Posted on 07/16/2008 11:21:38 AM PDT by djsherin
What does everyone here think of the Federal Reserve?
Does it do too much or too little? What should it's role be? Is it necessary? Should we actually have it at all?
Just curious to get people's opinions.
There are pros and cons. The pros is that the federal reserve system allows for economic growth without always having continuing to increase the storage and supply of some relatively scare resource. If the supply of that resource should be restricted, then our economy could no longer grow. The con is that all money is created in debt and the economy will have to continually keep growing to chase that debt. If our economy stops growing, our money system would probably collapse.
It is a necessary evil, but lately it has been far overstepping its bounds. It should go back to the old days of keeping its nose out of the economy as much as possible and only step in when we have a solvency crisis that could effect national security (economic or otherwise).
It is a corporation with a board appointed by the President. The shares in the Federal Reserve are held by member banks in proportion to their capital.
This posses a material issue for shareholders that themselves are subject to Sarbanes-Oxley because they are required to mark their assets to market for purposes of their periodic financial reports.
What is the value of even a single share of the corporation that has the sole monopoly authority to print US currency?
Moreover, how can the US Government properly maintain oversight of the Federal Reserve if nobody can place a value on its capital stock? Indeed, should the US government ever decide to revoke the Federal Reserve’s charter or seize all shares, upon what basis would the government calculate the proper compensation?
The shameful truth is that anytime the Federal Reserve prints a single fiat dollar bill, it is in effect counterfeiting our private wealth in direct proportion to the dilution that act has caused.
The only path to a far sounder dollar is for private people to return to using private money in the form of gold or gold proxies like warehouse receipts. Fiat money coupled with the income tax on capital gains allows government to inflate the currency and levy a tax in the numeric “income” of increased dollars. It destroys both liberty and prosperity.
Louis T. McFadden, who was the Chairman of the House Banking Committee back in the 1930s, described the FED this way in the Congressional Record, House pages 1295 and 1296 on June 10, 1932:
"Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and he people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the maladministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it".
There are so many things wrong with this sentence, I don't even know where to start. First, the Federal Reserve doesn't print money. All they are is a conduit for money to enter the economy. They are like an entrance ramp into an interstate. They don't make the cars that drive on the interstate, nor do they make the road, they just channel traffic through it. Secondly, they are not 'counterfeiting'. The Constitution authorizes congress to regulate the value of money, and they have done so through the Federal Reserve charter. This makes 'fiat' currency legal, not counterfeit.
The only path to a far sounder dollar is for private people to return to using private money in the form of gold or gold proxies like warehouse receipts
That is not a solution for 'sound' money, that is a risky option. No first world economy based on a single commodity standard has survived. Having any single standard (versus full faith and credit) subjects the currency to far greater fluctuations in that commodity and makes the country that holds that commodity based currency more prone to be a slave to other countries that may hold more of that commodity. Imagine the US as a commodity slave to, say, South Africa, a very large gold producer.
A single point commodity currency is also not a guarantee of stability, on the contrary, according to the Mises-Hayek business model, with a single point commodity currency, it would be far more subject (and require) depressions, recessions, inflation, and deflation as the market would always be self correcting based on the movement of that currency. This wasn't coming from a 'gold standard' skeptic, this was from Mises who was saying this while promoting moving to the gold standard.
Oh thanks a lot for that image.. Hillary Clinton gets PMS and suddenly the economy tanks.
LOL Rick,
You know, that reminds me. I believe the Masons should be given full control over the Federal Reserve. Might as well have someone trustworthy be in charge.
Some day I will reveal my position in the Illuminati. The Conspiracy Theorists won’t like it a bit...
I’m just really curious about this subject. I haven’t made up my mind one way or another. That’s why I’ve been posting so much about it.
For example, how many places have you read that ‘The Fed prints money’. Heck, I've even heard this myth from politicians. Another myth, ‘the Fed isn't regulated’. On the contrary, it is the most regulated institution in the country. It has far greater reporting requirements than any other bank or government agency and is subject the oversight of congress.
I would honestly suggest, before you start digging into this, read this:
http://www.amazon.com/gp/product/015603297X/ref=s9sims_c2_img1-rfc_p?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-2&pf_rd_r=0SGQGBC7Y27DD5MS7ZFE&pf_rd_t=101&pf_rd_p=320448701&pf_rd_i=507846
It will give you a good perspective of how humans in general like to create archetypes of ‘controllers’. Once you read this, it will help you discern when someone is just reliving an archetype.
I would suggest then that you actually do some research on the conspiracy theory before you try to form an opinion on this subject.
The fact is you posted two different things - one regarding the CFR and the other about the Fed.
I know people who work for the Fed. It’s a BANK. Period.
The CFR, that’s another story and certainly there are some interesting folks that belong to it, but you REALLLLLLY have to draw the line at pulling information from people like Jeff Rense and Alex Jones.
Then, instead of listening to what other people write about this, try looking a little deeper yourself, find out where the information that writers are talking about COMES from in the first place.
You are going to be very, very surprised I think, to find out that a good portion of most conspiracy theories is simply made up information or worse, it is misdirection.
Well I’m trying to get informed by seeing what other people have to say. I’m doing research as well, but it’s nice to hear what other people have to say in forum like this.
Well... a little hint for you.
Opinions.. we’re all full of them, and opinions aren’t always what they are cracked up to be. I consider mine to be well thought out opinions. A lot of people don’t like my opinion and think I’m full of it.
Then again, I think others are full of it sometimes.
Thus, OPINIONS being what they are should be informed and truth be told, they aren’t always informed. (Yes, I AM an informed opinion maker, many are not...BUT that doesn’t MEAN you take my opinion for gospel EITHER. I’d never say that, I’d tell you “check it out” and make sure I’m telling you the facts.)
I’m not going to lie to you. I will always tell the truth here on FR. I might on occasion be wrong on something, but it won’t be in general, it will be on some nit-picky thing I missed.
Others are similar in their opinions. Informed and accurate for the most part.
But, the MOST important thing to remember is “Opinions are not always facts”.
Therefore, your most important asset in doing research is your OWN brain. Keep your mind OBJECTIVE, don’t believe everything you read until you can verify a source, verify the accuracy of the source and most importantly see if that source is backed up by OTHER verifiable and accurate sources.
One source in anything is not enough.
As for the various conspiracy theories out there, ALL of them have MULTIPLE, VERIFIABLE sources. Almost ALL of those sources are completely inaccurate. That’s where you have to be careful.
Because three people say that the CFR is simply the Illuminati in Disguise doesn’t make it so.
The Fed needs to let the economy take care of itself, regardless of the outcome. Let the chips fall where they may.
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There are so many things wrong with this sentence, I don’t even know where to start.
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Sorry, the plain, raw truth about paper and electronic, fiat money is simple: it is only a medium of exchange. It has no intrinsic value. It only has value based on supply and demand.
To the extent that any party adds to the supply, it dilutes the value of the existing stock in exact proportion to the dilution.
When government prints money and uses it to purchase goods and services, it has counterfeited private wealth exactly as I stated. It is only legal because government has made it so. It has given itself a pass, to print, inflate and tax away the private wealth of every party who uses US Dollars.
People who think that Congress is “regulating” the value of money when it charters a private corporation and gives it the monopoly power to issue money have not considered all the facts. They excuse counterfeiting under the color of law by being sloppy with the Constitution’s Money Clause, claiming that this theft is legal “regulation” of the currency. That is like saying we regulate the speed of teen drag racing by building straight stretches of road for them, or we “regulate” home buglers by requiring every neighborhood to have a pawn shop.
I cannot recall a single instance when Congress has legislated monetary policy for the Federal Reserve, Inc. Indeed, it is by design and by political contract, an “independent” entity, free to do as it pleases. It is so independent that Congressional oversight is limited that only a few members of Congress, who get to ask precious few questions of the Fed’s Chairman only a few times a year. It appears that idiot members of Congress are always at the head of the line, so their foolish and nonsense questions allows the Chairman to run out the clock and thus avoid any serious grilling.
Complaining that the Federal Reserve does not print money misses the point. The US Bureau of Printing and Engraving prints the official currency of the Federal Reserve corporation: Federal Reserve Notes. But paper money is just a small part of the total money supply, as you know. The rest is mostly in the form of electronic money, all of which only really reside in the computers of the Federal Reserve, and are only issued with on the Fed’s order and authority.
Personally, I’m a hard assets and gold backed currency supporter, but I suggest that you acquire and read (at least) these two books on the subject:
The Creature from Jekyll Island by G Edward Griffin, and
Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution by Edwin Vieira, JD
We have a 100% pure fiat currency, declared legal tender by Congress, with its value ONLY determined by political and private banking interests. Can this possibly be a good thing? Check out the asset inflation which has occurred since the last link to gold was broken (~1972). Why is the purchasing power of the FRN “dollar” so low? In a growing free market economy, we should have very gradual deflation of prices across the board, due to increases in productivity, not incipient hyperinflation.
It is also impossible to eliminate the federal debt without destroying the “dollar”, but you should research that for yourself...
I’ve been reading about how money in today’s world is really debt because banks loan money that isn’t there and since a loan needs to be paid back (i.e. debt) then that money is debt. If we paid all the debt back, there would be only the money created by government (the M0 I believe which makes up about 5% of the total money in the economy). I’m still not totally sure how it works but that’s the jist I’ve gotten so far.
I tend to think that we need a standardized “dollar” backed by gold and silver with no central bank and the elimination of or severe restrictions on fractional reserve banking. But like I said, I’m no expert, I just started realy getting into this in the last week or so.
And just in case I didn’t make it clear, I welcome any corrections to anything I’ve presented. When I say I tend to think something, I’m not solid in those beliefs. I’m only beginning to understand monetary theory.
Every federal reserve “note” is also debt, because the Fed “dollars” are purchased by the Treasury in exchange for bonds.
Every federal reserve “note” is also debt, because the Fed “dollars” are purchased by the Treasury in exchange for bonds.
So from what I understand everything I said was on the right track? It can never hurt to get too many opinions.
It sucks that our entire system is based on debt. Do you think the system I described/proposed would be viable assuming it got enough public support? It seems that there should be a system that doesn’t REQUIRE ever growing debt.
“So from what I understand everything I said was on the right track? It can never hurt to get too many opinions.”
I wouldn’t draw any conclusions from listening to or reading opinions here or anywhere else. Hit the books - including pro-Fed sources.
Oh I know. I’m just curious to see what other people think and why. Sometimes I miss something so it’s good to have more perspective. That said, I am doing lots of my own research.
Good points. Some refinement needed.
The board is appointed by the President but the list of nominees is provided by those that control the enterprise. Of course that means they get their man no matter who is picked.
There is no value on a fiat currency note other than a promise which these days is worth next to nothing.
The Fed does not counterfeit but they in fact do dilute the value of we, us, the People. The dilution that occurs is in fact an indirect tax. (Ron Paul has a point on that).
As far as getting some real backing, that can be done in a number of ways. One of which was suggested as shares of infrastructure (buildings, bridges, transmission lines, etc.) See the online video entitled ‘Money as Debt’.
And as a side note, although there are several regional Federal Reserve Banks, there is only one that matters and that is the New York Bank. All the others take orders from New York. And it is no coincidence that New York houses the world’s largest investment banks.
The fact is that the Fed and the Income tax go hand in hand. They were both passed in 1913 not by coincidence. The Fed says to government we can trade your T-Bills for our Fed Reserve notes (paper for paper) so long as you promise you will tax incomes, pay us the interest with those income taxes so that we can recoup, retire and match your taxed dollars with our newly printed dollars all for the purpose of mitigating our dilution activity, and of course we get an inflation premium kicked in for our investment banking affiliates.
In other words, the Federal Reserve is the US Governments Credit Card and there is no virtually no credit limit, at least none set by the Fed. The inflation premium is passed on from a portion of the taxes paid to the Fed in the form of interest. The more the People are taxed directly by the federal government (the income tax is a direct tax), the more leverage and looser policy the Fed can grant its investment banks. Conversely, the less the People are taxed directly, the more restrictive the Fed must be with its affiliates else lose control over inflation.
And in times of loose lending rules and high leverage on the part of affiliate banks, they have one target, debt. They exist to create debt and that means create debtors. In this sense they are predators. So it is no error to say that the more the People are directly taxed, the more power the predators have to capture (using credit as the carrot) and enslave.
The main point is that the Fed is in a perpetual conflict with the American People and the taxes levied on the People.
So what to do?
The issue is the size of government and the demands of the cost of government on the Fed extending fiat money to the government.
The size of government is entirely too big but the fights and skirmishes over its role (its size) can eat up the clock without end.
Therefore, to get at the root of the problem, a reform must be embraced that at first will guarantee revenue neutrality, so that spending battles are moot.
And after designing for revenue neutrality, the reform must be transparent and carry a progressive component fair to all, else it would never pass.
And after other careful design considerations, the reform must abolish the US Income Tax system completely and also repeal the 16th Amendment so that there would be no chance of having the monster that exists today return to enslave the People.
And after these reforms are passed the People will know how truly big their government is and they will be able to act because they will have knowledge that was previously unavailable.
http://video.google.com/videoplay?docid=-9050474362583451279
This will open your eyes and explain all.
And toss in that not so long ago the banking network beholden to the Fed could ‘borrow’ the reserves they needed to remove any limits on total loan amounts written.
Very similar to Enron when you think about it, in the sense of shifting bad debt (borrowed reserves) off the books (back to the Fed).
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