04-03-2003 03:34									#151
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quote: Originally posted by PLATO1003 Ned's analysis is correct to a point. The Fed should only pay interest on the required reserves. Further, this would increase the money supply with a multiplier effect of 2 times for government lending and 3 times for consumer and business lending. Therefore you could assume that the net effect on M1 would be .01 X (.1 X reserve requirement) X 2 for government lending and .01 X (.1 X reserve requirement) X 3 for consumer or business lending.

Why not just give me the money? I promise to spend it

Why should the banks get free money? The reserves are there for their interest, to protect the banking system.

	04-03-2003 03:37									#152
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quote: Originally posted by GePap The problem with the admin and its supporters is that they put up several reasons for war, all of which are not consistent: one day the admin. says that if Iraq disarms fully, then war is off, then they say it is our mission to liberate Iraq and bring freedom to the region: those are not fully equal aims. Make up your minds people! According to reports, there will be a meeting tomorrow to discuss the how's and when's of these missiles being destroyed. I also see a fundamental logics problem which no one supporting this war seem to want to deal with: we are told we can't continue this process of inspections cause Saddam has shown for 12 years he won't: so, his past action is a proof of possible future action(he won't disarm). Of course, the afct that for 12 years he hasn't given WMD ot any terrorist group, Al Qaeda, Palestinian, Lebanese, whatever, simply can't be seen as proof he won't in the future. Thus, when it comes to terrorist, his previous actions simply can't be seen as a reliable way of guaging his future action... Why this is true, we are never to be told, of course.

This is incorrect - if there wa zero chance that Saddam would disarm=, there would have been no point to UNSC 1441. So he was given a LAST chance to COMPLETELY disarm. He has not. He has given up his last chance. Despite the massing of hundreds of thousands of troops, the maintenance of sanctions, diplematic isolation, etc. Ergo he wont.



Now IF the UNSC had passed by 15-0 a resoultion saying Saddam should give WMD to terrorists, keeping up sanctions until he did so, massing forces to get him to do so, I rather suppose he would do so.

Youre mixing up his refusal to do something that he has had every incentive to do, with one that is likely to be beneficial to him only in certain specific strategic (or psychological) situations.

	04-03-2003 03:37									#153
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That's why I asked why wouldn't the Fed do better lending money itself (which they already do, I thought...)

	04-03-2003 03:39									#154
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quote: Originally posted by Ozz Effective control of the region from US controlled bases at the top of the persian gulf not worth 100 billion? 70 billion would be spent in the US anyway so, the real cost is only the bribe money-profit on weapons sold to turkey.

But of course the US already has bases in the Gulf, in kuwait, Qatar, bahrain and of course Saudi. So to want bases in Iraq there has to be something else going on.

	04-03-2003 03:47									#155
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quote: Originally posted by GePap The problem with the admin and its supporters is that they put up several reasons for war, all of which are not consistent: one day the admin. says that if Iraq disarms fully, then war is off, then they say it is our mission to liberate Iraq and bring freedom to the region: those are not fully equal aims. Make up your minds people! .

If Iraq had disarmed fully since 1441 war WOULD have been off, as we no longer have a casus belli. The liberation of IRaq, which IS a strategic goal, and is PART of the prudential reason for war, would no longer able to be fulfilled, and we would have to find alternative means to accomplish those tasks. From August on the admin has not worried about alternative means, as they have been virtually certain that Iraq would not disarm. At this point whether Iraq proceeds to disarm later is almost irrelevant - in the US view UNSC 1441 was not intended to last forever - the time was over as soon as it became clear that Saddam was violating 1441. Since it is clear that Saddam has violated 1441, the US has casus belli NOW, regardless of any further actions by Saddam, which is why the US is resisting puttin a time limit in any second resolution - that would imply yet another "last chance" - the US wants a resolution it can act on immediately upon passage.

	04-03-2003 03:52									#156
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quote: Originally posted by DuncanK Why not just give me the money? I promise to spend it Why should the banks get free money? The reserves are there for their interest, to protect the banking system.

The end result would be the same. And we know we can trust you to spend it wisely Duncan

Additionally, the reserves are their to protect the depositor and the financial integrity of the FDIC, not to benefit the banks.

	04-03-2003 03:54									#157
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quote: Originally posted by Frogger That's why I asked why wouldn't the Fed do better lending money itself (which they already do, I thought...)

The Federal Reserve banking system makes no direct loans to the public. It is against its charter to do so. Its main function , actually, is to be a clearing house for banking transactions among banks.

	04-03-2003 03:58									#158
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quote: Originally posted by PLATO1003 The end result would be the same. And we know we can trust you to spend it wisely Duncan Additionally, the reserves are their to protect the depositor and the financial integrity of the FDIC, not to benefit the banks.

Even if banks weren't part of a federal system they should still keep reserves, even more so, to be safe. Why should they get paid for that just because they are part of a federal system?

	04-03-2003 04:05									#159
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quote: Originally posted by DuncanK Even if banks weren't part of a federal system they should still keep reserves, even more so, to be safe. Why should they get paid for that just because they are part of a federal system?

History teaches us otherwise. Lack of reserves was one of the underlying causes of massive bank failure in the 1930's (among many others of course)

	04-03-2003 04:07									#160
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quote: Originally posted by Velociryx oliverfa , one would think so, yes! However, the peacenik crowd is pointing out how "cooperative" Saddam is being for graciously offering the destruction of the missiles he obviously knew nothing about in his country..... It's amusing....put your hand on a hot stove, and it burns, so you take it away. A few minutes later....you put your hand back on the stove, and much to your amazement....IT BURNS AGAIN! Take your hand away....wait a few more minutes....put your hand back on the stove. Yep....still burns. Eventually, one would think that the message would begin to seep through even the most lovable, thick-headed people around. If the stove is hot, and you put your hand there....it WILL burn. But no....apparently this is some deeply mysterious message as it relates to Saddam Hussein, and rather than seeing the missiles for what they are (a blatant defiance of 1441, and by themselves--never mind the anthrax we know he bought, and all the other stuff he has yet to provide destruction orders for--PROVE non-compliance.....no....instead, we should focus on his willingness to destroy the missiles (but only after being caught red-handed) as proof of what a nice, cooperative man he is.... Yeah. -=Vel=-

Go Vel!

	04-03-2003 04:07									#161
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quote: Originally posted by Frogger That's why I asked why wouldn't the Fed do better lending money itself (which they already do, I thought...)

But banks are privately owned. The Fed is the regulatory body. The Fed is sort of owned by the banks, but is suppose to act in the interest of both the banks and the economy. They do tend to act more in the interest of the banks.

	04-03-2003 05:12									#162
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Are you guys talking about that 150 km ranged missiles, that are rumored to be able to go 180 km - without guidance system? They are ballistic, and ballistic missile without guidance system could miss its target by 50 km for 180 km.
I think if not for missiles then US would have another reason for war in the gulf. US Spain war, Tonkin gulf... It was funny how easily could US get some reason for war.

quote: If Iraq had disarmed fully since 1441 war WOULD have been off, as we no longer have a casus belli. The liberation of IRaq, which IS a strategic goal, and is PART of the prudential reason for war, would no longer able to be fulfilled, and we would have to find alternative means to accomplish those tasks. From August

Alternative? Bombs.
So, get Sadam out, put someone else in. And next funny things would be done by democratically elected government.

Ask Butrus about resolution 1441 and no fly zone, he would be happy to share something from UN discussions with you.

	04-03-2003 07:10									#163
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quote: Originally posted by PLATO1003 Spiffor, I have been unable to locate specific transcripts of security council presentations. I have attached two links to help clarify the background. Security counsel press release concerning 1441: Included are the resolution itself and the statements of the council members and the Secretary General http://www.un.org/News/Press/docs/2002/SC7564.doc.htm Wrt the French position on use of force I am attaching a BBC article from 06 Feb 2003 http://news.bbc.co.uk/2/hi/middle_east/2732939.stm I will continue to look for transcripts for you.

I've just read the links (took time to decipher the legalese in the first one). Thanks for the info !
Indeed, "serious consequences" clearly meant the use of force, after a second resolution stating Iraq is not cooperating. Not in the text, but in all declarations of diplomats after.

As per France's hesitations (2nd article), I think Chirac played a difficult game : gaining as much international prestige and internal support (as well as bargaining power in Europe) as possible with keeping a warlike exit to please the US. I don't think things happened exactly as he wanted, because I suppose he underestimated the loyalty of other European vassals countries, and the harshness of the US reaction.

	04-03-2003 07:16									#164
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I believe that this is a correct assesment of France's position with one addition and one exception.

The addition is that France has a ME powerbase to protect. Years ago a large part of this base was in Iraq. In order to maintain or increase their influence in the ME they had to show opposition to a "rush to war"

The exception is that I do not believe that France's position of having an exit strategy to please the US is correct. I believe that they want Saddam gone as much as we do. They just had their own agenda on how to attain this.

	04-03-2003 07:23									#165
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quote: Indeed, "serious consequences" clearly meant the use of force, after a second resolution stating Iraq is not cooperating. Not in the text, but in all declarations of diplomats after.

Herin lies the compromise of the resolution and the ambiguity we continue to debate.

This resolution allowed both sides to state that theirs was the correct position. The US that no further authority is needed (and they are correct) and the French that a resolution outlining "material breach" had occured was needed( and they are correct).

Typical of the UN, it gives everybody something to stand on and provides clear guidance to no one.

One could say that it is a French diplomatic victory that there is another resolution being crafted even now.

	04-03-2003 07:33									#166
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quote: Originally posted by raghar Are you guys talking about that 150 km ranged missiles, that are rumored to be able to go 180 km - without guidance system?

I forget. Are we believing Iraq or the UN when it comes to arms declarations, especially with Blix saying that Iraq lacks credibility?

	04-03-2003 09:29									#167
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Below is a link to a 1997 article on the Fed's Open Market operations where the author ends up, see the paragraph on page 16 just above the summary, recommeding paying interest on required deposits to offset the continuing effective decline in reserves due to an increasing use of "sweep" programs.

The author also notes that the failure to pay interest on deposits is an implicit tax on deposits incenting the trend.

So actually, Duncan and Frogger may be right. Paying interest may have the effect of increasing reserves.

Interesting.

http://www.federalreserve.gov/pubs/.../199711lead.pdf

	04-03-2003 09:35									#168
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Ned : you still want to go to war with France, Germany and Belgium because these countries are a "much bigger menace" than Iraq ?

	04-03-2003 10:47									#169
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quote: Originally posted by Spiffor Ned : you still want to go to war with France, Germany and Belgium because these countries are a "much bigger menace" than Iraq ?

Spiffor, No and Yes. It is clear we are be jobbed by Chirac and I just don't like it. But I guess the French do not have a reputation for being masters of diplomacy (and deceit) for nothing.

Obviously, we Americans are trying to read between the lines and determine what it is that Chirac is after. He may be after votes in France. But, that is what most say about both Clinton and Bush, don't they. Wag the Dog.

No, I think Chirac has a long term strategy. Certainly his game iin the UN has no made him de-facto leader of the anti-Americanism world. He and France now have a lot of influence. Maybe he planned this outcome.

	04-03-2003 10:59									#170
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Ned,

Maybe we could charge them for keeping their reserves

	04-03-2003 12:21									#171
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Actually, if you take a look at the article, it clearly shows how dramatically the total reserves shrank during the 1992-2000 timeframe as banks switched wholesale to moneymarket sweeps. This reduction in reserves fueled an expansion in the money supply, and undoubtedly lead to the "good times" of the '90s. But, at some point, the party had to end. The point now is how to get the party started again. We can no longer reduce reserves to fuel expansion - and paying interest on reserves may have the effect of increasing them, just as you predicted.