We have been Cyprus since 1913, 6% every year to the Fed out of the economy

My fevered brain | 03/20/2013 | RW

[reluctantwarrior]

Why the sudden anxiety over a one time 10 percent haircut out of Cypriot bank accounts?

[reluctantwarrior]

Forget Cyprus, Nobody Is Stealing from Depositors More than Bernanke
By Bernice Napach | Daily Ticker –

“At this stage of a recovery normalized interest rates should be around 2-3%,” says Rickards. “Apply that 2-3%…to the entire multi-trillion-dollar deposit base of the United States of America and that’s a $400-billion per year wealth transfer from savers to bankers so they can pay themselves bigger bonuses or make crazy bets.” Over time, Rickards says, that wealth transfer could reach $1 trillion.

Rickards says zero interest rates are just one way the Fed is fleecing depositors. Others include increasing inflation, which Bernanke is trying to do, and taxing deposits like Cyprus is pushing for. “Bernanke is stealing more money from depositors than Cyprus is... looting everyday Americans—teachers, firemen and retirees,” says Rickards.

[BfloGuy]

I will go re reread the monster from Jekyll Island to check on this

Doesn't answer the question but "The Creature from Jekyll Island" was the first economics book I ever read. Learned a lot from it and was inspired to continue studying. Including the link for others who want to learn more about Bernanke's creature.

Just dug it out of the bookshelf and will try to find what you're talking about. I just think the numbers don't add up.

[BfloGuy]

I will go re reread the monster from Jekyll Island to check on this, but I do believe it does pull 6 percent on the M1

And, if so, you shall be vindicated! And rightly, so.

[DannyTN]

oh great, you quoted a gold bug. We’d have depressions every 20 years if we took Rickard’s prescription of a gold standard.

The thing that is stealing wealth from Americans is the almost non-existent import tariffs. They are allowing third world countries to steal our industries, and then sell the products back to us.

And the communist government of China taxes it’s firms at a 90% tax rate. But they don’t have any problem competing against us putting the lie to the claim that high taxes are the problem. The problem is the wage differential. And China’s high tax rate helps keep that wage low. But we don’t have to buy from China if we had the will not too. We could raise the tariffs and put our own people back to work. Neither party will talk about this though.

[DannyTN]

Have you thought past the conspiracy theories enough to ask the question "Why is the FED keeping the rates low?"

The answer is right there in the law that I posted. The FED has a mandate to keep unemployment low and after that keep the money supply stable.

The FED isn't keeping rates low to enrich bankers. Bankers make money when the economy is doing well and demand for loans is high. The FED is keeping rates low to encourage investment and hiring, in hopes of lowering the unemployment rate.

But it is a sisilean task while we have a ridiculous trade policy. The Cato institute has done a snow job on America and convinced her that Free Trade is always good regardless of how the other players play. Regardless of whether your own people have jobs. Regardless of how high your debts go. Regardless of the wage differential and regardless of how many industries you lose.

The FED is not the problem. The FED is doing exactly what they should be doing. Congress and the Executive are the problem. And they aren't even talking about trade policy and unemployment. One side is talking taxes and the other side is talking cutting safety nets.