Alternatives to The Federal Reserve System

[Brian4Liberty]

Short, clear, concise, nice!

"Alternatives to The Federal Reserve System" via FreedomWorks University and @TreyLowell.

[Occam's Banana]

Yesterday's Tom Woods Show is of relevant interest ...

End the Fed - Then What?
http://tomwoods.com/blog/end-the-fed-then-what/
The Tom Woods Show - 22 October 2014

The brilliant Jeffrey Herbener, whose courses in Austrian economics can be downloaded at my Liberty Classroom, joined me today to discuss how the free market can provide money, and that government intervention, either directly or via government-privileged central banks, is unnecessary. Here’s the mp3, and the YouTube is below. Have a listen!

https://www.youtube.com/watch?v=nEUPQUCeyOg

[Zippyjuan]

No monetary system has ever been able to avoid bubbles and recessions. In this country, they happened under metal standards and both with and without a central bank. http://en.wikipedia.org/wiki/List_of..._United_States

Gold standard? The Great Recession occurred under a gold standard.

We had competing currencies during the Free Banking Era with over 30,000 different currencies issued by individual banks which collapsed over confusion and forgery.

When the Fed does make changes in policy, they announce them months in advance to avoid shocking the system- so businesses can expect what will happen and plan for them.

[Brian4Liberty]

[Brian4Liberty]

No monetary system has ever been able to avoid bubbles and recessions. In this country, they happened under metal standards and both with and without a central bank. http://en.wikipedia.org/wiki/List_of..._United_States

Gold standard? The Great Recession occurred under a gold standard.

We had competing currencies during the Free Banking Era with over 30,000 different currencies issued by individual banks which collapsed over confusion and forgery.

When the Fed does make changes in policy, they announce them months in advance to avoid shocking the system- so businesses can expect what will happen and plan for them.

So what's your point? You love the Federal Reserve? You don't like gold and silver? Euros, and the other ~180 current national currencies give you the willies? Maybe you don't like credit cards or gift cards? Or is it that you hate crypto-currencies like Bitcoin?

[Occam's Banana]

No monetary system has ever been able to avoid bubbles and recessions. In this country, they happened under metal standards and both with and without a central bank. http://en.wikipedia.org/wiki/List_of..._United_States

Whenever the subject of abolishing or replacing the Fed comes up, you very often repeat things like this - as if they are somehow dispositive of something.

Yet I have never heard anyone claim that bubbles and recessions have never occurred (or cannot occur) under commodity standards or without central banks. (Perhaps there are some who do make such claims - if so, they are wrong.)

There is more than one way to skin a cat - and more than one way to induce bubbles and cause recessions. The ultimate causes of bubbles/recessions are artificially-induced expansions of credit. Central banks - when they exist - are a MAJOR source of such expansions. But that does not mean that if you get rid of central banks, there won't be any more bubbles or recessions. It only means that you have gotten rid of the chief culprit (but not the only possible one). When a central bank does not exist, other artificially expansionary factors - such as "unit banking" laws and assorted other government interventions - may also result in bubbles/recessions.

IOW: Just because every bubble/recession is not caused by a central bank does NOT mean that none of them are. It certainly does not mean that central banks should not be abolished as a source of bubbles/recessions (among other things).

And the fact that artificial expansions of credit may be erected upon commodity money as well as fiat money is NOT a "black mark" against commodity money. Nor is it an exoneration of fiat money. It is a "black mark" against artificial expansions of credit (which are most easily accomplished by central banks - who favor fiat money precisely because it is so easily "expandable").

[Madison320]

No monetary system has ever been able to avoid bubbles and recessions. In this country, they happened under metal standards and both with and without a central bank. http://en.wikipedia.org/wiki/List_of..._United_States

Gold standard? The Great Recession occurred under a gold standard.

We had competing currencies during the Free Banking Era with over 30,000 different currencies issued by individual banks which collapsed over confusion and forgery.

When the Fed does make changes in policy, they announce them months in advance to avoid shocking the system- so businesses can expect what will happen and plan for them.

We also had the industrial revolution and became the most prosperous nation in the world over a short period of time with free market banks. And as soon as we got the Federal Reserve we got the Great Depression.

[HOLLYWOOD]

7 minutes to understanding the scumbags that rob everyone: THE FED





The Fed Then And Now – Remembering William McChesney Martin, Jr. | Zero Hedge

[green73]

Why bother debating Zippy? You can trounce him to death and he'll just come back with the same $#@! the next time the topic comes up. Ban him already.

[HOLLYWOOD]

If anything, remember this piece to repeat to people, because the complexity for the average citizen is Jell-O'd by the same ruling class cabal.


The FEDERAL RESERVE aka THE FED cleverly planned and honed their devious, 'Dual Mandate'

Capture All Assets through the Boom & Bust cycle it creates, and Enslave the Free People into Debt.

[heavenlyboy34]

Whenever the subject of abolishing or replacing the Fed comes up, you very often repeat things like this - as if they are somehow dispositive of something.

Yet I have never heard anyone claim that bubbles and recessions have never occurred (or cannot occur) under commodity standards or without central banks. (Perhaps there are some who do make such claims - if so, they are wrong.)

There is more than one way to skin a cat - and more than one way to induce bubbles and cause recessions. The ultimate causes of bubbles/recessions are artificially-induced expansions of credit. Central banks - when they exist - are a MAJOR source of such expansions. But that does not mean that if you get rid of central banks, there won't be any more bubbles or recessions. It only means that you have gotten rid of the chief culprit (but not the only possible one). When a central bank does not exist, other artificially expansionary factors - such as "unit banking" laws and assorted other government interventions - may also result in bubbles/recessions.

IOW: Just because every bubble/recession is not caused by a central bank does NOT mean that none of them are. It certainly does not mean that central banks should not be abolished (as a source of bubbles/recessions, among other things).

And the fact that artificial expansions of credit may be erected upon commodity money as well as fiat money is NOT a "black mark" against commodity money. Nor is it exoneration of fiat money. It is a "black mark" against artificial expansions of credit (which are most easily accomplished by central banks - who favor fiat money precisely because it is so easily "expandable").

Yup. Zippy is generally respectable guy, but that comment was quite silly. Perhaps intentionally so?

[HOLLYWOOD]

[Feelgood]

I keep meaning to look into this, perhaps one day I will have the time.

In 1913 when the Federal Reserve Act was enacted, wasn't the Federal Reserve actually only granted a 100 year charter? Meaning at the end of that 100 years, it would have to be re-enabled by Congress and the President to continue? If so, then it would have expired last year and would be gone by default. I've heard of nothing in Congress or from Obama about granting them a continuing charter.

Any info on this is welcomed. Any guru's?

[DFF]

Gold standard? The Great Recession occurred under a gold standard.

The Great Depression was not caused by the Gold Standard, but rather the failure of the Federal Reserve to adhere to the Gold Standard properly.

Additionally, what you failed to mention was that during the true gold standard the greatest growth in US history took place, and not coincidentally, the consumer price index was stable for over a hundred years.

A dollar in 1800 had almost the same purchasing power as a dollar in 1900, because Gold doesn't lose it's value unlike paper money.

Which in truth isn't money at all; Federal Reserve Notes are counterfeit.

[Ronin Truth]

"The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson."

A letter written by FDR to Colonel House, November 21st, 1933

[acptulsa]

No monetary system has ever been able to avoid bubbles and recessions.

Very true. But to avoid, or at least ameliorate, such things was the stated purpose of the Fed and the ostensible reason we've been putting up with evaporating savings and shrinking real wages for the last century. The question isn't is gold magic, the question is, if the Fed isn't capable of the magic they said it could perform, why are we putting up with it?

So what is it good for--besides making the rich richer and the poor poorer? That's the question.

[osan]

No monetary system has ever been able to avoid bubbles and recessions.

That is untrue. The Byzantine empire endured 900 years of essentially perfect economic stability WRT the gold money. It was not until they began debasing the coin that trouble began.

Zipp-0, the lessons of history are clear, relative simple, and easily understood. There is not great magic there at all. Currency inflation can be avoided with no effort of thought, but rather only of the will to remain on the path. Commodity inflation is a whole other issue, that being dependent on supply and demand and in some cases beyond the control of men. You may have the latter confused as the former - a common enough error.

In this country, they happened under metal standards and both with and without a central bank. http://en.wikipedia.org/wiki/List_of..._United_States

Firstly, one should quote wikipedia with endless caveats. The editorial bents of the articles in political and economic terms tends strongly to the progressive, despite the somewhat transparent efforts to couch opinions in language not too blatantly biased.

That said, the article's list begins with this, RE the Panic of 1785:

"The causes of the crisis lay in the over expansion and debts incurred after the victory at Yorktown, a postwar deflation, competition in the manufacturing sector from Britain, and lack of adequate credit and a sound currency."

As to currency, the statement as given actually torpedoes your argument with conspicuous violence, and conversely supporting the opposite position with equal faith and vigor. No sound currency == no money. That, in case you have not twigged that part yet, is a major problem.

WRT "[in]adequate" credit, that bespeaks a matter of opinion, pure and simple. It is inadequate when there is not enough to get done what one wishes. One can ALWAYS cry "inadequate credit". It is a bull$#@! term that has meaning ONLY in very specifically constructed context. For tribal people in grass skirts, there is almost never any such thing as "inadequate credit". For people who want too much, too quickly, there is never enough. To cite a lack of credit as precipitating a money panic speaks nothing of money per sé, but rather of the artificial human circumstance at play. Inadequate credit speaks only to that artifice and the (likely) morbid greed that drives its existence.

How about the Copper Panic of 1789:

"Loss of confidence in copper coins due to debasement and counterfeiting"

Gold standard? The Great Recession occurred under a gold standard.

We had a gold standard in 2007? Might pay to read your own article.

We had competing currencies during the Free Banking Era with over 30,000 different currencies issued by individual banks which collapsed over confusion and forgery.

Your reasoning is really loused up in all this. You are attempting to imply that it is being claimed that a gold standard will prevent the deleterious effects of chicanery and other human misdeeds. Nobody in their right mind will claim this. A proper money prevents certain types of problems, the main being currency inflation. There is no way for an inanimate object to change the hearts of men. Crookery has to be addressed in other ways and there is really nothing to be done about speculation, save to decouple speculative ventures from those stable. Beyond what can be reasonably done, onus rests with investors to become sufficiently knowledgeable. Caveat emptor and all that.

[Ronin Truth]

I keep meaning to look into this, perhaps one day I will have the time.

In 1913 when the Federal Reserve Act was enacted, wasn't the Federal Reserve actually only granted a 100 year charter? Meaning at the end of that 100 years, it would have to be re-enabled by Congress and the President to continue? If so, then it would have expired last year and would be gone by default. I've heard of nothing in Congress or from Obama about granting them a continuing charter.

Any info on this is welcomed. Any guru's?

https://www.google.com/search?hl=en&...20.ayCX2nxdv0A

[Zippyjuan]

I keep meaning to look into this, perhaps one day I will have the time.

In 1913 when the Federal Reserve Act was enacted, wasn't the Federal Reserve actually only granted a 100 year charter? Meaning at the end of that 100 years, it would have to be re-enabled by Congress and the President to continue? If so, then it would have expired last year and would be gone by default. I've heard of nothing in Congress or from Obama about granting them a continuing charter.

Any info on this is welcomed. Any guru's?

There was no 100 year charter. It did initially have a twenty year one but in 1927 it was made "open ended".

http://www.federalreserve.gov/faqs/i...-to-expire.htm

Is the Federal Reserve Act going to expire?

No. The Federal Reserve Act of 1913--which established the Federal Reserve as the central bank of the United States--originally chartered the Federal Reserve Banks for 20 years. But in the McFadden Act of 1927, the Congress rechartered the Federal Reserve Banks into perpetuity, and so there is currently no "expiration date" or repeal date for the Federal Reserve.

Osan- My intent on quoting Wiki was to show a list of recessions in the past and how frequently they happened- regardless of our monetary system at the time.

And thanks for catching my error- that should of course said that the Great Depression happened on a gold standard- not the Great Recession which is the most recent economic crisis.

[georgiaboy]

bump - good stuff here.

endafed

[georgiaboy]

Yesterday's Tom Woods Show is of relevant interest ...

End the Fed - Then What?
http://tomwoods.com/blog/end-the-fed-then-what/
The Tom Woods Show - 22 October 2014

The brilliant Jeffrey Herbener, ...

Here's the link to Jeffrey's testimony before the House Financial Services Committee back in 2012, and chaired by Ron Paul.

http://www.c-span.org/video/?305885-...onomists-panel

[DFF]

Looking back, the cover on the right should have been titled "The committee to destroy the world."

Through insatiable greed, and extreme corruption, Rubin, Greenspan, and Summers collectively obliterated the global financial system.

[acptulsa]

And thanks for catching my error- that should of course said that the Great Depression happened on a gold standard- not the Great Recession which is the most recent economic crisis.

Fact checking you is a full time job. Good thing there are a bunch of us doing it.

Admittedly our currency wasn't completely uncoupled from gold until 1971. But that certainly doesn't mean we were on a gold standard in the nineteen thirties. We were not.

The Federal Reserve was thirty years old by then, Z2.0. FDR was so far from backing the dollar with gold, or pinning it to gold, or even allowing Americans to use gold eagles and double eagles to make their purchases that he was confiscating them, for God's sake.

[Occam's Banana]

Admittedly our currency wasn't completely uncoupled from gold until 1971. But that certainly doesn't mean we were on a gold standard in the nineteen thirties. We were not.

Further to this point ...

Gold Standards: True and False | Joseph T. Salerno
https://www.youtube.com/watch?v=CscG1x6-QUk

Archived from the live broadcast, this Mises University lecture was presented at the Mises Institute in Auburn, Alabama, on 25 July 2014.

[osan]

Osan- My intent on quoting Wiki was to show a list of recessions in the past and how frequently they happened- regardless of our monetary system at the time.

OK, but what of it? As I pointed out, proper money can go only so far in maintaining the ship in a rightful attitude. It can go a long way, but cannot guarantee anything. That said, a proper money system disallows several brands of chicanery, particularly on the part of the king because when the money is righteous, the king is able to borrow only so far and no further. Why? Because there is nothing left to loan. It is only when bull$#@! and vapor is offered up as money in the form of promises to pay or when real money is diluted with some cutting agent that the brands of trouble we now face become possible. Note how it all turns on keeping the money intact. If a dollar is defined as 1.000 ozt. of .9999 fine gold, so long as the coin of the realm remains within specification, fiscal discipline is maintained. When it is diluted with bull$#@!, the money loses its purchasing power, perhaps at some phase lag, but it inevitably happens. If phone baloney currencies of various forms come out to play, basically the sky becomes the limit in terms of the trouble. The economic fall of 2007 is a prime example of this where promissory instruments were bundled, sold, rebounded, resold, rinse, repeat until crash... CDOs, CDSes... Those people were basically selling the same 3 square feet of swamp to 1000 different people. How was it possible? Because there was no original document transfer in any of this. That allowed copies of copies of copies to be made and circulate with the authority of the actual instruments. At the heart of it all, the whole deal was a colossal, legitimized counterfeiting operation.

And thanks for catching my error- that should of course said that the Great Depression happened on a gold standard- not the Great Recession which is the most recent economic crisis.

Again, so what? The GD had NOTHING to do with money, per sé, but rather everything to do with artificial manipulations, primarily through the floating of false rumors by the likes of JP Morgan. There is nothing that even sound money can do about such things. Try reading this: http://vantagepointtrading.com/wp-co..._of_Crowds.pdf

[Ronin Truth]

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and born in sin. Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with the flick of a pen, they will create enough money to buy it back again. Take this great power away from the bankers and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a better and happier world to live in. But if you want to continue the slaves of bankers and pay the cost of your own slavery, let them continue to create money and to control credit."

Sir Josiah Stamp, Director and President of the Bank of England during the 1920's

[TheCount]

Sir Josiah Stamp, Director and President of the Bank of England during the 1920's

Bogus quote.

[Zippyjuan]

More info: http://www.worldsocialism.org/spgb/s...2/fabrications

It can't be found in any text before 1975.

In his book Debt, The First 5000 Years David Graeber says (p. 344) that "it seems extremely unlikely that Lord Stamp ever really said this, but the passage has been cited endlessly—in fact, it's probably the single most often-quoted passage by critics of the modern banking system," In a footnote (pp. 448-9) he goes into more detail: "Said to have been given at a talk at the University of Texas in 1927, but in fact, while the passage is endlessly cited in recent books and especially on the internet, it cannot be attested to before roughly 1975. The first two lines appear to actually derive from a British investment advisor named L.L.B. Angas in 1937: ‘The modem Banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banks can in fact inflate, mint and unmint the modern ledger-entry currency’ (Angas, Slump Ahead in Bonds, New York, 1937: 20-21). The other parts of the quote are probably later inventions—and Lord Stamp never suggested anything like this in his published writings."

There is also no evidence of any talk made at the University of Texas in 1927.

http://www.garynorth.com/public/6871.cfm

I shall now examine the veracity of this document.

First, she says that it was a 1927 speech at the University of Texas. There is no record of this speech.

Second, can you imagine a man becoming a director of the Bank of England a year after he gave such a speech? It is preposterous. In any case, she does not tell the reader that he was not a director in 1927.

Third, she offers a footnote to an obscure magazine, Alarm Magazine (May 1995). This is another tip-off: the editor of the magazine had no source document.

[NorthCarolinaLiberty]

Why bother debating Zippy? You can trounce him to death and he'll just come back with the same $#@! the next time the topic comes up. Ban him already.

I really don't think he meets his goal very effectively at all on this forum. He puts in a lot of work for very little to no return.

Those others members like him haven't fared to well lately either. The buttercup fella voluntarily left after two months. Seems he wasn't up to the task of debating. The other guy mostly posts weak one-liners. Those other two clowns have been fairly neutered since they've been here.

Looks like some new blood is needed in the department.

[RonPaulIsGreat]

He says contradictions instead of contractions at 0:53.