Alternatives to Political SystemsEconomicsEthical InvestmentFinancial ManagementPeople Systems

The Fed and the Two Trillion Dollars – Ask No Questions, We’ll Tell You No Lies

The following clip is fascinating. Watch Donald Kohn, deputy to the current Chairman of the Federal Reserve, Ben Bernanke, stick dutifully to his script of non-disclosure as novice Congressman Alan Greyson, who, according to his own confession, "didn’t get the memo about which questions not to ask" presses him on what, exactly, happened to the two trillion dollars of U.S. Taxpayer money the Fed’s been tasked with manufacturing out of thin air and handling since last September (and note, this is in addition to the 700 billion dollar treasury bail-out):

In case two trillion dollars doesn’t mean a lot to you – here’s an equation to help put this into perspective: If you were to spend one million dollars, every day, from today onwards, for the next 5,500 years, you’d have spent just a little over two trillion dollars….

No wonder these people are getting upset:

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YouTube Preview Image

For more background details, be sure to check out Money As Debt, and The Crash Course, and follow up with Thomas’ excellent ‘Money Literacy‘ series, where we seek to find an economic model that works for people and place.

If you have ideas on economic alternatives you believe could foster a permanent culture, send them as explanatory articles to editor (at) permaculturenews.org for publishing.

11 Comments

  1. lol, JBob. I’d agree that there should be more transparency, but do you really want to abolish the Fed? Do you have any idea what you’re advocating?

  2. Just FYI, the guy speaking in the last video is Peter Schiff, and he’s running for the US Senate.

    https://schiffforsenate.com

    He’s a regular guest on Jim Puplava’s Financial Sense Newshour and is usually better organised than that speech showed.

  3. I find it strange to see free market capitalism advocated on a permaculture website :)

    I am pleasantly surprised.

    End the fed. Let the free market determine what to use as money, not the government – no more paper money.

  4. Hi Cyrus – Thanks for your comment.

    I don’t see any promotion of free market capitalism in this post. Rather, just shining the spotlight on the foibles of fiat currency, and having a nation’s financials managed by a private organisation.

    You may want to peruse some of the many conversations on this site, like the comments on this post, for example:

    https://www.permaculturenews.org/2010/03/22/letters-from-slovakia-aggressors-victims-and-scapegoats/

    Free market capitalism, as a concept, I think is wholly aligned to permaculture – but where it fails is that it can only work if the majority of the citizenry are operating under a code of ethics that enable that freedom to be expressed in ways that benefit their fellow man. Otherwise, people are simply ‘free’ to extract, abuse, and deplete.

    Milton Friedman believed that the only system that works is one based on greed. Permaculturists hold to higher ideals than that. Thankfully.

  5. You have to hand it to these guys, they’ve pulled off the biggest heist in history, and they are not in prison. Seems parties and sport and ‘reality tv’ are more important.

    For sure it’s not looking good. Let’s vote for the other psychopath next time!

    from Hitch-Hiker’s Guide to the Galaxy:
    [An extraterrestrial robot and spaceship has just landed on earth. The robot steps out of the spaceship…]

    “I come in peace,” it said, adding after a long moment of further grinding, “take me to your Lizard.”

    Ford Prefect, of course, had an explanation for this, as he sat with Arthur and watched the nonstop frenetic news reports on television, none of which had anything to say other than to record that the thing had done this amount of damage which was valued at that amount of billions of pounds and had killed this totally other number of people, and then say it again, because the robot was doing nothing more than standing there, swaying very slightly, and emitting short incomprehensible error messages.

    “It comes from a very ancient democracy, you see…”

    “You mean, it comes from a world of lizards?”

    “No,” said Ford, who by this time was a little more rational and coherent than he had been, having finally had the coffee forced down him, “nothing so simple. Nothing anything like so straightforward. On its world, the people are people. The leaders are lizards. The people hate the lizards and the lizards rule the people.”

    “Odd,” said Arthur, “I thought you said it was a democracy.”

    “I did,” said ford. “It is.”

    “So,” said Arthur, hoping he wasn’t sounding ridiculously obtuse, “why don’t the people get rid of the lizards?”

    “It honestly doesn’t occur to them,” said Ford. “They’ve all got the vote, so they all pretty much assume that the government they’ve voted in more or less approximates to the government they want.”

    “You mean they actually vote for the lizards?”

    “Oh yes,” said Ford with a shrug, “of course.”

    “But,” said Arthur, going for the big one again, “why?”

    “Because if they didn’t vote for a lizard,” said Ford, “the wrong lizard might get in. Got any gin?”

    “What?”

    “I said,” said Ford, with an increasing air of urgency creeping into his voice, “have you got any gin?”

    “I’ll look. Tell me about the lizards.”

    Ford shrugged again.

    “Some people say that the lizards are the best thing that ever happened to them,” he said. “They’re completely wrong of course, completely and utterly wrong, but someone’s got to say it.”

  6. Hi Craig,

    Thanks for your reply. I interpreted your youtube link to Peter Schiff as a promotion for free market capitalism. Peter Schiff is an Austrian economist and a strident free market guy. He often argues for a return to the gold standard.

    By the way, Milton Friedman never believed in free markets – he was all for government intervention. You cannot have a free market when the government (the Federal Reserve is a part of the government – Bernanke was voted in by congress) is in charge of the money supply and interest rates.

    You said that in free markets “people are simply ‘free’ to extract, abuse, and deplete.”

    I agree with you 100%. But what is the alternative? Central planning? Bureaucracy?

    In my opinion, the larger the government, the more opportunities there are for large vested interests to buy the politicians. Just look in Australia how many subsidies are given to the coal industry and to big-agriculture.

    If the government in Australia would simply get out of the way, electricity would be more expensive, food would be more expensive and living in suburbia would be a lot more expensive.
    The result would be more farmers markets, more green energy and more high density living in the cities – something I think all permaculturists would rejoice.

  7. HI Cyrus. I agree with much of what you say, but, again, how to get ethics into it. Without that, ‘freedom’ translates to a free-for-all. I would again refer you to the conversation I mentioned in last comment (first link in my last comment) – to save having the same conversation in two places (actually, it’s already been had in several places, and I am unfortunately too pressed for time to continue it in each thread it gets raised in…).

  8. I think the main problem with any kind of capitalism is that it still lies within the boundaries of money systems, and money systems all allow people to do something without the consent of the community. You can take money from one community and use it in another. There’s no need to contribute to the second community at all. The money might contribute, but doesn’t have to.

    Humans grew up in conditions where everyone knew each other, and the vast majority of interactions were limited by this knowing. People couldn’t become leaders if they were known as reckless, or stupid, for example. Now that we have money, stupid people seem to be the only kind of leaders we have, and that might be because only stupid people would believe that such large-scale impersonal systems could work for humans. Well, stupid people and psychopaths who can see well how such systems would suit them.

    The people we elect are people we don’t know. I think this is a fundamental thing we should be looking at in our search for a viable future. We ought to be dissipating power, rather than looking for new ways to ‘manage’ it. All the new or modified ideas are just dealing with symptoms, not causes. Greed is natural, otherwise we wouldn’t have it. What’s unnatural is the system we’ve built. We’re like a fox in the henhouse that kills all the hens.

    Without a henhouse, and with their wings intact, the hens could escape. The fox would have no problem. The solution for wild animals was domestication or extermination. There is a drive to domesticate us, in many ways pretty much completed now. We’re a pale shadow of our ancestors. Mostly willing to follow whatever nutcase will stand up and shout the loudest, impressed not by insight or wisdom, but by slick presentation and fashion sense, or flashy cars. I don’t think that will change unless we can get rid of the circumstances, like the fox in the henhouse. Is this civilization we have really worth becoming cattle for?

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