Actually, I don't see how you could teach the formula for calculating the money supply without explaining monetary expansion. The formula requires the reserve rate in order to calculate M1.
That means that a fair number of students who took economics should have been exposed to it.
This brings to mind a Father Guido Sarduchi's "Five Minute University" skit, where, for a small fee, he teaches you in five minutes, everything you will remember about your college classes, five years after you graduate accompanied by a college degree.
I may be showing my age. I think the skit aired on "Rowan and Martin's Laugh In."
Oh, absolutely. My comment wasn't meant to imply your overall point was incorrect, but to give a little ray of light that there are some of us out here teaching "outside the economics textbook." I also often rail against Fed policy and explain how distorted the markets are, as well as why they are so distorted, on a regular basis in person and on social media. This explains why I am a bit of a social pariah at my school (I'm known as the negative nellie and doom prophet by some) and most of my 'friends' on Facebook have quietly unfollowed most of my posts. I've paid some costs for my preaching, and I still have to moderate some of what I do in the classroom so as to walk the line between "rebel" and "keeping my job." It should be noted that I wish to keep my job primarily so that I can accumulate more fiat and convert it to things that will aid my family and community after the fall, as much as to teach the youth of tomorrow.
Before I accept too much praise for doing all of this, I need to come clean: I do it in the hopes of changing some minds and hearts - though I know I'm battling against forces I'm not likely to change in time - and also because, when the collapse comes, I can look back with self-respect and know I did everything I felt I could do to stave it off.
At least I won't be part of the problem.
One thing that shocks me isn't the number of people living in complete denial, though, but rather the number of people I talk to who agree with me on all the problems, and reasons for those problems! Many more people than we may realize are dimly aware of the crisis and can glean where the causes come from (I socialize mostly with college educated people, though, so keep that in mind). However I take little solace in this because almost every time I am having conversations with these people, they stop short of actually taking the final few steps and putting all of the disparate pieces together into a whole picture of where we are and what's likely coming if we don't undertake massive change soon. I can understand why they don't; it's a scary picture, and massive change is hard, so why not settle back into the safe, dry paradigm you were brought up in and ignore the actual warning signs (What Daniel Quinn might call the "soothing voice and embrace of Mother Culture")?
Either way, I do what I can, fully knowing that I am raging at the night sky, and also fully aware that I am doing it as much for myself as I am for the world. There is both selfishness and altruism in my motivations.
Oh, hell no. The modern educational system is still an industrialized system designed to knock free thought out of our youngsters as much as it is designed to instill discipline, obedience, and collective thought. Do you know that when I teach my unit on Columbus and the era of exploration and exploitation, my students can hardly ever answer one of the first "thought" questions I present them with:
I show them two maps. One of them shows all of the major tribal ethnic groups that existed in the Americas around the year 1400, as near as we historians know them. It shows strong and mighty native empires such as the Aztec and Incan empires, as well as hundreds of tribal ethnic names such as Apache, etc. Then I show them a map of the Americas circa 1700, which has the names of various European-controlled areas, with capital cities and such, but without any of the previous names of tribal groups anywhere to be found. And you know what? Almost all of them can't answer the question I ask them: "So, what changed? What's the story these two maps tell you?" Even when I point it out to them: These people on the first map are not here anymore, or at least not here in any official capacity, and often not here at all. As in, they are dead. Gone. Annihilated. To the tune of perhaps 80 million people.
I do this not to "guilt them" about past events, but so that they can see that the birth of the world they know and love came at enormous costs to other peoples, and also to give them some empathy for the plight of any remaining Native Americans who are forced by circumstance to live among the lands and cultures of their ancestors' destroyers. Daily. For some students it is still something they can't wrap their minds around because they've been taught that 'Murica is awesome and does no wrong since birth by parents and an educational system that does not look too deeplyat things. We teach what industry wants and expects, not what Socrates or Plato might have wanted, and certainly not in a manner that Ben Franklin would have agreed with.
I do take heart that in every class there are always a few savvy students - often the ones who are considered "outsiders" or "trouble makers" by their peers - who see the picture long before I have to paint it for their less savvy peers, and who get a gleam in their eye when I teach things this way. It's as if they see, for the first time, a teacher telling it like it is and NOT brushing the more horrible aspects of the past under the carpet for the sake of making the house look better for the neighbors, so to speak.
But, again, I'm no hero or anything. I do it as much for my own self-respect and to stroke the vanity of my rebellious nature as much as I do it for them.
It seems to me that the long term goal of those at the top is simply domination of this corner of the world. Some of my ancestors came from places where it impossible to own land if you weren't "ruling class". It was their dream to have their own property, and freedom from The Landlords. A dream which is being squeezed out of existence for many people now.
I think we are witnessing nothing less than the establishment of a new royalty. One which has most of us out-gamed and out-classed. They're doing it all with our wealth, but that's nothing new. Maybe I'm wrong, maybe I'm being melodramatic, but, long-term, these will be the new masters if they keep it together long enough.
Nail on the head as usual Mr Martenson.
The truly smart 'get it' sooner and then have to wait around in despair for years and decades until the rest of the population wake up from the sedative effects of intravenous propaganda and realize their world is fatally flawed - usually long after irreparable damage is done.
If democracy wasn't such a sham of course the truly intelligent (of the middle-class) would have more of a say in getting problems fixed. As it is we have to wait for a damned pitch-fork and fire revolution from the masses to randomly act on what ever belief system is in fashion at the time.
I would propose that many times the unaware & uneducated masses are actively nudged in well crafted directions by TPTB so the masses rarely ever really get it. Dan Ariely, a behaviorial economist who has been interviewed by Chris on PP in the past, wrote a book called "Nudge". He talks about the fact it only takes a small nudge in a certain direction on groups of people to put them on the path you want them to be on. TPTB have known this for a long time & this is how they maintain their power.
So, I'm doubtful the masses are never going to really "get it". Instead, they will be redirected. Various scapegoats will be crafted. I wouldn't hold your breath for the damned pitch-fork and fire revolution moment from the masses.
I was in undergrad in the mid 80's. My economics prof was Marty Feldstein, who had been Reagan's chief economic advisor. My TA was Todd Buchholz who would later serve in a similar capacity with Bush the elder. Obviously we discussed M1, etc., but there was not a single word of explanation about things like the Mandrake mechanism (by any name) or the fact that a unit of currency conjured out of thin air is exchanged for debt that is a claim on my future labor, or even that the Fed is privately owned and not a governmental agency. Had any of this been discussed in any form or fashion The Creature would not have induced the catatonic shock it did when I first read it a few years back.
I agree. I finally gave up fighting the "war on savers". I decreased my 401k contributions to a token 0.5% and am deliberately not saving any more cash (fiat currency) for retirement. But instead of buying crap (such as techno-gadgets, jewelry, clothing, cars, and poorly made consumables) or inflated stocks, our household is investing in another chicken tractor, more hoop coops, a high tunnel, a used walk-behind tractor…on top of the root cellars & 44 hp tractor & cold-climate greenhouse & solar panels & upgraded wood stove we "invested in" last year.
CM has advised that we have a list of things we should run out and purchase, once the helicopter money starts. I'm not waiting. At times I feel reckless for spending the money - I've always been a saver, and savings used to mean security, but not anymore. At times I feel foolish for NOT following the rest of the herd and continuing with business-as-usual. But I can feel the "sea change".
Two questions? First, what is the title of the article in the WSJ Chris refers to? Second, i know the topic has been discussed elsewhere, but one thing Chris never seems to question are the motives of the Fed. He constantly suggests it is their incompetence which leads them to follow a dead-end policy. Could it be that they have other motives, intentions? I can't rap my head around the fact that amongst the best and the brightest among economists should be so clueless. Granted, they may live and breath in an ivory tower and have never had experience of the real world of running a business. Yet, we al know, in this community at least, that the Fed is a PRIVATE institution with private stockholders i.e. big banks. A company and its leaders usually answers to the wishes of its stockholders, its owners. Why should it be different with the Fed? Who are they really working for? What is their ultimate goal or objective? Without going into all sorts of conspiracy theories involving lizard extraterrestrials and what not, I would like to hear Chris and other members of the community on this. It seems clear to me that there is more in play here than just incompetence.
I hadn't read the second part of Chris' article before posting my comment. I see my questions are answered in it. Yet I would still appreciate to hear other people's take on what motivates the Fed. Chris?
The Fed doesn't do all the stuff on its own. The fed is hand in hand with Treasury which issues instructions to the Fed to buy stuff like bonds which are not part of its mandate to maintain chosen interest rates [and supposedly full employment]
All the treasury securities are investor deposits. The Fed stores them in savings accounts and pays interest [coupons]. The fed does not use this money. The Fed has no need for this money. The Fed never needs to save or borrow at all. The fed represents the government which is monetary sovereign. So at maturity the bond money stored in the Fed is simply transferred back to the [check] accounts of the depositors. Problem solved. It all nets to zero even though the fed uses thin air money to pay interest.
All this flak about the fed is a bit displaced. The government is really to blame for most of the troubles.
I agree with you dryam2000 but clearly the establishment (TPTB) has limits. You can't nudge people out of hunger.
Collapse and revolution don't have to look like the French revolution, they can also look like the collapse of the USSR which took half a century of social misery to weather. For more recent examples of pitch forks and fire look at Ferguson, London, Greece, Ukraine, Egypt and so on.
I think some of you have overlooked the elephant in the room. Its not the government or the FED who is wrong. It is the CONSTITUTION that has failed… in pretty much every country. Wherever constitutions support 3 or 4 year rolling dictatorships.
Democracy is now a complete sham because elitism controls the message. In other words there is no real accountability and no independent audit so governments and their arms are free to dictate and subsequently mismanage. What is needed is a new constitution. One that will allow participation or accountability by a rolling jury of qualified middle class people. That is: people who aren't members of the establishment but represent instead the true majority - the man on the street. That's not a pipe dream because working class participation in government has worked in the ancient past.
For that to happen we need revolution of some sort…and that will take a while admittedly . But it will take even longer if everyone shoves their heads in the sand or hides under their flag out of some misguided religious belief in the forefathers, monarchy or nationalist pride.
I have yet to see anyone who was clumsy be deft, or anyone who was deft be clumsy.
It would take a huge conspiracy, in my book, to fake one or the other by our leadership.
Honestly, I think they are simply clumsy.
you say that the constitution has failed, but, the constitution was never valid as a binding contract, it was merely a set of guidelines.
the great 19th century american political philosopher lysander spooner had this to say about the constitution:
“But whether the Constitution really be one thing, or another, this much is certain - that it has either authorized such a government as we have had, or has been powerless to prevent it. In either case it is unfit to exist.”
― Lysander Spooner, No Treason: The Constitution of No Authority
as far as your suggestion that a new constitution is needed, i disagree - there is no magical formula that can be enshrined on parchment that can ensure a free, just, and open society, there is no substitute for constant vigilance and awareness.
true governance only comes when each of us governs ourselves, rather than abdicating this responsibility to others, who will surely be corrupted by whatever measure of power is granted them.
