Abolish the Fed

[floridarocks]

Can someone please explain why we should not abolish the Federal Reserve or explain why lawyers won't discuss the bankruptcy of the corporate US in 1933 the keeps us perpetually indebted to the international bankers. How rich are those Rothschilds anyway? Is there such a thing as kazillion?

[expositor]

No, the Federal Reserve is NOT a Federal agency!!!

How can you tell? Well, if you look at the telephone directory in any city in which there is a Federal Reserve Bank, as I did when in Minneapolis, you will find that there is NO LISTING of the Federal Reserve under US Government agencies; rather, you will find the Federal Reserve listed (on the average) about an inch below "Federal Express," the well-known package-delivery service, in the "business section" of the telephone directory.

Also, if it were a Federal agency, which it is not, it would not be placing postage on its outgoing mail. Instead, we see that the Federal Reserve does indeed place postage on its outgoing mail. Too, the Federal Reserve, as a Federal employer, does not recognize "veterans preference" in placement.

How do I know this? Well, I was once called as a witness in a court case and so testified. The opposing counsel for some odd reason, when given opportunity to cross-examine me, declined this opportunity to impeach my testimony.

[Nick Danger]

how long could the neighborhood bank stay in business were it to start lending money below the "going" (discount) rate?

Not very long, but I doubt that has much to do with the Fed. How long could any business last if it sold things below cost?

The discount rate is not the "going" rate, it is a highly discounted rate (currently it's 1.5%) that the Fed would charge a member bank to borrow money. I would bet that the cost of running the bank (rent, salaries, etc.) exceeds that. Even if a bank could borrow at zero cost, it would probably still lose money if it made consumer or small business loans at or below 1.5%. Plus I don't think many depositors would be running in there to open savings accounts; if they're loaning the stuff out at 1.5%, what could they be offering savers?

I know it's considered cool to think that bankers and the Fed and stuff are all magically powerful, immune from market forces, and able to sell below cost to boot, but I'm afraid it isn't so.

[Nick Danger]

No, the Federal Reserve is NOT a Federal agency!!!

Well, you certainly seem to have proved this. There's nothing quite so definitive as the phone book.

The real question is whether you think it should be a federal agency. Should the fedrel gubment own a bank? Should politicians be given the keys to the money tree?

Don't act so shocked that it's not a federal agency. Nobody wanted it to be one. It's there precisely so that politicians would not have the keys to the money tree. And it's not government-owned because the people who designed it did not want the government in the business of running banks. Unlike the kookburgers who try to convince people that there is something awful going on if the government doesn't own the central bank, the people who wrote the Federal Reserve Act were not Socialists. The people who write those kookburger sites are Socialists. In fact I think they're Marxists.

[Nick Danger]

Hey Nick, what do you make of this "KooK"?

I think he took a perfectly good article about the dangers we face from environmental zealots and other land-grabing Socialists, and hosed it up with a rambling rant that wandered off into Gold Land for no apparent purpose, and without making much sense. By the end I concluded that he was really a Golden Kookburger who was trying to sell us his way back to the 15th century by attacking a differnt path to the 15th century. To tell you the truth, I don't want to go there no matter what method they try to use to sell it to me.

[Deuce]

The original issue was: did money center banks make bad loans to the lesser developed countries on their own or were they induced to do so by the government. As you acknowledge, the Business Week quote does not, directly, address this issue. Therefore, there is no evidence that contradicts the more straightforward explanation (i.e., the banks chose to make the loans on their own).

The next issue was: Do you favor such bailouts?

I oppose all such bailouts. They violate fundamental principles of free enterprise. Your position is:

It depends on whether the taxpayers would lose more by bailing out whatever failed, or by having to eat the consequences if it did fail.

Regarding the $53bn Mexican bailout, for example, I have heard each of the following so called arguments:

1. It’s unthinkable not to do so! It would be devastating to us all! (These shrill voices never even bothered to offer an explanation).

2. Robt Rubin: If you don’t want to lose 700,000 American jobs and see millions of illegal Mexicans stream across the border, we have to do this (the scare tactic---and total bs designed to scare the gullible).

3. Bill Clinton: it’s not aid; it’s not a gift; we are just co-signing (Isn’t that the same thing with a bankrupt borrower?)

4. Journal of Commerce (for example): for every $1 WE send down, WE will get $9 back. (As Tonto said to the Lone Ranger when the latter lamented: we’re surrounded by Indians…whaddya mean ‘we white man?)

To their credit, the American people weren’t buying. Polls showed 85% were opposed to the bailout. Gingrich had just been swept in by popular uprising and wasn’t about to go against those numbers but, of course, all pols (Dems and Reps) wanted to bail out Citicorp and Goldman Sachs. They were all ultimately happy when Clinton figured a way to use the Exchange Stabilization Fund and circumvent Congress.

Are you saying that you subscribe to the domino effect? You believe that if Citigroup is required to play by the rules of free enterprise that might, somehow, cause the collapse of the Fortune 500? Please explain how?

[Deuce]

We don't have centralization of credit

Any time it wants the Federal Reserve could INSTANTANEOUSLY render every bank in the country insolvent. Alternatively, any time it wants, it could bailout any bank from any bad investment by merely buying the bad assets of the bank at par. It can do all this without an ounce of further authority, in secret. How much more centralized can you get?

[Nick Danger]

Any time it wants the Federal Reserve could INSTANTANEOUSLY render every bank in the country insolvent.

Oh, stop it. You talk as if these people are five-year-olds in charge of an Ohio-class boomer. Why, any minute they are going to push the button to blow up the world.

Get a clue. There are jobs in this world where a screw-up could cause a hell of a lot of damage. Right this minute, there are guys flying F-16's around our nation's airports. Any one of them could decide to blow a 747 out of the sky, just because he can. The crew of a single boomer could go nuts and blow up half of the United States.

If you get to the point where you don't trust anybody to do anything, because you think the world consists entirely of capricious evil-doers like Osama bin Laden, you have officially entered the Twilight Zone.

[Nick Danger]

And the fact that the "cost" of Capital (ie. debt) is set by a central Bank...

Where do you get this crap? You're slinging around words when you don't even know what they mean. Do us all a favor and go read Thomas Sowell's Basic Economics: A Citizen's Guide to the Economy. It's a lot better than those kookburger sites, and when you get back you'll actually have a clue about the difference between a cost and a debt. You might even find out what capital is.

[Mikey]

Go to (EWPA) </A HREF= http://www.FreeRepublic.com/forum/a39fda2203dde.htm>.

There you will many answers to your questions.

[Mikey]

It gets even better. The FED doesn't print the notes. the MINT does and they "sell" the notes to the FED at the cost of printing them (2-3c per) and then the CORPORATE UNITED STATES "borrows" it at face value plus interest, which the American people pay & pay & pay.

Talk about a scam.

[Nick Danger]

so instead of trying to refute ANYTHING in the article, you simply say, "He's a Kook"..

Your ability to import thousand-word articles into this forum does not constitute an obligation on my part to spend an hour two answering every one.

I merely note that the kookburgers here have had very little to say that they didn't import from somewhere else, whereas I have taken the trouble to write almost as much material right off the top of my head. I did that to demonstrate that I can think on my feet in this area, and the kookburgers can't. Which means that I know what I'm talking about, and they don't. Almost every response I've gotten here that was not written somewhere else and imported, consists of taunting, baiting, and name-calling, which I believe demonstrates the level of understanding of the subject that the kookburgers actually possess. They can post an article from somewhere else, but since they don't actually understand what it says, they can't really defend it. All they can do is wave their arms and call me names.

I think I've done enough of that now to make the point. So you can import all the articles you want now; I don't care. Your fellow citizens of the grassy knoll will undoubtedly cheer them. But I'm confident now that no one visiting Free Republic for the first time will come away from this thread thinking that you guys represent the state of economic understanding on this forum; which is all I cared about. I don't believe you guys are persuadable, because you've consistently demonstrated that you don't have a clue about how any of this really works. It's all buzzwords and nonsense with you guys, and you think you're making sense even when you're spouting jargon-laden gibberish. There's just no cutting through ignorance wrapped in certainty. All I can do is try to demonstrate that it is just ignorance wrapped in certainty, and then move on.

[Torie]

It sure is an uphill struggle isn't it? The knowledge base is simply too low on this site in general for this kind of topic. Actually, the skill of the fed is quite awesome these days. It does seem that microeconomics might be a perfectable science, or some asymptotical function thereof.

[Free Vulcan]

We've never been on a pure gold standard.