Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The history of the Federal Reserve Act of 1913 has been well documented by dozens of scholars ... dozens of books ... in the greatest of detail, naming names, dates, places, documents, congressional records ... the whole 9 yards. That it was a conspiracy of foreign bankers operating as agents of the Rothschild dynasty is common knowledge among those who have studied that matter for the last 90 years. It's not a theory, or drivel, just because you don't know the history.
I totally understand that the Federal Reserve was secretly created by a bunch of bankers in a meeting. And I understand that Woodrow Wilson would later complain that the Federal Reserve(which he created) was in effect selling out the country to the bankers. So why did Woodrow Wilson, who would later complain about the Federal Reserve, create the Federal Reserve to begin with?
Look no further than the panic of 1907. And what caused it? A run on the Knickerbocker trust company, which caused many more runs on other banks.
And as I said before, the primary reason for the creation of the Federal Reserve was to be the "lender of last resort", so there would not be "runs" on the banks.
When you are on a "gold standard" the price of goods is set in gold. And while that might seem like a nice thing, to have trade in hard currency. To pretend that gold does not appreciate or depreciate in value relative to other things is absurd.
Just look at gold right now, it is up to what? Almost $1400 an ounce? It was worth less than $300 an ounce a decade ago, far outpacing inflation. Supposedly inflation-adjusted gold prices peaked back in 1980. Where gold would have been worth well over $2,000 an ounce.
Even if you want to blame all of this on the strange valuing of the dollar vs gold on the federal reserve. You could instead look at the price of gold in relation to the price of other precious metals.
In 2001, gold was worth $255.95.. Silver was worth $4.07.. So gold was worth roughly 63 times more than silver. The 2011 high for gold was $1,422.60, and the 2011 high for silver was $29.49. So gold is now only about 48 times more valuable than silver. In that sense, if gold was the currency standard, then there would be severe silver price inflation relative to the currency. And if you were a commodity speculator, you might actually buy up large quantities of silver(in stock) to create an artificial scarcity, which would drive up silver prices even more(relative to gold). Then you would just dump all of your silver at inflated prices into gold(which is now fairly worthless compared to silver), and then silver prices will lower and gold prices will rise. You could continue speculating in these precious metals over and over again until you became an extremely rich man.
If you don't understand why this is an issue, you might read about the Coinage act of 1873, and the Panic of 1893. They might give you a little insight on some of the issues involving using publicly traded commodities as currency.
And while I understand that the Federal Reserve has caused nothing but inflation since it was created. And since hard currency doesn't maintain value, giving a person only two options with their money. A) Spend it as fast as you get it, or B) To invest in stocks which can be risky, and can cause you the loss of everything you have worked for your entire life. And of course, both of them aren't really the greatest of options.
In fact, if you look at Social security, it was created because of the great depression. More notably that so many people had lost their entire life savings in the stock market crash, and now had nothing to live on in their old age. If everyone must invest their assets or lose them to inflation, and if there is no safe place for their assets to stay until their retirement. That necessitates the federal government to step in and provide people that level of "security", but of course that "security" is only necessary because the government created an environment of insecurity in the first place.
Maybe I am wrong, but I do not believe the majority of the people who helped to create the Federal Reserve had bad intentions. I don't believe Woodrow Wilson who signed it into law had bad intentions either. There were real economic problems that had been occuring on a fairly regular basis in the preceding time even on the Gold Standard. The Federal Reserve was intended to be a tool to help prevent recession. Obviously it has not prevented recession. But times weren't always great on the Gold Standard either.
Whether or not the Federal Reserve has been a failure or not, I don't really know. It certainly hasn't done what it was intended to do(many would argue it has made things worse). But it would simply be nearly impossible to get rid of the Federal Reserve while the federal government is still spending like it does. The only way we can have the environment where we can have a Gold standard, would be to get rid of practically everything the Federal government does. Namely, toss Social security entirely, toss medicare and medicaid, cut almost every federal department(FDA, Department of Agriculture, Department of Education, TSA, etc), and to greatly limit military expenditures.
In the 1800's the entire government was only about 4% of GDP. Now it is something like 30-40% of GDP. Right now, a gold standard simply could not work.
Last edited by Redshadowz; 01-12-2011 at 01:33 AM..
Maybe I am wrong, but I do not believe the majority of the people who helped to create the Federal Reserve had bad intentions. I don't believe Woodrow Wilson who signed it into law had bad intentions either.
Admittedly, I know next to nothing about economics. I've just been thinking lately about how our economy is driven by people buying things. This goes against my basic values (though I can be a bad shopper along with a lot of people). Many people are starting to embrace frugality and simple living principles. If more people do this, which I think is admirable, what will happen to our economic system? How does it need to change in order to support better principles as well as thrive?
In other words, what is an alternative type of economy that would be healthy and based on better personal principles rather than just buying stuff all the time?
If you eliminate "money madness" and usury from the economy, the problem is easy to remedy.
Prosperity is not determined by a large sum of money tokens. If it was, we could "eliminate poverty" by crediting each person with a billion billion quatloos. However, money, by itself, is not prosperity. Money is merely an abstraction, a medium of exchange and an accounting system to facilitate the trade of goods and services.
Prosperity is the creation, trade and enjoyment of surplus usable goods and services. Making more with less, so more can enjoy, is the goal.
Unfortunately, the current system penalizes the productive and rewards the non-productive consumers, and that hampers prosperity. Worse, the culture adores those who are not only unproductive, but spend their wealth avoiding boredom.
So now we have a system that discourages hard work, encourages wasting resources, so it takes more to do less, and that is not good.
If you eliminate "money madness" and usury from the economy, the problem is easy to remedy.
Prosperity is not determined by a large sum of money tokens. If it was, we could "eliminate poverty" by crediting each person with a billion billion quatloos. However, money, by itself, is not prosperity. Money is merely an abstraction, a medium of exchange and an accounting system to facilitate the trade of goods and services.
Prosperity is the creation, trade and enjoyment of surplus usable goods and services. Making more with less, so more can enjoy, is the goal.
Unfortunately, the current system penalizes the productive and rewards the non-productive consumers, and that hampers prosperity. Worse, the culture adores those who are not only unproductive, but spend their wealth avoiding boredom.
So now we have a system that discourages hard work, encourages wasting resources, so it takes more to do less, and that is not good.
I understand your point, but I think you are sort of exaggerating the effect the government has on consumption.
You seem to believe that the government somehow encourages over-consumption, and if we were to only remove the government, then somehow we would no longer be wasting as many resources as we are now. But you also say, "prosperity is basically surplus usable goods" and that the government is hampering prosperity by lowering productivity.
So lets pretend the government "butted" out of your life tomorrow, and freed the country to be more productive. What would they be producing? More food? More cars? Bigger houses? More, more, more right? And what would this "more" be made of? How can the result of more production not equal more waste?
The only way to eliminate waste is to consume less(or at least produce more efficiently). Even service-based industries are still consumption heavy(think haircuts and the need for buildings, hair products, hair trimmers, electricity, and then the gas to transport everything and everyone).
Consumption isn't necessarily bad, as long as you consume only as fast as you can replace. And as long as you aren't exploiting people, the environment, or other governments(especially through militarism).
The problem is, our politicians have continually placed economic growth(which requires consumption) over practically everything else. And why wouldn't they? They reflect the values of the people who elect them. Who constantly bicker about unemployment. How are you going to create jobs by lowering consumption? You're not. And theres an old saying about what really matters in elections, "It's the economy stupid!".
If consumption declines then production will also decline. If production declines then there will be less need for labor. This isn't exactly the 1800's, when there was no electricity, no power tools, no cars, and inefficient manufacturing processes. Back then one person might only be able to farm 10 acres by himself. It would take a whole family or a couple families to handle the 160 acres given away through homesteading. Now, with modern equipment, the same family of people could handle hundreds of acres of farmland. Back then 90% of the people were employed in agriculture, today only 2% of Americans are employed in agriculture(and we export a very large percentage of what produce). What would these people be doing if they weren't producing goods for the purposes of consumption? Nothing, cause they wouldn't have a job.
Last edited by Redshadowz; 01-12-2011 at 04:46 AM..
Admittedly, I know next to nothing about economics. I've just been thinking lately about how our economy is driven by people buying things. This goes against my basic values (though I can be a bad shopper along with a lot of people). Many people are starting to embrace frugality and simple living principles. If more people do this, which I think is admirable, what will happen to our economic system? How does it need to change in order to support better principles as well as thrive?
In other words, what is an alternative type of economy that would be healthy and based on better personal principles rather than just buying stuff all the time?
whatever it is, it sure as doesnt need to be a goverment based economy.
In general, the freer the people the healthier the economy. The less taxes and regulations, the more can be produced. Laissez-faire (free market capitalism) is the best way to go. Big government is the worst way to go.
Laissez-faire capitalism got us into this mess, and the mess in 1929, and the mess in 1890.
Do you mean to say that there is no other alternative than to buy excessive amounts of things we don't really need? Is there really no other way? What about buying-selling of something else, so that the basic economic model is intact, but not so much junk going around?
Please don't be snarky. I'm trying to understand if there is a better way.
Actually the OP's question is poorly worded. The objective should not be to increase consumption but to increase manufacturing and exports. Germany has survived this recession in much better shape than the United States because it has a strong manufacturing sector and it exports a significant number of products.
Now that we've dealt with the original question the solution to expanding the economy is technical and scientific innovation and high quality, highly technical manufacturing were the emphasis is on quality NOT cost.
Bt thosae without ;who often were dependent on thsoe with such economies sufferede even worse during those times. If you look tose on governamnt based distribution even during good times in the world's economies died by the millions.Starving to death is nothig new but it certainly happens less in a consumer based econmy where more is produced. In fact this economy has for decades prodcued enough to feed mnay who are not in such a economy.Capitaliam has brought india form being feed to where they can feed thier people. In China the switch to mroe capitalist system has it has been said has lead to the sayig of two bowls of rice a day and just compare sotuh Korea to nrth korea. Consumjerism capital has done thois thru out the world while controlled economies have for decades failed to do so at very hgh death tolls.
In general, the freer the people the healthier the economy. The less taxes and regulations, the more can be produced. Laissez-faire (free market capitalism) is the best way to go. Big government is the worst way to go.
Actually the financial markets were fairly "Laisser-Faire" from 2001 to 2008 and we see where that got us. A certain level of regulation is needed to make sure that behavior is not excessively risky or excessively speculative in the financial markets. Regulations are also needed to make sure that anti-competitive practices by some businesses don't inhibit the growth of other businesses. Regulation is also needed to protect the consumer for abusive business practices and unsafe products.
Most regulations are based on the fact that left to their own devices historically the business community has show they will act in an uncompetitive, risky and often abusive and unsafe matter in regards to the environment and consumer safety issues.
The easiest way to create wealth is for one produce and save more than one consumes.
That is what people in the United States did until the last 20 years or so.
Saving in and of itself in most cases does not create wealth. In most cases there has to be some level of investment to create wealth and there has to be a return on that investment. The issue right now in this country is that it's simply more profitable to invest in other countries around the world than it is to invest in the United States.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
