Sadly, being effectively colonial minions of the USA, we have absolutely no say in either ending the Fed or influencing the negative flow-on effect it's activities have on our lives here in Australia.
I'm not sure I like his alternatives either. Allowing banks to print their own bank notes will see the same problems that caused bank runs when the gold standard was in place.
The point about having the FED and central control, is not to have market forces control the economy but instead to have the government (aka the Fed) influence/control market forces to in turn control the economy. As we can see in the USA now, the economy is woeful and only artificially spluttering along BECAUSE of the intervention of the Fed artificially increasing the flow of money (fiat) into the market with global implications for other economies as well as the USA. To get rid of the Fed would put the USA economy on a more even keel with the rest of the worlds economies. The US didn't set up the IMF, world bank and the US$ as defacto world reserve currency (ostensibly backed initially by gold until they reneged on that measure of fiscal accountability) etc to have it all fall over without the Fed/government pulling the strings. It won't ever happen.................
not really... if a bank cannot produce the gold or silver on demand - which backs their paper - then those responsible for the unbacked notes shall be hung by the neck until dead. its that simple. I can assure you that then there will be no unbacked noted produced. savvie??
The point in having a Fed is the serving of the best interests of the big banks. Without the Fed all of the systemic troubles we are seeing in the world right now simply wouldn't exist. It would look a whole lot different though.
Absolutely agree with you YKY. But no-one got hung subsequent to 15 Aug 1971 when the US abandoned the gold standard but left us with "valueless" $USD. The USA will not allow the Fed to disappear as the FED is a key tool for it's global monetary influence.
No system is going to ever be perfect. However, I'm curious what it is you don't like about his alternatives. Is it the banks creating their own money part? They are in competition with each other. Do you think the ones which retain the value of people's money are likely to have more business than those who don't? This is free market competition. Anyone is able to enter the marketplace if they have a better idea that is likely to attract customers than the existing ones.
Or they will lose credibility in the marketplace at least. And the clearing house associations will be less likely to do business with them. When it becomes all about trust, it takes a long time to build trust with your customers and you can lose it all with one bad decision and end up closed out of the marketplace because people won't do business with you. Look at Ebay, how many people on there build up good reputations and then decide to start scamming their customers? It's just not worth it.
Just curious as to what you see these negative effects have been on our lives in Australia, as caused by the Fed?
Have you not learnt yet? Giving bankers ANY opportunity to create their own money will end badly for the little guy. It happened during the 1800's with bank runs. The banks countered this with clearing houses that transferred cash to the banks under pressure, that eventually led to the Fed. You really only need one regulation. A Glass-Stegal type regulation that leaves 100% of customers deposits available at all times. The other half of the banking system can take investment deposits from customers looking for yield. Those customers need to be 100% on their own and unbacked by the state. The bank loses the lot and it's suck eggs to you but anything in the standard deposit account is protected from such speculation on customers behalf. Bankers that get caught with less than deposited funds have balls removed with blunt spoon.
This is what i've been thinking too. Also, leaving banks to their own devices might lead to cartels and predatory activity (eg, trying to run other banks out of business).
Article 1 section 8 of the U.S. Constitution gives only Congress the power to coin money and set a value. If they did away with the fed, the goverment still would have the responsibility for the nations money.
Have you not learnt yet? Giving the govt control over the financial system leads to constant inflation, erosion of savings and the middle class and eventually financial crises. That was all set off way before Glass-Steagall. Glass Steagall Myth You think the government is just going to sit at one regulation? No, if you do manage to pull it back, they'll just keep on adding to them again. People like you need to realise that the government can't be controlled and you can't get it to do what you want. If you think you can, why haven't you yet? I've been on this Earth for almost 4 decades now and been told that we live in a democratic society where the govt serves the people. The empirical evidence proves this wrong. Government has had it's nose in the financial system for centuries now. There's been more than one central bank in the history of the US. The others were in the 1800's if I recall correctly. Not to mention that govt has controlled the currency in that time. They even printed greenbacks in the Civil War and suspended specie(gold) payments several times. So let's not pretend that the 1800's was a free market. It wasn't. EDIT: ugghhh, numerous syntax mistakes.
