SleepWalkerX
Platinum Member
- Jun 29, 2004
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I'll try to respond to your post as best as I can, but keep in mind two things: I have a limited scope of economics and I'm drunk right now.
No its not.
Ok I think your post is a little confusing and brings about a false alarm. Its true that hard currencies tend to be deflationary in nature. But that's not a bad thing at all with a free market. Hard currency is deflationary in nature when the increase of money does not keep up with the increase in the size of the population. That just means that since more people need to access to money to buy goods then money becomes more scarce. But remember, money is just a commodity relative to other goods so if access to currency was a problem you can just increase the currency (which will of course increase prices, but will allow more people to use the currency).
The "smoothness" of the economy hasn't been that much greater under a fiat system..
Run on banks are the reason for the panics and the problem is with fractional reserve banking, which is just plain fraud and should be illegal.
http://en.wikipedia.org/wiki/Fractional_reserve_banking
Ok, I still don't like the idea of a monopoly on money so I don't really care what oversight is provided. If one money supply is tanking then why should I not be able to switch to a more stable one?
Eh? What is this short term thinking, why is it a problem, and why won't people think in the long term?
See above how fractional reserve banking should be illegal.
Competing currencies is a grand idea. Just allow people to compete with the Fed. A dis-aggregated economy is better than an economy that's only money supply declines. Lol, reducing predictability? It'd be about the same predictability. Reducing desire to invest when times are uncertain? Why would times be uncertain? And towards what? Arbitrage opportunities? Define please. Because here's what I found:
Sounds like capitalism to me. Buy low, sell high, make profit, right? Each sale is totally voluntary. Each party can negotiate, restructure the deal, or refuse the offer.
I'm off to enjoy the rest of my buzz now. Sorry if certain sentences didn't make sense. Wee!
Originally posted by: LegendKiller
1. The Fed shouldn't be abolished because it's essential to have a central banking authority to keep control over the proper flow of funds through the economy, the amount of currency in the economy, and the overall liquidity of the economy.
No its not.
Originally posted by: LegendKiller
2. A hard currency is deflationary by nature. Furthermore, it doesn't allow #1 to exist, since being able to manage the liquidity of the economy and control the "smoothness" of the economy cannot exist under a hard currency.
Ok I think your post is a little confusing and brings about a false alarm. Its true that hard currencies tend to be deflationary in nature. But that's not a bad thing at all with a free market. Hard currency is deflationary in nature when the increase of money does not keep up with the increase in the size of the population. That just means that since more people need to access to money to buy goods then money becomes more scarce. But remember, money is just a commodity relative to other goods so if access to currency was a problem you can just increase the currency (which will of course increase prices, but will allow more people to use the currency).
The "smoothness" of the economy hasn't been that much greater under a fiat system..
Originally posted by: LegendKiller
3. A fed must exist because without a central bank controling the liquidity, runs on banks and panics are rampant, see CitizenKane's post in the other thread, which pointed out several panics. Some of those panics were only prevented by bankers themselves, such as JP Morgan.
Run on banks are the reason for the panics and the problem is with fractional reserve banking, which is just plain fraud and should be illegal.
http://en.wikipedia.org/wiki/Fractional_reserve_banking
Originally posted by: LegendKiller
4. The Fed is not a private entity and has quarterly and annually audited financials that are presented to Congress and the President. THe President appoints the Governors that control the fed and he can remove them at any time. Thus, oversight is there and can be undertaken at any time.
Ok, I still don't like the idea of a monopoly on money so I don't really care what oversight is provided. If one money supply is tanking then why should I not be able to switch to a more stable one?
Originally posted by: LegendKiller
5. Having Congress or any other non-quasi-independent authority control the monetary supply will only result in short-term thinking.
Eh? What is this short term thinking, why is it a problem, and why won't people think in the long term?
Originally posted by: LegendKiller
6. A measured amount of expected and managed interest is *good*, because it maintains projections and reduces variability. It allows businesses, lenders, financiers, and the capital markets in general to plan investments, hirings/firings, and economic stability. In the times before the Fed, as this country was becoming more integrated, it was plagued by bank runs, rampant inflation or deflation, all inhibiting the growth of the country.
See above how fractional reserve banking should be illegal.
Originally posted by: LegendKiller
7. Competing currencies is a horrible idea. It results in a dis-aggregated economy, further reducing predictability and reducing the desire to invest when times are uncertain. Furthermore, competing currencies allow for arbitrage opportunities, uncertainty of the banks, added complexity, and reduced liquidity and transparency.
Competing currencies is a grand idea. Just allow people to compete with the Fed. A dis-aggregated economy is better than an economy that's only money supply declines. Lol, reducing predictability? It'd be about the same predictability. Reducing desire to invest when times are uncertain? Why would times be uncertain? And towards what? Arbitrage opportunities? Define please. Because here's what I found:
Buying securities in one country, currency or market and selling in another to take advantage of price differentials.
Sounds like capitalism to me. Buy low, sell high, make profit, right? Each sale is totally voluntary. Each party can negotiate, restructure the deal, or refuse the offer.
Originally posted by: LegendKiller
All of those are reasons why gettng rid of the Fed, or other RPB ideas, are loony.
There, there is 7 points, PLUS my original post to work from. I fully expect you to address them, point by point. Failure to do so is admittance of defeat. I fully expect a post of no less than the length of my first post, otherwise you have not articulated your ideas thoroughly or completely. Mention of Mises or Friedman shouldn't be considered as an effective post, since it details nothing but somebody else's idea. Unlike mine, which detail my own thoughts, ideas, conclusions, and facts.
I am really looking forward to this, as it will be the first time any RPB has gone anywhere with me. Don't let me, or Ron Paul, down.
I'm off to enjoy the rest of my buzz now. Sorry if certain sentences didn't make sense. Wee!