IPFS Edwin Sumcad

Straight Light

Edwin Sumcad

More About: Federal Reserve

Bad New Year Wish For America: Abolish Federal Reserve And What -- Back To The Cave?

      The light I want to share to those who are in the dark is very simple and down-to-earth: Count your blessings and thank them … do not grieve for their cost, which one may swear in total desperation worse than the curse of a condemned man in a slammer about to hang.

       Is the Federal Reserve the cause of our troubles yesterday, today and tomorrow? It is time to find out. The time of accounting for the year and the years we lived by has come. We have up to December 31st of 2008 to do it, either with grace or disgrace.

       Let’s face 2009 with hope, not despair. Majority of Americans are happy Barack Obama is going to be president starting this January, yet millions of Americans believed that because he is the nation’s elected president, the sky is about to fall.

      I share some of those concerns.  But the shining light I want others to share is to count our blessings rather than complain how much did it cost us to earn them. Historically there are great blessings indeed, with a hell of a price we paid for.

      Just a sample of a collective judgment of concerned Americans: Whatever hell-bent critics say about the falling sky, we have changed the political dynamics in the Middle East for the betterment of humankind by bringing up the light of liberty and freedom in that dark side of the globe.  It is a priceless American legacy to the world. Only those who are still inside their cocoon of prejudice would deny this historical achievement.

      We planted not necessarily our flag but the seeds of freedom in Iraq to grow and spread like branches of the Great Sherman Tree that provide a protected shield of security and comfort against  political persecutions, religious intolerance and cultural bondage,  against despotisms, fear and ignorance, specifically to millions of our Muslim brethrens in the Arab world we have just awakened.

       Here at home, we put terrorists on the run.  If not for this war on terror the Bush Doctrine had declared to serve notice to those who would like to destroy us, who knows – you might not have been able to read this year-end editorial assessment of this nation’s annual cost and benefit because terrorists would have made America their killing field and you and I would have been consigned to our final resting place six feet below the ground.

       No matter what the disgruntled elements say in our present society that is shifting to the left – especially rabid radicals consumed by hate -- Mankind owed it to the man who did it – George W. Bush, president of the United States.

       And what is the cost we are paying? We have thousands of unmarked graves of unknown soldiers throughout the land; we have what the Arlington Cemetery stands for – to use a metaphor that aptly describes the cost of war in a euphemistic way. 

       Think of the injury of war to the undead or the living dead that is beyond monetary estimation.  The billions of dollar we spent in Iraq and Afghanistan cannot compare when we make an accounting of what our society had suffered and lost.  Our sadness for what we have lost for the joy of freedom we have won has no words to describe what really the heart has captured to make us hide those teardrops that fall.  So let us grant and admit this without any further argument.

       But let me remind you also that diamonds sparkle only when subjected to the most extraordinary grind that is unthinkable.  It speaks of the great American people when they come out of the greatest troubles they have had that throughout the years have been indescribable.  Our thanks to the president of the United States, who walked us out of the minefield of troubles when those in the dark side wanted to destroy us, had melted under the heat of ingratitude as the nation moves from the center to the left.

      Thus if during the last days of the old year we are gazing through our crystal balls to review the past and welcome the New Year, we see a mix of ignominious trivialities and great achievements, a touch of glee and gloom, a picture of discontent and triumphs.

       To switch on the light to share so that others may see through this glass darkly, let us review some of these troubles and see if these are bad enough for the dead to rise from their grave with remorse and stump their feet in protest.  

       Is the Federal Reserve the cause of all our troubles yesterday, today and tomorrow? That’s the trouble … we have less of Federal Reserve that’s why we have this financial troubles now punctuated with heavy bailouts!

      To abolish the Fed is a bad, bad Christmas wish for the holiday season, and a ghastly hope for the New Year and the coming years. Everybody is happy at Yuletide because it is a time of joyful redemption, except the Antichrist that’s said to be cheerless and depressed every time Christendom celebrates the birth of Christ.

       It may be surprising for the rest of us to know that many Americans share this gloom from the dark side. They are not just unhappy in the midst of the season’s merriment and merrymaking but also resentful of life in America. They need somebody to hang by the neck or someone to throw their dirty boots at to vent their anger.

       President Bush is a favorite target of this hellish rage even at Christmastime. Like that Iraqi journalist in Baghdad that caught the attention of the world with his flying shoes, they really believe that Bush is responsible for all and every imaginable corruptions that occurred in the year 2008.

       Instead of exchanging gifts on Christmastime, in anger they kick something else to represent a gift-wrapped present for America.

       For example, demonizing the nation’s central bank with quixotic argumentation the worst of it is purely acrobatic, impractical if not nonsensical economics, is a macabre way of welcoming a Very Unhappy New Year!

       Unhappy because to simplify life in America without the Fed, is simply suggesting that Americans should demonetize and warp back to the economics of the cave. 

       Just imagine what life would be to the 21st century Americans without income taxes, banks, paper money, clearing houses, stock exchange, mortgages, credit and more of its kind, and what have you … doing away all these out of rage or spite in a revolutionary crusade or societal rebellion is nothing less than heedlessly dismantling the sophisticated infrastructures of the world’s richest and most advanced economy that ever graced this planet!

       For thirty years, England’s most celebrated survivor of the wild named Robinson Crusoe lived a life without a Fed to think and worry about.  Anyone who dreams of a guileless financial community yet want luxuries or embellishments to become rich and richer using the banks, mortgage loans, credit institutions and the stock exchange market just to mention a few, must be this millennium’s lost Robinson Crusoe.

      To this day from the time they were born, those who never heard of the existence of banks or never used credit in their life, must be living in the boondocks of America if not in a remote island light years away from civilization.

       But today no single American -- either suffering a terrible privation in the wilderness of Africa or mental illness in the asphalt jungle of Chicago, home of the charmed ones where Bill Ayers and president-elect [allegedly-Kenyan-born] Barack Obama met to forge a lasting professional friendship -- claims to be a castaway like Crusoe, and America is not a tiny island in the Caribbean, an unmarked dot in the map in a screwy comparison. 

        If by some freak accident or miraculous incident seen through a hallucinating mind more than 230 million Americans are cast off to some remote island infested with cutthroat thieves, pirates and ferocious cannibals, then we have no need of Federal Reserve that we now live with in this advance and complicated life in a push-button economy otherwise known as the United States of America, the riches and the most powerful nation on the planet!

       Records show that we tried to control these financial troubles from turning into a nationwide contagion that it is now. But the Democrats raised hell when regulatory control was needed at the time irregularities were discovered in the nation’s leading mortgage banks and lending institutions.  Now we are reaping the harvest of this folly.

        In the height of congressional investigations, recall that the Democrats raised hell calling the legislative inquiry a “political lynching”. Now, we are at the worst of this seemingly unstoppable “financial lynching”.

       Abolitionists were against the Fed because they see “control” of excesses in the private sector as a harmful “intervention” in our free market system.  They hated the Fed so much they feel their hatred gnawing deep down the marrow of their bones. 

      If you want to find out how mad are they, access those video reports in the Internet and understand the shock of their protests against regulatory control the Fed represents.

      In Foxnews, the public had a preview of the garrulous Democrat in Congress named Barney Frank, Chairman of the Financial Services Committee, joined by his political cohorts who reportedly just “sat by as mortgage brokers while Freddie Mac and Fannie Mae made bad loans".  And when this led us to the present financial crisis, look who you think they are scapegoating … the Federal Reserve.

     There is no need to second-guess the outcome when trouble-makers argue for the abolition of the Fed. Like scorned economists full of blasts and blames, they are making the current worsening economic situation even worse. Fed-bashers deserved their iniquitous moniker – the Abolitionists.

     Abolitionists want the standard of gold and silver reintroduced instead of full faith and reliance on government in the use of credit and paper money.  That’s going backward.  It is not appropriate for the advance and sophisticated economy of the United States.  Review the lessons of history in economics.  There are always important teaching moments to learn from.

      The 1970s’ worst inflation was not caused by the Fed as erroneously claimed by radical Abolitionists.  It was triggered by OPEC when they raised the cost of oil sky-high out of greed.  It resulted in worldwide inflation and stagflation.

      We often hear this mantra of protest -- abolish the Fed and let the National Treasury take over its functions. Revolutionary politicians and followers claim the Fed is run by “thieves”. Without proof of the reported thievery, their demonstration of hostility is “trenchy” and gutter-like. It is a boorish craving to reinvent America for the year 2009 onward. 

        What they do not tell the public is that central banking is not, and has never been the function of the Treasury.  A little review of the workings of economics and the role of central banks will shed a shining light of knowledge for the failing eyes of gloom and doom to see.

      The intricate functions of the Fed in the U.S. economy are not synonymous to the deteriorating value of gold and silver held in reserve with other reserve currencies. That’s the short end of the Abolitionists’ prognosis of the role of central banks.

       In international economics, the ups and downs of the values of gold and silver held in reserve and the currency issued are determined by the condition of the economy affected by the balance of payments and the country’s ability to pay or settle debts. It is not deteriorated by manipulation -- as what Abolitionist pointed out the Fed is doing out of greed -- but by the expanding demand to meet the need of the time. The central bank restores and maintains order in an otherwise chaotic financial community.

       The IMF was established in the Bretton Woods Agreement of 1944 to address the problems of balance of payments and to stabilize the exchange rates of international currencies.  Like the central bank, it issued paper money called S.D.R. [Special Drawing Rights for countries in trouble] badly needed when liquidity is growing less rapidly than the growth of exchanges of goods and services, to prevent the contraction of trade. Thus the ultimate function of the IMF is more or less similar to that of the Fed, in the global economy.

      A bird’s eye-view of the role of the U.S. Federal Reserve is described in the editorial I wrote: Abuse of the Fed.  

      It is incorrect to say that the Fed can regulate the supply of money but cannot control the velocity of money attributed as the cause of our economic debacle.  In the Quantity Theory of Money, the equation of exchange is MV=PQ.  The quantity of money can be determined and the velocity of exchange can be controlled with aggregate demand [AG.D.] as a key determinant. 

      Thus it can be shown in this equation how many times a dollar has been spent in a certain period of time given the total quantity of output, goods and services.

      I wrote a critique of the Fisher Equation. The problem is which unit you will hold constant. If velocity is held constant in determining the quantity of money [Q], you bump with the problem of quasi-money and credit instruments used in the transactions.   

      Inversely, if you hold Q constant in determining velocity [V], expenditures rise when consumers withdraw mutual funds or use credits extended by financial intermediaries. It means AG. D. is determined by liquidity in the economy leading to the Keynesian fiscal policy of controlling expenditures or AG. D. This gives an idea of the technicality of how inflation is controlled through fiscal and monetary policies.

     It should also give a good idea to critics who are obviously unaware when they lampoon the financial need for institutional assistance and reconstruction, that the critical objective of the current massive financial rescues of banks and lending institutions that are going under is to create and maintain LIQUIDITY.  It is so critical that without this emergency financial assistance of the Federal government, banks, lending institutions and corporations will run out of cash [liquid financing] and the economy will ground to a halt.

       One may wonder why Abolitionists and the radical Left are so bitter over the distribution of this programmed rescue package that is critically necessary.  Why they are blatantly impervious to the eventual collapse of the economy portends a lot of questionable intentions.

       At least they should know why foreign economies want to help the United States fund the solution to this financial meltdown. The failure to address this economic trouble promptly would create a larger problem, which would eventually catch up with them and pull the global economy down the drain. International anarchy will reign and nations will declare war in the struggle for survival as what the history of the causes of wars tells us in so many disturbing paces, disquieting phrases and stresses.

      Indeed, there is no other outcome more terrifying if we deconstruct America starting from the abolition of the Federal Reserve, than for Americans reverting to the life of the cave, which after all, if probable is next to the impossible.

     But even as a Yuletide wish, that’s not the kind of hope we want for the coming New Year.  We should be graceful rather than disgraceful and irresponsible in making an accounting of the year 2008 and beyond.

       We shouldn’t wish something we do not want, or welcome the Year 2009 with a retarded hope of a juvenile delinquent to deface and defame our duly established institutional infrastructures and destroy America with such a foolish make-over, and start all over again a life in the cave. #

© Copyright Edwin A. Sumcad. Freedomsphoenix.com access December 29, 2008.

The writer is an award-winning journalist. Know more about the author by reading his published editorials and feature articles or you may e-mail your comment at ed.superx722@yahoo.com.sg


13 Comments in Response to

Comment by Edwin Sumcad
Entered on:
There is no answer to your question because nothing was "taken" like "stolen"? "appropriated" like [pocketed?] from the American people, much less from you. When did you learn, and from what source did you get this, for you to say with certainty that "the power to coin and print money was unconstitutional" because those were handed to the Fed? If it is unconstitutional, it would have been declared to be so more than 80 years ago and there would be no Fed today. Obviously, you just heard it from somebody or got it from nowhere because you cannot cite any legal authority to show that you are not imagining or lying when you say this.

So that these are not all imagined, prove to all and sundry that [1] wealth was stolen … what wealth, and in what form, and how much? And when was it stolen? [2] who declared unconstitutional the power to coin and print money that was handed to the Fed?

If you cannot answer these, then you must be saying all of these out of anger, judging from the pride of holding a gun as if with a gun, that which is imagined or false can coerce people into believing that these are true. No way.

Comment by Ed Vallejo
Entered on:

I HAVE to get a piece of this...
Ok Lolo - I'm a typical American Numnutz that hasn't been to a fancy 'academe' - please answer me ONE question.
HOW MUCH (in round 'dollar' figures, please) wealth has been (taken? stolen? appropriated? not sure of the exact word to use) from THE AMERICAN PEOPLE, since December of 1913 when THE POWER TO COIN AND PRINT MONEY was UNCONSTITUTIONALLY handed to a PRIVATE CORPORATION known as 'The Fed'!?!
Please don't throw a bunch of terms I don't understand being the hillbillie rube I am with my Bible in one hand and my gun in the other - just give me a NUMBER...

Comment by Edwin Sumcad
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We can disgust this issue well without casting aspersions or slanderous remark on the discussants. I appeal to freedomsphoenix.com steward Ernest to do something on this concern of mine. If commentators on this fine piece of published editorial written by author Sumcad are bankrupt of rational arguments and civil behavior because what they only have is an expertise in making defamatory comments, I will end my participation and retreat from this low down free for all mudslinging which apparently you are enjoying.
My respond to you Mr. Gardner is not to write down like you did, what I think of you. I will refrain from giving you a stomach crump. Besides, that's too far away from where I am now, and from what I have reached in education. In the academe, I taught students mental discipline. You cannot do that unless you mastered self-discipline yourself. I like the way Ernest made his comment … let's model this please, in this discussion.
In your comment, Mr. Gardner, I noticed that "Deregulation and beliving [sic] the banks would police themselves" is precisely my argument why we need regulatory guidelines or control which the Fed [interventionist] represents. Did they police themselves out there? Obviously not, hence the playing field is messy.
If you arrange your thoughts in order, it will spare your comment of obvious contradictions. Long time ago when I was young and rush, I also fell for this error. But years of experience make people mellow and mature, and more precise. Please don't get offended by this, but if it offends you, my apology. I always speak from my heart.
Your other comment that "The FED is totally responsible for this mess, as they [sic] control everyone and everything with their monetary policies" lacks a better understanding of what the Fed does. The Fed did not cause it, its role is to fix it. Just like what the opponents said that the Fed caused the dreaded inflation and stagflation of the 1970s. OPEC caused it, and our economy like that of the rest of the world, went loco. The Fed fixed it, in terms of monetary and fiscal policy measures taken to alleviate the problem. That's the role of the Fed in central banking. Greenspan was just the shell of a large team that works intricately with the Office of the President and Congress. It is hard to understand this if you are not exposed to the structural functions of the United States Federal Reserve.
Author Sumcad was right, greed of the Main Street and lack of fiscal discipline in the Wall Street caused this problem. Surf the Web and you will find this brilliant analysis at http://nationalwriterssyndicate.com/content/view/736/2/ subtopic: What Caused This Problem: Greed And Lack Of Fiscal Discipline.

Comment by Stephen Gardner
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You my friend, are out of your mind. The FED is totally responsible for this mess, as they control everyone and everything with their monetary policies. Even Greenspan finally bellied up to the bar acknowledging " I made a mistake" What was that mistake?" Deregulation and beliving the banks would police themselves. The FED runs the best Ponzi scheme ever devised, get real and do some real research. Or are you in their pocket as well. We need sound money, not green toilet paper!

Comment by Edwin Sumcad
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Brock, your little knowledge on this esoteric subject is dangerous. To complement your little knowledge on this, I want you to know that MV=PQ I cited is the equation in the Quantity Theory of Money of which the key determinant is Ag. D. [Aggregate Demand].
The Fisher Equation is MV=PT. Do you understand what this expression means? M= Stock of money; V= is Income Velocity or Circulation of money; P= Average Price Level, and T= Measure of Flow of Goods and Services, i.e. the real flow of income.
Do you understand how this works? This is an established identity. The left side and the right side are equal by definition. You have measurement of total value of transactions over time MV. PT measures the total money value of goods sold. Fisher holds T and V constant [the subject of the critical dissertation I wrote in graduate school] which I concluded that it is only for the SHORT RUN. These features only change slowly over time. This being the case, in determining the stock of money [M], monetary economists rewrite the identity to M=T/V.P, which implies that that because T/V is a constant, changes in the stock of money are associated with proportionate changes in the price level. This relative relationship is the core of the Quantity Theory of Money.
From this core of the Fisher Equation, you can advance to MV=PQ equation where PQ is [PxQ] = total spending using a collateral equation of PQ=VxM. Remember, I advanced too far ahead of you. You are still at the fundamental MV=PT of the equation which I don't think you understand what it is either.
Ag.D. is the key determinant when you use the identity MV=PQ, which I don't think you understand either. If you understand this, it will bring you to the popular Harrod Domar model of growth measurement or to the Cobb-Douglas Function that does the same thing.
I read Sumcad's biodata which several websites published. I understand that he had an advance study in fiscal and monetary economics under the auspices of the UN-ILO-World Bank and as a development economist had served as deputy permanent representative to the United Nations Economic and Social Commission for Asia and the Pacific for more than a decade. He must be laughing at you by now. I doubt if he will waste his time to anyone who would lead a lynching crowd out of ignorance. I don't know about you, but this rather cryptic side of economics is our bread and butter.
By the way, in case you have a hard time locating "AmChronicle Truncates Piece, Eludes Suit" written by Sumcad, click on
Truncate [or at the "Cached" of the Conservative Voice if you print edwin sumcad in the Yahoo search engine which will bring you to the article].

Comment by Jim Lorenz
Entered on:

This guy is sure some cad for belching the Machaivellian fascist-socialist lines.
Sign me I.P. Freely

Comment by Ernest Hancock
Entered on:

Remind me later to comment on the value of Mr. Sumcad. First I hope you all will continue the discussion.

Comment by Brock Lorber
Entered on:
Just in case anyone's interested, there is no "Q" in the Fisher Equation:

nominal interest rate = real interest rate + inflation

written: i = r + pi

The "Q" in the quantity theory equation is production, or more precisely, the produce consumed in a given time period. "M" is the quantity of money.

MV = PQ where:

M = money
V = monetary velocity
P = price level
Q = production consumed (generally GDP is used)

Comment by Edwin Sumcad
Entered on:

Your comments on Sumcad's editorial interest me. Ernest, if by "Fed's monopoly on money" you mean control of the Q in the Fisher Equation, then you are right. Fed performs a badly needed governmental function. If private entities are free to barter value for value for as long as they want, monopoly results causing economic inequities. Fed regulates. Even Adam Smith suggests a form of control when corporations cabal to increase prices out of greed and destroy the free market system.
The comment of annonymouscitizen is too personal. Minds bankrupt of argument throw stones from the gutter at the messenger, not the message. Iraq war was approved by Congress. Right after 9/11 75%-95% of surveyed population endorsed the invasion of Iraq. It later on became unpopular. But it does not mean it was "illegal". When the enemy starts a war by launching a surprise invasion of our shores, do you call that an "illegal war"? I don't think you understand what "illegal war" means. There is no such thing, buddy. Ask a lawyer to enlighten you. I wonder in a life time how many times an emotionally disturbed activist could led a lynching crowd out of ignorance.
Brock, Sumcad, the author, is popular and his name is in Yahoo and in almost every website in the Internet. You seem to be a rabid follower of Ron Paul that shoots first before asking questions. If you surf the Internet, you will know that the author published an editorial in the American Chronicle touching on the "oddities" of Paul as a nuisance candidate for president. It is in public's interest to expose candidates people will vote. For example, he disagrees with Paul that 911 was NOT the fault of Al Qaeda terrorists but of the American people. In his article, the author found that rather "odd". Nothing wrong with that. But it hurt the candidacy of the Congressman from Texas, and a bunch of campaigners ganged up on American Chronicle to remove the article. It was at the time when a new leftist editorial staff has taken over AC. Conservative views were banned. They removed all Sumcad's articles that hit the highest marks in readership nationwide and worldwide, and in addition, libeled him to discredit his influence on the reading public.
American Chronicle allows authors to publish personal attack articles so long as these are written by leftist and radical writers as part of its political agenda. Sumcad, a lawyer, warned AC of a civil suit if management and editors will not remove hate-propelled libelous articles, and AC complied. All of these can be read in the article
"AmChronicle Truncates Piece, Eludes Suit" [click here Cached or click the author's name or the title of the article in Yahoo].

Comment by Brock Lorber
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A grain of salt.

Comment by Ed Vallejo
Entered on:
Ernie - did you dig this guy up just for contrast!?!

He makes me feel good! LOLOL

Comment by Anonymous Citizen
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I stopped reading after this: "It is a priceless American legacy to the world. Only those who are still inside their cocoon of prejudice would deny this historical achievement."

Are you on the payroll of the Bush administration? The Iraq war was an illegal war that against an "enemy" that had no threat to the United States. You sir, are a moron and no defender of our country.

Comment by Ernest Hancock
Entered on:
Remove the Fed's monopoly on money and allow the entities involved in any transaction to exchange whatever value for value items they want without force or coercion (social or economic engineering) and I don't care if the Fed stays or not.

The free-market will discover their the Fed's true value very quickly.