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Thread: A speech to the Federal Reserve

  1. #1
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    A speech to the Federal Reserve

    A speech and a half really !
    http://www.economicpolicyjournal.com...k-federal.html

    A snippet:

    Thank you very much for inviting me to speak here at the New York Federal Reserve Bank.

    Intellectual discourse is, of course, extraordinarily valuable in reaching truth. In this sense, I welcome the opportunity to discuss my views on the economy and monetary policy and how they may differ with those of you here at the Fed.

    That said, I suspect my views are so different from those of you here today that my comments will be a complete failure in convincing you to do what I believe should be done, which is to close down the entire Federal Reserve System

    My views, I suspect, differ from beginning to end. From the proper methodology to be used in the science of economics, to the manner in which the macro-economy functions, to the role of the Federal Reserve, and to the accomplishments of the Federal Reserve, I stand here confused as to how you see the world so differently than I do.

    I simply do not understand most of the thinking that goes on here at the Fed and I do not understand how this thinking can go on when in my view it smacks up against reality.

    Please allow me to begin with methodology, I hold the view developed by such great economic thinkers as Ludwig von Mises, Friedrich Hayek and Murray Rothbard that there are no constants in the science of economics similar to those in the physical sciences.

    In the science of physics, we know that water freezes at 32 degrees. We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. There is preciseness because there are constants, which do not change and upon which equations can be constructed..

    There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time. If potato prices remain the same for 10 weeks, it does not mean they will be the same the following day. I defy anyone in this room to provide me with a constant in the field of economics that has the same unchanging constancy that exists in the fields of physics or chemistry.

    And yet, in paper after paper here at the Federal Reserve, I see equations built as though constants do exist. It is as if one were to assume a constant relationship existed between interest rates here and in Russia and throughout the world, and create equations based on this belief and then attempt to trade based on these equations. That was tried and the result was the blow up of the fund Long Term Capital Management, a blow up that resulted in high level meetings in this very building.

    It is as if traders assumed a given default rate was constant for subprime mortgage paper and traded on that belief. Only to see it blow up in their faces, as it did, again, with intense meetings being held in this very building.

    Yet, the equations, assuming constants, continue to be published in papers throughout the Fed system. I scratch my head.
    Originally Posted by bawang:
    you will never be ready to spar, wing chun subhuman. your muscle have atrophied to size of a paraplegic from years of sil nim tao.

  2. #2
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    Whether people want to admit it or not, the economy does engage in predictable, measurable behaviors. These people aren't inventing complex mathematical formulas (a bit more complex than freezing and boiling points, mind you) for their health. It has more to do with statistical probability, and like cryptoanalysts, finding that pattern in what looks like a huge mess.

    It's there.
    The weakest of all weak things is a virtue that has not been tested in the fire.
    ~ Mark Twain

    Everyone has a plan until they’ve been hit.
    ~ Joe Lewis

    A warrior may choose pacifism; others are condemned to it.
    ~ Author unknown

    "You don't feel lonely.Because you have a lively monkey"

    "Ninja can HURT the Spartan, but the Spartan can KILL the Ninja"

  3. #3
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    Quote Originally Posted by Drake View Post
    Whether people want to admit it or not, the economy does engage in predictable, measurable behaviors. These people aren't inventing complex mathematical formulas (a bit more complex than freezing and boiling points, mind you) for their health. It has more to do with statistical probability, and like cryptoanalysts, finding that pattern in what looks like a huge mess.

    It's there.
    Indeed, yet his point is quote clear, if you focus on the incorrect "predictable behaviors" you get an horrific mess.
    The issue is the "constants" that exist in physics ( which makes physics the more predictable of ALL sciences) don't really exist in economics, at least not in the way it seems the FED Reserve is seeing them.
    Or the EU for example.
    Originally Posted by bawang:
    you will never be ready to spar, wing chun subhuman. your muscle have atrophied to size of a paraplegic from years of sil nim tao.

  4. #4
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    Except that any behaviors that are presumably predictable fall within a bell curve of probability. There is never 100% predictability when it comes to humans. There is only percent probability!
    FAITH: "Confidence, born of experience"

  5. #5
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    My girlfriend and I just had this same conversation.
    Attached Images Attached Images  
    "if its ok for shaolin wuseng to break his vow then its ok for me to sneak behind your house at 3 in the morning and bang your dog if buddha is in your heart then its ok"-Bawang

    "I get what you have said in the past, but we are not intuitive fighters. As instinctive fighters, we can chuck spears and claw and bite. We are not instinctively god at punching or kicking."-Drake

    "Princess? LMAO hammer you are such a pr^t"-Frost

    www.ao8training.com/

  6. #6
    Quote Originally Posted by Scott R. Brown View Post
    Except that any behaviors that are presumably predictable fall within a bell curve of probability. There is never 100% predictability when it comes to humans. There is only percent probability!
    There is never 100% predictability for anything, ever. Sometimes we say otherwise for the sake of ease and taking theories for granted and assuming they are truth. Really though, we don't know much for certain. We just have a ton of ideas we believe to be true. History has shown us time and time again how solid truth today can be outdated theory tomorrow. So many examples, big and small. Too many to even contemplate a list of sorts. The big examples are enough, I think, to more than make that point.
    ‏Just 'cause I don't want to war with you it don't mean go warm up the barbecue - AesRock

    If the world is something you accept rather than interpret, then you're susceptible to the influence of charismatic idiots. - Neil deGrasse Tyson

    It's always easier to believe in something than it is to understand it - Chris Hadfield

    How you expect to run with the wolves come night when you spend all day sparring with the puppies? - Omar Little

  7. #7
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    Quote Originally Posted by Hebrew Hammer View Post
    My girlfriend and I just had this same conversation.
    I'd buy that for a dollar
    Originally Posted by bawang:
    you will never be ready to spar, wing chun subhuman. your muscle have atrophied to size of a paraplegic from years of sil nim tao.

  8. #8
    Quote Originally Posted by Drake View Post
    Whether people want to admit it or not, the economy does engage in predictable, measurable behaviors. These people aren't inventing complex mathematical formulas (a bit more complex than freezing and boiling points, mind you) for their health. It has more to do with statistical probability, and like cryptoanalysts, finding that pattern in what looks like a huge mess.

    It's there.
    Yeah, but people who have financial concerns in this area do not want outsiders to figure out any pattern what so ever. A lot of the complexity in this field is not only unnecessary, but are in fact there to disguise the truth. As an intelligence man you should understand the value of flooding disinformation to hide the facts. Of course the sheer amount of data involved makes it look like a clutter mess to anyone looking from the outside in, even in a clean house, but a ton of the crap surrounding this area is there simply to keep out undesirables. Pros are still trying to sift through this mess of a banking scam the U.S. and old Europe has forced on the world. People who have no say in anything American were hurt by American arrogance and greed. Your financial world needs to change if it wants to stay anywhere close to the top. If todays trends continue as they are, the U.S. will be out of the top 5 in less than 20 years. That is not healthy and it is entirely unfair to the little guy who has no say in any of this but still manages to end up having to pay for it. Is that really the American way anybody wants to promote? It's the truth, change it. Be active in your community and do SOMETHING. Too many just sit on their ass and complain then go eat a bag of chips with a coke and watch 4 hours of TV before passing out. Anyone who isn't active in doing something about their complaints really have no right to complain. Shiiiiit, most of yall don't even vote. I couldn't live with myself if I was one of those whining lil b1tches who complains and does nothing more.
    ‏Just 'cause I don't want to war with you it don't mean go warm up the barbecue - AesRock

    If the world is something you accept rather than interpret, then you're susceptible to the influence of charismatic idiots. - Neil deGrasse Tyson

    It's always easier to believe in something than it is to understand it - Chris Hadfield

    How you expect to run with the wolves come night when you spend all day sparring with the puppies? - Omar Little

  9. #9
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    Of course you are the best judge of what others do and shouldn't do! Because you are an intelligence man and know better than anyone else!

    As an intelligence man you should know that any system created by any source will be eventually corrupted by those in charge. It isn't America and Europe that are greedy and domineering towards other countries, it is man's nature. Any dominant culture will corrupt the process to their own advantage. But as an intelligence man you know that, so you should have said so, or you don't have the right to crticize those who sit on their butts complaining and eating chips, drinking beer and watching Idol sings Elton John!
    Last edited by Scott R. Brown; 04-27-2012 at 05:11 PM.
    FAITH: "Confidence, born of experience"

  10. #10
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    Quote Originally Posted by Scott R. Brown View Post
    Of course you are the best judge of what others do and shouldn't do! Because you are an intelligence man and know better than anyone else!

    As an intelligence man you should know that any system created by any source will be eventually corrupted by those in charge. It isn't America and Europe that are greedy and domineering towards other countries, it is man's nature. Any dominant culture will corrupt the process to their own advantage. But as an intelligence man you know that, so you should have said so, or you don't have the right to crticize those who sit on their butts complaining and eating chips, drinking beer and watching Idol sings Elton John!
    Then people ***** about oversight and regulation. The one thing greater than man's drive towards corruption is man's desire to publicly bust and embarrass his fellow man with corruption charges.
    The weakest of all weak things is a virtue that has not been tested in the fire.
    ~ Mark Twain

    Everyone has a plan until they’ve been hit.
    ~ Joe Lewis

    A warrior may choose pacifism; others are condemned to it.
    ~ Author unknown

    "You don't feel lonely.Because you have a lively monkey"

    "Ninja can HURT the Spartan, but the Spartan can KILL the Ninja"

  11. #11
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    Quote Originally Posted by Drake View Post
    Then people ***** about oversight and regulation. The one thing greater than man's drive towards corruption is man's desire to publicly bust and embarrass his fellow man with corruption charges.
    Too True!!!
    FAITH: "Confidence, born of experience"

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