The 1913 federal reserve act (signed by the ‘progressive’ Wilson) created the Federal Reserve System with 12 regional central banks (Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, San Fransisco), in order to control monetary policy. Indeed, shares are privately held, but to call it a private system/institution(s) is like saying Freddy and Fanny were ‘private institutions.’ This cartel, like all cartels, is entirely contingent upon government protection and enforcement; it would never emerge from voluntary economic activity (from the free market). Furthermore, the central banks control short-term interest rates by manipulating the money supply, they don’t contro**l the money supply, nor can they ‘set’ long-term interest rates (though they try).
The leading members are appointed by congress. So again, you’re completely wrong and confused.
Ok, lets go with the austrian idea of getting rid of all the central banks.
Now what?
We are still going to be forced to borrow money at interest from the very same private commercial banks that do all the lending to the public right now! What has been solved? OMG we still get to be in debt in order to have any money! Whew we really solved the problem there!
The problem isn’t what we use for money its the principles under which out money functions. Wealth Money - vs - Debt money. Honesty - vs - Fraud. This entire banking system is a fraud because they create through book keeping entry our entire money supply as interest bearing loans payable to themselves, then they demand back more numbers than was ever created.
The only reason the fed was ever created was that the banking system needed a way to prevent runs on banks. Any moderate amount of research can/will show this. The Fed was only created to help the banking system maintain it’s monopoly over the creation of money as interest bearing loans. We all sit around and get bent out of shape about the fed but the bulk of the money supply is not created by the Fed, it’s created over at your local private commercial bank on the street corners on America as interest bearing loans. Once time and interest kick in, the debt grows but the money supply does not.
Plus the Fed only controls the Federally chartered banks and member state banks. All non-member State Chartered banks are completely controlled by the state legislature.
Repeating your failed positions and confusion over and over again does not make your argument any stronger. First, you need to realize that saying “there isn’t enough money in the economy” is utterly meaningless. Then, you need to understand the nature of credit transactions, the monetary base, and the role of interest rates (wouldn’t hurt to understand the credit superstructure (inverted pyramid)). You need to understand the basics before you worry about the solution. The solution is rigorously debated amongst Austrians; you have the Rothbardians and 100% reserve rate, on the one hand, and the ‘free bankers,’ who don’t mind 1-2% reserve rates on the other.
A) If you had any fundamental understanding of how cartelization and market monopolies work you would know that we have nothing to really be worried about in such a situation. There is a reason why the central bank must be maintained through violence and cannot exist on it’s own by voluntary association.
B) How else do you charge for the service of lending money? Are you making an argument that lending money is un-ethical? Why?
These are rhetorical terms you are your friends have coined that have no tangible meaning.
This fact alone disproves your entire thesis.
It’s too bad you don’t actually believe what you just wrote.
Again if you don’t charge interest how else would the service of lending be paid? Should the service be free? Should it be 0% with a collective board deciding who gets dibs?
But without this safety net irresponsible banks would fail and the system as we know it would stabilize into honest lenders.
The author fails to realize that all of our financial crisis is being cause by a contraction in the money supply. We have a 7.7 trillion dollar money supply, and a 57 Trillion dollar interest bearing debt. How can we get out of a 57 trillion dollar debt with only a 7.7 trillion dollar money supply? It’s impossible.
Let me get the austrain and free banker aurgument correct here…Austrians - They don’t care if the people are permantly indebted just so long as the banks have the gold? The “free bankers” have a 1-2% reserve consisting of what??? Who cares about the people just so long as the banks can maintain their monoply over the creation of money as interest bearing loans.
My arguement is Wealth - vs- debt. You’re argument is debt - vs - debt. I’m glad you’re being such a good debt slave defending this banking system, taking the austrian banker controlled ‘theory’ of how money should be ran. All money must be loaned into exsistance because it’s great for the bankers!
With a genious such as yourself can you please tell me how we can borrow ourselves out of debt?
OMG, if all banks create the meduim of exchange as interest bearing loans, then demand back more than was ever created, or you are forced into forecloser, aren’t all the banks performing theft by deception? I’ve never seen such a fine peice of double think in my life “honest lenders”. The only way they would be honest if when you got the loan they told you that in time they will use this system to foreclose on all the property of the american people.
I’m having some trouble paying my bills because of mounting financial burdens. Do you think you could give me another big fat loan to help me out of this mess?
Here is my financial statement.
My total worth is 38,000 dollars
My total debt is 57,000 dollars
My future obligations are 64,000 dollars
and
My total money on hand is 7,700 dollars.
Banker Bob’s reply,
Hell no man you’re already broke!
(change those numbers from thousands to trillions and you have the financial statement of america).
I guess it is impossible to borrow ourselves out of debt. Who da thunk it.
If i’m to stupid then please tell me how we borrow ourselves out of debt because that is exactly what America is trying to do. Please explain, I’m really waiting to hear the austrian approach to this.
But production creates no money, and the only way anyone can get any money to save is by borrowing it from the bank. Money is only created at private commercial banks as loans. Since both of those options won’t work, can you now tell me the only solution to paying off the debt?
Honestly we’ve been attacked by these confused monetary cranks for days now and it doesn’t really contribute anything of value to this forum. Someone should practice some private property rights and send him and his delusional conspiracies away. He is acting the troll…
I would rather argue with a socialist, at least they have coherent argument. Such debates add value as they learn and readers learn. This post by contrast along with all the other recent monetary posts are just riddled with falsities and incoherent rhetorical garbage.
Those numbers come directly from David Walker former Comptroller General of the USA and the Federal Reserve Bank of New York’s website. (as of last august).
I’m sorry if the facts hurt. I’ll stop presenting facts and start presenting falsehoods now.
Gold is money, and if we just had gold money all our problems would be solved because gold has real intrincic value. It matters not that we are permantly indebted just so long as we have a little bit of a raw element of the earth in our pockets. Gold is money.
You have a real problem with money. Money is not wealth, people are not made wealthier when they increase their cash holdings. As total output increases, society is made wealthier, we have more stuff, and the purchasing power of the monetary unit increases. Increased production allows for more savings and consumption simultaneously, without changing the ratio between them. This is one reason why an invariable money supply benefits debtors at the expense of creditors. If total output doesn’t increase, then you merely need to reduce your consumption and save more (pay off debt). You have an income, and you must ration that income over various expenses (including your debt). If you wish to pay off your debt, you merely need to reduce your consumption levels. This is basic economics; something my 13 year cousin understands.
You’re absolutely correct, but money has to be created under a certain set of principles. Right now the actual creation of money always involves an extention of credit by a private commercial bank, and as soon as time and interest kick in the debt grows but the money supply does not. There is no more effective tool then creating the meduim of exchange as interest bearing loans to transfer all the wealth of the people into the hands of a few.
We don’t need to “Create” money. More money does not equate to more wealth. More gold does not mean more steel.
You can save units of exchange or save commodities and either pay or barter your dept away. It is entirely possible to get out of dept. People and business’s do it all the time.
We don’t need to create new money to pay off dept. We pay off dept with existing units of exchange.
The demand for Credit is not a demand for more “NEW” money. Issuing credit is a temporal issue, not a monetary issue and as I said like 10 times now is a legitimate market function. It’s not some conspiracy that only happens from banks. I have previously lent money to my co-workers for lunch. They have paid me in return plus interest. That interest was not some new dollar bill magically fabricated out of their wallets.