While discussing with friends the topics of money, banking, inflation, fractional reserve banking, and the Federal Reserve, we have created two presentations, both mostly based on the “The Case against the FED” from Murray Rothbard.
Perhaps they can be useful for you folks as well! Both are available in Google Docs for viewing and as a .PPT to download. Questions and comments are welcome.
does the fed use policy today that wasnt around in the sixties that would mitigate alleged harm in the past???
could banks operate without the fed using the dollar in its paper form and checkbook form and using a bank network like similar to atm networks for bank lending to meet contracted ratios???
“Does the Fed use policy today that wasn’t around in the sixties that would mitigate alleged harm in the past???”
While in details have the practical policies of the Federal Reserve changed, the basic mode of operation stays - it is the head of a bank cartel, inflating the money supply while attempting to keep the system somewhat stable. It can be argued, that it is not doing a particularly good job in its official objectives (‘keeping the economy stable’) and wasn’t before either. Actually the whole point of it is to show that harm is unavoidable with this institution and it should not exist in the first place.
“Could banks operate without the Fed using the dollar in its paper form and checkbook form using a bank network like similar to ATM networks for bank lending to meet contracted ratios???”
Well, depending on what you are asking exactly about - of course they could.
The trouble with Fractional Reserve Banking is, that it is inherently unstable. Cartels have been historically used to overcome some of its weaknesses, but you can’t avoid the inherent issue, namely that such banks are by definition insolvent. Even if they keep a certain reserve, they promise two customers the same access to their money, at any time. For a short term it might work out, in the long term it is just that, unstable and prone to failure, and the best run cartels and “insurance” schemes don’t change that.
Then there is the whole thing with inflation and how it’s used to enrich the first users of the ‘new’ money at the expense of the others, while it tends to produce these nasty little boom-bust cycles.
