Should and will the Fed be abolished?

[Sallow]

I think it should be abolished Wie. We shouldn't have an entity that can simply print endless amounts of money to our detriment. All of these supposed fail safes are now failing.

So.

I'm guessing Congress is next on the list?

Section 8 - Powers of Congress

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

I don't have a problem with the constitution and the printing of money. I have a problem with congress' extension, fed reserve, printing trillions and trillions to our detriment. Our system is built upon trust and when that fails we're left with nothing.

Congress or the Fed aren't the ones screwing up the economy..

Almost each and every time Congress deregulates..some smart asses in the private sector fill the void with a scheme to make a ton of money. And generally? That winds up screwing things up..and leads to bailouts.

I think it's high time to take the hint.

People are really really greedy.

 

[Toddsterpatriot]

So.

I'm guessing Congress is next on the list?

I don't have a problem with the constitution and the printing of money. I have a problem with congress' extension, fed reserve, printing trillions and trillions to our detriment. Our system is built upon trust and when that fails we're left with nothing.

Congress or the Fed aren't the ones screwing up the economy..

Almost each and every time Congress deregulates..some smart asses in the private sector fill the void with a scheme to make a ton of money. And generally? That winds up screwing things up..and leads to bailouts.

I think it's high time to take the hint.

People are really really greedy.

Was the CRA one of those times Congress deregulated?

 

[editec]

So.

I'm guessing Congress is next on the list?

I don't have a problem with the constitution and the printing of money. I have a problem with congress' extension, fed reserve, printing trillions and trillions to our detriment. Our system is built upon trust and when that fails we're left with nothing.

Congress or the Fed aren't the ones screwing up the economy..

Almost each and every time Congress deregulates..some smart asses in the private sector fill the void with a scheme to make a ton of money. And generally? That winds up screwing things up..and leads to bailouts.

I think it's high time to take the hint.

People are really really greedy.

And when you give really really greedy PRIVATE BANSTERS' ORGANIZATION (the FED) the power to control the amount of specie in circulation, and you also give them the sole authority to control that currency and what it will cost the private citizens to borrow?

Gee!....what a shock.

They make themselves RICH at the TAXPAYERS' AND CITIZENS expense.

What a surprise!

 

[LordBrownTrout]

So.

I'm guessing Congress is next on the list?

I don't have a problem with the constitution and the printing of money. I have a problem with congress' extension, fed reserve, printing trillions and trillions to our detriment. Our system is built upon trust and when that fails we're left with nothing.

Congress or the Fed aren't the ones screwing up the economy..

Almost each and every time Congress deregulates..some smart asses in the private sector fill the void with a scheme to make a ton of money. And generally? That winds up screwing things up..and leads to bailouts.

I think it's high time to take the hint.

People are really really greedy.

Congress/fed/jpmorgan, goldmansachs. What's the difference. They're all in it together. The populace is getting screwed....any way you slice it.

 

[sparky]

I'm suggesting the model is an option Todd>


You prefer that "model" to private banks or to a central bank?

What is it about that model that you feel is better than what we have now?

well it'd be the same basic model, just scaled down, but what would possibly make it better?


imho, simply that it's harder to be a big bad fish in a smaller pond Todd, you see , we give any entity enough power and public trust, and eventually it becomes corrupt and collusive with $$$$


this is not to say it won't occur, given time it most likely will , yet i'd wager it'll take longer than the Jekyl Island crew took to become Goverment Sachs with the local torch & pitchfork crowd many states enjoy


besides, if the US$ tanks (which on present course is a consideration) state banks are likely to sprout up for it's populance to keep on truckin'

 

[Toddsterpatriot]

I'm suggesting the model is an option Todd>


You prefer that "model" to private banks or to a central bank?

What is it about that model that you feel is better than what we have now?

well it'd be the same basic model, just scaled down, but what would possibly make it better?

Still not clear, you prefer scaled down state banks with the power to issue money, over a single Central Bank with the power to issue money?

 

[FiscalSanity]

When you get right down to it, any entity that is issuing money is in effect issuing debt for the American people. That's all a dollar is-an IOU on the American people, because we accept is payment for the goods and services that we produce. So, what the real question should be is whether or not we want one institution to be able to do this on a national level, or do we want 50 (or maybe even more) entities doing it on a state level? We can't seem to hold the existing Fed accountable, but do we really want to make 50 lesser versions of it that may turn out to be just as bad (or even worse)?

 

[Kevin_Kennedy]

WEll its a drop dead cinche that a privately owned bank is NOT going to make policies that are in the BEST interests of the nation, isn't it?

Now I DO think that national BANK oversight that does SOME of the things that the FED does is necessary in a modern capitalistic system.

But that national banking oversight ought to be done by PUBLIC officials, and ALWAYS with the motivation to serve the best interests of the United States of America and her PEOPLE.

If the Federal Reserve is privately owned then I'm a penguin.

 

[Toddsterpatriot]

When you get right down to it, any entity that is issuing money is in effect issuing debt for the American people. That's all a dollar is-an IOU on the American people, because we accept is payment for the goods and services that we produce. So, what the real question should be is whether or not we want one institution to be able to do this on a national level, or do we want 50 (or maybe even more) entities doing it on a state level? We can't seem to hold the existing Fed accountable, but do we really want to make 50 lesser versions of it that may turn out to be just as bad (or even worse)?

A dollar is debt? What's the coupon? How is it paid? Who receives it? Who sends it?

 

[expat_panama]

...the real question should be is whether or not we want one institution to be able to do this on a national level, or do we want 50 (or maybe even more) entities doing it on a state level? ...

We used to rely on state banks and we found that things went a lot better with a central bank. As soon as we discover something better than the Fed then we'll all want to switch; in the mean time we've got to do what works best.

 

[Polk]

WEll its a drop dead cinche that a privately owned bank is NOT going to make policies that are in the BEST interests of the nation, isn't it?

Now I DO think that national BANK oversight that does SOME of the things that the FED does is necessary in a modern capitalistic system.

But that national banking oversight ought to be done by PUBLIC officials, and ALWAYS with the motivation to serve the best interests of the United States of America and her PEOPLE.

The oversight is already done by public officials.

 

[Oddball]

WEll its a drop dead cinche that a privately owned bank is NOT going to make policies that are in the BEST interests of the nation, isn't it?

Now I DO think that national BANK oversight that does SOME of the things that the FED does is necessary in a modern capitalistic system.

But that national banking oversight ought to be done by PUBLIC officials, and ALWAYS with the motivation to serve the best interests of the United States of America and her PEOPLE.

The oversight is already done by public officials.

Oh, well that's a relief!

 

[ShackledNation]

As a catalyst to the business cycle and the ultimate foundation of our corporatist economic system, it absolutely must be abolished. Will it? I say ultimately yes, but it may not be anytime soon. People are at least talking about it more now than before, and at least are calling for a serious audit.

The question is if it will be replaced by the free market or by an even worse concoction of government. On that I am not sure. Hopefully Americans will wise up to the fact that central economic planning does not work.

 

[Jessica Blume]

The fed will end. It's just a question if we end it, or if they end it and take the dollar with it.

 

[Toddsterpatriot]

End the fractional reserve system.

How would that work? Banks have to hold your entire deposit in reserve? How would anyone get a loan?

Have Congress once again print money interest free and pay off our national debt with the new United States notes and retract Federal Reserve notes.

Congress doesn't pay interest on the money that's printed now, how is your suggestion an improvement? There is currently less than $1 trillion in outstanding FRNs. Hardly enough to pay off the national debt. And if you exchange the new interest free money for the old interest free FRNs, the government wouldn't get any benefit or have any extra to pay off the debt.

 

[ShackledNation]

End the fractional reserve system.

How would that work? Banks have to hold your entire deposit in reserve? How would anyone get a loan?

Time deposits. You would have to pay to have demand deposits, but you would get interest for the time deposits. This is when you agree to give the bank ownership of your money for a certain amount of time. (This is done today as well). The banks then pay back the money with interest. Basically, you loan your money to the bank, and then the bank loans that same money out rather than printing new receipts that represent no new wealth.

Likely banks would suggest plans in which a certain amount of money is saved in time deposits and another amount is in the demand deposits. It would do it in a way so costs are minimized to customers (more will go to cheaper banks) but they still make profits off loans and fees. Maybe they would even offer free plans in which the payment by the customer was simply a certain amount of funds in a time deposit. The bank would profit off the interest, covering storage costs. The difference is, bank runs will be impossible, and prices will cease to continually rise over time, and instead fall (on net balance, of course some things will change in price as consumer valuations change). You would eliminate the moral hazard of government having to bail out banks, saving the tax payers billions in revenue. With the the inflation cycle ended, savings will grow in value over time, rather than diminish in value as the dollar loses purchasing power. Poorer families will not have to worry about complicated investment plans to move up the social ladder.

Banks would also likely lend out some of their profits to create an even larger supply of savings. This When you think about it, it is a much more logical, safe, and desirable system. Banks would also likely lend out some of their profits to create an even larger supply of savings. This larger supply will allow them to charge lower interest rates. Shareholders investing in the banks also contribute to that banks loanable funds. When you think about it, it is a much more logical, safe, and desirable system.

Here is a better explanation I found on google"

I frequently encounter this question while promoting 100% reserve.

It is most important to point out first that there are two different kinds of banking. Demand banking and Loan <merchant> banking. In a 100% reserve world, commercial banks will most likely offer both types of banking, but the two types of banking would be strictly firewalled. A small percentage of banks would operate as demand only banks, but would only serve other commercial banks, acting as specie clearinghouses.

I will deal quickly with the demand side. The demand bank would accept deposits of specie and would either issue warehouse receipts <banknotes> in return or they would enter the deposit on a ledger. The actual specie on deposit would be considered a bailment, could not be loaned out by the bank and would be redeemable on demand.

Now we go to the loan <merchant> side of the bank. You would make your savings or other timed deposits to this side of the bank. These deposits could NOT be redeemed on demand, according to your agreement with the bank. The bank can and would loan these deposits out. The bank would be limited to loaning out the amount of money deposited on the loan side of the bank. If savings fell, the bank would have to tighten up credit. If savings rise, the bank can increase lending.

Credit would be strictly tied to savings, thus eliminating the business cycle for good.

Two main points you have to understand. Two types of banking exist: demand and loan. 100% reserve only applies on the demand side.

Hope that clears up confusion. When I first lost my faith in fractional-reserve banking, I asked the same questions. People have savings accounts and checking accounts already. The difference is that only savings could be loaned out, tying credit to savings. In the view of Austrians, it is the severing of the tie between savings and credit that causes over expansions and retractions in capitalism. If the currency you use to do business with is unstable and constantly changing in quantity, business itself will be unstable.

 

[sparky]

http://en.wikipedia.org/wiki/Federal_Reserve_System#Influence_on_economics_researchers

pro's , con's, history, etc....

 

[editec]

WEll its a drop dead cinche that a privately owned bank is NOT going to make policies that are in the BEST interests of the nation, isn't it?

Now I DO think that national BANK oversight that does SOME of the things that the FED does is necessary in a modern capitalistic system.

But that national banking oversight ought to be done by PUBLIC officials, and ALWAYS with the motivation to serve the best interests of the United States of America and her PEOPLE.

If the Federal Reserve is privately owned then I'm a penguin.

Live and learn, Kevin.

The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system, and thus own the Fed banks.

The concept of "ownership" needs some explaining here, however. The member banks must by law invest 3 percent of their capital as stock in the Reserve Banks, and they cannot sell or trade their stock or even use that stock as collateral to borrow money. They do receive dividends of 6 percent per year from the Reserve Banks and get to elect each Reserve Bank’s board of directors.

 

[Toddsterpatriot]

End the fractional reserve system.

How would that work? Banks have to hold your entire deposit in reserve? How would anyone get a loan?

Time deposits. You would have to pay to have demand deposits, but you would get interest for the time deposits. This is when you agree to give the bank ownership of your money for a certain amount of time. (This is done today as well). The banks then pay back the money with interest. Basically, you loan your money to the bank, and then the bank loans that same money out rather than printing new receipts that represent no new wealth.

Currently, the reserve requirement on time deposits is 0%. Is the problem that current reserve requirements are too high?
Not sure what your point is about "new receipts". Banks don't print FRNs, so I guess you mean account statement, which would be the case for demand or time deposits.

Likely banks would suggest plans in which a certain amount of money is saved in time deposits and another amount is in the demand deposits. It would do it in a way so costs are minimized to customers (more will go to cheaper banks) but they still make profits off loans and fees. Maybe they would even offer free plans in which the payment by the customer was simply a certain amount of funds in a time deposit. The bank would profit off the interest, covering storage costs. The difference is, bank runs will be impossible, and prices will cease to continually rise over time, and instead fall (on net balance, of course some things will change in price as consumer valuations change).

Since loans from time deposits increase the money supply just like loans from demand deposits do, I'm not sure how prices will stop rising under your plan.

You would eliminate the moral hazard of government having to bail out banks, saving the tax payers billions in revenue. With the the inflation cycle ended, savings will grow in value over time, rather than diminish in value as the dollar loses purchasing power. Poorer families will not have to worry about complicated investment plans to move up the social ladder.

Banks didn't lose money because they lent demand deposits, they lost money because their borrowers failed to repay them. How is that changed under your plan? You would outlaw bad loans? Besides, the bank portion of TARP was paid back in full and then some. It actually made a profit.

Banks would also likely lend out some of their profits to create an even larger supply of savings. This When you think about it, it is a much more logical, safe, and desirable system. Banks would also likely lend out some of their profits to create an even larger supply of savings. This larger supply will allow them to charge lower interest rates. Shareholders investing in the banks also contribute to that banks loanable funds. When you think about it, it is a much more logical, safe, and desirable system.

Shareholders do not contribute to loanable funds when they buy stock.

Here is a better explanation I found on google"

I frequently encounter this question while promoting 100% reserve.

It is most important to point out first that there are two different kinds of banking. Demand banking and Loan <merchant> banking. In a 100% reserve world, commercial banks will most likely offer both types of banking, but the two types of banking would be strictly firewalled. A small percentage of banks would operate as demand only banks, but would only serve other commercial banks, acting as specie clearinghouses.

I will deal quickly with the demand side. The demand bank would accept deposits of specie and would either issue warehouse receipts <banknotes> in return or they would enter the deposit on a ledger. The actual specie on deposit would be considered a bailment, could not be loaned out by the bank and would be redeemable on demand.

Now we go to the loan <merchant> side of the bank. You would make your savings or other timed deposits to this side of the bank. These deposits could NOT be redeemed on demand, according to your agreement with the bank. The bank can and would loan these deposits out. The bank would be limited to loaning out the amount of money deposited on the loan side of the bank. If savings fell, the bank would have to tighten up credit. If savings rise, the bank can increase lending.

Credit would be strictly tied to savings, thus eliminating the business cycle for good.

Eliminate the business cycle? That's funny.

Two main points you have to understand. Two types of banking exist: demand and loan. 100% reserve only applies on the demand side.

Hope that clears up confusion. When I first lost my faith in fractional-reserve banking, I asked the same questions. People have savings accounts and checking accounts already. The difference is that only savings could be loaned out, tying credit to savings. In the view of Austrians, it is the severing of the tie between savings and credit that causes over expansions and retractions in capitalism. If the currency you use to do business with is unstable and constantly changing in quantity, business itself will be unstable.

Every time you take out or pay back a loan, the money supply changes. Nature of the beast. Thanks for the reply.

 

[Toddsterpatriot]

End the fractional reserve system.

How would that work? Banks have to hold your entire deposit in reserve? How would anyone get a loan?

Time deposits. You would have to pay to have demand deposits, but you would get interest for the time deposits. This is when you agree to give the bank ownership of your money for a certain amount of time. (This is done today as well). The banks then pay back the money with interest. Basically, you loan your money to the bank, and then the bank loans that same money out rather than printing new receipts that represent no new wealth.

Likely banks would suggest plans in which a certain amount of money is saved in time deposits and another amount is in the demand deposits. It would do it in a way so costs are minimized to customers (more will go to cheaper banks) but they still make profits off loans and fees. Maybe they would even offer free plans in which the payment by the customer was simply a certain amount of funds in a time deposit. The bank would profit off the interest, covering storage costs. The difference is, bank runs will be impossible, and prices will cease to continually rise over time, and instead fall (on net balance, of course some things will change in price as consumer valuations change). You would eliminate the moral hazard of government having to bail out banks, saving the tax payers billions in revenue. With the the inflation cycle ended, savings will grow in value over time, rather than diminish in value as the dollar loses purchasing power. Poorer families will not have to worry about complicated investment plans to move up the social ladder.

Banks would also likely lend out some of their profits to create an even larger supply of savings. This When you think about it, it is a much more logical, safe, and desirable system. Banks would also likely lend out some of their profits to create an even larger supply of savings. This larger supply will allow them to charge lower interest rates. Shareholders investing in the banks also contribute to that banks loanable funds. When you think about it, it is a much more logical, safe, and desirable system.

Here is a better explanation I found on google"

I frequently encounter this question while promoting 100% reserve.

It is most important to point out first that there are two different kinds of banking. Demand banking and Loan <merchant> banking. In a 100% reserve world, commercial banks will most likely offer both types of banking, but the two types of banking would be strictly firewalled. A small percentage of banks would operate as demand only banks, but would only serve other commercial banks, acting as specie clearinghouses.

I will deal quickly with the demand side. The demand bank would accept deposits of specie and would either issue warehouse receipts <banknotes> in return or they would enter the deposit on a ledger. The actual specie on deposit would be considered a bailment, could not be loaned out by the bank and would be redeemable on demand.

Now we go to the loan <merchant> side of the bank. You would make your savings or other timed deposits to this side of the bank. These deposits could NOT be redeemed on demand, according to your agreement with the bank. The bank can and would loan these deposits out. The bank would be limited to loaning out the amount of money deposited on the loan side of the bank. If savings fell, the bank would have to tighten up credit. If savings rise, the bank can increase lending.

Credit would be strictly tied to savings, thus eliminating the business cycle for good.

Two main points you have to understand. Two types of banking exist: demand and loan. 100% reserve only applies on the demand side.

Hope that clears up confusion. When I first lost my faith in fractional-reserve banking, I asked the same questions. People have savings accounts and checking accounts already. The difference is that only savings could be loaned out, tying credit to savings. In the view of Austrians, it is the severing of the tie between savings and credit that causes over expansions and retractions in capitalism. If the currency you use to do business with is unstable and constantly changing in quantity, business itself will be unstable.

WEll its a drop dead cinche that a privately owned bank is NOT going to make policies that are in the BEST interests of the nation, isn't it?

Now I DO think that national BANK oversight that does SOME of the things that the FED does is necessary in a modern capitalistic system.

But that national banking oversight ought to be done by PUBLIC officials, and ALWAYS with the motivation to serve the best interests of the United States of America and her PEOPLE.

If the Federal Reserve is privately owned then I'm a penguin.

Live and learn, Kevin.

The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system, and thus own the Fed banks.

The concept of "ownership" needs some explaining here, however. The member banks must by law invest 3 percent of their capital as stock in the Reserve Banks, and they cannot sell or trade their stock or even use that stock as collateral to borrow money. They do receive dividends of 6 percent per year from the Reserve Banks and get to elect each Reserve Bank’s board of directors.

If the Fed is privately owned, why does the government get much much more of the Fed's earnings than the shareholders?