Economic growth - an axiom?

[20000miles]

Here's a good primer on money, banking and central banking:

[ame=http://www.youtube.com/watch?v=iYZM58dulPE]YouTube - Money, Banking and the Federal Reserve[/ame]

And no, there is no mention of the Jews or lizard people.

[Fear Dorcha]

Here's a good primer on money, banking and central banking:

YouTube - Money, Banking and the Federal Reserve

And no, there is no mention of the Jews or lizard people.

Here's a different take on the same subject. It is in agreement with the above on the Federal Reserve but advocates a debt free fiat system and warns against a gold based system. Its depiction of the first use of a Fiat system by Lincoln during the Civil War is at complete odds with the one above. Interestingly it ommitted the entire Vietnam War and Nixon's floating of the dollar.

http://www.politics.ie/1528046-post5161.html

[Christel]

Thanks for the video links. Unfortunately I'm on dial up, can't watch videos.

I would be grateful for a short explanation of the importance of the role of central banks in all this.

[Fear Dorcha]

Thanks for the video links. Unfortunately I'm on dial up, can't watch videos.

I would be grateful for a short explanation of the importance of the role of central banks in all this.

Cental Banks can increase or decrease inflation by one, some or all of the following and other means. Setting interest rates. Manipulating the money supply. Setting loan conditions. However they may or may not do any of this to be of assistance to the country or states where they reside. Why, because unlike what many people believe, they are not part of the government. The FED is not part of the Federal government of the US. It is privately owned but with a US government representation which more than likely was previously a member of the board of a private bank or has been influenced and chosen by private banks.

[Irish Liberty Forum]

I guess so. We need a new name for it though. Chemistocracy, Econocracy...?

http://en.wikipedia.org/wiki/Technocracy_(bureaucratic)

[Christel]

Cental Banks can increase or decrease inflation by one, some or all of the following and other means. Setting interest rates. Manipulating the money supply. Setting loan conditions. However they may or may not do any of this to be of assistance to the country or states where they reside. Why, because unlike what many people believe, they are not part of the government. The FED is not part of the Federal government of the US. It is privately owned but with a US government representation which more than likely was previously a member of the board of a private bank or has been influenced and chosen by private banks.

Thank you.

And why do central banks do this, or are meant to do this?

[20000miles]

Becuase allegedly there is a tradeoff between unemployment and inflation, and the central bank has to keep these at reasonable levels through monetary policy. Also, they have an irrational fear of falling prices, so they try to avoid them too.

[Christel]

I try to say with my own words what I understood, which might be wrong:

With high employment people can spend more and that makes prices rise. (Why actually? Should prices not go down when more is purchased? But it was my impression in the last years here.)
The irrational fear stems from the fact that low prices and low employment are associated with deflation, and that's what they want to avoid. Thereby denying that it happens anyway once in a while?
(Sorry for my poor attempts. It's just interesting times, which make me try to understand what's going on.)

[Fear Dorcha]

I try to say with my own words what I understood, which might be wrong:

With high employment people can spend more and that makes prices rise. (Why actually? Should prices not go down when more is purchased? But it was my impression in the last years here.)
The irrational fear stems from the fact that low prices and low employment are associated with deflation, and that's what they want to avoid. Thereby denying that it happens anyway once in a while?
(Sorry for my poor attempts. It's just interesting times, which make me try to understand what's going on.)

Should prices not go down when more is purchased? Thats the beauty of the free market you see. Funnily now that you say it I recall "what the market will bear" as being one of the catch phrases during the boom. Its not such a mystery. If there is a demand for a product then you can increase the price knowing that those with the cash will buy it anyway. Even if there is a surplus its quite easy to increase demand by simply withholding supply which is in fact what the central banks do as well. You can also get together with like producers and set the price. Prices can also increse during holidays like Christmas when everything gets more expensive and miraculously cheaper in January. Or flights abroad can cost 3-4 times more during school holidays yet all other costs are relatively the same. All these are of course are merely benefits of the free market.

[20000miles]

...
Prices can also increse during holidays like Christmas when everything gets more expensive and miraculously cheaper in January. Or flights abroad can cost 3-4 times more during school holidays yet all other costs are relatively the same. All these are of course are merely benefits of the free market.

Beleive it or not, they are. The purpose of prices is to convey information about the relative scarcity of goods and to ensure that they go to where they are more valued.