Is auditing the Fed really the elephant in the room?

Look man I'm not some economics major here so if you are expecting some egghead technical answer you are going to be disappointed I would go approach Reiver for that. That's his specialty.

All I know is from 1880, the emerging modern industrial economy became to unstable for anyone to predict with any certainty, we had bank runs and people losing their entire life savings over night with bankers packing gold in suitcases and fleeing the country with their depositors wealth rather than go bankrupt and off to debtors prison. The gold standard was STILL centrally planned anyway, and it required monthly adjustments to interest rates and constant maintenance.

Hell man all one has to do is read The Count of Monte Cristo where the count used stock manipulation to destroy the wealth of one of his enemies who was one of the largest bankers in Paris to see the dangers of a privatized monetary system.

Like Landgru has said, the Fed didn't just pop into existence overnight. It took from 1880-1913 for the system to come into fruition which meant 30 years of policy debate so it wasn't some snap decision by "banking families" to take over the world, which is the primary Conspiracy Theory that Ron Paul types keeping spouting about why the Fed came into existence.

Is it a perfect system? No, not by a long shot but nothing is and I know its a better system than returning to the days of private bank notes and gold coins which IMHO, is antiquated and stone age thinking.

 

The War of 1812 established the necessity and propriety of laws creating a central bank for promoting and providing for the common defense and general welfare.

 

what is that assumption based on?

 

ok, so gold bugs think the us could return to using gold as currency, and you don't think that would be possible?

 

hmm, are you sure that's what happened? why do you think there were frequent recessions? what about using gold as currency caused those recessions?

actually I don't act like the FED just happened one day. there is a lot of history behind it. free market currency never failed. fractional reserve banks failed repeatedly, and the government propped them up. there is a difference.

 

ok that's fair enough. I would suggest you read "what has government done to our money?" by murray rothbard if you want to know why we had bank failures before the fed, and why a free market currency, specifically gold, is the only solution to bank failures. I would suggest to you that there is a lot of misinformation out there surrounding the use of gold as currency, and the fractional reserve banking system, but don't take my word for it. read that essay I referenced and make up your own mind. but you owe it to yourself to at least hear the other side before making up your mind.

 

Our social Contract and federal Constitution which only delegates the power to fix Standards for the Union, in our federal Congress.

 

No, sir, that does not hold up. You made the assumption that no market based standard would emerge on its own without government planning. Why do you assume that?

 

How did you reach your conclusion that any Standard could be fixed for our federal Union, without it being done so, by our federal Congress?

Why would any individual market have any basis for metrics, external to that market?

 

We aren't talking about any standard we are talking about one specific standard, we are talking about the medium of exchange. Why do I think the market an select the medium of exchange? Because it has done it throughout history over and over. It has proven it is capable of it.

So why do you think it is not possible for the market to determine the medium of exchange?

 

your accusation about central planning is ridiculous

would you like to see control of our country's financial and credit markets go back to the 'money trust'?

 

Oo, tinfoil. Fun. Money trust? Go on.

 

are you really so ignorant of history that you don't know what the 'money trust' was?

 

Go on, tell me

 

i suppose that means, yes, you have no clue

http://en.wikipedia.org/wiki/Money_Trust


'Historical Beginnings: The Federal Reserve'

CHAPTER 2: FINANCIAL REFORM IN THE 20TH CENTURY

The “Money Trust” page 19

http://www.bos.frb.org/about/pubs/begin.pdf

 

Interesting. No I am not worried the "money trust" will take over.

 

that's funny, considering you seem to have just now found out about it

i think someone like you, that doesn't seem to have a real understanding of how and why the federal reserve was created, isn't the person to listen too in regards to what's important

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let's say the fed is abolished

where are smaller, less liquid banks supposed to go for short term loans?

 

Interesting theory. Was this money trust involved in the creation of the fed?

Smaller banks can go wherever they want for loans, why do I care? Isnt the function of banks to lend not borrow, anyway?

 

it was probably the primary reason for the creation of the fed

read the short book i referred to

'Historical Beginnings: The Federal Reserve'

http://www.bos.frb.org/about/pubs/begin.pdf

you obviously have little understanding of how banks work

they often need to borrow, sometimes just over-night, to comply with reserve requirements

without the fed, banks would have to go to larger, more powerful banks that could charge whatever the market would bear

the result would likely be that the large banks would begin to control the market, like they did prior to the fed

 

oo fun, we can do a book swap. I'll read that one and you can read this one http://mises.org/books/whathasgovernmentdone.pdf

oh yes, I do understand how banks work. when you operate fractional reserve banks that is the risk you take. I have no sympathy for banks that find that they cannot meet their obligations because they've loaned out too much.

 

i read that book, long ago

we've already been through this

full-reserve banks became extinct, along with the bank of amsterdam, nearly 200 years ago

they can't compete, because they can't lend out deposits without becoming a bank that only holds a fraction of its deposits/reserves and it doesn't matter how you classify the account types

 

oh good, so you know the dangers of fractional reserve banking.

maybe maybe not. fractional reserve banks are protected by laws from the constraints the free market would put on them. this also you should know because you read that book.

 

Read these 2 articles. investigate, hell no hang em high.http://www.rollingstone.com/politic...e-sec-covering-up-wall-street-crimes-20110817

 

yes, i studied banking, economics and finance at university and have decades of real world business experience

you realize rothbard was jewish, right?

do you understand what mises (also jewish) lived through?

all banks, even full-reserve banks, are protected by laws from the constraints of the free market

and in reality, a purely free-market doesn't and could most likely, not exist

it's an abstract concept used by philosophers, economists et al

 

phd or masters? or both?

why is it important that rothbard was jewish?

yea, but why is being jewish important here?

well I think that's the point. banks that started out as money warehouses quickly discovered they could cheat a little by printing too many warehouse receipts, and when they got called upon to redeem their receipts and didn't have the money they got government to suspend their obligations to their depositors, among other things.

fair enough, but I see no reason not to move in the direction of freer markets. it's kind of like corruption, sure there will always be corruption but less is preferable to more.