why abolish the federal reserve?

[dukker]

I like Ron Paul's views on pretty much everything. I am a strong advocate for civil liberties, individual freedoms, free trade and free markets.

What I don't understand is the argument for the abolition of the federal reserve. can someone please explain this to me? My understanding is that central banks are a necessary instrument for controlling monetary policy and I don't think any prominent economists have called for such a radical move, or am I wrong about this too? I am pretty sure every developed industrialised economy has a central bank playing a similar role to the fed reserve.

I have heard some of Paul's arguments eg secretive private bank etc. My own understanding comes from Australia's own central bank (I am from Australia but have lived in the US and may move back soon). In Australia we have a central bank staffed with independent economic experts that are charged with keeping inflation between 2-3%. I have not heard any serious calls for such an organisation to be abolished.

I am not criticising Paul's view, I just want to understand it. I am sure he has an educated opinion on this issue - given he has an excellent understaning of free trade and economics.

[American]

www.ronpaullibrary.com

Let Ron Paul tell you, or you can see the movie money masters.

Or you can wait for someone else to tell you.

[Original_Intent]

Here's a link to "The Money Masters" - long and possibly not 100% accurate, but a good eye opener if you can make it thru the 3.5 hours.


http://video.google.com/videoplay?docid=-515319560256183936&q=money+masters&total=1355&start=0&num=10&so=0&type=search&plindex=0

Zeitgiest: the movie also has a segment on the Fed.

[Mordechai Vanunu]

Another (shorter) movie is "Freedom to Fascism" by Aaron Russo - shorter and less thorough than Money Masters but still solid and summarizes the important points. Also available on Google Video.

[Trance Dance Master]

Mayer Amschel Bauer, who founded the Rothschild family had said, "Give me control of a nation's money and I care not who makes the laws"

http://www.the7thfire.com/debt_elimination/debt_elimination_is_part_of_the_solution.htm

[Chester Copperpot]

I like Ron Paul's views on pretty much everything. I am a strong advocate for civil liberties, individual freedoms, free trade and free markets.

What I don't understand is the argument for the abolition of the federal reserve. can someone please explain this to me? My understanding is that central banks are a necessary instrument for controlling monetary policy and I don't think any prominent economists have called for such a radical move, or am I wrong about this too? I am pretty sure every developed industrialised economy has a central bank playing a similar role to the fed reserve.

I have heard some of Paul's arguments eg secretive private bank etc. My own understanding comes from Australia's own central bank (I am from Australia but have lived in the US and may move back soon). In Australia we have a central bank staffed with independent economic experts that are charged with keeping inflation between 2-3%. I have not heard any serious calls for such an organisation to be abolished.

I am not criticising Paul's view, I just want to understand it. I am sure he has an educated opinion on this issue - given he has an excellent understaning of free trade and economics.

Read my thread on here and youll understand in a minute
http://ronpaulforums.com/showthread.php?t=15478&highlight=who+makes+your+money

[BrianH]

Not all Central Banks are bad. Some truly are owned and controlled by the government for the publiic good. Not so with Federal Reserve. The problem with the Fed is that is was set up to take power from the Government and give it to the banks.

"I believe that banking institutions are more dangerous to our liberties than standing armies. The issuing power should be taken from the banks and restored to the people to whom it properly belongs." Thomas Jefferson

[Tn...Andy]

"In Australia we have a central bank staffed with independent economic experts that are charged with keeping inflation between 2-3%."


ahahahaaaaaaaaaa......so screwing you slowly is OK ?

Do you understand that 3% inflation means the value of you money is cut IN HALF every 24 years ?.....and if it goes to 6%, the value is cut in half every 12 years.
( Study up on the Rule of 72 on interest )


You DO understand with honest money ( which paper fiat isn't ), there basically is NO inflation, right ?

A ten dollar gold eagle issued in 1813 was worth....get this......TEN DOLLARS in 1913 !

100 years.....no inflation....hmmmmmmm......

NOW that ten dollar eagle ( 1/2oz gold ) will cost you 300 Federal Reserve Note "dollars".......hmmmmmm...... DID gold go up in value ? NOPE.....the paper fiat simply got more worthless. A 1/2 oz of gold is simply a 1/2oz of gold....if anything, you could argue it might should go DOWN in value since we have mined so much more of it since 1913 !

PLUS the "Federal" ( it isn't ) Reserve is unconstitutional.

Congress was given the power to "coin money and regulate the value thereof".....not SUBCONTRACT that to a corporation of private banks. Either we HAVE a rule book.....or we don't. George Bush thinks it's "just a GD piece of paper"......if that's the case, let's just burn the dusty document and admit we're back to a monarchy.

The whole purpose of a "central bank" and it's alledged control of the economy ( which it really doesn't have.....only the illusion until the game is up ) is to screw the common man out of his wealth. Whether that bank is controlled by private interests ( like the FED ) or by a government entity, the end result is the same !

John Kennedy looked at the FED and said "Hey.....the Treasury can issue 'US NOTES' and we won't have to pay this private bank interest for doing so....." So he issued an Executive Order to the Treasury to start making US Notes and put them into circulation AT NO INTEREST TO THE UNITED STATES and stop selling the FED notes for 2 cents each that we have to pay interest on when they "lend" them back to us. Kennedy ended up in a grave a few months later. Follow the money.

( You can still find these US Notes at coin and stamp shops if you hunt around....the few that were issued have all been withdrawn from circulation.....wonder why ? )

Honest, tamperproof money is the ONLY way to keep the politicians from screwing The People. Our founders knew it, and we need to re-learn it.

[TheEvilDetector]

"In Australia we have a central bank staffed with independent economic experts that are charged with keeping inflation between 2-3%."


ahahahaaaaaaaaaa......so screwing you slowly is OK ?

Do you understand that 3% inflation means the value of you money is cut IN HALF every 24 years ?.....and if it goes to 6%, the value is cut in half every 12 years.
( Study up on the Rule of 72 on interest )


You DO understand with honest money ( which paper fiat isn't ), there basically is NO inflation, right ?

A ten dollar gold eagle issued in 1813 was worth, get this, TEN DOLLARS in 1913 !

PLUS the "Federal" ( it isn't ) Reserve is unconstitutional. Congress was given the power to coin money and regulate the value thereof.....not SUBCONTRACT that to a corporation of private banks.

The whole purpose of a "central bank" and it's alledged control of the economy ( which it really doesn't have.....only the illusion until the game is up ) is to screw the common man out of his wealth. Whether that bank is controlled by private interests ( like the FED ) or by a government entity, the end result is the same !

Honest, tamperproof money is the ONLY way to keep the politicians from screwing The People. Our founders knew it, and we need to re-learn it.

Commodities are a good investment:

The best of which seems to be platinum, then silver, then gold

http://www.kitco.com/LFgif/pt92-pres.gif
http://www.kitco.com/LFgif/ag95-pres.gif
http://www.kitco.com/LFgif/au95-pres.gif

These have increased around 300% roughly in last 6 years.

All of these are outpacing the CPI increases, so they are more than
just a store of value in the current climate. There is no reason to think
the current trends are going to change.

The current Iraq war is driving up the inflation and another war is planned in the near term.

(In case you don't understand why war drives up the inflation:
From: http://www.heinerfischle.de/meinung/inflat-e.htm
Ever wondered why inflation is creeping on us and eating up our savings?
War is strongest cause for it.
If someone builds a house, he must spend a lot of money. However, afterwards there is a house, a valuable thing standing against this money.
If someone wags a war, he must spend a lot of money. But afterwards, he has trouble. No matter who was victorious, after a war you have trouble.
So nothing valuable stands against the money spent for the war.
Moreover, a lot of valuables, for which money was spent, were destroyed during the war.
Nevertheless, all this money is valid currency. So there is more money on hand, but less to buy for it, and consequently money is devaluated.
If there can be a natural law for something as artificial as money, this is one:
WAR CAUSES INFLATION)

In any case the troops in Iraq will be there for some time, meaning huge
military expenditures for some time into the future.

Bush has said he intends for the next administration to keep the military presence in the region
which means huge borrowings by congress for some time. This was mentioned by Olbermann,
as written in some book that had that quote by Bush and it doesn't surprise me.
http://www.youtube.com/watch?v=JT5shLMGKu0

(Note: The war is a sorry mess of coverups, bad planning and mismanagement.
They have to lie to make it look like progress is being made.
All of this implies they are committed to throwing gigantic sums of US tax dollars
into the middle east for some time to come:
http://www.youtube.com/watch?v=Cf7CQdYXl-Y)

Of course if Ron Paul wins the election, dollar inflation may decrease due to spending cuts, however
since Paul wishes to switch to gold/silver standards, the price of these will still remain high,
since these will be a very sought after commodity as the entire country switches over.

From: http://www.fintrend.com/inflation/Consumer_Price_Index/CurrentCPI.asp

Current Consumer Price Index
(base 1982=100)


Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ave
2007 202.4 203.5 205.4 206.7 207.9 208.4 208.3
2006 198.3 198.7 199.8 201.5 202.5 202.9 203.5 203.9 202.9 201.8 201.5 201.8 201.6
2005 190.7 191.8 193.3 194.6 194.4 194.5 195.4 196.4 198.8 199.2 197.6 196.8 195.3
2004 185.2 186.2 187.4 188.0 189.1 189.7 189.4 189.5 189.9 190.9 191.0 190.3 188.9
2003 181.7 183.1 184.2 183.8 183.5 183.7 183.9 184.6 185.2 185.0 184.5 184.3 183.96
2002 177.1 177.8 178.8 179.8 179.8 179.9 180.1 180.7 181.0 181.3 181.3 180.9 179.88
2001 175.1 175.8 176.2 176.9 177.7 178.0 177.5 177.5 178.3 177.7 177.4 176.7 177.07
2000 168.8 169.8 171.2 171.3 171.5 172.4 172.8 172.8 173.7 174.0 174.1 174.0 172.2

So what this seems to suggest is that it makes sense to convert excess cash into metal holdings such as the above.
For example diversifying in proportions like 40%-35%-25% physical platinum, silver, gold.

I suppose if one had the opportunity to do so it would make sense to have these holdings offshore and to memorise
account and pin numbers for these.

That way if one day fascist swine came to your door to confiscate your wealth to pay for their latest genocidal project
you wouldn't be left on the street without a penny.

If the interest to the fed grows a bit in the future the gubmint might employ more direct wealth extraction methods
to accomodate the interest and their government growth agendas ie. huge tax burden and national emergency based
direct confiscations.

--
I am sure there is some law somewhere that requires me to say something like this:

This is just my personal opinion and does not reflect professional advise, please consult a legally certified,
professional financial advisor before making any financial decisions.

LOL

[Tn...Andy]

Wrong......gold and silver are money, not "investments".

Money is, among other things, a "Store of value"......which is WHY that 1813 gold eagle was worth ten dollars in 1813 and in 1913.

Federal Reserves Notes are obviously NOT MONEY based on your charts above.....because if they were, then a ten dollar FED "token" would be exchangable for a 10 dollar gold eagle.

Clearly, that is not so.....

So, while it would 'appear' that gold and silver are going UP in value, that is not so......the paper is simply becoming more worthless on it's way to completely worthless.

[TheEvilDetector]

Wrong......gold and silver are money, not "investments".

Money is, among other things, a "Store of value"......which is WHY that 1813 gold eagle was worth ten dollars in 1813 and in 1913.

Federal Reserves Notes are obviously NOT MONEY based on your charts above.....because if they were, then a ten dollar FED "token" would be exchangable for a 10 dollar gold eagle.

Clearly, that is not so.....

So, while it would 'appear' that gold and silver are going UP in value, that is not so......the paper is simply becoming more worthless on it's way to completely worthless.

LOL, you are arguing with me over semantics of what constitutes money?

I think you have missed the point of my post my friend.

Speaking of value.

Value is simply what people are prepared to pay for something.

What is the point of what you are saying again? Are you saying that people shouldn't invest in commodities I have talked about?

[noxagol]

A good bank and government would have no inflation because they wouldn't spend more than they can make.

[constituent]

you are both right...

when the price required for the purchase of a given
measure of gold is outpacing the consumer price index,
you are essentially winning in terms relative to the economy
in which you find yourself.

so yes an ounce of gold is still just an ounce of gold. afterall
you can't eat it. paper, maybe... gold, no.

[TheEvilDetector]

Yes, it is true the dollar is depreciating, because presumably more of it is needed to buy the same thing over time, as the CPI reflects.

The question arises, what are the alternatives to holding dollars?

I suggested precious metals.

Someone has pointed out that precious metals are not investments but are money.

This is a semantic challenge, but does it invalidate the merits of my suggestion? I am not sure.

That person has said gold and silver aren't going up in value, however I am not sure that statement is entirely correct.

If say, you held an ounce of silver and you found it to be outpacing the CPI, that would mean the ounce of silver can buy more of something (lets say a standard CPI basket of goods) over time.

Couldn't one then say that the silver has gained value, because it attracts more of something such as a tangible good or service over time?

Furthermore, if you on the other hand held dollars, you would find that your dollars are buying less and less of something over time
and as I and the other poster agree, that implies dollar's depreciation.

I am not sure, where my logic is flawed, perhaps someone can explain it better to me.

:)

[fsk]

You can't use the CPI to measure inflation. The CPI understates the true inflation rate.

If you want a better measure of inflation, use money supply inflation, M2 or M3. Fortunately, the Federal Reserve stopped publishing M3.

I have a detailed list of arguments against the Federal Reserve on my blog. http://fskrealityguide.blogspot.com/2007/08/federal-reserve-thoughts-why-it-should.html

[Cindy]

This issue is the foundation of why RP has my support and his speaking out publically to the powers that be on is what makes him my personal HERO. The guy is risking his life doing it.

How many of you know the History of JFK, taking on the Federal Reserve PRIVATE bankers like Paul is? Yes he did and he got as far as getting U.S. notes printed in an effort to phase out the Private Fedral Reserve, the week prior to his assination. The U.S. Treasury notes never got a chance to be issued.

THE grand daddy of economists certainly had some words exposing the "shabby little secret" as he put, of the Federal Reserve using deficit spending to confiscate wealth. Understand how trade deficts work along with hedge funds, and then imagine being a part of a group ( Private federal reserve bankers) that has control over the value of the yen, euro and dollar. It is legalized theft in broad daylight. They can't loose- we can and do.

Check this out from Alan Greenspan, written in 1966 before he sold his soul.

http://www.321Gold.com/fed/greenspan/1966.html



David Rockefeller, whose family owns one of the Private U.S. Federal Reserve banks, Chase Manhatan said this in his biograpghy-

" There are people who say that I am a member of an international cabal that does not have Americas best interest at heart. They are right. "

Here is what REALLY pisses me off. With one fell swoop of the pen, Woodrow Wilson undid everything the Revolutionary war acomplished and turned the rule of this nation back over to European Powers ( private European Bankers that made up the Federal Reserve- including the Rockefellers U.S. banks)

The Boston Tea party was not the straw that broke the camels back leading to the revolution against Englands high taxes. benjamin franklin who owned a printing press, got togther with some banks and started printing a currency. They loaned it to the colonists INTEREST FREE, to help boost the economy and they were thriving. England caught wind of this and told them to shut it down and declared that the colonists had to borrow money from their banks and PAY interest.

That was the final straw that lead to the revolt against England.

The private bankers of the Federal Reserve own this country again thanks to Wilson, now including China. Our property serves as the collateral for the money the U.S. government borrows from them. You could have a million dollar property paid for in full and the Federal reserve bankers could take it away from you to collect on unpaid National debts if they wanted too.


Their puppets in Washinton, wage war to borrow money from them, that we have to pay back with interest. This debt to them keeps us their economic slaves. Free soverign country my ass.

Please take the time to read this page about the history and players behind creation of the Federal Reserve. It's very illuminating-

http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=FinalWarn02-2

[TheEvilDetector]

You can't use the CPI to measure inflation. The CPI understates the true inflation rate.

If you want a better measure of inflation, use money supply inflation, M2 or M3. Fortunately, the Federal Reserve stopped publishing M3.

I have a detailed list of arguments against the Federal Reserve on my blog. http://fskrealityguide.blogspot.com/2007/08/federal-reserve-thoughts-why-it-should.html

I am not so concerned about why the FED should be abolished.

In my mind it should never have been created.

I am more concerned about how to preserve wealth, during this period of sharp dollar depreciation.

The CPI figures may understate the seriousness of the problem, but I have doubts as to whether CPI increases can outpace the growth of precious metals, as seen from the charts I posted earlier in this thread.

[fsk]

I am more concerned about how to preserve wealth, during this period of sharp dollar depreciation.


Stock investments aren't that bad. They're more liquid than gold. Large corporations receive massive government subsidies, which make them good investments for now.

Stocks are a good inflation hedge, until the dollar finally completely collapses to a value of zero.

If you're planning for a SHTF scenario, gold and silver hidden in your residence are the only assets that are going to be worth anything.

[constituent]

Large corporations receive massive government subsidies, which make them good investments for now.


which is exactly the problem...

enough of the wall st. welfare queens... they create the inflation to steal from those who would choose to save rather than reinvest, and then naturally they manage to stay above everyone else...

if freedom is what you desire, abandon wall st. particularly those

wall st. welfare queens who profit off of government subsidies.

[fsk]

There's nothing immoral about investing in stocks. If there are massive government subsidies to large corporations, why not take your slice?

Assuming that the dollar is going to collapse to zero eventually, that's the point where stock investments are going to be worthless. However, that point is still at least 20 years away. I'm thinking of moving 5-10% of my savings into physical gold and silver.

What happened to cjhowe? Isn't he supposed to be here saying that the Federal Reserve is the best thing since sliced bread?

[constituent]

There's nothing immoral about investing in stocks. If there are massive government subsidies to large corporations, why not take your slice?


1) i don't recall saying investing in stocks was immoral.. however perpetuating evil systems (in this case the corporate welfare fascist state) through either passive or active behaviors is immoral.. in choosing to invest in corporations that play that game, you are footing the bill that covers the expenses needed to continue squeezing out the competition to ensure hog trough hegemony.

2) the day all the wealthy quit bitching about the 'welfare moms' and their food stamps is the day any member of the investment class has the right to turn around and profit off of corporate welfare

[Brandybuck]

My understanding is that central banks are a necessary instrument for controlling monetary policy and I don't think any prominent economists have called for such a radical move, or am I wrong about this too?
Central banks are not necessary. Banking is no different from any other economic activity. We don't need central dairies to get our milk, so we don't need central banks to get our money.

Prominent economists who are against the Fed and/or central banking: Milton Friedman and Ludwig von Mises for starters. Both are from divergent economic views of banking, but reach the same conclusion: central planning of the money supply is bad.

[fsk]

1) i don't recall saying investing in stocks was immoral.. however perpetuating evil systems (in this case the corporate welfare fascist state) through either passive or active behaviors is immoral.. in choosing to invest in corporations that play that game, you are footing the bill that covers the expenses needed to continue squeezing out the competition to ensure hog trough hegemony.


Unfortunately, stock investments are the safest inflation hedge for now. Physical gold and silver are also good inflation hedges, but there are many legal and practical obstacles to buying gold and silver.

It isn't immoral for me to buy shares of stock, if it's the safest place for me to store my savings right now. I can invest in stock and use the profits to start my own grey-market business.

[Trance Dance Master]

there are many legal and practical obstacles to buying gold and silver
It's easy as cake to buy gold and silver. Just go to your local coin dealer with some FRNs.

shares of stock, if it's the safest place for me to store my savings right now
Got any shares of SLV and GLD?

[fsk]

I don't have a "local coin dealer". Sales taxes make it difficult to operate a coin dealer near where I live. I have to buy on the Internet.

SLV and GLD are not honest investments. The lease out their holdings for short sales, which defeats the entire purpose. If you're buying gold and silver, it's to hedge against a SHTF scenario, and the SLV and GLD ETFs are going to be worthless in a SHTF scenario.