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Gold activist fail to understand history. The gold standard was part of the reason why the economy collapsed in the first place.
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Why do we need the Fed?
Sometimes, in order to understand why you need something, it helps to find out what it was like before that "something" was created. Before the Federal Reserve was created in 1913, there were over 30,000 different currencies floating around in the United States. Currency could be issued by almost anyone -- even drug stores issued their own notes. There were many problems that stemmed from this, including the fact that some currencies were worth more than others. Some currencies were backed by silver or gold, and others by government bonds. There were even times when banks didn't have enough money to honor withdrawals by customers. Imagine going to the bank to withdraw money from your savings account and being told you couldn't because they didn't have your money! Before the Fed was created, banks were collapsing and the economy swung wildly from one extreme to the next. The faith Americans had in the banking system was not very strong. This is why the Fed was created.
The Fed's original job was to organize, standardize and stabilize the monetary system in the United States. It had to set up a method that could create "liquidity" in the money supply -- in other words, make sure banks could honor withdrawals for customers. It also needed to come up with a way to create an "elastic currency," meaning it had to control inflation by making sure prices didn't climb too quickly, and it needed a way of increasing or decreasing the country's supply of currency in order to prevent inflation and recession. In the next two sections, we'll discuss these inflation and recession.
I wish corporations could be as loving as the Federal Reserve. I commend them for their civil service to humanity. And all the effort they're making to help us get through recession. I can't believe money use to be backed by gold, that sounds outrageous.
Location: In a Galaxy far, far away called Germany
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Gold as the standard was not the problem in your opening post. The problem was one that could have easily existed in a silver or "liquid" standard. The Great Depression happened - not with the Gold standard, but with its successor (and the Fed) a full decade and a half in use before the Great Dep.
Gold as the standard was not the problem in your opening post. The problem was one that could have easily existed in a silver or "liquid" standard. The Great Depression happened - not with the Gold standard, but with its successor (and the Fed) a full decade and a half in use before the Great Dep.
A gold stand grants a monopoly to a single commodity.
The Federal Reserve act grants a monopoly to the Federal Reserve System.
What do they have in common?
They are both publicly created monopolies enforced by law, and turned over to private interests to give money power to a small, wicked cabal, the absolute worst form of anything.
private to private - good
publicly run monopolies - necessary evil.
publicly granted authority and monopoly - the absolute worst of everything
That is why they both do the exact same thing.
Legal tender laws institutionalizing a gold standard, and then putting a "free market" stamp on it makes my tummy hurt from laughter.
I feel very sorry for the misguided few that think we need a privatized Central Bank, run by International bankers with international interests, to control our economy and dictate currency levels.
America is one of a few countries where it explicitly says in our Constitution that the states have a right to issue and control currency, not a private bank with unlimited amounts of power.
Congress approved $700 Billion in Bailout Money, The "Federal" "Reserve" issued $16 Trillion, many to International companies with no influence on America.
There has never been an audit on The "Federal" "Reserve" but upon a preliminary look into the "Fed's" activities, 18 current and former Chairman were found to have strong connections to companies and banks that received Bailout money.
The secrecy and lies of the "Federal" "Reserve" are a disgrace to democracy and it must be abolished.
This is the longest period in American history that the people have let a private Central Bank control the country.
Bank of North America 1782-1785 First Bank of The United States 1791-1811 Second Bank of The United States 1816-1836 The Federal Reserve 1913-When will Americans wake the F up?
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford
"As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed." Abraham Lincoln
Gold activist fail to understand history. The gold standard was part of the reason why the economy collapsed in the first place.
The reason for a central bank, federal reserve is to fund wars and control a nation. You are completely lost.
One cannot manipulate the price of gold as easily as printing money. That fool FDR manipulated gold and it helped prolong his depression until after the war ended.
The mains reason why ALL empires fall is they debase their currency. They expand faster than they can fund it. Talk about failing to understand history.
At this point, it would be very difficult to go back to the gold standard or any standard. Either the USA dollar fails and we start over or some really long, fine tuning has to be done to it.
my opinion is that you can't have a "sound currency" without full reserve banking. fiat currency is not the problem.
Hi Cletus Awreetus-Awrightus,
Ain't that the truth. We will end up with fractional paper gold.
The choices are a full reserve chartalist system or free banking where any commodity producer can issue notes as we saw with Scottish free banking.
Its also rather funny how the Wiemar republic is supposed to have had its problems with its currency as if it did not lose WWI and have a huge war indemnity put on it. Yeah, blow my head of and tell me that the problem was I bought a band aid with fiat currency.
And so what would a gold standard have done for them ? Good question since Germany had NO GOLD.
Also conveniently forgotten is that Germany nearly conquered Europe with the Rentenmark.
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