Banks cannot issue their own currency.
The word “dollar”, a common word is banned. The Fed does not need to no knock down doors when banning common words is simpler and everyone gets in line.
The State could ban the words “bread” and “water”, and other derivatives, then sell their own monopoly at inflated prices.
Power is spread by allowing non threatening money alternatives to flourish. Once a money threatens, it’s Intellectual Property is stolen and the dissident owners are in prison. That has happened. The process is similar to shadow banning.
The Fed’s primary role is to protect Congress from their bad decisions, replaced with the Fed’s own poor decisions. Historically the Govt created money directly, got greedy and were thrown out of office. Now the people are screwed but Govt stays in power.
I enjoyed your discussion, both Pelham & central_va, you both are knowledgeable. :-)
I have scoured the internet for years, but a good source explaining the Fed Reserve and practical economics is still sadly elusive. So we are all left with what we know.
“Banks cannot issue their own currency.”
They did so right up to the 1930s; they created some of the most beautiful American banknotes. Click on the first link for some bank issued currency.
IIRC they still can, but it costs them to do so whereas money creation via checkbook entry costs them next to nothing. There’s not a lot of difference between a loan officer crediting your checking account with a hundred dollars or the same bank printing a $100 bill and giving it to you.
Checkbook money costs the bank nothing and can be used for further money expansion if it’s deposited... whereas paper money can’t be used for further fractional reserve lending
https://en.wikipedia.org/wiki/National_Bank_Note
this will take you to a history of the financial panic of 1907 that led to the creation of the Fed:
https://www.federalreservehistory.org/essays/panic_of_1907