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Thread: Ron Paul: The Neo-Alchemy of the Federal Reserve

  1. #21
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    [QUOTE=Warfish;2890879]well, you know how much I love Wikipedia :D



    So the question is twofold. Are these important or legitimate things for the Govt. to do? And if so, and we dump the Fed, how will they get done?[/QUOTE]

    We can't have banking without a Central Bank?

  2. #22
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    [QUOTE=Warfish;2890887]Be happy to....as soon as he explains what his replacement for the Fed is.

    Or did I miss that in the piece you posted? Cause I'm seeing alot of "get rid of teh Fed" and not much "Lets do THIS instead!"

    Which was my point.[/QUOTE]Why not replace the Fed with whatever preceded it, and consider the effects of increased information flow on the "bank panics" which caused the need for the Fed?

    Why couldn't a bank or other asset-holding entity issue notes, certificates, scrip, whatever you want to call it, which would be acceptable to most parties, in a day and age where PayPal transactions move billions on winds of electrons?

    Why couldn't a Lloyds of London-type entity, wherein the personal properties of the members of Lloyds are pledged to cover any claims, be created to issue "shares" representing value?

    Why not use gold as the underlying standard, it doesn't mean we will be trading grains of metal in the vending machines, just symbols representing those grains?

    Most of what you posted as the duties of the Fed are just restrictions on the market disguised in flowery words. The only restriction the market needs is that all transactions are voluntary, and that contracts must be honored.

  3. #23
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    The concept of fractional reserve banking in a fiat monetary system is absurd. Fractional reserve banking was created during the times of gold and silver money systems.
    Since there wasn't enough "real" money in those times to satisfy everyone's needs, society had to resort to fractional reserve banking.
    In a fiat currency regime, all you need to do is replace fractional-reserve credit with real "fiat" paper notes and you no longer have bank runs. We need what the Chicago-school economists proposed in the 1930s, a 100% reserve system under the control of Congress, not the private banks via the not-so-Federal Reserve cartel

    The reason this sensible proposal was shot down was because it would have taken away the vast profits that the banks get by arbitrarily creating fractional-reserve credit at no cost to themselves and lending it at interest.
    In essence, the Chicago plan would have deprived the banks of their "casino socialism for the rich" and thus the sensible Chicago plan was shot down since most politicians are funded by Wall Street interests.

    The means to solve the problem of booms-and-busts and distribute wealth justly were discovered by the 1930s. Society is being held back by bankers and globalists who want to prolong their racket until all of humanity is brought to its knees.
    Last edited by JetsCrazey; 12-03-2008 at 04:14 PM.

  4. #24
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    Here's a good explanation of the "causes" of the depression" and the complete failure of the gold standard. Ron Paul is an idiot.

    [url]http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm[/url]

  5. #25
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    Ron Paul isn't for the gold standard. You might want to look his position up before you call him an idiot.

  6. #26
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    [QUOTE=JetsCrazey;2894073]Ron Paul isn't for the gold standard. You might want to look his position up before you call him an idiot.[/QUOTE]

    Umm, I think you might do a little research of your own. Ron Paul is literally the standard bearer for the gold standard (pun intended). See the article below both for Paul's views and why they are sheer hokum. Just put Ron Paul and "gold standard" in google and see what you get.

    "Ron Paul and the Gold Standard

    It's no secret that Ron Paul has become the libertarian's standard bearer in the 2008 presidential election. The Libertarian Party nominee has even agreed to endorse Ron Paul if he were to get the Republican nomination. Never before has a libertarian candidate received so much attention and so much support.

    As a libertarian-minded conservative, there is much for me to like about Ron Paul. He is unquestionably the staunchest defender of federalism, small government and individual liberty of all candidates. He opposes the interventionist foreign policy of so-called neoconservatives, and it doesn't hurt that he's a thorn in the side of generally detestable, ignorant and unprincipled candidates.

    Yet Paul has a quirky obsession with the gold standard that just doesn't add up. Last week, on the heels of a tremendous fundraising quarter and a solid debate performance, Paul sent a lengthy email to supporters attributing his recent success to his opposition to the Federal Reserve and support for the gold standard. In various debates, he has also discussed monetary policy in answering completely unrelated questions. One gets the impression that this is priority #1 for Paul. As such, it deserves some consideration.

    A common refrain by Paul is that the Fed "prints money" or just issues new currency whenever it needs cash. Paul also blames much of the national debt on the Fed. These are mostly erroneous claims that stretch the truth.

    The Federal Reserve (the "Fed") is a private banking system which has a lot of money. And by "a lot," I mean massive amounts. Using this money, the Fed buys and sells bonds on the open market. Buying expands the money supply to make interest rates go down to the target federal funds rate, and selling bonds causes the money supply to contract until rates go up to the target rate. This is how the Fed controls inflation and is the essence of monetary policy. Without these Fed actions we would have absolutely no control over monetary policy.

    Paul has a tendency to blame inflation on this policy and its use of fiat money and then imply that it is the reason prices for some goods, such as oil, continue to rise. But even if you assume that the value and supply of gold remains constant (which are, of course, impossible assumptions), prices will still rise. When the supply of a good decreases, or the demand rises, the price of that good will rise as well, regardless of the currency.

    Ron Paul still sees gold as the answer. Using it as currency would relieve us of inflation and certain debt, he argues, and free us from bondage to the evil Fed. But as PJ O'Rourke has noted previously, it is possible that future generations may decide gold is revolting or immoral, and suddenly the price/value of gold will plummet and cause inflation. Similarly, new massive gold deposits could be discovered and also cause inflation. The possibility of inflation under a gold standard is just as great as it is under fiat currency. And there would be absolutely nothing we could do about it.

    The key to understanding Paul's position is understanding the libertarian philosophy. Whereas many people view the potential volatility above with skepticism, Paul embraces it as a natural market force. These market forces, he would argue, are far more desirable than government manipulation through an unaccountable Fed.

    Paul's monetary policy reveals certain limits to my libertarian leanings. I understand his position and the justification for it, but I just don't buy it. A Paul presidency would bring about a tremendous number of positive changes, but this one - one of his favorites - I can do without."

    Posted by Joshua Claybourn at October 24, 2007 11:42 AM

    [url]http://www.intheagora.com/archives/2007/10/ron_paul_and_th_1.html[/url]

  7. #27
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    [QUOTE=long island leprechaun;2894063]Here's a good explanation of the "causes" of the depression" and the complete failure of the gold standard. Ron Paul is an idiot.

    [url]http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm[/url][/QUOTE]

    Really? The Fed is justifying it's own existence? Never saw that coming.

  8. #28
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    [QUOTE=BrooklynBound;2894157]Really? The Fed is justifying it's own existence? Never saw that coming.[/QUOTE]

    Why am I not surprised at that response. Bernanke was an economics professor before the Fed and his scholarly work has been very consistent on the subject, on which he is a leading expert by the way. Unless you're willing to dismiss Friedman's Monetary History as well, which is the basis for modern theory on the depression. The crux of the issue is not whether the Federal Reserve has made mistakes, but whether it has the capacity to regulate the economy effectively... The alterative of market forces is chaos.

  9. #29
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    [QUOTE=long island leprechaun;2894305]Why am I not surprised at that response. Bernanke was an economics professor before the Fed and his scholarly work has been very consistent on the subject, on which he is a leading expert by the way. Unless you're willing to dismiss Friedman's Monetary History as well, which is the basis for modern theory on the depression. The crux of the issue is not whether the Federal Reserve has made mistakes, but whether it has the capacity to regulate the economy effectively... The alterative of market forces is chaos.[/QUOTE]

    Of course Bernanke's scholarly work has supported the Fed. I never said there was an absence of economists who believe in the Fed.

    The alternative to the Fed is market forces.

  10. #30
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    [QUOTE=long island leprechaun;2894115]Umm, I think you might do a little research of your own. Ron Paul is literally the standard bearer for the gold standard (pun intended). See the article below both for Paul's views and why they are sheer hokum. Just put Ron Paul and "gold standard" in google and see what you get.

    "Ron Paul and the Gold Standard

    It's no secret that Ron Paul has become the libertarian's standard bearer in the 2008 presidential election. The Libertarian Party nominee has even agreed to endorse Ron Paul if he were to get the Republican nomination. Never before has a libertarian candidate received so much attention and so much support.

    As a libertarian-minded conservative, there is much for me to like about Ron Paul. He is unquestionably the staunchest defender of federalism, small government and individual liberty of all candidates. He opposes the interventionist foreign policy of so-called neoconservatives, and it doesn't hurt that he's a thorn in the side of generally detestable, ignorant and unprincipled candidates.

    Yet Paul has a quirky obsession with the gold standard that just doesn't add up. Last week, on the heels of a tremendous fundraising quarter and a solid debate performance, Paul sent a lengthy email to supporters attributing his recent success to his opposition to the Federal Reserve and support for the gold standard. In various debates, he has also discussed monetary policy in answering completely unrelated questions. One gets the impression that this is priority #1 for Paul. As such, it deserves some consideration.

    A common refrain by Paul is that the Fed "prints money" or just issues new currency whenever it needs cash. Paul also blames much of the national debt on the Fed. These are mostly erroneous claims that stretch the truth.

    The Federal Reserve (the "Fed") is a private banking system which has a lot of money. And by "a lot," I mean massive amounts. Using this money, the Fed buys and sells bonds on the open market. Buying expands the money supply to make interest rates go down to the target federal funds rate, and selling bonds causes the money supply to contract until rates go up to the target rate. This is how the Fed controls inflation and is the essence of monetary policy. Without these Fed actions we would have absolutely no control over monetary policy.

    Paul has a tendency to blame inflation on this policy and its use of fiat money and then imply that it is the reason prices for some goods, such as oil, continue to rise. But even if you assume that the value and supply of gold remains constant (which are, of course, impossible assumptions), prices will still rise. When the supply of a good decreases, or the demand rises, the price of that good will rise as well, regardless of the currency.

    Ron Paul still sees gold as the answer. Using it as currency would relieve us of inflation and certain debt, he argues, and free us from bondage to the evil Fed. But as PJ O'Rourke has noted previously, it is possible that future generations may decide gold is revolting or immoral, and suddenly the price/value of gold will plummet and cause inflation. Similarly, new massive gold deposits could be discovered and also cause inflation. The possibility of inflation under a gold standard is just as great as it is under fiat currency. And there would be absolutely nothing we could do about it.

    The key to understanding Paul's position is understanding the libertarian philosophy. Whereas many people view the potential volatility above with skepticism, Paul embraces it as a natural market force. These market forces, he would argue, are far more desirable than government manipulation through an unaccountable Fed.

    Paul's monetary policy reveals certain limits to my libertarian leanings. I understand his position and the justification for it, but I just don't buy it. A Paul presidency would bring about a tremendous number of positive changes, but this one - one of his favorites - I can do without."

    Posted by Joshua Claybourn at October 24, 2007 11:42 AM

    [url]http://www.intheagora.com/archives/2007/10/ron_paul_and_th_1.html[/url][/QUOTE]

    competing currencies, not gold standard. trust me, he would not bring back the gold standard

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