[DcifrThs]

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this sounds like some typical drivel regurgitated from ACists or something (or austrians or whatever group is always commenting on the demise of the dollar).

first off, the statement is totally backwards.

correctly it should read: when more money is released via open market operations, interest rates fall and then currency falls.

in other words, when the decision to lower rates occurs, more money is injected into the system by open market operations in the NY Fed. this excess money lowers interest rates (lower interest rates doesn't result in more money printed. more money released results in lower interest rates). the value of the currency (all else equal) then goes down, not because more money is "printed" but because the relative demand to hold that currency drops when compared with the other available options.


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I like how you claim that the Austrians "reguritate drivel", and then proceed to describe exactly the situation as Austrians describe it. [img]/images/graemlins/tongue.gif[/img] Yet more evidence that you have no idea what the people you scorn are actually saying.

And you are being slightly disingenuous when you say that "lowering the interest rate increases the money supply" is totally backwards. What is the intent when the Fed increases the money supply? To lower the interest rate, of course. They have an interest rate target, and if the market gets too far away from their target they will inject (or drain) reserves into (or from) the system to try to hit that target.

The interest rate is the cart. The money supply is just the horse. It might come first, but what it's hauling is what's important from the Fed's point of view.

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dude. the point is that the OP regurgitated something he read here without understanding the distinction.

the sound bites and snippets are what i refer to as "drivel"...the situation exactly as the austrians describe it (i.e. what the OP said) is not how it actually works in reality despite the fact that the result is the same.



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NO. The situation as the Austrians describe is EXACTLY how YOU yourself described it. In other words, you ascribed "drivel" to the Austrians and then went on to explain EXACTLY the situation as the Austrians decsribe it.

If you BELIEVE the Austrians say anything otherwise then it is YOUR MISTAKE. Which you could CORRECT if you BOTHERED TO LEARN ANYTHING ABOUT THE STUFF THAT YOU HEAP SCORN ON. YOU have apparently conflated the intent, to lower interest rates, with the mistaken belief that the Austrians believe in a mistaken belief in the direction of cause and effect (lower interest rate inflates money supply), when nothing could be furhter from the truth (the Fed wants to lower interest rates, and hence inflates the money supply to achieve this).

It boggles my mind that I have to explain the same exact thing to you TWICE because even after you are corrected the first time about it you still claim otherwise. This is like me telling you my favorite color is purple and you saying, "No it isn't, your favorite color is blue!" [img]/images/graemlins/tongue.gif[/img]

I don't know which is more infuriating, your insults or your arrogant confidence in your mistakes.

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don't you get it. my beef isn't content, it's presentation.

man you're dense. it boggles my mind that i have to tell you again the content isn't what i'm bothered about.

the fact that you tell people who aren't as smart/knowledgeable as you that the fed prints money and that printing money devalues the dollar is what i'm talking about. the intent regarding interest rates is clearly the driver, we all know that (we= those who have studied this)...but the literal action isn't the intent and those that get that confused end up like the OP.

look at the OP's post. THAT is what i'm TALKING about.
the op regurgitated that without having a clue what it actually meant...i.e. DRIVEL:

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to utter childishly

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dictionary definition FTW! those utterances is what i'm heaping scorn upon. i've said in many posts recently that i agree to a large degree with what the austrian school is talking about.

on another note, i think it is hilarious that you state "the austrians describe it" like their the only ones who know what is going on under the hood. it is common knowledge and on wikipedia (i checked). glad the austrians could clear up what an open market operation is.

back to above: it is very clear you know i understand the difference between intent and action and i've described it clearly.

you are a professor so maybe you have a pent up need to:

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...explain the same exact thing to you TWICE because even after you are corrected the first time about it you still claim otherwise.

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yea. thanks for your explanation. i clearly needed it otherwise i wouldn't have understood the complex workings of the federal reserve lol.

those who can't do...

Barron