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Message 5743
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| Subject: | RE: [socialcredit] Finance: Credit "Crisis" and "Depression" | | Date: | Monday, December 1, 2008 13:55:22 (-0800) | | From: | william_b_ryan <william_b_ryan @.....com>
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"Others insist that it shall be a discount of a certain percentage of the price,
whatever it is. Which, to me, in the sellers market that SC would establish,
would lay the situation completely open to profiteering."
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A fixed-percentage discount off the varying price is how Douglas proposed it.
Why and how could this lead to profiteering? Douglas proposed that it be paid
directly to consumers as a rebate on their sales invoices, lowering the effective
price of their purchases. Why do you think this would create a "sellers'
market"? One intended effect would be to increase the rate of profit, thereby
increasing the quantity and array of products and services reaching the point of
retail, inasmuch as more production would be profitable than otherwise would be
the case, which is hardly "profiteering." I don't believe it is a particularly
difficult concept to understand. And it would be a very powerful tool to combat
the current recession.
I believe that the Fed could legally send out checks right now, in dividends and
rebates directly to final consumers, without additional implementing legislation.
I believe they already have the legal authority to do so.
Instead, it is creating hundreds of billions of dollars in new money in its
stimulus program to purchase various securities, and in various loan programs, as
Chairman Bernanke said in his speech in Austin earlier today. It is the
extension of the "trickle down from Wall Street" program they have always
followed, in their "pushing on a string" effort to respond to changing
circumstances. I've appended the AP report of that speech below:
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F-A-I-R U-S-E C-L-A-I-M-E-D
December 1, 2008
Bernanke: lower interest rates are "feasible"
By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer
WASHINGTON – Federal Reserve Chairman Ben Bernanke said Monday that further
interest-rate cuts are "certainly feasible," but he warned there are limits to
how much such action would revive an economy likely to stay weak well into next
year.
The Fed's key interest rate now stands at 1 percent, a level seen only once
before in the last half-century. To help lift the country out of a recession that
started in December of last year, many economists predict Bernanke and his
colleagues will drop the rate again at their next meeting on Dec. 15-16.
Bernanke spoke just hours after the National Bureau of Economic Research
announced that the U.S. economy has been in a recession since December 2007.
He didn't mention the NBER's finding in his speech to business leaders in
Austin, Texas, nor in answering questions afterward. However, Bernanke warned
that the economy likely will remain stuck in a slump.
"Even if the functioning of financial markets continues to improve, economic
conditions will probably remain weak for a time," he said.
In his speech, Bernanke noted that the bracing impact of the Fed's aggressive
rate reductions has been somewhat stymied by the worst credit and financial
crises to hit the world economy since the 1930s. Despite lower borrowing costs
ordered by the Fed, skittish banks have been reluctant to lend money to people
and businesses, a vicious cycle that has seriously hobbled the U.S. economy.
"Although further reductions ... are certainly feasible, at this point the scope
for using conventional interest rate policies to support the economy is obviously
limited," Bernanke said in the speech. The Fed can lower its key rate only so far
— to zero — and it's getting ever closer to that threshold.
Bernanke said there are other ways that the Fed might bolster economic activity.
The Fed, for instance, could buy longer-term Treasury or agency securities on
the open market in substantial quantities, he said. This might lower rates on
these securities, "thus helping to spur aggregate demand," Bernanke said.
Given the limits to how low the Fed can go in reducing interest rates, the
central bank over the past year has resorted to a flurry of other radical — and
often unprecedented actions — with the hope of busting through credit jams and
getting financial markets operating more normally.
It has ramped up cash and other types of loans to financial institutions,
started buying mounds of short-term debt that companies rely on for day-to-day
operations like paying salaries and buying supplies, and expanded its emergency
lending program to investment firms.
Just last week the Fed announced two new programs aimed at increasing the
availability and lowering the costs of credit card loans, auto loans, student
loans and home mortgages.
The Fed last week said it would purchase $200 billion in securities backed by
different types of consumer debt. That market essentially froze in October,
making such loans harder to obtain while carrying higher interest rates.
The Fed also said it would spend $500 billion to purchase mortgage-backed
securities guaranteed by mortgage giants Fannie Mae and Freddie Mac, and another
$100 billion to directly purchase mortgages held by Fannie, Freddie and the
Federal Home Loan Banks.
Bernanke said the Fed will continue to look for innovative ways to break through
the credit logjams.
"We at the Federal Reserve and our colleagues at other federal agencies will
carefully monitor the conditions of all key financial institutions and stand
ready to act as needed to preserve their viability in this difficult financial
environment," Bernanke said.
The NBER — a private, nonprofit research organization — said its group of
academic economists who determine business cycles met on Friday and decided that
the country tipped into recession in December 2007. The economy contracted in the
final quarter of last year.
The economy jolted into reverse again in the summer. Many economists predict it
is still shrinking now and will continue to do so through the first quarter of
next year.
Consumers — major shapers of national economic activity — likely will keep
cutting back on their spending, he said Consumers have been reeling from job
losses, hard-to-get credit and hits to their wealth from sinking home values and
tanking portfolio investments.
In October, the unemployment rate zoomed to 6.5 percent, a 14-year high. So far
this year, 1.2 million positions have disappeared. The jobless rate is likely to
climb to 8 percent or higher next year.
A student of the Great Depression, Bernanke said the current period of economic
woe bears "no comparison in terms of severity" to the 1930s.
____
AP Business Writer John Porretto contributed to this report from Austin.
----------------original message------------------
RE: [socialcredit] Finance: Credit "Crisis" and "Depression"
Monday, December 1, 2008 1:46 PM
From: "John G Rawson" <johngrawson@hotmail.com>
To: "Socred elistas" <socialcredit@elistas.com>
This discussion is purely with the mechanism of paying it, for which I see no
problems and several solutions, but:
Martin uses the term "just price" which implies conditions for its payment, i.e.
a means of containing price inflation. How do we establish "just prices" for a
multitude's multitude of items, each in different parts of a country each with
different transport costs, local taxes, etc?
Others insist that it shall be a discount of a certain percentage of the price,
whatever it is. Which, to me, in the sellers market that SC would establish,
would lay the situation completely open to profiteering.
A bureaucratic nightmare to beat all socialist efforts anywhere, or uncontrolled
inflation?
If someone can answer these points, I too will favour the system. But I've been
asking for these answers for decades now.
John R.
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