Comments on: The Perils of Central Banking http://cafehayek.com/2009/07/the-perils-of-central-banking.html where orders emerge Mon, 16 Jan 2012 02:06:33 +0000 hourly 1 http://wordpress.org/?v= By: vikingvista http://cafehayek.com/2009/07/the-perils-of-central-banking.html/comment-page-1#comment-52565 vikingvista Tue, 30 Nov 1999 07:00:00 +0000 http://70.32.86.159/2009/07/the-perils-of-central-banking.html#comment-52565 <p>But the economy of the last 96 years would've been EVEN MORE unstable without the Fed. </p> <p>Nice summary of Fed folly.</p> But the economy of the last 96 years would've been EVEN MORE unstable without the Fed.

Nice summary of Fed folly.

]]> By: dg lesvic http://cafehayek.com/2009/07/the-perils-of-central-banking.html/comment-page-1#comment-52566 dg lesvic Tue, 30 Nov 1999 07:00:00 +0000 http://70.32.86.159/2009/07/the-perils-of-central-banking.html#comment-52566 <p>Prof Boudreaux,</p> <p>If I understood you correctly, you spoke of the US money stock's losing a third of its pre-crash value as the "great contraction."</p> <p>Was that just a different way of saying that the capital stock lost a third of its value, and that the money stock and capital stock were interchangeable terms?</p> <p></p> <p></p> <p></p> <p></p> <p></p> <p><br /> </p> Prof Boudreaux,

If I understood you correctly, you spoke of the US money stock's losing a third of its pre-crash value as the "great contraction."

Was that just a different way of saying that the capital stock lost a third of its value, and that the money stock and capital stock were interchangeable terms?

]]> By: dg lesvic http://cafehayek.com/2009/07/the-perils-of-central-banking.html/comment-page-1#comment-52567 dg lesvic Tue, 30 Nov 1999 07:00:00 +0000 http://70.32.86.159/2009/07/the-perils-of-central-banking.html#comment-52567 <p>I'm having a terrible time understanding "the value of the money stock." I can't figure out how you value it. I can understand how you value the capital stock. It's worth one third fewer dollars. But how do you value the money stock? It's worth one third less capital goods? But what are the capital goods worth?</p> I'm having a terrible time understanding "the value of the money stock." I can't figure out how you value it. I can understand how you value the capital stock. It's worth one third fewer dollars. But how do you value the money stock? It's worth one third less capital goods? But what are the capital goods worth?

]]> By: K Ackermann http://cafehayek.com/2009/07/the-perils-of-central-banking.html/comment-page-1#comment-52568 K Ackermann Tue, 30 Nov 1999 07:00:00 +0000 http://70.32.86.159/2009/07/the-perils-of-central-banking.html#comment-52568 <p>dg lesvic, that's a good question; did it lose 1/3rd of its purchasing power? If so, for how long?</p> <p>I don't remember reading about a money shock before the crash.</p> dg lesvic, that's a good question; did it lose 1/3rd of its purchasing power? If so, for how long?

I don't remember reading about a money shock before the crash.

]]> By: K Ackermann http://cafehayek.com/2009/07/the-perils-of-central-banking.html/comment-page-1#comment-52569 K Ackermann Tue, 30 Nov 1999 07:00:00 +0000 http://70.32.86.159/2009/07/the-perils-of-central-banking.html#comment-52569 <p>The Fed needs to be audited.</p> <p>The thing that bothers me the most right now is how the Fed, and Treasury, have bent over backwards to prevent price discovery of bank's illiquid assets.</p> <p>Even the ban on shorting back last fall was designed to prevent price discovery.</p> <p>Now, with the change in accounting, the banks are carrying severely impaired balance sheets like nothing is amiss.</p> <p>In fact, they are doing so well, and are so flush with money, that they can return the TARP funds. After all, the plan is for you and I to purchase this theoretically valuable paper.</p> <p>Why should the banks have to borrow taxpayer money, when they can sell us valuable assets instead?</p> <p>Merill got 22 cents for their paper. That's where I'd be willing to step in.</p> <p>I bet the PPIP is not going to go forward until the next crisis of confidence in the banks. or in about 4 months - October.</p> <p>The Fed absolutely needs this paper to be worth something. It's what is backing our currency now. It what the Fed is going to have to use to mop up reserves someday.</p> <p>The Fed and the Treasury have made a mockery of the free market. The stimulus at least goes through the motions of adhering to the free market - albiet, the demand is artificial, but monetary, bank, and accounting policy during this crisis has been horrible.</p> <p>I literally cannot go near the market right now, because I don't have a clue what is truth, and what is fiction. All I know is, we are in for some real pain.</p> The Fed needs to be audited.

The thing that bothers me the most right now is how the Fed, and Treasury, have bent over backwards to prevent price discovery of bank's illiquid assets.

Even the ban on shorting back last fall was designed to prevent price discovery.

Now, with the change in accounting, the banks are carrying severely impaired balance sheets like nothing is amiss.

In fact, they are doing so well, and are so flush with money, that they can return the TARP funds. After all, the plan is for you and I to purchase this theoretically valuable paper.

Why should the banks have to borrow taxpayer money, when they can sell us valuable assets instead?

Merill got 22 cents for their paper. That's where I'd be willing to step in.

I bet the PPIP is not going to go forward until the next crisis of confidence in the banks. or in about 4 months – October.

The Fed absolutely needs this paper to be worth something. It's what is backing our currency now. It what the Fed is going to have to use to mop up reserves someday.

The Fed and the Treasury have made a mockery of the free market. The stimulus at least goes through the motions of adhering to the free market – albiet, the demand is artificial, but monetary, bank, and accounting policy during this crisis has been horrible.

I literally cannot go near the market right now, because I don't have a clue what is truth, and what is fiction. All I know is, we are in for some real pain.

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