What happens when the FED goes down?

[Sematary]

I'm just curious, since our economy is currently being propped up by the FED, what happens if it's eliminated? Won't the economy take a dive (temporarily) while the market adjusts itself to the new condition of not being regulated to that extent?

[jj111]

The better question is what is we DON'T get rid of the Fed? The "correction" would be much much worse, and much much longer, perhaps like the Great Depression or worse. Getting rid of the Fed will only make things better, but there needs to be a gradual transition period and Ron Paul plans for this and recognizes this. If Ron Paul becomes frontrunner, at that point, the market will start adjusting itself in preparation for wonderful changes in our monetary system.

[Taco John]

No. Ron Paul's plan, as I understand it, is to open the market for competition... The US dollar might lose it's value, but the competing dollars using a true value standard wouldn't.

Here's an example of a private currency
http://www.libertydollar.org/



http://www.libertydollar.org/ronpauldollar/images/ronpaul_sgc.jpg

[nullvalu]

Yep it would likely take years to fully take down the FED. Thus, allowing markets to gradually makes changes and catch up.

[jkaufmann]

http://www.sais-jhu.edu/media/sept2007/ronpaul091107.mp3

This is Ron's speach at John Hopkins. Very good -- The format was more intelectual then debate or political. Where RP shines I think.

Towards the end questions are asked of him, and a question similar to this is asked.

He basicaly says to legalize the use of gold and silver, alongside the Federal Reserve Notes. This creates competetion against the Federal Reserve Notes. He states it would be too disruptive to outright destroy the Fed. The eventual goal is to do just that, but not overnight

[rajibo]

How would we replace all those federal reserve notes floating around the country? Every time I go to an ATM machine it seems I get crisp brand spankin' new ones.

[wolv275]

I heard RP talking on a interview saying that we have such enormous debt that the "us bank" (fed) should liquidate the debt in order to stabilize its run away inflation. Saying that instead they just re inflate the system with more money, they would never liquidate the debt or any politician ever suggest we do that. Me thinks that he would do or at least try something like that? Imagine that...

[jkaufmann]

bump

[Channing]

The FED is not propping up the economy. Actually it's responsible for the boom and bust cycles. Without it the economy would steadily grow. Also, if we phase out the FED that means we get to save a lot of money on interest payments.

[jonahtrainer]

I'm just curious, since our economy is currently being propped up by the FED, what happens if it's eliminated? Won't the economy take a dive (temporarily) while the market adjusts itself to the new condition of not being regulated to that extent?

There are already alternatives such as GoldMoney.com (http://www.goldmoney.com). The Fed's days are numbered regardless of whether Ron Paul is elected or not. Gold and the Information Age (http://zealllc.com/2002/digigold.htm) is going to be rapidly changing the scene.

[constituent]

The FED is not propping up the economy. Actually it's responsible for the boom and bust cycles. Without it the economy would steadily grow. Also, if we phase out the FED that means we get to save a lot of money on interest payments.

not to mention deflation... we'd save money as the price of everything
was reduced through advances in technology.

the price of goods are maintained artificially high by the fed (through inflation),
and wages are kept artificially low through public policy...

the fed sees unemployment of 4% as a good thing b/c it maintains
deflationary pressure in the labor market.

[yoshimaroka]

http://www.youtube.com/watch?v=lP7a14IlVP4

[jkaufmann]

Although I have not heard this discussed by RP, the main way to establisha currency, Fiat or otherwise, is to decree that the currency can be used to pay government taxes.

Gold and silver can be bought on the open market, but it can't be used in its current form to pay Federal or state taxes.

Thoughts on this?

[libertarianguy]

test

[Sematary]

http://www.sais-jhu.edu/media/sept2007/ronpaul091107.mp3

This is Ron's speach at John Hopkins. Very good -- The format was more intelectual then debate or political. Where RP shines I think.

Towards the end questions are asked of him, and a question similar to this is asked.

He basicaly says to legalize the use of gold and silver, alongside the Federal Reserve Notes. This creates competetion against the Federal Reserve Notes. He states it would be too disruptive to outright destroy the Fed. The eventual goal is to do just that, but not overnight

That makes sense. I can't see tearing down a century's worth of government overnight. It would cause havoc.

[Thurston Howell III]

I don't think he has to "take the fed down" but rather just bust up the fed monopoly, like you would any other monopoly.

[Gee]

Yes, there must be free competition in banking. Not simply banks themselves, but entire financial systems. Banking needs to be the result of consumer choices in the marketplace, not the result of political clout.