In response to:

Can We Envision a World without a Central Bank?

ServantDujmovJr Wrote: Sep 20, 2012 7:09 AM
Uhmm, excuse me but... "Fed will be good central planners and never be influenced by their political masters" is inaccurate. The Fed answers to no one. They are not legally bound to anyone. Also, in the video "Should we end the Fed" just after 19 seconds the good Prof. states that the Fed is a central bank which is a government agency. This is also inaccurate. The Federal Reserve Bank is a privately owned bank. The Fed is about as Federal as Federal Express.
Anthony305 Wrote: Sep 20, 2012 5:58 PM
Wrong. While the Fed is a consortium of privately owned banks, it is chartered by Congress, from which it gets its authority as the sole producer/manipulator of currency and credit. The President appoints the board of governors, who have control over the system.

Basically, the Federal Reserve is a collusion between government and the banking industry, in which government is allowed to borrow far beyond its means to ever repay and at rates of interest much lower than a free market would demand; in return for this service the banking industry is rewarded with the power to produce as much currency and credit as it likes, guaranteeing that it can't go broke, regardless of how stupidly it loans and invests its money (bank bailouts anyone?).
Anthony305 Wrote: Sep 20, 2012 5:59 PM
And we get to pay the price, through an economy misdirected by artificial interest rates and ever-increasing prices, driven by production of money and credit "out of thin air" to cover government borrowing, bank bailouts, etc.
scott s. Wrote: Sep 20, 2012 5:32 PM
I think you need to draw a distinction between the Federal Reserve Banks (plural as there are several of them, the New York bank being first) and the Federal Reserve Board of Governors.
johnm h Wrote: Sep 20, 2012 9:11 AM
The Fed was created by the financial elite to be a banking cartel so JP wouldn't have to bail out the nation again. It has morphed into a monopoly which the Banks do not fully control. The point though is that not only do we not need it, we would be far better off without this monopoly/cartel. Gold worked better, would work again, but most importantly gold puts the government and the banks back into a box with sides.
FletchforFreedom Wrote: Sep 20, 2012 8:31 AM
Um, excuse me but... the notion that the Fed answers to no one is absurd on its face as history abundantly demonstrates. It is beholden to the powers that be and always has been. Along the same lines the fiction that the ostensible private ownership alters in any way the fact that the central bank is a governmnet monopoly doesn't pass even the most cursory scrutiny.

Both of the so called "inaccuracies" you suggest are entirely correct.
big jack II Wrote: Sep 20, 2012 10:28 AM
FleshforFreedom: Why if they are beholden, why haven't they been audited? I think you better check your facts or assumptions. The only federal control if any , are government officials on the governing board. Other than that they are left alone pretty much, Heck , they wouldn't answer a senate inquiry about where and to whom trillions of dollars have gone. They are so mysterious , you wonder why they refuse to answer direct questions, and get away with it. So who do they answer to?
FletchforFreedom Wrote: Sep 20, 2012 1:48 PM
They haven't been audited because those same powers that be don;t want the fact that they can manipulate (devalue) the monetary system exposed or even discussed. As Tom Woods pointed out, that the Fed responds to the Chairman's wishes and that the chairman responds to the individual with the power to appoint him has been the historical norm for virtually the entire Fed's existence.

I’ve expressed concern about QE3 and other decisions by the Federal Reserve about monetary policy, but I have also admitted that it’s difficult to know the right monetary policy because it requires having a good idea about both the demand for money and the supply of money.

But this raises a bigger issue. The only reason we expect the Fed to “know the right monetary policy” is because it’s been assigned a monopoly role in the economy. But not just a monopoly role, we also expect the Fed to be some sort of omniscient central planner, knowing when...

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