

In his book, Friedman insisted that the accepted explanation for the Great Depression was mistaken. "Friedman found that both the original collapse of 1929 and the long contraction of the real economy were probably caused and certainly exacerbated by the Federal Reserve's failure to provide an adequate money supply."

Most of that missing money was going to the 300 or so private shareholders in the FED.

By 1973, prices were escalating rapidly again and the CPI rose by a new postwar record, 8.8 percent. The following year, 1974, OPEC pushed up oil and the price level rose 12.2 percent

Who eactly was to blame? The standard explanations from economists seemed to blame everyone, a bit, and no one singularly. Milton Fiedman offered a much simpler answer to the question: inflation was caused by the Federal Reserve.

....Friedman said, the Federal Reserve swerved back and forth irresponsibly - supplying too much money and causing inflation, then tightening the money supply abruptly, which choked off the economy and produced recession."

This is a direct quote from Friedman:

"The Federal Reserve System is a political institution, and like every political institution, it is seeking to retain its own power, its own decisions, its own prestige. To what end do politicans want to maintain their positions? To what end does a CEO of a business concern want to run that concern for profit? Because the coin he is interested in is both income and power. In the same way, people who are in the Fed want to maintain their position. Their coin is influence and power."

Using Friedman's method, there never would have been a Great Depression. But, if the FED didn't have control...that is, they had to stay within a guideline of only increasing the money supply by 3% each year, they would have no prestige. They would be reduced to a minor service agency of the government. By having us all by the short ones, the FED has power. They certainly don't want less power.....and this is why they have never agreed to apply Friedman's method.


[edit on 8-11-2006 by Excitable_Boy]

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Added 'ex' tags for external quotes

[edit on 29/11/06 by masqua]

[edit on 29/11/06 by masqua]

Would you mind fixing the quote/external source tags? It's not completely clear which comments are your own and which are William Greider's.

Milton Freidman is indeed a great scholar, and in my view correctly identified poor management of the money supply by the Fed as a leading cause of the depression. However, I'm not quite sure what you mean in the last paragraph.... particulary the reference to "Friedman's method", that you say the Fed refuses to adopt. What method do you mean exactly?

Today the Fed doesn't have the power you decribe, and are in fact bound to certain targets, though that target is an inflation figure around 1-2% ish, rather than a money supply figure. The fed itself can't pump money into the economy. Someone has to actually borrow it from the Fed. Lower interest rates will cause people to borrow more money. Higher rates will disuade borrowers. The only power the Fed has is the power to set interest rates, thus influencing the demand for money, and therefore how much new money is borrowed/created.

The thing to remember is that economics essentially a social science. As your post highlights, opinions change. Great minds often disagree fundamentaly on how best to manage the economy, and it's only through trial and error over the decades, that new and better understandings emerge.

As such, one has to be caseful when judging the motivations of the players involved. Malice and incompetance are different things. Milton Friedman himself argued that it was lack of foresight that caused the Fed to tightewn the money supply as it did, causing the crash and depression. The measure was taken, because they thought easy credit was fueling the stock market boom at the time, as speculators borrowed the money to buy stock. What they didn't expect was what effect this would have on the economy. The got it wrong, but it does automatically follow that they got it wrong on purpose.

For example, A similar dilema faces Ben Bernanke today.

On the one hand, there are signs that we may be facing a recession in the coming 12 months... which on it's own would suggest lowering interest rates might be a good idea to stimulate demand. On the other hand, consumer borrowing and house prices are still high. A lowering of interest rates could cause this problem to get worse, as people get more in to debt. What should the Fed do? Very often they're damned if they do, damned if they don't.

I'm glad though that trying to be popular with the voting public isn't also one of Ben's goals as well.





[edit on 8-11-2006 by nowthenlookhere]

Would you mind fixing the quote/external source tags? It's not completely clear which comments are your own and which are William Greider's.

The information comes from a book I am reading...therefore, nothing external. I used quotation marks...that should suffice.

Today the Fed doesn't have the power you describe

Yes it does. Check out the information provided on this thread:
www.abovetopsecret.com...

The FED is a privately owned, for profit organization that nets $1 trillion per year for its 300 or so private stock holders. I would say that gives them an awful lot of power and plenty of room for corruption....don't kid yourself. Deny ignorance!

[edit on 9-11-2006 by Excitable_Boy]

Originally posted by Excitable_Boy
The FED is a privately owned, for profit organization that nets $1 trillion per year for its 300 or so private stock holders. I would say that gives them an awful lot of power and plenty of room for corruption....don't kid yourself. Deny ignorance!
[edit on 9-11-2006 by Excitable_Boy]

People keep saying that but it's simply not true,. The Fed actually nets around 30 billion a year, and pays 23 billion of that straight to the US government. The rest is running costs.

Each year the the Fed publishes a Full, audited report covering EXACTLY what money comes in and what money goes out.

Check out pages 125, 313 and 280 of the most recent report. this given the full breakdown.

Edit : you should also be aware that many of the "Federal Reserve is Scam" sites that are so often quoted as "evidence" of conspiracy, are actually set up and paid for by gold dealers. It's one of the oldest tricks on wall street... Create fear, then offer the perfect "safe" investment.

You'll notice that non of the conspiracy sites offer real evidence.. just century old quotes, amateurish legal interpretations and fact-fitting. Nowhere will you see a balance sheet, an income statement, or any kind of real financial investigation. You'll also notice that all the sites, videos etc are ALL just re-hashes of the same old information.. nothing new, other than maybe an interview with another person you've never heard of who is being mooted as an expert..






[edit on 9-11-2006 by nowthenlookhere]

i smell ......denial

it's so true today , and even when evidence is put in your face u refuese to beleive it cause u are COMFORTABLE ENOUGH in the matrix

btw what in your mind is real evidence a letter by the fed saying yes we are a scam?

seriously i am curious

are u even open to wondering if the fed "which is privately and internationally owned is operting corruptly"

or is the world such a peaceful moral place (especially at high levels of power) that this thought escapes you

or are u just too comfortable in the matrix to take the time to rethink a few of your beleifs

[edit on 9-11-2006 by cpdaman]

[edit on 9-11-2006 by cpdaman]

Originally posted by cpdaman
btw what in your mind is real evidence a letter by the fed saying yes we are a scam?

seriously i am curious

If you can produce such evidence, I'd certainly like to see it! ( the letter that is, not just a link to a website that merely claims such a letter exists)

Please provide a link. Thanks.

edit : btw, if any of you CAN prove that someone is defrauding the US public to the tune of $1 trillion a year, you might want to report it here :-

www.whistleblower-qui-tam.com...

Apparently, under federal law you are entitled to a collect between 15% to 30% of the total amount of the fraud as a reward.

$150-$300 billion would certainly come in useful I'd imagine. Good luck!


[edit on 9-11-2006 by nowthenlookhere]

Originally posted by nowthenlookhereAs such, one has to be caseful when judging the motivations of the players involved. Malice and incompetance are different things. Milton Friedman himself argued that it was lack of foresight that caused the Fed to tightewn the money supply as it did, causing the crash and depression.

Friedman lacks the courage to come out right and say that the deflation of the money supply was deliberate.

Of course, the contraction of the money supply was intentional and conspired by the banking cartel.

If you can produce such evidence, I'd certainly like to see it! ( the letter that is, not just a link to a website that merely claims such a letter exists)

Don't be ridiculous. What cpdaman is saying is that no such evidence exist.

All the evidence you need is common sense. This is not rocket science. Even my 9-year-old nephew and his friends understand. I gave them marbles and they were happily playing until little by little I removed marbles from their game. Eventually, they realized that I took too much marbles away and they can't play their game anymore.

You are telling me that the Federal Reserve is that incompetent to not know reducing money in circulation is not going to hurt the economy. Please! Simple question. Who benefitted? The answer should be obvious.

Originally posted by tazadar
Don't be ridiculous. What cpdaman is saying is that no such evidence exist.

All the evidence you need is common sense. This is not rocket science.

So there there is no evidence that the letter you refer to exists? OK. That speaks volumes.

You are telling me that the Federal Reserve is that incompetent to not know reducing money in circulation is not going to hurt the economy

That would appear to be the case yes, though I am happy to examine any evidence to the contrary. Evidence mind you, not just allegations. Anyone can make up allegations. the test is whether they stand up to close scrutiny.

NowThenLookHere...there has been plenty of evidence provided regarding this scam that has been going on since 1913 and was tried prior to that. Again I ask you to check out this thread:
www.abovetopsecret.com...

There is an awful lot of information there and for you to sit here and debunk it all is pretty ridiculous. What are your credentials to be able to debunk such a vast amount of information?

People keep saying that but it's simply not true,. The Fed actually nets around 30 billion a year, and pays 23 billion of that straight to the US government. The rest is running costs.

Each year the the Fed publishes a Full, audited report covering EXACTLY what money comes in and what money goes out.

Like this argument...this argument is ridiculous as well. You are saying the FED audits itself and provides true information? Hey....wanna buy the Brooklyn Bridge? I can get you a deal!! I also have some great swampland in Florida you can get at a great price!!

Why has no outside agency ever audited the FED? Why do they only audit themselves? Does this make sense to you? It's like saying the Mafia keeps proper records of all their business and pays the proper amount of taxes on everything they do...... PLEASE!!

Edit : you should also be aware that many of the "Federal Reserve is Scam" sites that are so often quoted as "evidence" of conspiracy, are actually set up and paid for by gold dealers. It's one of the oldest tricks on wall street... Create fear, then offer the perfect "safe" investment.

Are you kidding? Your name isn't Rockefeller or Rothschild is it?

Nowhere will you see a balance sheet, an income statement, or any kind of real financial investigation.

No kidding...that's because they audit themselves and they have never been audited by any other organization. So where would the balance sheet you want come from? You have one from the FED itself and because it is the only one you can find, you assume it is factual?

Read through the "FED is a scam" thread and tell me there is no credible evidence that the FED is a group of money-mongering scumbag international banking cabalists......who have destroyed Democracy in the United States and made us bankrupt in 1933 and have made many other countries bankrupt by loaning them money they couldn't afford to pay back!

They love to loan countries money for wars. They makes TONS of money off of that. i.e. WW2....they loaned money to the US for weapons and also loaned money to Germany for weapons. Does that seem ethical to you? Or does it appear that the FED have committed treason?....but of coursce, they get away with it because they only audit themselves. They have never been audited by any other organization.

They made a killing off of WW2, Korea, Vietnam, etc.etc.etc. and now Iraq. They have had their fingers in every war, big and small, since they came into existence. Why? Because war is big business and they make a killing off of killing. Those 300 shareholders made trillions off of 30,000 dead Americans in Korea and 60,000 in Vietnam and now Iraq. Three useless wars. Korea accomplished nothing but death to 30,000 of our troops and a lot more Koreans...same with Vietnam...not only 60,000 of our troops died but an insane amount of Vietnamese died...and it accomplished what? Nothing except to make TRILLIONS for the shareholders of the FED.

Iraq is the same crap all over again.

Where's your research NowThenLookHere? Are you such an authority on this subject that you have no need to provide any sources to back up your nonsense? And try to find some information from some place other the the FED's website. Please be smart enough to understand that the information on there is worth as much as the money they print........

NowThenLookHere.....here are some of the sources against the FED (or the idea) from that other thread that YOU say are bogus:

Presidents:
Thomas Jeffereson
James Madison
Abraham Lincoln
Woodrow Wilson
John F. Kennedy

Congressman Charles Lindberg Sr.
Congressman Louis T. McFadden
Documentary maker Aaron Russo
Alan Keyes
Steven Jacobsen
Tom Rose
Ludwig von Mises
Murray Rothbard
Navy Captain Gunther Russbacher - Involved with Naval Intelligence and the CIA
John Kenneth Galbraith
Frederick Tupper Saussy
Dr. Barnard
Lord Acton
John F. Hylan

I only searched through about half the thread...to find these names. These are all unacceptable sources of information for you? Give us YOUR credentials and back up your opinions with some sources.

I certainly have plenty of sources and knowledge to back up what I know are facts!

That would appear to be the case yes, though I am happy to examine any evidence to the contrary. Evidence mind you, not just allegations. Anyone can make up allegations. the test is whether they stand up to close scrutiny.

Where is your evidence? Anyone can just tell people they are wrong friend....You have a lot of balls to come in here and try to debunk a lot of research with just words out of your own mouth......

[edit on 9-11-2006 by Excitable_Boy]

Well, I've laid the evidence before you... including the accounts audited by Price Waterhouse Coopers, the well known accounting firm, disproving your alegation that no outside body audits the fed.

I've read the the thread you point to, and it's just the same old hearsay and mis-interpreted quotes. You show me numbers, objective facts, and I'll continue the debate. If you can't do that, you have no case. As I said before, allegations, however numerous, are not evidence.

Well, I've laid the evidence before you... including the accounts audited by Price Waterhouse Coopers, the well known accounting firm, disproving your alegation that no outside body audits the fed.

I've read the the thread you point to, and it's just the same old hearsay and mis-interpreted quotes. You show me numbers, objective facts, and I'll continue the debate. If you can't do that, you have no case. As I said before, allegations, however numerous, are not evidence.

You have laid no evidence before anyone!

Nice copout, which is what I expected. The FED hired Price Waterhouse Coopers to audit themselves. What are you talking about? So THEY ARE AUDITING THEMSELVES! No outside agency hired PWC to audit the FED......so you have no argument.

I could care less if you continue the debate friend.....because you have nothing at all to add to it. The only thing you have done is use the FED's own website to try and debunk tons of research by brilliant minds dating back to Thomas Jefferson.

If you were an attorney, you'd be laughed out of court! There can be no debate friend, when you have nothing to debate with!! The ball isn't in my court....it's in yours. Why don't you bring something to the table...because right now you don't have jack!

Ah forget it... . Let's lleave it at that then. I can see this is like trying to argue evolution with a creationist. Utterly pointless and frustrating. I'll still contribute to financial threads, but I'm not getting into anymore arguments over this.

Rooting around all those Fed documents and accounts and trying to explain the contents on various threads has been a stimulating and enjoyable exercise for me. I've certainly learned at lot of things I never knew before.. as such, I've gained a lot from these discussions. Maybe you have too.. maybe not. eitherway, I guess we're gonna have to agree to disagree.

no hard feelings.

I'll still contribute to financial threads, but I'm not getting into anymore arguments over this.

Well done. You're not getting into anymore arguments over this? Where are your arguments? Where's your research? Where's your sources? Where's your knowledge?

Finally... Thank YOU Excitable Boy.

And don't forget President Andrew Jackson. Though he had alot of policies I didn't like, he did have one great accomplishment: He kicked out the Federal Reserve when their contract expired under his administration and then he actually balanced the budget to where we were 100% DEBT FREE - for the ONLY time in U.S. History. That should tell you right there that there's something fishy about the Fed Reserve. The Fed Reserve makes money off the U.S. and its citizens through interest it charges on NON-existent money. Does that sound very patriotic to you? Why do we have these people instead of our own govt-run agency? Another piece of info that should make you suspicious. I mean the Fed isn't loaning money to the U.S. because of the goodness of their hearts...

And don't forget President Andrew Jackson. Though he had alot of policies I didn't like, he did have one great accomplishment: He kicked out the Federal Reserve when their contract expired under his administration and then he actually balanced the budget to where we were 100% DEBT FREE - for the ONLY time in U.S. History.

Thanks for adding this. Very true indeed. Don't forget also, the FED loans money to all kinds of countries and has made every single one it has loaned money to bankrupt including our own. Why? because every country can't afford to pay back the money they are loaned. The FED knows exactly what they are doing when they do this...they do it quite on purpose and it's quite disgusting.

Every country they have bankrupted, they now own...including the United States!

Just caught the headline on Faux News that Milton Friedman has died. Sorry for the oneline post. I'll try to find a link and post it.

Fervent free market believers lost a hero Thursday with the passing of Milton Friedman.

The Nobel Prize-winning economist, known for his strong laissez-faire views, died Thursday in San Francisco at age 94. The cause wasn't immediately known.

link

There you go. May God Bless and Keep Milton Friedman. My condolences to the family of this brilliant man.

His rational, functional approach to economics will certainly be missed.

[edit on 16-11-2006 by Icarus Rising]

There you go. May God Bless and Keep Milton Friedman. My condolences to the family of this brilliant man.

His rational, functional approach to economics will certainly be missed.

Very true. Thank you for the info. I'm currently reading some of his stuff and knew he was pretty old. Weird coincidence.........

Some interesting quotes from Milton Friedman:

"Inflation is the one form of taxation that can be imposed without legislation."

"Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government."

"Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless."

"The most important ways in which I think the Internet will affect the big issue is that it will make it more difficult for government to collect taxes."

"We have a system that increasingly taxes work and subsidizes nonwork."

source: www.brainyquote.com...

That last quote is good. If you work for your money, we will take what we want from it. If you don't work, you can get government subsidizing. So I guess it's true...those who work are paying for those that don't work. Isn't that nice of us.

And the quote about the internet. That is great...people are learning more than ever thanks to the internet. There aren't as many chumps out there as there used to be.......i.e. a lot of us understand things that we never had access to understanding of before....

The FED is a bad thing. There lies the root of the problems of many, many countries......