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Opponents of a central bank should take advantage of the post-Brexit vote revival of secessionist sentiments to promote a secession from central banking, or “Fed-exit.” Ending the Federal Reserve’s monopoly on money is the key to restoring and maintaining our liberty and prosperity.

By manipulating the money supply to fix interest rates, the Federal Reserve engages in price fixing. After all, interest rates are nothing more than the price of money. Like all prices, they communicate information about economic conditions to market actors. Federal Reserve attempts to override the market rate of interest with a Fed-favored rate distort the price signals sent to businesses, investors, and consumers. The result of this distortion is a Fed-created boom, followed by a Fed-created bust.

The Fed’s action affects the entire economy and impacts the lives of all Americans, as well as of people around the word. Therefore, it is no exaggeration to say that the attempt to fix interest rates is the most harmful example of price fixing.

Many who normally oppose government intervention in the marketplace claim that central banking could work if only the Fed adhered to a monetary rule. Supporters of a “rules-based” monetary policy claim that a rules-based approach will bring stability and predictability to monetary policy, and thus put the economy on a path to permanent prosperity. But under a rules-based monetary policy, the Federal Reserve retains the power to manipulate interest rates. So under a rules-based approach, investors and entrepreneurs would still receive distorted price signals, which would still result in a boom-bust cycle. No rule can fix the flaws inherent in our system of monetary central planning.

In recent years, many progressives have joined libertarians and conservatives in criticizing the Federal Reserve. Progressive Fed critics often focus on the ways the Fed’s policies benefit big banks, Wall Street, and other special interests, and how the policies harm average Americans. Unfortunately, but not surprisingly, many progressives do not want a free market in money. Instead they want a more “democratic” Fed. Thus, progressives favor, for example, requiring that more members of the Fed’s board be confirmed by the US Senate. They also favor putting representatives of “public interest” groups on the Fed’s board.

The Fed’s progressive critics are correct that big banks together with powerful financial institutions have too much influence on monetary policy. While implementing progressive reforms may reduce Wall Street’s influence on monetary policy, it will likely also strengthen the influence of the deep state — that network of crony capitalists, lobbyists, congressional staffers, and others who work behind the scenes to control our economic and foreign policies.

Many progressives believe that middle- and working-class Americans would benefit from a more “stimulative” (meaning inflationary) monetary policy. Saying that inflation would help the average American turns reality on its head. Middle- and working-class Americans are the main victims of the Fed’s inflation tax. Average Americans also suffer the most when the bubble created by the Fed’s inflationary “stimulus” inevitably bursts. The true beneficiaries of inflation are crony capitalists and big-spending politicians.

Instead of fruitless efforts aimed at “reform” of the Fed, those concerned with restoring a true free market, reducing economic inequality, and promoting peace and prosperity for all should work for a “Fed-exit.” The first step, of course, is to pass Audit the Fed.

Once Congress and the people learn the full truth about the Fed, they can begin to consider the best ways to Fed-exit. There are a number of steps that can and should be taken toward that goal that I will outline in a future column.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Economics • Tags: Federal Reserve 
Commenters to Ignore...to FollowEndorsed Only
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  1. Ron Paul has it totally right; the Rothschild Central Bank aka “Federal Reserve” must be totally abolished or nationalized, not just reformed. He knows that the RCB aka “Fed” is incapable of reform, as the London Rothschilds are totally against reform of any kind.
    Nationalization is just another form of abolishing, as it takes away ownership from the Rothschilds and returns it to Congress who – from the Constitution – has the power/responsibility to coin and print money and lend it to the Federal Govt without interest.
    In June, 1963, President John F. Kennedy issued/signed an Executive Order doing just what Ron Paul has been advocating. Unfortunately, he was assassinated 5 months later, and Lyndon B. Johnson rescinded that EO the next day. No Presidents after JFK have ever tried to revive his EO, nationalizing the “Fed”.

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  2. Anonymous says:

    Ron Paul is right as rain. The Fed is part of the Jewish Communist Manifesto and was founded and still run to this day by the International Bankster Jews!

    It’s a given that they now circumvent the Constitution by printing money (coining money) instead of our US Treasury. It was illegally formed in 1913 and is responsible for the Great Depression, every recession, high and low interest rates and robbing our gold from Ft. Knox.

    The Fed needs to be thrown out of the country (actually most of the Jew Banksters are not citizens of the USA!). They make a profit on every transaction of every bank in the nation and feed the stock market with billions monthly to shore it up so investors (read suckers) think that we have a healthy corporate economy. They are hiding trillions in failed derivatives that will come home to roost one day………………soon. All markets will crash when that happens and they won’t care. After all, they own all the gold and many above and below ground assets making the Western World look like pikers!

    These evil money changers have had a couple of millenniums to perfect their insidious ways and it is high time we get rid of them and the entire IRS, their strongarm!

    Read More
  3. Sam Shama says:

    Dr, Paul,
    An admirer of your stand on some matters, including the effects of inequality in the U.S.A [not to mention your personal integrity], I find myself a somewhat reluctant antagonist, refuting the overarching message of this post, as well much of its more specific assertions.

    You happen to be offering yet another serving of goldbug economics, a doctrine more thoroughly debunked one can hardly name; still here he is once again, Dogmatix, scurrying around the Gauls, full of bright-eyed hope that all shall listen to the druid, and in so doing avert the sky from falling on their heads!

    The sky never fell on our heads, and not for listening to Austrian economics: a collection of middlebrow, moralistic wax that never withstood scrutiny for internal consistency, let alone any empirical tests. At some point is it not ineluctable, even to doctrinaires with a sprinkling of objectivity, that the notion of impending hyperinflation owing to “loose money policy” is a unicorn? You have been predicting this since 1981!!!

    https://www.congress.gov/member/ron-paul/P000583 and https://www.youtube.com/watch?v=Szf-kD1a2vM

    Thank you very much, Mr. Chairman, for allowing me to appear before your subcommittee this morning to discuss the feasibility of establishing a gold standard.

    As you know, I have introduced, and other members have cosponsored, H.R. 7874, which is a comprehensive bill to place the United States on a full gold coin standard within two years of the date of its passage.

    I believe such a standard to be not only desirable and feasible, but absolutely necessary if we aim to avoid the very real possibility of hyperinflation in the near future, and economic collapse.

    Are you not moved by the utter failure of your prediction in this regard, to question the deep flaws in your dogma? After all it has been your fruitless crusade for more than three decades!

    So are we, those of us who endorse Keynesian economics [ a central plank of Donald Trump's platform, btw], to believe that our economic experiences during the period 1933- , a period of vastly lowered volatility, depth and periodicity of economic fluctuations compared to the pre-Fed era, are in fact the artifacts of a reverie?

    Now on to some specific points:

    Therefore, it is no exaggeration to say that the attempt to fix interest rates is the most harmful example of price fixing.

    The Fed categorically does not “fix” rates. What it does do, is set a target rate for Federal Funds, at which inter-bank lending occurs – more or less. So the FFR has a suggestive and interventionary effect on short term rates. The Fed has little or no influence on longer term market rates. Recent QE are a set of actions undertaken as a means to correct a market failure where excess supply of savings over desired investments have created what has been termed a liquidity trap: when the desire for liquidity far exceeds its supply. Please note that the Fed stopped all QE back in 2014, yet since then U.S. government bonds yields have only moved south [meaning bond prices have appreciated] . The very opposite of what one should expect in an inflationary environment. Clear?

    Monetary policy is in its essence a technical one. The Fed is not giving money away, despite the complaints of the grumpy set, who, after accumulating some wealth are driven by the belief that all of it reflects their own virtue, and they think they know from that experience what it takes to create wealth. They hear that the Fed is printing money, and it sounds to them like a violation of both the laws of economics and morality — and they surely think of it as a plot to take away their completely earned gains and give them to Those People [um, you know the same set that sacrifices the gentile young and drinks their blood].

    Supporters of a “rules-based” monetary policy claim that a rules-based approach will bring stability and predictability to monetary policy, and thus put the economy on a path to permanent prosperity. But under a rules-based monetary policy, the Federal Reserve retains the power to manipulate interest rates. So under a rules-based approach, investors and entrepreneurs would still receive distorted price signals,

    First, you need to define what you understand those rules to be. In an important sense we currently do have a rules based policy, where a 2% core PCE for inflation and about a 5% level for [non-accelerating inflation] rate of unemployment, Significant deviations from these should trigger the Fed to act. For example if unemployment went to 8% the Fed engages in expansion; If inflation goes to 4% the Fed contracts. Those are the broad rules. I am loathe to concede the need for an unyielding and strict set of rules which leaves our nation fettered in much the same manner as did the Gold Standard. Gold is NOT money; it is a yellow metal, thought to be an asset in some circles and has some minor industrial use. It is also the mystical raw material for which ancient aliens supposedly visited this planet and procreated with Earthlings.

    The Fed’s progressive critics are correct that big banks together with powerful financial institutions have too much influence on monetary policy. While implementing progressive reforms may reduce Wall Street’s influence on monetary policy, it will likely also strengthen the influence of the deep state — that network of crony capitalists, lobbyists, congressional staffers, and others who work behind the scenes to control our economic and foreign policies

    Member banks were the recipients of U.S. Treasury capital infusions during the latest crisis in order to prevent a bank run and the resulting chaos. As usual, our conspiracists shall have none of it, satisfaction gotten only upon counterfactual scenarios of total banking system collapse, leading no doubt, to the much needed “cleansing” and blood-letting of the patient.

    Allright. On the the Deep State. What precisely is the mechanism by which the Fed aids the deep state? Whether there is such an organisation, formal or informal, is a debatable subject, yet if your claim is that loose monetary policy is chosen to aid this organisation, then contractionary policy surely harms it! Which one does the Fed choose to do? For it has contracted money supply perhaps in as many open market operations as it has the reverse! So my opinion on this outrageous assertion is that it does not rise beyond the level of pure crotchety crankiness. It is one thing to see these allegations from anonymous internet commentators, but quite another from respected Congressmen.

    You would be applauded to direct the attention of our Congress to the question of increasing inequality, one which deserves fiscal action in sustained infrastructure investments and re-distributive taxation. This is not a novel idea nor exclusively Keynesian. The emperor Julian during his brief but remarkable reign (A.D 361-363) doing the very same, i.e., enacting lowered but strictly exacted taxes on the rich and lowered taxes on the middle classes, produced an economic boom where the nation state prospered and the treasury overflowed. Contrast that to [your favourite I believe] Diocletian, 50 years prior to Julian who simply restored more gold in coinage and achieved significant little in economic prosperity but did manage to stem runaway inflation. So in a way you could say that Diocletian’s policy was purely monetary contraction and Julian’s a step beyond in engaging the warranted fiscal policy.

    Read More
    • Replies: @Sam Shama
    I apologise for I neglected to disclose that paragraph 8 is a paraphrase/quote of Paul Krugman's writing.
    , @Jacques Sheete

    The sky never fell on our heads...
     
    Well, aren't you special? Psssst, it fell some time ago. Wake up, if possible.
  4. Sam Shama says:
    @Sam Shama
    Dr, Paul,
    An admirer of your stand on some matters, including the effects of inequality in the U.S.A [not to mention your personal integrity], I find myself a somewhat reluctant antagonist, refuting the overarching message of this post, as well much of its more specific assertions.

    You happen to be offering yet another serving of goldbug economics, a doctrine more thoroughly debunked one can hardly name; still here he is once again, Dogmatix, scurrying around the Gauls, full of bright-eyed hope that all shall listen to the druid, and in so doing avert the sky from falling on their heads!

    The sky never fell on our heads, and not for listening to Austrian economics: a collection of middlebrow, moralistic wax that never withstood scrutiny for internal consistency, let alone any empirical tests. At some point is it not ineluctable, even to doctrinaires with a sprinkling of objectivity, that the notion of impending hyperinflation owing to "loose money policy" is a unicorn? You have been predicting this since 1981!!!

    https://www.congress.gov/member/ron-paul/P000583 and https://www.youtube.com/watch?v=Szf-kD1a2vM


    Thank you very much, Mr. Chairman, for allowing me to appear before your subcommittee this morning to discuss the feasibility of establishing a gold standard.

    As you know, I have introduced, and other members have cosponsored, H.R. 7874, which is a comprehensive bill to place the United States on a full gold coin standard within two years of the date of its passage.

    I believe such a standard to be not only desirable and feasible, but absolutely necessary if we aim to avoid the very real possibility of hyperinflation in the near future, and economic collapse.
     

    Are you not moved by the utter failure of your prediction in this regard, to question the deep flaws in your dogma? After all it has been your fruitless crusade for more than three decades!

    So are we, those of us who endorse Keynesian economics [ a central plank of Donald Trump's platform, btw], to believe that our economic experiences during the period 1933- , a period of vastly lowered volatility, depth and periodicity of economic fluctuations compared to the pre-Fed era, are in fact the artifacts of a reverie?

    Now on to some specific points:


    Therefore, it is no exaggeration to say that the attempt to fix interest rates is the most harmful example of price fixing.
     
    The Fed categorically does not "fix" rates. What it does do, is set a target rate for Federal Funds, at which inter-bank lending occurs - more or less. So the FFR has a suggestive and interventionary effect on short term rates. The Fed has little or no influence on longer term market rates. Recent QE are a set of actions undertaken as a means to correct a market failure where excess supply of savings over desired investments have created what has been termed a liquidity trap: when the desire for liquidity far exceeds its supply. Please note that the Fed stopped all QE back in 2014, yet since then U.S. government bonds yields have only moved south [meaning bond prices have appreciated] . The very opposite of what one should expect in an inflationary environment. Clear?

    Monetary policy is in its essence a technical one. The Fed is not giving money away, despite the complaints of the grumpy set, who, after accumulating some wealth are driven by the belief that all of it reflects their own virtue, and they think they know from that experience what it takes to create wealth. They hear that the Fed is printing money, and it sounds to them like a violation of both the laws of economics and morality — and they surely think of it as a plot to take away their completely earned gains and give them to Those People [um, you know the same set that sacrifices the gentile young and drinks their blood].


    Supporters of a “rules-based” monetary policy claim that a rules-based approach will bring stability and predictability to monetary policy, and thus put the economy on a path to permanent prosperity. But under a rules-based monetary policy, the Federal Reserve retains the power to manipulate interest rates. So under a rules-based approach, investors and entrepreneurs would still receive distorted price signals,

     

    First, you need to define what you understand those rules to be. In an important sense we currently do have a rules based policy, where a 2% core PCE for inflation and about a 5% level for [non-accelerating inflation] rate of unemployment, Significant deviations from these should trigger the Fed to act. For example if unemployment went to 8% the Fed engages in expansion; If inflation goes to 4% the Fed contracts. Those are the broad rules. I am loathe to concede the need for an unyielding and strict set of rules which leaves our nation fettered in much the same manner as did the Gold Standard. Gold is NOT money; it is a yellow metal, thought to be an asset in some circles and has some minor industrial use. It is also the mystical raw material for which ancient aliens supposedly visited this planet and procreated with Earthlings.

    The Fed’s progressive critics are correct that big banks together with powerful financial institutions have too much influence on monetary policy. While implementing progressive reforms may reduce Wall Street’s influence on monetary policy, it will likely also strengthen the influence of the deep state — that network of crony capitalists, lobbyists, congressional staffers, and others who work behind the scenes to control our economic and foreign policies
     
    Member banks were the recipients of U.S. Treasury capital infusions during the latest crisis in order to prevent a bank run and the resulting chaos. As usual, our conspiracists shall have none of it, satisfaction gotten only upon counterfactual scenarios of total banking system collapse, leading no doubt, to the much needed "cleansing" and blood-letting of the patient.

    Allright. On the the Deep State. What precisely is the mechanism by which the Fed aids the deep state? Whether there is such an organisation, formal or informal, is a debatable subject, yet if your claim is that loose monetary policy is chosen to aid this organisation, then contractionary policy surely harms it! Which one does the Fed choose to do? For it has contracted money supply perhaps in as many open market operations as it has the reverse! So my opinion on this outrageous assertion is that it does not rise beyond the level of pure crotchety crankiness. It is one thing to see these allegations from anonymous internet commentators, but quite another from respected Congressmen.

    You would be applauded to direct the attention of our Congress to the question of increasing inequality, one which deserves fiscal action in sustained infrastructure investments and re-distributive taxation. This is not a novel idea nor exclusively Keynesian. The emperor Julian during his brief but remarkable reign (A.D 361-363) doing the very same, i.e., enacting lowered but strictly exacted taxes on the rich and lowered taxes on the middle classes, produced an economic boom where the nation state prospered and the treasury overflowed. Contrast that to [your favourite I believe] Diocletian, 50 years prior to Julian who simply restored more gold in coinage and achieved significant little in economic prosperity but did manage to stem runaway inflation. So in a way you could say that Diocletian's policy was purely monetary contraction and Julian's a step beyond in engaging the warranted fiscal policy.

    I apologise for I neglected to disclose that paragraph 8 is a paraphrase/quote of Paul Krugman’s writing.

    Read More
  5. @Sam Shama
    Dr, Paul,
    An admirer of your stand on some matters, including the effects of inequality in the U.S.A [not to mention your personal integrity], I find myself a somewhat reluctant antagonist, refuting the overarching message of this post, as well much of its more specific assertions.

    You happen to be offering yet another serving of goldbug economics, a doctrine more thoroughly debunked one can hardly name; still here he is once again, Dogmatix, scurrying around the Gauls, full of bright-eyed hope that all shall listen to the druid, and in so doing avert the sky from falling on their heads!

    The sky never fell on our heads, and not for listening to Austrian economics: a collection of middlebrow, moralistic wax that never withstood scrutiny for internal consistency, let alone any empirical tests. At some point is it not ineluctable, even to doctrinaires with a sprinkling of objectivity, that the notion of impending hyperinflation owing to "loose money policy" is a unicorn? You have been predicting this since 1981!!!

    https://www.congress.gov/member/ron-paul/P000583 and https://www.youtube.com/watch?v=Szf-kD1a2vM


    Thank you very much, Mr. Chairman, for allowing me to appear before your subcommittee this morning to discuss the feasibility of establishing a gold standard.

    As you know, I have introduced, and other members have cosponsored, H.R. 7874, which is a comprehensive bill to place the United States on a full gold coin standard within two years of the date of its passage.

    I believe such a standard to be not only desirable and feasible, but absolutely necessary if we aim to avoid the very real possibility of hyperinflation in the near future, and economic collapse.
     

    Are you not moved by the utter failure of your prediction in this regard, to question the deep flaws in your dogma? After all it has been your fruitless crusade for more than three decades!

    So are we, those of us who endorse Keynesian economics [ a central plank of Donald Trump's platform, btw], to believe that our economic experiences during the period 1933- , a period of vastly lowered volatility, depth and periodicity of economic fluctuations compared to the pre-Fed era, are in fact the artifacts of a reverie?

    Now on to some specific points:


    Therefore, it is no exaggeration to say that the attempt to fix interest rates is the most harmful example of price fixing.
     
    The Fed categorically does not "fix" rates. What it does do, is set a target rate for Federal Funds, at which inter-bank lending occurs - more or less. So the FFR has a suggestive and interventionary effect on short term rates. The Fed has little or no influence on longer term market rates. Recent QE are a set of actions undertaken as a means to correct a market failure where excess supply of savings over desired investments have created what has been termed a liquidity trap: when the desire for liquidity far exceeds its supply. Please note that the Fed stopped all QE back in 2014, yet since then U.S. government bonds yields have only moved south [meaning bond prices have appreciated] . The very opposite of what one should expect in an inflationary environment. Clear?

    Monetary policy is in its essence a technical one. The Fed is not giving money away, despite the complaints of the grumpy set, who, after accumulating some wealth are driven by the belief that all of it reflects their own virtue, and they think they know from that experience what it takes to create wealth. They hear that the Fed is printing money, and it sounds to them like a violation of both the laws of economics and morality — and they surely think of it as a plot to take away their completely earned gains and give them to Those People [um, you know the same set that sacrifices the gentile young and drinks their blood].


    Supporters of a “rules-based” monetary policy claim that a rules-based approach will bring stability and predictability to monetary policy, and thus put the economy on a path to permanent prosperity. But under a rules-based monetary policy, the Federal Reserve retains the power to manipulate interest rates. So under a rules-based approach, investors and entrepreneurs would still receive distorted price signals,

     

    First, you need to define what you understand those rules to be. In an important sense we currently do have a rules based policy, where a 2% core PCE for inflation and about a 5% level for [non-accelerating inflation] rate of unemployment, Significant deviations from these should trigger the Fed to act. For example if unemployment went to 8% the Fed engages in expansion; If inflation goes to 4% the Fed contracts. Those are the broad rules. I am loathe to concede the need for an unyielding and strict set of rules which leaves our nation fettered in much the same manner as did the Gold Standard. Gold is NOT money; it is a yellow metal, thought to be an asset in some circles and has some minor industrial use. It is also the mystical raw material for which ancient aliens supposedly visited this planet and procreated with Earthlings.

    The Fed’s progressive critics are correct that big banks together with powerful financial institutions have too much influence on monetary policy. While implementing progressive reforms may reduce Wall Street’s influence on monetary policy, it will likely also strengthen the influence of the deep state — that network of crony capitalists, lobbyists, congressional staffers, and others who work behind the scenes to control our economic and foreign policies
     
    Member banks were the recipients of U.S. Treasury capital infusions during the latest crisis in order to prevent a bank run and the resulting chaos. As usual, our conspiracists shall have none of it, satisfaction gotten only upon counterfactual scenarios of total banking system collapse, leading no doubt, to the much needed "cleansing" and blood-letting of the patient.

    Allright. On the the Deep State. What precisely is the mechanism by which the Fed aids the deep state? Whether there is such an organisation, formal or informal, is a debatable subject, yet if your claim is that loose monetary policy is chosen to aid this organisation, then contractionary policy surely harms it! Which one does the Fed choose to do? For it has contracted money supply perhaps in as many open market operations as it has the reverse! So my opinion on this outrageous assertion is that it does not rise beyond the level of pure crotchety crankiness. It is one thing to see these allegations from anonymous internet commentators, but quite another from respected Congressmen.

    You would be applauded to direct the attention of our Congress to the question of increasing inequality, one which deserves fiscal action in sustained infrastructure investments and re-distributive taxation. This is not a novel idea nor exclusively Keynesian. The emperor Julian during his brief but remarkable reign (A.D 361-363) doing the very same, i.e., enacting lowered but strictly exacted taxes on the rich and lowered taxes on the middle classes, produced an economic boom where the nation state prospered and the treasury overflowed. Contrast that to [your favourite I believe] Diocletian, 50 years prior to Julian who simply restored more gold in coinage and achieved significant little in economic prosperity but did manage to stem runaway inflation. So in a way you could say that Diocletian's policy was purely monetary contraction and Julian's a step beyond in engaging the warranted fiscal policy.

    The sky never fell on our heads…

    Well, aren’t you special? Psssst, it fell some time ago. Wake up, if possible.

    Read More
    • Agree: jtgw
    • Replies: @jtgw
    The same idiots who celebrate the abandonment of Bretton Woods scratch their heads at the stagnation of real wages since the early 1970s.
  6. jtgw says: • Website

    Anyone who thinks the 1930s were an era of unprecedented stability and prosperity can be safely ignored on other matters, in my opinion.

    Read More
    • Replies: @Sam Shama
    Not the 1930s by themselves, a period when the Fed was basically a neophyte, but do take U.S. gdp, price and other data since 1933- [which stands for 1933 onward] and then take the data prior to that period, run all the stats you wish, come back and we shall then have a meaningful conversation. If you cannot do that, run along.
  7. jtgw says: • Website
    @Jacques Sheete

    The sky never fell on our heads...
     
    Well, aren't you special? Psssst, it fell some time ago. Wake up, if possible.

    The same idiots who celebrate the abandonment of Bretton Woods scratch their heads at the stagnation of real wages since the early 1970s.

    Read More
  8. Sam Shama says:
    @jtgw
    Anyone who thinks the 1930s were an era of unprecedented stability and prosperity can be safely ignored on other matters, in my opinion.

    Not the 1930s by themselves, a period when the Fed was basically a neophyte, but do take U.S. gdp, price and other data since 1933- [which stands for 1933 onward] and then take the data prior to that period, run all the stats you wish, come back and we shall then have a meaningful conversation. If you cannot do that, run along.

    Read More
    • Replies: @Jtgw
    GDP are fake stats. They only measure increase in amount of money, not increase in wealth. How else could Keynesians argue that war, which by nature destroys wealth, rather than creating it, is good for the economy? Wartime inflation is all it is.

    The Fed was founded in 1913, by the way, not 1933. 1933 is when FDR took the dollar of the gold standard domestically. What we got was a depression lasting right through the war
  9. Jtgw says: • Website
    @Sam Shama
    Not the 1930s by themselves, a period when the Fed was basically a neophyte, but do take U.S. gdp, price and other data since 1933- [which stands for 1933 onward] and then take the data prior to that period, run all the stats you wish, come back and we shall then have a meaningful conversation. If you cannot do that, run along.

    GDP are fake stats. They only measure increase in amount of money, not increase in wealth. How else could Keynesians argue that war, which by nature destroys wealth, rather than creating it, is good for the economy? Wartime inflation is all it is.

    The Fed was founded in 1913, by the way, not 1933. 1933 is when FDR took the dollar of the gold standard domestically. What we got was a depression lasting right through the war

    Read More
    • Replies: @Sam Shama
    Yes I am aware of when the Fed was founded. There is a reason why 1933 was picked as the year of demarcation, something to do with economic history. Now go and take those stats.

    As to the question of what a dollar can buy today vs 1913, you really need to understand what inflation adjusted per capita income and standard of living has to do with each other.

    Your statement re:gdp, money supply and wealth is all I need to know to get a fair idea of your faith, not scientific training.

  10. Sam Shama says:
    @Jtgw
    GDP are fake stats. They only measure increase in amount of money, not increase in wealth. How else could Keynesians argue that war, which by nature destroys wealth, rather than creating it, is good for the economy? Wartime inflation is all it is.

    The Fed was founded in 1913, by the way, not 1933. 1933 is when FDR took the dollar of the gold standard domestically. What we got was a depression lasting right through the war

    Yes I am aware of when the Fed was founded. There is a reason why 1933 was picked as the year of demarcation, something to do with economic history. Now go and take those stats.

    As to the question of what a dollar can buy today vs 1913, you really need to understand what inflation adjusted per capita income and standard of living has to do with each other.

    Your statement re:gdp, money supply and wealth is all I need to know to get a fair idea of your faith, not scientific training.

    Read More
    • Replies: @Jtgw
    IPYeah there's been some progress since 1933. Whether that progress is because of or despite the government and the Fed is another question. Even the Soviets managed to oversee some economic growth; that doesn't mean socialism is a good system.

    Your claim that recessions are milder now than before the Fed is certainly questionable. The stats are open to a lot of different interpretations, e.g. the belief that there was a recession at all in the 1870s depends on treating all deflation as evidence of economic contraction, but Rothbard for one showed that real wages were growing throughout that decade. And the broader trends of growth certainly seem to have been higher in the 19th century than today.

    The thing is that you Keynesians have been running the show for most of the past century, so all our economic problems are really on your head. Just arguing that we need yet more stimulus is like those leftists arguing that we just need to pour more money into education and all inequality will disappear, as if leftism hasn't already been in charge of education for fifty years.

  11. Jtgw says: • Website
    @Sam Shama
    Yes I am aware of when the Fed was founded. There is a reason why 1933 was picked as the year of demarcation, something to do with economic history. Now go and take those stats.

    As to the question of what a dollar can buy today vs 1913, you really need to understand what inflation adjusted per capita income and standard of living has to do with each other.

    Your statement re:gdp, money supply and wealth is all I need to know to get a fair idea of your faith, not scientific training.

    IPYeah there’s been some progress since 1933. Whether that progress is because of or despite the government and the Fed is another question. Even the Soviets managed to oversee some economic growth; that doesn’t mean socialism is a good system.

    Your claim that recessions are milder now than before the Fed is certainly questionable. The stats are open to a lot of different interpretations, e.g. the belief that there was a recession at all in the 1870s depends on treating all deflation as evidence of economic contraction, but Rothbard for one showed that real wages were growing throughout that decade. And the broader trends of growth certainly seem to have been higher in the 19th century than today.

    The thing is that you Keynesians have been running the show for most of the past century, so all our economic problems are really on your head. Just arguing that we need yet more stimulus is like those leftists arguing that we just need to pour more money into education and all inequality will disappear, as if leftism hasn’t already been in charge of education for fifty years.

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  12. Anonymous says:

    Wrong. The Fed MUST regulate interest rates to maintain price stability, because massive inflation or deflation cause many real problems for real people living in the real world. Massive deflation was a major contributor to the Great Depression. Massive inflation in Germany contributed to the rise of Hitler. Not only can people lose their life savings, but entire governments can be overcome.
    Mr. Paul correctly points out that interest rates are simply the price of money. And anybody who’s taken a basic economics class knows that is the point where supply meets demand. But what does that mean? The demand side changes constantly — the amount of goods and services created by the economy changes (i.e. GDP growth or contraction), changing wealth distribution alters marginal propensity to consume and thus aggregate demand, etc. The supply side, therefore, must also change. But the supply of fiat money, by definition, MUST be determined by somebody! Dollar bills don’t print themselves. (For the sake of brevity we’ll set aside credit, reserve requirements, etc., but they are all ultimately derivative of money supply determined by the Fed). If the Fed doesn’t adjust supply to match changing demand, we’ll go back to the constant boom and bust that existed before the Federal Reserve Act.

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