NationStates Jolt Archive

I'd say definitely not.

What's so bad about the Federal Reserve?

What's so bad about the Federal Reserve?

Everything. The idea of a central bank that can manipulate the economy at will is frightening, not to mention unconstitutional. Moreover, the idea is strongly communistic. Plank 2 of the Communist Manifesto called for the creation of a national bank.

Everything. The idea of a central bank that can manipulate the economy at will is frightening, not to mention unconstitutional. Moreover, the idea is strongly communistic. Plank 2 of the Communist Manifesto called for the creation of a national bank.
The idea of a central bank is much older then communism. The bank of England was established in 1694.

Everything. The idea of a central bank that can manipulate the economy at will is frightening, not to mention unconstitutional. Moreover, the idea is strongly communistic. Plank 2 of the Communist Manifesto called for the creation of a national bank.


It doesnt manipulate the economy, just the interest rate. And that interest rate is influenced by the performance of the economy, that the Central Bank analyses.
Also, the central bank controls the printing of currency. You dont want to lose that. Imagine if anyone could coin their own currency! lol.

(I wouldnt accept your currency! im ebil.)

Everything. The idea of a central bank that can manipulate the economy at will is frightening, not to mention unconstitutional. Moreover, the idea is strongly communistic. Plank 2 of the Communist Manifesto called for the creation of a national bank.
The Federal Reserve does not 'manipulate' the economy. It's basically what keeps the economy from doing a nosedive. And communism's stance on naitonal banking is that it should be the ONLY bank--ban private banking.

Also, the central bank controls the printing of currency.

That's the Department of Treasury's job, though.

Everything. The idea of a central bank that can manipulate the economy at will is frightening, not to mention unconstitutional. Moreover, the idea is strongly communistic. Plank 2 of the Communist Manifesto called for the creation of a national bank.

Much more frightening is the idea of ever pillars of integrity businessmen running things unchecked.

Much more frightening is the idea of ever pillars of integrity businessmen running things unchecked.
Amen!

Yeah you'll be hearing more of this chatter as the economy tanks hard and conservatives start looking for a scape goat.

Much more frightening is the idea of ever pillars of integrity businessmen running things unchecked.

They're both frightening, if you ask me. But then again, few things are more frightening than big government.

We should abolish the Federal Reserve and IRS and bring back the Gold Standard at once.

They're both frightening, if you ask me. But then again, few things are more frightening than big government.
Big government is not having people control interest rates!!!

We should abolish the Federal Reserve and IRS and bring back the Gold Standard at once.
ABOLISH THE IRS??!!!! HTF are we supposed to pay for a military?!

We should abolish the Federal Reserve and IRS and bring back the Gold Standard at once.
Can the hard currency system be compatible with Gold Standard? Or are they part of the same system?

ABOLISH THE IRS??!!!! HTF are we supposed to pay for a military?!
Mercenaries. Hire when your in need of troops. Fire once your done.

what's the Gold Standard?

Mercenaries. Hire when your in need of troops. Fire once your done.
Of course! Feudal policies! I love turning the clock back 750 years!

Mercenaries. Hire when your in need of troops. Fire once your done.

That worked remarkably well for Rome. Wait...

That worked remarkably well for Rome. Wait...
I know... :D

what's the Gold Standard?


It was a fixed conversion rate between the dollar and gold, i.e., one dollar was worth a fixed amount of gold (cant remember how much). The gold standart was abandoned because in the 70s, there were simply many more dollars than gold; So if by any chance, there was a rush to convert dollars into gold, there would not be enough gold to convert it all. Ence, the gold standart was abandoned. One may argue that the peak of American economical dominance ended here, since having the gold standart made the dollar the most stable, reliable currency at the time

(in truth, this is far, far, more complicated, this is just a summary. If you want to know more, research on the web for the bretton woods system)

Are you saying that the dollar is no longer a stable, reliable currency? I think basing a currency on a (in my opinion) worthless metal is madness.

Are you saying that the dollar is no longer a stable, reliable currency? I think basing a currency on a (in my opinion) worthless metal is madness.


No, no. It is still backed by the largest economy in the world. It just was alot stronger with the gold standart.. impervious to attacks. Now, as you see in the current downfall of the dollar, it is far more susciptible to market movements, or goverment spending screwups. (which it was why the gold standart was abandoned, in the beggining.. because in the 60s the USA ran huge deficits, so got itself a huge debt in dollars, i.e., created alot more dollars than gold)

(im being overly simplistic, please dont jump any conclusions)

What's with the obsessive fear of government & communism?

Are you saying that the dollar is no longer a stable, reliable currency?
Not in the past 12 months or so.

Not in the past 12 months or so.

Well, it's reliable in the sense that you should be betting against it.

What's with the obsessive fear of government & communism?
Just two central tenets to libertarianism :D! (jk)

What's with the obsessive fear of government & communism?

A world war here, a genocide there...nasty stuff this govenment. I don't recall McDonalds ever attempting to wipe out the Native Americans or Bosnians.

A world war here, a genocide there...nasty stuff this govenment. I don't recall McDonalds ever attempting to wipe out the Native Americans or Bosnians.
when the hell did communism ever cause a world war?
also, i dont know what the hell you're getting at, but the united states along with the other european powers before it, all essentially capitalist, were the ones who wiped out the n.a.'s
what history book have you been reading?

I don't recall McDonalds ever attempting to wipe out the Native Americans or Bosnians.
What do you think they put in their burgers? Beef? Ha!!!

What do you think they put in their burgers? Beef? Ha!!!


Yeah I knew someone would make a joke about that. They are slowly killing us all I suppose.

Yeah I knew someone would make a joke about that.
:D
They are slowly killing us all I suppose.
Then the cows will rule the earth. It's an atheist, liberal, tree hugging, communist cow plot.

when the hell did communism ever cause a world war?
also, i dont know what the hell you're getting at, but the united states along with the other european powers before it, all essentially capitalist, were the ones who wiped out the n.a.'s
what history book have you been reading?


Capitalist or not, it was still government action. The economic system is irrelevant.

It was a fixed conversion rate between the dollar and gold, i.e., one dollar was worth a fixed amount of gold (cant remember how much)."From 1947-1971 the dollar replaced the pound and became directly linked to the gold standard at 33 dollars an ounce." (http://www.geocities.com/s011023/coldwar9.htm) By comparison, gold is at $437 per ounce today (12/29/04).
One may argue that the peak of American economical dominance ended here, since having the gold standart made the dollar the most stable, reliable currency at the timeNo, gold was more stable and reliable, since one could exchange it for a defined amount of dollars or other currencies or sell it on the open market. The dollar has been stronger since then--that's why we have a trade deficit: people (at least in China) would prefer dollars to goods. Back then, people could simply trade their currency for gold and gold for dollars if they wanted dollars. Now they have to sell us stuff.

The Fed is not something that can be eliminated, only replaced. Someone would still have to control the money supply and regulate banking (which also affects the money supply).

For those who don't know, the Fed works as follows. Each night, it calculates the average rate at which banks loan cash to each other. This is called the funds rate. If that average is lower than its funds rate target, it purchases government bonds, infusing cash into the economy. If the average is higher, it sells government bonds, pulling cash out of the economy.

You might ask why banks are loaning cash to each other. The basic reason is that they need to satisfy their reserve requirement. The reserve requirement is how much of the money on deposit they need to keep as cash. If a bank has a lot of withdrawals one day, it will either sell assets or borrow money. The reserve requirement is set by the Fed as a percentage of deposits. If you eliminate the Fed, then the reserve requirement will need to be set by someone else.

The gold standard is actually irrelevant to the Fed. The Fed was created in 1913. Therefore, for much of its existence (1913-33 and 1945-1971), the Fed was used *with* the gold standard.

Possible replacements for the Fed:

1. Allow banks to set their own reserve requirements. If your bank doesn't have any cash, you just can't write checks or withdraw money. The Fed was created in response to a six month period in 1907 (IIRC) when no bank had cash, so no withdrawals were allowed.

2. Instead of the US government running deficits, it could just print money. This tends to be inflationary. Obviously doesn't work with a gold standard.

3. Allow Congress to control reserve requirements.

It's worth noting that a big part of the Fed's duties is simply offering liquidity. If banks can't find anyone to loan them money or buy their assets, the Fed buys government bonds from them or from someone who will loan money to them (or it can loan money directly, but it hardly ever does this). If banks are flush with cash and can't find anyone to borrow money or sell assets, the Fed sells them government bonds. If the Fed runs out of government bonds, it needs to get them from the Treasury

Btw, if you really think a precious metal standard is the cat's meow, why not go with the Liberty Dollar (http://www.libertydollar.org/default.asp)? It's backed by silver. Personally, I think precious metal standards are overrated, but it is certainly available if you want it.

I can't stand the Fed, I think it's a blemish to capitalist economic systems, but I also realize that it's a big part of the American economy now. I want to get rid of it but it'd have to be on a gradual scale