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Old 11-24-2008, 03:14 PM
 
18,353 posts, read 16,327,013 times
Reputation: 7154

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Quote:
Originally Posted by baystater View Post
Let me just through this out there. OK so I see that a lot of people on CD's forums want to abolish the federal reserve. OK I'm an open minded guy and maybe will to go for that. But I was born, heck most or all of us were born after the fed was created. So I don't thing most of use know a life without it. So tell me in as much detail as you can what are the possible upsides and downsides to riding ourselves of the fed.
Let me stipulate, that I would like to heard mostly economic impacts not political rhetoric.
Hi baystater,

That is a hard question to answer without discussing what it would be replaced with. I would replace the Federal Reserve system as such.

1 Treasury notes issue directly to finance government operations. Anything in excess of 3% inflation would need to be recovered in taxes.
2. No fractional reserves. Any money loaned out must be accounted on the books. No money growth through lending ever.


The alternative gold backing really falls apart once one goes into the details. No one will actually give you any either because they have never really thought it through. Let me give an island example( may favorite kind) of one problem with gold.

Island 1 decides coconut shells will be the national currency.
Island 2 decides to split coconut shells so that halves my be authenticated as real currency at the treasury.

Island 2 notices they have coconut shells, the island currency of island 1. They decide its time for an island 1 shopping spree and they buy up half the island.
Island 1 tried to use their coconuts but unfortunately they do not match the issued currency of island 2. Result is 1 +1/2 islands goes to the island that issues their currency.

Now does someone want to tell me why someone in India , well known to have lots of gold jewelry, won't buy Rode Island with a ring? How will we tell their gold from ours? Do we really want to sit on a heap of gold with our country purchased out from under us?
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Old 11-24-2008, 08:10 PM
 
Location: Orlando
8,249 posts, read 11,554,720 times
Reputation: 4084
I think people miss a possibility in this the process of the fed can be run by the government and not private banks. We have turned over our money, and everything tied to it to the fed. so they can charge us and tie us forever to their debt. It is our money and we should take control of it. remove the control of our money from the banks. Stop paying them the interest. That is a way to reduce our debt.
Eliminating the fed doesnt mean we dump the process just the private owners of the system.
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Old 11-25-2008, 10:09 PM
 
3,853 posts, read 11,860,265 times
Reputation: 2521
Quote:
Originally Posted by Mircea View Post
Um, sure, that's why the inflation rate in the 1800s averaged 35%, right?


Read and weep

Year Avg Inflation
1800 51%
1801 50%
1802 43%
1803 45%
1804 45%
1805 45%
1806 47%
1807 44%
1808 48%
1809 47%
1810 47%
1811 50%
1812 51%
1813 58%
1814 63%
1815 63%
1816 55%
1817 51%
1818 48%
1819 46%
1820 46%
1821 42%
1822 63%
1823 40%
1824 40%
1825 36%
1826 33%
1827 34%
1828 34%
1829 34%
1830 33%
1831 32%
1832 32%
1833 32%
1834 30%
1835 29%
1836 30%
1837 31%
1838 33%
1839 34%
1840 32%
1841 32%
1842 30%
1843 31%
1844 29%
1845 28%
1846 28%
1847 28%
1848 27%
1849 28%
1850 26%
1851 25%
1852 25%
1853 25%
1854 25%
1855 25%
1856 27%
1857 28%
1858 27%
1859 28%
1860 26%
1861 27%
1862 27%
1863 27%
1864 30%
1865 37%
1866 47%
1867 27%
1868 46%
1869 44%
1870 42%
1871 40%
1872 40%
1873 38%
1874 36%
1875 36%
1876 36%
1877 34%
1878 33%
1879 32%
1880 32%
1881 29%
1882 28%
1883 29%
1884 29%
1885 29%
1886 28%
1887 27%
1888 27%
1889 27%
1890 27%
1891 27%
1892 27%
1893 27%
1894 27%
1895 27%
1896 27%
1897 26%
1898 25%
1899 25%
Don't be fooled guys. these numbers are FAKE.
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Old 11-25-2008, 10:47 PM
 
2,541 posts, read 10,531,898 times
Reputation: 968
^^^^

well was inflation really a big deal back then

I mean most people did not purchase much if any at all back then

Most people grew their own food, and drilled for their own water, made most of their own stuff

back then it was just eat, farm, sleep; eat, farm, sleep; and that just cycled around until they passed away
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Old 11-25-2008, 11:30 PM
 
Location: Los Angeles Area
3,306 posts, read 3,560,378 times
Reputation: 592
Quote:
Originally Posted by HappyTexan View Post
Go buy a copy of "The Creature from Jekyll Island" . That book will tell you everything you want to know about the Federal Reserve..created by the bankers, run by the bankers and keeps the bankers interests at the top at all times.
Note, he said "without politic rhetoric". Not sure how someone could read that book and think....its not mostly political rhetoric. Not saying anything against the book per se, but without politic rhetoric it is not.


I find it funny that nobody has given any sort of real answer to this question. I have wondered this myself and I'm not how things would work long term without the FED. US financial history before the FED is far from stable.

Personally, I think most of the problems with the current system stem from too much leverage and not the existence of the FED. Fractional reverse banking is a system of mass leverage.

If we use commodity money again, I just hope someone tells me what its going to be before it happens. That why I can be rich.
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Old 11-25-2008, 11:33 PM
 
3,853 posts, read 11,860,265 times
Reputation: 2521
Quote:
Personally, I think most of the problems with the current system stem from too much leverage and not the existence of the FED. Fractional reverse banking is a system of mass leverage.
Are you kidding me? The problems today are a DIRECT result of the fed. What do you think would have happened if we never lowered the interest rates to 1% after the dot com crash? We would have never been in this mess. Notice that this mess was caused by the housing bubble.
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Old 11-26-2008, 02:04 AM
 
48,509 posts, read 86,231,222 times
Reputation: 18106
Just the ron paul 1% really.
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Old 11-26-2008, 03:30 AM
 
Location: Los Angeles Area
3,306 posts, read 3,560,378 times
Reputation: 592
Quote:
Originally Posted by killer2021 View Post
Are you kidding me? The problems today are a DIRECT result of the fed. What do you think would have happened if we never lowered the interest rates to 1% after the dot com crash? We would have never been in this mess. Notice that this mess was caused by the housing bubble.
Two issues:

1.) This mess was not caused by the FED targeting the FED funds rate at 1% during the last recession. It was only 1% for a relatively short period of time and started to be raised in 2004. In fact the worst part of this mess didn't get started until after the fed funds rate was being raised. By the end of 2005 it was back up to 4.25%. Houses were appreciating the most when the fed fund rate was higher....


2.) Even if today's problems were the result of FED action in what way does that mean the FED should be abolished? No where in the federal reverse act did it mention "The FED shall not make a mistake".
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Old 11-26-2008, 08:05 AM
 
Location: Heartland Florida
9,324 posts, read 24,279,525 times
Reputation: 4927
The FED has a 100% record of failure. They have only suceeded in transferring more wealth to the top and that's it. They are unconstitutional and need to go, along with the income tax created to support them. It's like the root of a noxious weed. Cut the fed and the rest of the mess dies with them. I would turn the FED into nothing more than a check cashing business.
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Old 11-26-2008, 10:41 AM
 
Location: Backwoods of Maine
7,257 posts, read 8,592,909 times
Reputation: 19679
Quote:
Originally Posted by tallrick View Post
The FED has a 100% record of failure. They have only suceeded in transferring more wealth to the top and that's it. They are unconstitutional and need to go, along with the income tax created to support them. It's like the root of a noxious weed. Cut the fed and the rest of the mess dies with them. I would turn the FED into nothing more than a check cashing business.
All true, so very true.

But I think this whole argument is without merit. The Fed will DIE. Every un-backed paper fiat currency in history has DIED. Usually after about 30-35 years. If you count 1971 when Nixon closed the gold window as the start of pure fiat, then our currency is now 37 years old.

It can't possibly last much longer, and it won't. What we are going through now - and will for the foreseeable future - is the death throes of another failing un-backed paper fiat currency. No way to stop it.
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