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Comment by JumpCrisscross | Hacker News Reader

> until you discover that its the people who own the fed that are really in power

This is nonsense. The President and Congress control the Fed. And nobody can knowledgeably claim, today, that its banking members (legally, its shareholders) are more powerful than America’s non-bank financial institutions (e.g. Blackrock or Brookfield).

The greatest boon our billionaire class could inherit is a politically-controlled Fed. It’s why one of any autocrat’s first moves is bringing the central bank under their control.

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It's not nonsense. The banking system printed every dollar out of thin air and is charging interest on every single one (giving a cut to government). For decades and decades.

I made a post earlier detailing the mechanism they use to extract the wealth from us: https://news.ycombinator.com/item?id=42621878

You can't just append "out of thin air" to standard monetary policy and pretend you're making some kind of argument. Everything you describe in the comment you linked to is sophomore level economics. I don't understand your point. There is nothing sketchy about it. Do you want us back on the gold standard? That's an awful idea.

I don't want a gold standard - it was good while it lasted, but it'll just end up zero-reserve again.

Instead I am saving in a money with fixed issuance, that people can't just print out of thin air. It's proof of work, like gold, but digital and with a capped supply.

If you don't understand, I'm afraid I don't have the time to explain it to you.

>> The banking system printed every dollar out of thin air

what is the alternative exactly? money created by god?

like no duh the economy & money system was created out of thin air. we created all this shit out of thin air.

> what is the alternative exactly?

created by putting in work of equal value, you know, like that one form of money that has lasted for millenia, as opposed to these fiat tokens that always fail.

> like no duh the economy & money system was created out of thin air. we created all this shit out of thin air.

One side of the economy was created out of thin air - the money. The other half - goods and services - were created through work. Sound like a fair system? Or a con trick?

Keep working for the tokens dude, and the banks will keep creating them out of thin air until you realise what they're doing.

> Keep working for the tokens dude, and the banks will keep creating them out of thin air until you realise what they're doing.

So what's your alternative? Refuse to work unless you're paid in gold? Refuse to work and go on welfare? Refuse to work or eat? Become a banker and print your own tokens? What?

Work and then sell your tokens back into the market as fast as you can, for gold. Or even better, for gold V2: bitcoin.

> The banking system printed every dollar out of thin air[...]

What banking system doesn't do this?

Ones with steps in between don't count.

Plenty of banking systems use currency with names other than dollars.

Brazil's banking system prints reals out of thin air. But that's better, because they're real, says so in the name :)

> banking system printed every dollar out of thin air and is charging interest on every single one (giving a cut to government)

This is also nonsense, though less so.

Money is created by private banks through lending. The government gets a cut, but that comes through taxation. Money creation is complicated, but it seems like every year someone watches a YouTube video about inflation and deduces, with zero further thought, that it must be a conspiracy.

> Money is created by private banks through lending.

Exactly. Every single dollar was created from thin air, as a "loan".

> it seems like every year someone watches a YouTube video about inflation and deduces, with zero further thought, that it must be a conspiracy.

I've been studying and researching this for years.

> Every single dollar was created from thin air, as a "loan"

Not quite. Minted currency isn’t created from a loan. Neither is fiscal spending.

On the other side of the spectrum, money is destroyed through taxation (by the state) and repayment of debts and defaults (privately).

The monetary hypothesis of income inequality is overly simplistic. It supposes our tax, trade and funding policies are all dictated by monetary policy, which is obviously nonsense. (That or our tax, trade and social spending policies have no effect on inequality. Which is obviously stupid.)

It is an easily-digested hypothesis. We like those, particularly when the alternative is reading lots of arcane monetary financial texts.

Fiscal spending is still created as a loan though since the government has to sell bonds to finance it, no?

> Fiscal spending is still created as a loan though since the government has to sell bonds to finance it, no

Monetarily speaking, the government creates the money when it spends it. The loan then (and optionally) removes a similar amount of money from the system.

This is an enormous power, so we try to legally limit the government in how it can do this. (If we removed the Fed's independence and put it under the Treasury, the Treasury could just add numbers to the bank accounts of the government's employees and vendors. This is analogous to its minting power. We separate the Treasury and the Fed in part to fracture this power.)

I forgot one more creation/destruction mechanism above: the Fed's open-market operations. When the Fed buys assets, it creates money. When it sells them, it destroys money.

Thanks for the clarification, if you have any pointers to learn more about this I'd be interested to check it out.

Oldie but a goodie: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

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