Federal Reserve Should Become A Public Institution

[dilloduck]

If we elect people that are dishonest enough to fuck with our economy by printing money to get elected we may as well throw in the towel.

Hello? You think we don't already live in a country where politicians spend taxpayers dollars to get re-elected?

Christ, Obama wrote all kinds of checks we couldn't cash when he was campaigning in 2008. So did Newt Gingrich at every whistle stop in this campaign. Who is in the audience today? Space program people? Okay. "I promise to build a colony on the fucking moon!"

And every Congressman promises to bring home the pork.

This is who you want controlling our currency?

Is America so stupid that we need to hire out a company to do our banking for us?

Yes.

If I take $10 and add 2 percent interest, compounded annually, what will it be worth in 20 years? Quickly now...

Are you now claiming that the Fed is the only institution that can do math ?
I want someone controlling our money who is elected and I want to see an audit of OUR money on demand.

 

[TakeAStepBack]

Not nearly as frequently as before 1913. Facts are facts.


Gold also limits the money supply with the amount of gold you dig up. It does not keep up with a growing economy, is way too rigid, and is highly susceptible to speculators.

Not nearly as frequently?

And not nearly as deep.

I don't know why you picked 1913, but weo did not go off the gold standard until 1933.

Let's take a look at how deep the recessions/depressions were before and after that time.

1836-1838 recession, business activity shrank 32.8%.

Late 1839–late 1843 recession, shrank 34.3%.

1845–late 1846 recession, shrank 5.9%.

1847–48 recession, shrank 19.7%.

1853–54 recession, shrank 18.4%.

Panic of 1857, shrank 23.1%.

1860–61 recession, shrank 14.5%.

1869–70 recession, shrank 9.7%.

Panic of 1873 and the Long Depression (this was the Great Depression until 1930 and lasted six years), shrank 33.6%.

1882–85 recession, shrank 32.8%.

1887–88 recession, shrank 14.6%.

1890–91 recession, shrank 22.1%.

Panic of 1893, shrank 37.3%.

Panic of 1896, shrank 25.2%.

Panic of 1899–1900 recession, shrank 15.5%.

1902–04 recession, shrank 16.2%.

Panic of 1907, shrank 29.2%. It was this Panic which ultimately led to the creation of the Federal Reserve.

Panic of 1910–1911, shrank 14.7%.

Recession of 1913–1914, shrank 25.9%.

Post-World War I recession, shrank 24.5%.

Depression of 1920–21, shrank 38.1%.

1923–24 recession, shrank 25.4%.

1926–27 recession, shrank 12.2%.

Great Depression, shrank 26.7%.




And here is the point we came off the gold standard.

Those countries which came off the gold standard at this point first, recovered first.

Now notice the incredibly dramatic difference in GDP decline from this point forward:




Recession of 1937, shrank 18.2%.

Recession of 1945, shrank 12.7%.

Recession of 1949, shrank 1.7%.

Recession of 1953, shrank 2.6%.

Recession of 1958, shrank 3.7%.

Recession of 1960–61, shrank 1.6%.

Recession of 1969–70, shrank 0.6%.

1973–75 recession, shrank 3.2%.

1980 recession, shrank 2.2%.

Early 1980s recession, shrank 2.7%.

Early 1990s recession, shrank 1.4%.

Early 2000s recession, shrank 0.3%.

Late-2000s recession, 5.1%.



Now you can plainly see since we came off the gold standard in 1933, our recessions have been farther and farther apart, and much, much shallower and shorter.

Not only that, our poverty level plummetted to 15 percent of the population and has held steady there for more than half a century.


The gold standard clearly creates massive economic instability.

Right. Because the federal reserve and congress debase the currencies value by printing more and more of it to lessen the fall when they build and pop a bubble. You must be of the economic mindset that this can go on forever without any consequence.

 

[eflatminor]

I would much rather have a person who understands the mechanics of the economy at the controls of our currency than some clueless demogogues in Congress who will print money to get re-elected and debase the currency...

I reject both options. I would much rather have the market determine interest rates.

Since you appear to support central price controls, which other products and services should have their prices set by central planners, be it from businessmen or "clueless demagogues"?

 

[TakeAStepBack]

It also does not capture the hardship of an economic downturn to only measure percentage of...whatever that is you are citing as "shrinkage".

You're also confusing true downturns with govt. imposed downturns. Such as the 1893 - 1907. This was caused directly by govt. interventions into the gold/silver markets.

 

[KevinWestern]

I’m totally fine with abolishing it; what I’m saying is that if it has to exist, shouldn’t it at least be under control of a public office? Or at least audited every few years?

We're working on the audit. You can thank Ron Paul for that. Should we get a full audit and the publicity matches the facts, it should show how bad it really is and move public opinion in the way of dismantling or at least severely limiting its powers. A it stands, we can thank almost every negative economic consequence since 1913 directly onto the shoulders of the fed. It is the moral hazard of our economics..

FRB: Does the Federal Reserve ever get audited?

Currently, the GAO is prohibited from auditing:
1. transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
2. deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations
3. transactions made under the direction of the Federal Open Market Committee; or
4. a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection of US Code.

The GAO is also prevented from conducting on-site examinations of banks or bank holding companies without the written consent of the appropriate regulatory agency.

Point is, there are many facets of the Federal Reserve's activities that are still completely secret and hidden from view. From what I understand Ron Paul is trying to change that. Do you oppose greater transparency and a full audit?

Also, what's your problem? You seem to come out swinging like a drunk douche bag college frat boy; we're just an adult crowd that's largely just trying to have an intelligent and calm back-and-forth debate. Grow up, buddy, and get that chip off your shoulder; you'll be a much happier person..



*The above is taken from: About the Audit

 

[OohPooPahDoo]

We're working on the audit. You can thank Ron Paul for that. Should we get a full audit and the publicity matches the facts, it should show how bad it really is and move public opinion in the way of dismantling or at least severely limiting its powers. A it stands, we can thank almost every negative economic consequence since 1913 directly onto the shoulders of the fed. It is the moral hazard of our economics..

FRB: Does the Federal Reserve ever get audited?

Currently, the GAO is prohibited from auditing:
1. transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
2. deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations
3. transactions made under the direction of the Federal Open Market Committee; or
4. a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection of US Code.

The GAO is also prevented from conducting on-site examinations of banks or bank holding companies without the written consent of the appropriate regulatory agency.

Point is, there are many facets of the Federal Reserve's activities that are still completely secret and hidden from view. From what I understand Ron Paul is trying to change that. Do you oppose greater transparency and a full audit?

Also, what's your problem? You seem to come out swinging like a drunk douche bag college frat boy; we're just an adult crowd that's largely just trying to have an intelligent and calm back-and-forth debate. Grow up, buddy, and get that chip off your shoulder; you'll be a much happier person..



*The above is taken from: About the Audit

Operations at each Federal Reserve Bank also are subject to review by the Government Accountability Office (GAO), the audit arm of the U.S. Congress. However, GAO auditors are restricted by law from reviewing monetary policy operations and transactions carried out by the Federal Reserve on behalf of foreign central banks. This restriction was imposed by Congress to assure the independence of the Federal Reserve from political influence.

How the Federal Reserve Is Audited - Fedpoints - Federal Reserve Bank of New York

 

[OohPooPahDoo]

Not nearly as frequently?

And not nearly as deep.

I don't know why you picked 1913, but weo did not go off the gold standard until 1933.

Let's take a look at how deep the recessions/depressions were before and after that time.

1836-1838 recession, business activity shrank 32.8%.

Late 1839–late 1843 recession, shrank 34.3%.

1845–late 1846 recession, shrank 5.9%.

1847–48 recession, shrank 19.7%.

1853–54 recession, shrank 18.4%.

Panic of 1857, shrank 23.1%.

1860–61 recession, shrank 14.5%.

1869–70 recession, shrank 9.7%.

Panic of 1873 and the Long Depression (this was the Great Depression until 1930 and lasted six years), shrank 33.6%.

1882–85 recession, shrank 32.8%.

1887–88 recession, shrank 14.6%.

1890–91 recession, shrank 22.1%.

Panic of 1893, shrank 37.3%.

Panic of 1896, shrank 25.2%.

Panic of 1899–1900 recession, shrank 15.5%.

1902–04 recession, shrank 16.2%.

Panic of 1907, shrank 29.2%. It was this Panic which ultimately led to the creation of the Federal Reserve.

Panic of 1910–1911, shrank 14.7%.

Recession of 1913–1914, shrank 25.9%.

Post-World War I recession, shrank 24.5%.

Depression of 1920–21, shrank 38.1%.

1923–24 recession, shrank 25.4%.

1926–27 recession, shrank 12.2%.

Great Depression, shrank 26.7%.




And here is the point we came off the gold standard.

Those countries which came off the gold standard at this point first, recovered first.

Now notice the incredibly dramatic difference in GDP decline from this point forward:




Recession of 1937, shrank 18.2%.

Recession of 1945, shrank 12.7%.

Recession of 1949, shrank 1.7%.

Recession of 1953, shrank 2.6%.

Recession of 1958, shrank 3.7%.

Recession of 1960–61, shrank 1.6%.

Recession of 1969–70, shrank 0.6%.

1973–75 recession, shrank 3.2%.

1980 recession, shrank 2.2%.

Early 1980s recession, shrank 2.7%.

Early 1990s recession, shrank 1.4%.

Early 2000s recession, shrank 0.3%.

Late-2000s recession, 5.1%.



Now you can plainly see since we came off the gold standard in 1933, our recessions have been farther and farther apart, and much, much shallower and shorter.

Not only that, our poverty level plummetted to 15 percent of the population and has held steady there for more than half a century.


The gold standard clearly creates massive economic instability.

Right. Because the federal reserve and congress debase the currencies value by printing more and more of it to lessen the fall when they build and pop a bubble. You must be of the economic mindset that this can go on forever without any consequence.

Sure, its worked well for the past 100 years, but its really just as scam bound to fall apart at any moment.

 

[eflatminor]

...its worked well for the past 100 years...

Depends on your definition of "well":

U.S. National Debt Clock : Real Time

You owe nearly $139,000. How will you be paying your share?

There is no way we'd have debt like this without the powers given to the Fed. NO WAY.

 

[OohPooPahDoo]

...its worked well for the past 100 years...

Depends on your definition of "well":

My quality of life is a lot better than it would have been in 1912. Its primarily due to our great economy. The past 100 years of the U.S. economy has been the most prosperous 100 year period of any nation in the history of the world.

U.S. National Debt Clock : Real Time

You owe nearly $139,000. How will you be paying your share?

I owe more on my house note, and the interest rate on my home is higher.

There is no way we'd have debt like this without the powers given to the Fed. NO WAY.

The Fed only owns a small fraction of the U.S. Governments debt.

 

[TakeAStepBack]

A small fraction? They bought 61% of alltreasury issuance in 2011. And the federal reserve has never been able to keep its charter mandates. it is also the very cause of boom/busts like housing, NASDAQ and the next one. Govt spending.

The federal reserves original charter might have been something I could see as positive, but what it really turned into and what it's doing now are absolutely destructive to our economy.

 

[OohPooPahDoo]

A small fraction? They bought 61% of alltreasury issuance in 2011.

I know that. I said they OWN a small fraction - not that they bought 61% of all issued in 2011. Do you understand the difference in those two statements?

The federal reserves original charter might have been something I could see as positive, but what it really turned into and what it's doing now are absolutely destructive to our economy.

And your solution is - what? To return to the national bank system?

 

[TakeAStepBack]

Audit them. Take away their authority, wind them down, get rid of the fed and re-instate a currency anchor.

 

[OohPooPahDoo]

Audit them. Take away their authority, wind them down, get rid of the fed and re-instate a currency anchor.

Get rid of the Fed - and then what? Who issues the currency genius? National Banks?

 

[TakeAStepBack]

I know that. I said they OWN a small fraction - not that they bought 61% of all issued in 2011. Do you understand the difference in those two statements?

You're wrong either way.

Fed Now Largest Owner of U.S. Gov

Fed Now Largest Owner of U.S. Gov’t Debt—Surpassing China

November 16, 2011

- At the close of business on Tuesday, the debt of the federal government exceeded $15 trillion for the first time--with the largest single owner of the publicly held portion of that debt being the Federal Reserve.

Over the past year, as the Federal Reserve massively increased its holdings of U.S. Treasury securities and entities in China marginally decreased theirs, the Fed surpassed the Chinese as the top owner of publicly held U.S. government debt.

 

[TakeAStepBack]

We're done debating until you actually have a clue. Im not your econ 101 teacher, holmes.

 

[OohPooPahDoo]

I know that. I said they OWN a small fraction - not that they bought 61% of all issued in 2011. Do you understand the difference in those two statements?

You're wrong either way.

Fed Now Largest Owner of U.S. Gov

Fed Now Largest Owner of U.S. Gov’t Debt—Surpassing China

November 16, 2011

- At the close of business on Tuesday, the debt of the federal government exceeded $15 trillion for the first time--with the largest single owner of the publicly held portion of that debt being the Federal Reserve.

Over the past year, as the Federal Reserve massively increased its holdings of U.S. Treasury securities and entities in China marginally decreased theirs, the Fed surpassed the Chinese as the top owner of publicly held U.S. government debt.

Nor did I claim they weren't the largest owner.

 

[OohPooPahDoo]

We're done debating until you actually have a clue. Im not your econ 101 teacher, holmes.

There's nothing to debate,. you refuse to explain what banking system should replace the fed, so nothing to talk about.

 

[TakeAStepBack]

The Fed only owns a small fraction of the U.S. Governments debt.

I said they OWN a small fraction - not that they bought 61% of all issued in 2011. Do you understand the difference in those two statements?

Nor did I claim they weren't the largest owner.

Right. They own a small fraction of the debt. It's just they happen to be the owner of the largest amount of US debt.

Have a pretzel.

 

[OohPooPahDoo]

The Fed only owns a small fraction of the U.S. Governments debt.

I said they OWN a small fraction - not that they bought 61% of all issued in 2011. Do you understand the difference in those two statements?

Nor did I claim they weren't the largest owner.

Right. They own a small fraction of the debt. It's just they happen to be the owner of the largest amount of US debt.

Have a pretzel.

Great! Now what's your point? That the Fed has only caused about 10% of our current debt? I agree!

 

[dilloduck]

The Fed only owns a small fraction of the U.S. Governments debt.

Nor did I claim they weren't the largest owner.

Right. They own a small fraction of the debt. It's just they happen to be the owner of the largest amount of US debt.

Have a pretzel.

Great! Now what's your point? That the Fed has only caused about 10% of our current debt? I agree!

That's enough reason to can their ass right there. Do you understand how much that is ?