Posted on 09/03/2009 4:39:19 PM PDT by all the best
Since H.R. 1207 was introduced by Dr. Ron Paul in Congress this February, there has been a growing movement questions whether the Fed should continue to operate without more oversight and some question whether or not the Federal Reserve should continue to operate at all.
Currenty, Paul’s “Audit the Fed” legislation has 282 co-sponsors and there are two similar pieces of legislation in the senate. If the legislation is passed, it will allow the Government Accountability Office (GAO) to review the Federal Reserve’s balance sheets and their policy deliberations and monetary transactions. Currently Federal Reserve Chairman, Ben Bernanke, opposes the plan, saying it would undermine the Fed’s independence.
The “Audit the Fed” act has a real chance in passing, but some supporters of the legislation, including Ron Paul, want to take it further than that by ending the Federal Reserve all together. Paul introduced a piece of follow-up legislation, entitled H.R. 833: The Federal Reserve Board Abolition Act which would wind down and eliminate the Federal Reserve over the course of the year. Currently, the act has no co-sponsors, but is gaining a lot of grass-roots support. Paul hopes that members of Congress will join his movement to end the Federal Reserve after they see the results of a full audit of the Federal Reserve. Paul also authored a book about his proposal to end the Federal Reserve, entitled “End the Fed.”
Although the movement is in its infancy and still gaining momentum, it’s not too crazy to think that the United States wouldn’t be better off without the Federal Reserve. Since the Federal Reserve System was brought into force into 1914, the United States economy has grown at a slower pace than it did before 1914, despite significantly improved productivity. The rate of inflation has been substantially worse since...
(Excerpt) Read more at americanbankingnews.com ...
Everyone thinks the Fed will buy all the outstanding Treasury securities? When the Fed said they were only going to buy until October? When they said they only meant to buy $300 billion between March and October? $300 billion out of what, $1 trillion plus?
Horse hockey.
There were 9 recessions or depressions between 1865 and 1900, totaling 229 months out of about 430 months.
The banker would act as broker between borrower and depositor. It would lend out time deposits.
So you'd have 0% reserves on time deposits?
Deflation is a result of improved productivity.
Deflation is a decrease in the general price level. If all prices drop, how is that a result of improved productivity?
Computer prices dropping every year is because of increased productivity and that is a good thing. Prices dropping every year because of a shrinking money supply is a bad thing.
As opposed to inflation, deflation encourages savings and investment.
What would you invest in during long term deflation?
Lower interest rates encourage business expansion.
What business will expand during long term deflation?
People are better off. The economy is sustainable because the savers have money to buy goods
If my employer has to reduce prices every year, I'd be lucky to keep my job and if I kept it, I'd be lucky to keep the same salary.
Lender of last resort.
Certainly not stability of money supply.
They only create part of the money supply.
It's a very simple process to create money out of thin air.
These new dollars have the same value as the dollars you own. There are now more dollars that represent the same total amount of value.
In a perfect world, money creation would mirror GDP growth.
The new dollars created by the Federal Reserve do not go out to everyone who has dollars at the same time.
I love this claim. Let's say the Fed buys Treasury securities from a Primary Dealer, Goldman Sachs, for instance.
Goldman starts with $10 billion in bonds that pay 2.5% a year. They end up with $10 billion in cash that pays 0% a year. Goldman gets the money first, how do they benefit?
Through the convoluted process, banks inject these new dollars into certain sectors of the economy.
Inject? How?
The process of creating new money is called inflation.
I can create new money by taking out a loan. Inflation is a rise in the general price level.
Our current recession is caused by the flooding of new money into the housing market.
A recession is a decrease in output. How is that caused by new money flooding into housing?
I think we all know the classic pap about the Fed, their love of children and fluffy animals.
If they are the lender of last resort, why are we borrowing from China?
Actually, its future generations that are lenders of last resort, not that anyone asked the kids.
And that it was dissolved in 1811....
“The call for dissolution grew louder when it was revealed that the bank’s coffers leaned heavily on foreign investments, most notably from British interests...”
Just a rhetorical question....on three major issues, immigration, healthcare, and cap n’tax the Congress is at 180
degree odds with American people ..d’ya think any of our creditors have anything to do with that?
Pretty much everything.
It's a nice change from the classic smear about the Fed, their blood sucking and foreign control.
If they are the lender of last resort,
They are, who did our banks borrow from during the crisis?
why are we borrowing from China?
That's the Treasury, not the banks.
in·fla·tion (n-flshn)
n.
1. The act of inflating or the state of being inflated.
2. A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.(bolding mine)
The general rise in prices is a RESULT of the increase in available currency.
My question to you Todd, is you seem so attached to the current system. Are you in banking or somehow make your living from the current monetary system?
Are you under the impression that this refutes something I said?
The general rise in prices is a RESULT of the increase in available currency.
That's not the only factor.
My question to you Todd, is you seem so attached to the current system.
Attached? No. I just like correcting errors posted about the current system.
Are you in banking or somehow make your living from the current monetary system?
No, I don't work for the Fed.
Declining prices in an of themselves is not deflation. Computers and electronics are an example familiar to everyone. The prices of electronics have been declining for decades, while at the same time the capabilities of electronics have grown exponentially. The decline in prices is a result of the increase in productivity.
A lesser known example is sugar. At the start of the 19th century, sugar was a luxury item. By the end of the 19th century, even the poor in Great Britain could have sugar with their afternoon tea. Price declines combined with supply increases were the result of increases in productivity. This is why workers could also be paid higher wages.
Without the inflation (again a monetary phenomenom, ie the increase of the money supply), the price levels for goods and services would decline as productivity gains were reflected in the decline of the prices.
The ideal world is NOT doing the impossible and matching the growth of the money supply with the growth of the economy and productivity. My ideal is monetary freedom. A free market in monetary policy. Freedom is always my ideal.
An increase in output with a static money supply would result in lower price levels. It would also result in lower incomes.
The ideal world is NOT doing the impossible and matching the growth of the money supply with the growth of the economy and productivity. My ideal is monetary freedom.
Monetary freedom? Please explain further.
And reincorporated about a decade later.
My point was that it is a falsehood to state that the Founding Fathers were unanimously opposed to something that they obviously were not.
Yeah, I know that, but I consider them running buddies.
Are you familiar with James M Buchanan and along with Turlock, their Public Choice theory?
I think, just like the SEC, a la Madoff, (New York Fed’s then “I see nothing’ Timmy ‘Taxes be hard’ Geithner, and now what a Union labor head, jeez ), that the Federal Reserve is incompetent and corrupt in a anti-republic way.
Just as Bernanke, and Greenspan screwed the pooch with the metastasizing easy money policy, I’m confident they won’t get this evolution right. That they will make things worse.
But the best part( insert bitterness here ), none, zero, zip members will pay any price at all. I’m not aware of any organization of any success, where in there is no penalty, save bureaucracies. Hence, I’m a enemy to the the very notion of 1880’s idea of technocratic managerial organizations. Like risk, penalties always exist, it is just that bureaucracies pass them off on to those whom they have dispowered. Kind of along the lines of private profit but public debts.
I think I identify your fear here. One, incomes can only increase in value (not necessarily in terms of currency units) with an increase in productivity. Everyone in Zimbabwe is a multi-trillionaire, their incomes have vastly increased but they have become poorer in value. Todd, I believe you are confusing the rise in income as a currency unit with a real rise in income as value.
If you are correct, why did the real income of workers rise in the 18th century with a monetary system closer to montetary freedom than today's Fed is? Your prediction would be that their incomes would decline. They did not.
And because it is freedom, any prediction of how it will work in practice is bound to be wrong, when you have 300+ million minds working out what they are going to do. People would be free to conduct their business in monetary systems that are mutually agreed upon. How this is going to end up in practice, you've got me.
We're not talking about productivity, we're talking about monetary deflation.
I didn't see it.
You want many private issuers of currency? So when I go to the store, prices are quoted in hundreds (thousands?) of competing currencies?
What/When did they do? What/When should they have done?
Care to place a bet whether the Fed will stop by the end of October?
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