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> the Fed is injecting new fiat money into the economy and it's going straight into the pockets of rich financial institutions which add no value whatsoever to
by lbotos 7y ago
> the Fed is injecting new fiat money into the economy and it's going straight into the pockets of rich financial institutions which add no value whatsoever to the economy or society.
Financial institutions control who gets levered money (loans). They provide a huge value to an economy and society in a fractional reserve banking system.
You are upset about the Fed, when you should be upset about the government who controls fiscal policy. The government can provide tax holidays and other benefits more directly to people, as is their role, not the Fed.
- cryptica 7y agoI don't agree that bank loans add any value to our modern fiat-based economy. It's possible that loans may have added economic value when money was based on a limited resource such as gold, but that economy was an entirely different beast from what we have today. Fiat is not simply a switch that one can flick off and on without anticipating negative flow-on effects; and yet that's exactly how governments have treated it when they abolished the gold standard whilst continuing to support an archaic system of debt and credit. Since the fiat system was introduced, house prices have skyrocketed (relative to average salaries) and corporations have gained monopoly positions in the market whilst using lobyists to take control of our governments. Our fiat-based, debt-oriented system has some obvious drawbacks. Both the government and the Fed are to blame; one for designing the whole scheme and the other for implementing it. I'm upset about the idea that the Fed can inject money into the economy based on obscure criteria. From the perspective of an average citizen, who is legally obliged to accept Fed money in exchange for their labor, whatever set of criteria the Fed chooses is going to be inherently inadequate; the mere lack of transparency behind the Fed's operation is by itself sufficient to discredit the validity of the entire operation. Money backed by gold was good money precisely and fundamentally because everyone understood what gold was and where it came from. Now, essentially nobody knows what fiat money is or where it comes from and yet everyone is legally obliged to accept it.
- jonahbenton 7y agoNo. There are all kinds of discontinuities in money but this narrative is just an exhibition of ignorance. Even when "money backed by gold" was a slightly less completely inaccurate fiction than it is now, what people "knew" to be money was many, many, many different things, depending on where they were and what they did for work. Stories like this are like religious narratives, and "money backed by gold" is like the story of the angry god allegedly giving tablets to some dude. It is at BEST an allegory but yall go and read it like it happened.
- OGWhales 7y agoWhat are you talking about? I’d love to see you actually expand on this and explain what you mean instead of just pooping on it and saying people believe in fairy tails.
- jonahbenton 7y agoI'm sorry- I am happy to respond to specific questions from the above but nearly every single sentence is a factual/historical misrepresentation, and the language/terminology ("fiat-based", "backed by gold", "yet everyone legally obliged to accept it") is that of someone who has a particular religious view of money (maybe a "goldbug") that may have its own philosophical consistency but...is...just...completely...ahistorical. Money is a much more interesting topic that goldbugs give it...um...credit for. There is another recent discussion on HN: https://news.ycombinator.com/item?id=22573204 https://news.ycombinator.com/item?id=22573204 that has a lot of pointers to good resources from which to begin the discovery process.