If the Federal Reserve was to abolished-what would replace it?

[HAPPYTREE]

That is debatable, as I am not aware of a "magic wand" that generates the massive amount of energy, that billions of people demand each day on this planet.

It is now time to demand less. we can not know matter what energy source we use can we just use with a blind eye. there is always a negative for every positive its all about finding balance.

F*** the federal reserve,f'n elitest bankers who piss on the rest of mankind as they light there cigars with benjis. TALK ABOUT REGRESION IN CLASS

HT

 

[Guest]

the fact of the matter is that if the dollar were to completely crap out china and all the other major holders of US treasuries will be the biggest losers...

local networks of currency work fine as long as u don't want to travel anywhere or do business with other people outside of your network...while there are many negative consequences to our monetary policy its not just a 'snap ur fingers' quick fix to something else...

sure it seems like a better idea to have money tied to commodities (i think it is better myself) but that can lead to its own problems, such as if someone tries to corner the market on whatever commodity is being tied to the money supply...there are no perfect solutions...

the fact that some in here are more interested in celebratory schadenfreude over the sad state of US monetary policy goes to show that u don't have to be a bushie or some religious zealot to cut off ur nose to spite your face...


EDIT-
the surplus thing is a total red herring as well, if u want to be critical u can either hate on the govt for running a huge deficit OR u can hate on them for having a bullshit currency...u can't have it both ways...can someone tell me what the point is of having a huge surplus if the money that u have on hand is worthless (the opinion of many in here) anyhow? as the fed has indeed adopted a policy of easy money/low rates and issues tons of securities payable in that crapola money then doesn't it make the most sense to sell all that shit to other people, run a deficit and have the creditors holding the bag when everything craps out? it does make more sense and if u look at the last 5 years that is exactly what we have done...when u take into consideration the weaker dollar these days the real value of the DJIA is more like around 10500 in 2001 dollar terms...i would argue that the market hasn't really been going up the last year or two on any trade-based merit, it is only rising to keep match with the lowered buying power of the weakening dollar...

i am NOT being an apologist for the scums at the fed and all the big ibanks and those fcuks...however its silly to throw the baby out with the bathwater and in order to fix the situation some accomodations will have to be made by using the present system...i don't think that's a big problem either, the problem arises when these fcuks know the jig is up and take huge payments and pass thru the losses to everyone else (like the merrill CEO last week)...these people want to have all the opportunity to make money but don't want to take any risk...if these companies were forced to eat all the bad paper and loans and whatnot they have made in the last 15 years then the cost of the coming recession wouldn't be passed on to people who had nothing to gain from all the risk that was taken in the first place...

 

[HCSmyth]

the fact of the matter is that if the dollar were to completely crap out china and all the other major holders of US treasuries will be the biggest losers...

True China/US is a relationship that benefits both sides.

 

[Fat Albert]

Right now, the dollar is backed by the overall health of the American economy.

Indeed, and it's one of the main reasons the U.S. dollar has been the benchmark currency for such a long time: we open for business every day. Our political stability has transformed itself into economic stability as well, and the overt lack of, let's say a military coup happening tomorrow translates into a valuable dollar.

Not to say that things have been rosy for the U.S. dollar lately; they haven't been. Historically, though, the dollar's power has been a product of our stable political system.

Cheers!
Fat A

 

[Pops]

In the early days of our history, taxes could be paid in hemp. Since marijuana is now the number one agricultural crop in the U.S.,valued at $35b per year, perhaps it is time to go on the Marijuana Standard. We don't have enough gold, but I am positive that collectively, we stoners could grow enough ganja to bail out the U.S. economy. Question is, do we want to and would we start smoking up all our profits and forget that we were being patriotic?

 

[minds_I]

Hello all,

And further Pops, would we then cure our munchie problem with twinkies and if so could we not go to the twinkie standard.

Just a thought.

minds_I

 

[Chamba]

I think they should change the name of the Federal Reserve and call it something else..suggestions?...."The Funny Money bank", "The mega rich bastards bank", "The US Peso printing department" or the "Non-Federal Un-Reserved Bank",

 

[Guest]

how about the "Bank that snookered china into royally fcuking themselves by buying crummy debt"?

 

[Berry_Coughin']

It's all about the Faith and Credibility of the United States, has been since we went away from the gold standard....

Look at a dollar... what does it say..... this note is legal tender for all debts public and private.... so what the hell is a dollar..... it is a belief... that tomorrow, I will be able to use this...... when someone gives you a dollar, they are passing a debt onto you, that you will redeem upon someone else, and on and on.... that is all.....

....so I know someone is gonna ask it....what if China called in it's debts .... what would happen.....absolutely nothing... what do we owe them.... dollars??? what are dollars??? nothing....they have no value, until someone deems it to have such value.... exactly how the stock market works........

 

[Guest]

pretty much...if the chinese paid for the treasuries in yuan it might not be so sweet...it is true, the main value of the dollar is in the stability and continuity of the political system responsible for issuing the money...

mcdonald's sucks in a lot of ways too but at least u know exactly how it will suck before you go in there so you never have to be disappointed...

 

[Chamba]

what if China called in it's debts .... what would happen.....absolutely nothing

hmmm...are you sure..lol

anyway, that's not going to happen..what would happen is that China would gradually convert alot more of it's holdings into Euros etc which would have far reaching effects on everyone in the world....but the fear of tariffs etc would prevent that from happening......

in the 80's the Japanese was in the same situation as China is in now

the big future problem the world faces is the eventual slowdown of the Chinese economy in the next 2 ~ 5 years as world demand slows (for Chinese made products)......then the chop-suey is really gonna hit the fan

 

[Chamba]

the main value of the dollar is in the stability and continuity of the political system responsible for issuing the money...

and to some extent the dollar's value is also based on the massive and ever increasing US consumer market..if US consumers suddenly realize that they each have to pay off their 17 maxed out credit cards and they slow down their buying habits then the dollar value will weaken...

the Fed is inbetween a rock and hard place right now ....it has to lower interest rates to stimulate the market but this will weaken the dollar and make oil imports cost more

The Fed is bit like a captain of ship in sea of whirlpools heading in basically the one direction...the ship is the US economy .....the captain can make subtle directional changes, slow and speed up but going blindly at full speed ahead will eventually cause it to either hit a whirlpool or force it to make sudden changes or slow downs which will affect the passengers

 

[ninjagrow]

Hello all,

Ok, print hte money ourselves...are you aware that the dollar is worth 4 cents of what it was in 1913.

What do we use to back up this dollar with?

minds_I

drugs.


get it? now you get the war on drugs(they hold the value of nearly all of our dollars).

 

[dreamdancer]

i think that ultimately the value of the dollar (or any currency) is backed by the labour of the workforce

 

[WhoAmI?]

money has never been backed up by anything besides a fancy network of imagination and collective agreement in whether money or the gold or the resevres that the money is supposedly back up with has a real value. any intelligent person realizes that whether money, whether gold, it simply has no value besides the arbitrary value and importance you subjectively assign to such objects. that is economics even atheists bow down to this imaginary god

paz

Hallelujah!!

 

[budvapor]

the main misconception is that this is a zero-sum game. it's not. the point is to grow the economy. that means creating wealth. that means creating money. otherwise you have deflation where the value of something keeps going down which is not conducive to a growing economy.

there are two main reasons there: 1) more people and 2) new business. if you have a set supply of money, let's say $1000 for every citizen today. what happens when the population doubles in a few decades? there's only $500 per person at that point.

also think about it this way: imagine you create a new business, with a new product nobody has thought about. your business is successful, you sell, you make money. are you taking away business from other businesses? not necessarily. you are creating wealth. if money isn't created in parallel, then you have deflation.

the role of the fed is to keep the economy stable and growing by moving key interest rates, thus making new money cheaper or more expensive depending on how well the economy is going. in other words, MONEY = CREDIT. it's the engine of the economy.

there is no better way to keep economies growing. and simply put you can't tie a currency to a commodity without a negative impact on the economy because then how do you trade that commodity? how do you control that commodity's supply? more importantly, who controls that?

and btw, the fed isn't evil like people like to believe. the fed doesn't profit (the interest they charge goes to the US treasury minus operating expenses). it's the best system anyone can think of right now.

it's possible to do without and let the market regulate interest rates. that would be more capitalistic in fact. but it would lead to a less stable economy with bigger swings.

now i'm not fan of all the greedy bastards out there. greed IS the root of all evil. but there is no better system as of yet. and don't forget that most companies make money more or less on par with the economy. when the economy is bad, even banks lose money.

 

[dreamdancer]

The Miracle of Wörgl

Worgl was a small town that had grown rapidly in the early 1900’s. Then came the crash of 1929, which quickly spread, into Europe. Michael was town councilor, he soon became deputy mayor. In 1931 he was elected mayor of Worgl. As mayor he had a long list of projects he wanted to accomplish. Projects like repaving roads, street lighting, extending water distribution across the entire town and planting trees along the streets. But in the midst of the depression out of the towns population of 4,500, 1,500 were without a job and 200 families were penniless.


Silvio Gesell

Michael read and re-read “The Natural Order” by Silvio Gesell. He talked with people in the town and convinced the members of the Worgl Welfare Committee to hold a session on July 5, 1932. In this session he gave a short summary and then proposed a “Distress Relief Program”. He stated that slow circulation of money is the principal cause of the faltering economy. Money as a medium of exchange increasingly vanished out of working people’s hands and accumulates into the hands of the few who collect interest and do not return it back to the market. He proposed that in Worgl the slow-circulating National Bank currency would be replaced by “Certified Compensation Bills”. The council would issue the Bills and the public would accept the Bills for their full nominal value. Bills would be issued in the denominations of 1, 5 and 10 shillings. A total issue of 32,000 Worgl “Money Bills” was printed and put into circulation.

Worgl Money

On July 31, 1932 the town administrator purchased the first lot of Bills from the Welfare Committee for a total face value of 1,800 Schillings and used it to pay wages. These first wages paid out were returned to the community on almost the same day as tax payments. By the third day it was thought that the Bills had been counterfeited because the 1000 Schillings issued had already accounted for 5,100 Schillings in unpaid taxes. Michael Unterguggenberger knew better, the velocity of money had increased and his Worgl money was working.

Worgl money was a stamp script money. The Worgl Bills would depreciate 1% of their nominal value monthly. To prevent this devaluation the owner of the Bill must affix a stamp the value of which is the devaluation on the last day of the month. Stamps were purchased at the parish hall. Because nobody wanted to pay a devaluation (hoarding) fee the Bills were spent as fast as possible.

The reverse side of the Bills were printed with the following declaration: “To all whom it may concern ! Sluggishly circulating money has provoked an unprecedented trade depression and plunged millions into utter misery. Economically considered, the destruction of the world has started. - It is time, through determined and intelligent action, to endeavour to arrest the downward plunge of the trade machine and thereby to save mankind from fratricidal wars, chaos, and dissolution. Human beings live by exchanging their services. Sluggish circulation has largely stopped this exchange and thrown millions of willing workers out of employment. - We must therefore revive this exchange of services and by its means bring the unemployed back to the ranks of the producers. Such is the object of the labour certificate issued by the market town of Wörgl : it softens sufferings dread; it offers work and bread.”

http://alt-money.tribe.net/thread/70e5eb29-853d-44ca-9faa-b789d1757037

 

[usa]

Money as Debt click here Paul Grignon's 47-minute animated presentation of "Money as Debt" tells in very simple and effective graphic terms what money is and how it ... all » is being created. It is an entertaining way to get the message out.

Easy to watch and understand visual on the creation of money & govt. Helped some questions I had.

Howto abolish the fed , how can Ron Paul do that? some stuff I found

As President Ron Paul could easily abolish the Fedreal Reserve, with or without the cooperation of Congress.

First, he can order the Department of the Treasury to stop printing fiat currency, and stop delivering it to the Fedreal Reserve Banks.

He can order the Department of the Treasury to stop auctioning Treasury bonds, and refuse to spend beyond the money that the government actually collects. Congress can not force him to borrow money in order to fulfill it's spending bills.

And he can order the Attorney General to file criminal charges against everyone at every single Federal Reserve bank, and send the U.S. Marshals, and Treasury agents, to arrest them.

Then the Attorney General can file against the Fed itself, and all the members of Congress if he choose too, because they engaged in a conspiracy to circumvent the clear Constitutional requirement that only Congress can coin, and SET THE VALUE, of MONEY!!!That will give them pause, I'll bet.

The Fed's loose money policy in the 20s caused the depression in the 30s. History is repeating. We are headed to a depression because of the interference in the free market by the fed. The lowering of the interest rate creates money, and an increase in the supply means the value per dollar goes down. which means that the price of goods goes up.

That hurts savers and those on fixed income. With the monetary inflation rate at 16%, expect the price of goods to eventually inflate at that rate

 

[budvapor]

that video is pretty cool but it's also misleading.

first off: look up capital reserves. banks don't just create whatever money they want. and reserves are not what determines how much a bank can loan. reserves are just meant to ensure a bank has enough liquidity to give people money when they want it. it's the capital requirements that determine how much money a bank can create.

and what do you think happens to all this money? it's spent, it's used to manufacture goods and to pay people salaries. it's not all immaterial. money is a lubricant for society's activities.

and does anyone think bankers don't work? what do banks do with the interest they collect? it pays for their operations. banks generally don't make more profits than other industries, and they pay taxes just like everyone else. it's a business out to make money just like every other business. i'm not saying that's good or bad. but if you think it's bad for a bank to make money, then you should also think it's bad for other businesses to make money. (and then how do you grow?)

energy is a different problem entirely. i totally agree that the situation is terrible and needs to be fixed. but it's a different topic and does not define whether the current banking system is good or bad.

and a stable population? that's absolutely necessary down the road. but that's just not reality today! in today's world, no money creation means the economy crashes and everyone hurts. and bankers used to have that control. but the purpose of the fed IS to take some control out of the hands of greedy bankers. yes, the fed is a private corporate, but the board of governors which decides the policies of the fed is nominated by the government, and every decision by the fed is reviewed by congress. what's left is the operation, and that is better left in private hands with better efficiency.

what's funny to me is that the video says a lot of true stuff but then leaves it out of its reasoning. it correctly explains that inflation is like a tax, and that if you have no inflation, then the gov't runs on taxes alone, which today would mean higher taxes. do you prefer higher taxes?

greed, dishonesty, corruption, and pervasive culture of consumerism cause the problems. not the system itself.

is anyone forcing you to borrow? is anyone preventing you from paying off your debts? lots of people are debt-free. but it means living a simpler life. most people CHOOSE to borrow to buy more stuff, not as a matter of survival.

and nobody's stopping you from being self-sustainable. some people have done it. some people create communities where they can do that. no one's stopping you.

but most people prefer a different lifestyle, a lifestyle that can only exist with creating money to create wealth.

and finally, and most importantly, YOU CAN START YOUR OWN BANK! if you think the system is so advantageous to bankers, then become one! it's a free society, you are free to start your own bank. and if you make huge profits, you can do something good with it.

i prefer to fill MY life with something more meaningful. i'm happy to let other people become wealthy if that's what they want.

don't get me wrong, I HATE the greedy corrupt bastards. the world would be a much better place if there wasn't so much dishonesty among the wealthy. and I HATE seeing our planet mistreated like it is. but this video is full of half-truths and doesn't propose a workable solution.

a good site with interesting info: http://wfhummel.cnchost.com/

 

[Guest]

that video is pretty cool but it's also misleading.

first off: look up capital reserves. banks don't just create whatever money they want. and reserves are not what determines how much a bank can loan. reserves are just meant to ensure a bank has enough liquidity to give people money when they want it. it's the capital requirements that determine how much money a bank can create.

and what do you think happens to all this money? it's spent, it's used to manufacture goods and to pay people salaries. it's not all immaterial. money is a lubricant for society's activities.

and does anyone think bankers don't work? what do banks do with the interest they collect? it pays for their operations. banks generally don't make more profits than other industries, and they pay taxes just like everyone else. it's a business out to make money just like every other business. i'm not saying that's good or bad. but if you think it's bad for a bank to make money, then you should also think it's bad for other businesses to make money. (and then how do you grow?)

my friend you are completely wrong...this whole money game is ABSOLUTELY a zero-sum game...the FOMC certainly dictates the money supply in this country and controls the trade in all treasury-backed assets...furthermore the amount of a bank's reserves are PRECISELY what dictate the amount of money a bank can lend out...

the SCAM of our banking system is as follows:
1) Fed purchases treasury bonds/notes from banks/individuals holding them, giving these entities cash money ($)

2) Bank which sold securities now has cash reserves to be lent out to other people. It used to be banks could lend out like $6 for every $1 they had in reserves, this may be different now but it is similar.

3) The banks receiving deposits by other entities made possible by this overleveraged lending are also entitled to lend money out after they have more reserves on hand, also $6 for every $1 held...

you can see how this is 'creating' more money, right?


Now initially in this cycle, this process does seem to create wealth, to 'put value' into the economic system where there was none before...however this is a fallacious notion made possible only by adopting an extremely short-term view of the situation...

The reason this process is still zero-sum no matter the introduction of more money is because prices rise in response to the extra money supply...once prices have risen commensurately with the increased money supply you have the same problems you started with...

now i must say that this scenario is a result of deficit spending and the currency would definitely strengthen if there were a surplus (this makes sense b/c a surplus dictates that the fed has removed money from circulation and its sitting somewhere, making the remaining money in circulation more valuable)...i realize this is a gross oversimplification but it is important to not attribute power over the economy to individuals/groups who truly have no power IN THE LONG TERM...much of the anxiety in bad times and euphoria in good times is b/c people nowadays have about a 3-year frame of reference for anything, if that...

if you think i'm full of it i would recommend checking out "The Alpha Strategy" by Pugsley, it can be had for $5 used on Amazon and is a tremendous read...One of the best financial books I have ever read and I have read many...It is from 1980, its unbelievable how relevant it is for our situation today...

peace
nug

EDIT- well hell here's a link you can read it right now if u like...

http://www.biorationalinstitute.com/zcontent/alpha_strategy.pdf