Tuesday, December 21, 2010

Denninger & Dennis Kucinich: Delete The Fed

This is in response to commentary by Karl Denninger. Quoted sentences are taken from the commentary:

http://market-ticker.org/akcs-www?post=175557

"His bill would end the process of money issuance by The US Federal Government as a debt instrument. It would thus restore actual "lawful money" as Ron Paul claims to want, but in a form he has never, ever elucidated. It does, however, exactly match up with the base position I have propounded upon, along with Bill Still and a few others."

Instead of money issued by the Fed, Kucinich apparently wants money issued by the Treasury. Ellen Brown in all her glory. Denninger quite vociferously endorses this idea.

Now, if one has a concern about money controlled by the Fed as being inflationary, wait and see what you get when money is controlled by a politically motivated Treasury and Congress. Of course, Denninger is comfortable with the solution, as follows:

"The existing "FOMC" would be replicated in Treasury with a mandate identical to The Fed's, with one important addition - a requirement that their operations be neither inflationary or deflationary.

That is, the precise mandate that is required - that United States Money maintain its purchasing power."

Well, of course Karl. Why didn't I think of that. Just require the Treasury to not get carried away. Yes, it is that simple.

I don't even know where to begin. I do not believe Denninger is really this naive, although it is consistent with his many recommendations. If only the government would do it better (meaning, of course, his way) everything would be fine.

Now, if he has a way to take politics out of politicians I am all ears. This is too stunning....

But it gets worse (or better?): "It would absolutely bar the use of depositor reserves for any lending purpose whatsoever - that is, if you deposited funds into a transaction account (any sort of "demand" account) the bank would have to hold the funds as an actual custodian with fiduciary requirements for performance. Other than by direct and punishable fraud, depositor losses would instantly become impossible."

Who would enforce this? The same people that failed to enforce the last set of regulations? Who would ensure fraud was punished? The same people who have not punished the fraud already committed? Is this man asleep?

"We're about to find out if people like Ron and Rand Paul really stand for what they claim, or if they're empty suits. If they do, then I expect to see them on the Tee Vee within hours demanding passage of this bill, and joining with Mr. Kucinich in making sure that it is immediately reintroduced in the new Congress - and passed.

"If that does not happen then these two claimants of a demand for "sound money" have been immediately and permanently exposed as FRAUDS, as will any so-called "Tea Party" members of Congress."

Yes, if Ron Paul doesn't support a bill handing over money creation to the government, he is a fraud. A bill 180 degrees opposite of everything Ron Paul has said about money, and he would be a fraud if he doesn't support this contrary bill.

It would help, before making such accusations of people of character, if Denninger actually understood something about money, monetary policy, government, politics, Ron Paul, economics, and many other subjects. This post, along with many others of his, seem to indicate he understands nothing of any of these.

Denninger is not this stupid by mistake.

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