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Say We Do Eliminate The Federal Reserve - What Then?
Posted May 12th, 2008 by gottago
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First, if gold and silver prices are manipulated by large institutional holders, how will it price ever be stable.
Second, do the banks fall under the jurisdiction of a national bank?
Third, how is the banking system to be regulated properly?
Fourth, would it be beneficial to reduce usury to a minimum - interests to the banks from the govt. and from the banks to U.S. citizens?
Fifth, do you outlaw the sleazy practice of fractional reserve lending?
Sixth, if under a national banking system, should the interests charged to banks be used to finance federal govt. programs?
I see tons of support for ending the banking cartel of the U.S., but I have not seen a sound blueprint to build a sound banking system that does not keep us in the servitude of excessive usury.
Any thoughts?
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Private currency
If the depression gets deep enough, people starved for credit will issue private currency. Study should be made of colonial scrip which circulated before the revolution.
The government has no proper role in issuing nor regulating currency. Currency can be efficiently regulated by the market.
Famous Quote from Justice William O. Douglas
"The Constitution is not neutral.
It was designed to take the government
off the backs of people."
Boycott Fox
Answers
1) Gold and silver prices are only manipulated because of fiat currency...if all currency was backed by precious metal, they wouldn't be able to move the price around.
2) More or less...banks are independent, and we don't officially have a national bank. What we do have is a pseudo-national bank that is owned by the banks whom are members of the federal reserve.
3) We would need to have some minimal standards for reserves, to ensure that banks aren't overextended, but the system we have now could be replaced by private ratings systems, where the bank's balance sheet could be given a rating determined by a private institution...think of United Laboratories...they aren't government funded but good luck selling a lightbulb without a UL label.
4) No, never. Competition would encourage banks to keep interest rates competitve, you would never need to set a standard interest rate of a loan.
5) I don't think you'd need to completely eliminate fractional reserve banking, just have a private ratings system to evaluate a bank's balance sheet and determine how overextended they are.
6) Sure...but you'd need to put a cap on what money could be printed...Dr. Paul has suggested the GDP growth as a measure of how much money should be printed.
This is not a lightswitch change...it has taken almost 100 years of bad economic policy, and we can't change that overnight. The first step would be to allow competing currencies, so you could own and trade gold and silver bullion with paper certificates. This would make the fed ease up on the money presses. Dr. Paul has also advocated for 30 years the opening up of federal reserve policy meetings.
"All this will not be finished in the first 100 days. Nor will it be finished in the first 1,000 days, nor in the life of this Administration, nor even perhaps in our lifetime on this planet. But let us begin." JFK