Economics

Re: How to Abolish the Federal Reserve in 2 Easy Steps

FleetCenturion — Tue, 29 Mar 2011 18:46:28 GMT

pandrews:
The Money Masters has a plan that calls for the U.S. Treasury to issue U.S. Notes to pay off debt...

I put little value in the solutions presented in The Money Masters documentary. Despite the excellent, if slightly biased, historical presentation, they end up advocating the same fiat money system we use now and ending fractional reserve banking, presumably by means of the same corrupt officials that caused the mess in the first place.

There are many problems with that. First, fiat money can only work when it is used for a single purpose. This was true in the American colonies with Colonial Scrip, as well as in ancient Sparta with their fiat money (Tally Sticks, contrary to the case presented in the video, were instruments of government debt.). In each case, the State's success hinged on fulfilling one purpose, and one alone. Hence, in each case, these governments had an incentive to control their money's value in a positive manner. Inflation and debt would have meant direct and immediate harm to the State.

Only a return to a standard based on gold and silver, without the manipulation of a central bank, would enforce any kind of financial discipline. All lending institutions will attempt to cheat the system, but banks who could not cover thier deposits in the event of a run would soon be out of business, and consumers would shop around for a bank with sound practices. To put this in a kind of perspective, the first bank to fail in the Great Depression was still able to pay its depositors 92 cents on the dollar once its assets were liquidated. No bank anywhere on earth could do that today. Lenders have always gamed the system ever since the invention of paper money, but a precious metal standard imposes a limit on shady practices using market principles.

How to Abolish the Federal Reserve in 2 Easy Steps

pandrews — Tue, 29 Mar 2011 14:37:30 GMT

Regarding calls to confiscate all the gold from central banks and similar calls to dissolve the Federal Reserve, confiscate and revalue its gold and use this to pay its creditors…is this practical? Can it work, or will central bankers through fraud and manipulation sell off or simply move this gold until we are worn -out chasing it?

The Money Masters has a plan that calls for the U.S. Treasury to issue U.S. Notes to pay off debt and as it circulates through the economy go to full-reserve banking within a year. It also requires Congress to limit the increase in U.S. Notes issued to a 3-5% (tied to population growth) and withdraw from the World Bank, IMF, and BIS.

I get this is a work around, Fiat money is dangerous and Congress would have to be pressed hard to not change the limits, but given the current conditions, it may the only practical way to get the central bankers out-of-the way (or at least reduce their power) and with that minimize the chance for fraud and manipulation while we do move toward open competition in currencies.

For more information visit http://www.themoneymasters.com/monetary-reform-act/ or

http://www.youtube.com/watch?v=JXt1cayx0hs

Re: Transistion to the Gold Standard, 100% Reserve Banking, and Privatized Currency

pandrews — Tue, 29 Mar 2011 14:34:47 GMT

Have you found a source? Please share!

Thanks

Re: Transistion to the Gold Standard, 100% Reserve Banking, and Privatized Currency

Kris Morgan — Tue, 14 Sep 2010 03:07:49 GMT

Hi there- To answer your question about a transition; Unfortunately I am not sure what the work is titled, but I have seen F.A. Hayek quoted in other Austrian works which refer to the idea that you can have two currencies; one tied to the Gold Standard, the other obviously not, being the current fiat dollar. Obviously, as prices come down in gold-terms, and the dollar loses value, it would be seen that the Gold Standard is the superior currency, as has been demonstrated all throughout history. I think the timeline would ultimately be determined by the market, but perhaps you can begin your search with Hayek. I'm sorry I can't be more specific, but I hope this helps some.

Re: Transistion to the Gold Standard, 100% Reserve Banking, and Privatized Currency

austinite — Tue, 14 Sep 2010 02:51:09 GMT

I think this guy is on to something: http://www.lewrockwell.com/orig5/johnsson7.1.1.html The best part is it can be implemented by anyone, without any government approval, starting today.

Transistion to the Gold Standard, 100% Reserve Banking, and Privatized Currency

Richard of Howell — Tue, 14 Sep 2010 00:55:20 GMT

I've been reading a number of summaries of Austrian economics lately, including Jesus Huerta de Soto (sp?) and J. T. Salerno about banking and money. However, I’d rather cut to the chase and start a conversation about the transition plan to the following situation:

A classical gold standard
100% reserve banking for demand accounts
Privatized currency
The end of the Federal Reserve, Fannie & Freddie, and other New Deal disasters

My problem is that I have yet to find the author to address all these items together. My 25 years as a professional problem solver in American industry driving to the root cause and developing real world solutions that work, I in interested in creating a plan that we could present to the American people as an intelligent way forward.

If someone has a source I would appreciate a name or a link.

My goal is to not only identify the endpoint, but to outline the transition plan including a time line. Is it a 6 month project or a 10 year project? In addition, I would like to start work on the marketing plan that we could use to educate, inform, and persuade the American public on how these changes would positively impact them and their children.

I truly believe Austrian economics has the building blocks of sound monetary policy, I believe it’s time to create the transition plans and start marketing.

The current ruling class in Washington, doesn't have the spine or the intelligence to lead on these issues. Therefore, we the American People need to develop the plan and hand it to them.