[Avalon Memories]

Tell me again why we even need a Federal Reserve? Maybe someone more financially savvy than I can provide a solid, positive reason for its existence.

[Vermont Lt]

In the system we have the Fed acts as a governor on interest rates. Without the Central Bank you would allow the marketplace to set rates. With the fiscally irresponsible Congress and Executive Branches we tend to elect allowing the Marketplace to set rates would be suicidal.

Yes, it sounds great—“Get rid of the Fed”—….just make sure every asset you have has been converted to gold before it happens. Because the dollar would be destroyed. The resulting “panic” would make the Great Depression look like a good time.

The Fed sucks. But it is the cleanest dirty shirt in the pile.

[pierrem15]

If it only did what it was originally supposed to, which is provide a mechanism for liquidity for national banks during a bank panic, that's fine.

The problem is by abandoning the Bretton Woods gold exchange mechanism in 1971, Nixon effectively transferred control of the currency to the Federal Reserve, because only the interest rates sets the value of the currency.

This means the Federal Reserve cannot remain as it is currently constituted because Congress, as the Constitution requires, is responsible for the currency.

Think about it: it took FDR and Dems in Congress to inflate the dollar from $20/oz to $35/oz. So how come the Federal Reserve now sets the value of the currency and inflates the dollar away?