Ron Paul and the Fed Reserve

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realasset's picture
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Ron Paul and the Fed Reserve

I'm new here. I've been reading posts here and elsewhere with great interest over what is to be expected in the future. I'm wondering what you folks think whether  Ron Paul will succeed in getting rid of it and if so, what would most likely happen to the economy in the US. I am a Canadian, so I am interested about what it would mean for me, here in Canada. 

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Re: Ron Paul and the Fed Reserve

real -

Welcome to CM.com.

There are a lot of people on the "End the Fed" bandwagon making all kinds of noise.  But when you ask the follow-on question, "And after you have ended the Fed, what will you replace it with?" you get a thundering silence and an occasional cricket.

Perhaps better questions are "How can the Fed be made more transparent?" or "How can we make the Fed accountable to the American taxpayers?"

And of course, the CT crowd will tell you that nothing can be done that isn't already a pre-ordained move in the grand chess game that has been played for centuries, blah, blah, blah.............

We could start by issuing money as sovereign credit instead of debt.  Or is that too easy?

Again, welcome - BTW, have you watched Crash Course yet?  A lot of folks come here following a topical link and miss the Crash Course - which IMO is the Crown Jewel of the site, all of the other great discussions notwithstanding.

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Re: Ron Paul and the Fed Reserve

realasset

Welcome, you came to the right place.

Assuming Paul winds up chairing the oversight committee (don't remember the name) of the Fed, for which he is in line, I expect to see some very illuminating hearings with Ben in the hot seat.  But, I doubt the Fed will go away.  It's too entrenched with too many supporters in congress and everywhere else.  Only a monetary collapse might bring about something that extreme.  jmho

Doug

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Re: Ron Paul and the Fed Reserve

I would like to see a PM coin system as a competing legal tender.  It would have to be  weight based coins with a floating  $ value to work.  With our instant access to market values with IPhone apps and computers I don't think this would be a problem.  With both monies being legal tender, then they could duke it out and see how long benificent Ben gets a paycheck.  Since this would remove control from a central power, I doubt this will happen, but it might well work otherwise.   

If you put a face value on the coins then Gresham's law of "Bad money drives out good if their exchange rate is set by law"  would come into play.   Without the face value (aka-fixed exchange rate), then people will gravitate to that which holds its value best. 

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Re: Ron Paul and the Fed Reserve

Well here's my two cents. No pun intended.

The Federal Reserve IS a private bank so they should not be issuing US currency and Ron Paul is correct in saying it is unconstitutional.

So if you get rid of the Fed then who replaces them? Congress. Because that is who is suppose to be doing it.

U.S. Constitution - Article 1 Section 8

(The Congress shall have Power To) coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

http://www.usconstitution.net/xconst_A1Sec8.html

I know...I know. Congress is so stupid it couldn't organize a drink in a brewery and so crooked it could hide behind a corkscrew. But is the Fed any better? My point is this. The Fed IS unconstitutional so it should be done away with. Congress? That is another matter.

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Re: Ron Paul and the Fed Reserve

Johnny Oxygen wrote:

Well here's my two cents. No pun intended.

The Federal Reserve IS a private bank so they should not be issuing US currency and Ron Paul is correct in saying it is unconstitutional.

So if you get rid of the Fed then who replaces them? Congress. Because that is who is suppose to be doing it.

U.S. Constitution - Article 1 Section 8

(The Congress shall have Power To) coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

http://www.usconstitution.net/xconst_A1Sec8.html

I know...I know. Congress is so stupid it couldn't organize a drink in a brewery and so crooked it could hide behind a corkscrew. But is the Fed any better? My point is this. The Fed IS unconstitutional so it should be done away with. Congress? That is another matter.

JO you are being generous.

Congress couldn't find their collective a$$ if they all sat down on their hands.  Surprised

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Re: Ron Paul and the Fed Reserve

Yes, the Fed is private.  It also enjoys a charter from the federal government.  One might call it extra-constitutional.  The Constitution says the government should regulate the currency, but it doesn't say that it can't outsource it to a private corporation or consortium.  Pity, that.  If Congress wanted to, it could demand by law that the Fed open up all the books.  But, there's a hitch.  Any congress person that attempts such a bill could find their career terminated - instantly.  Yes, some information trickles out once in a while, but in the main, no one "second guess(es) the Fed", as Obama clearly stated at the start of this latest mess.

Ron Paul, for all his good intentions, is jousting with a glacier.  The Fed is so powerful that he could sacrifice his body into the machinery and it would scarcely notice.  Most of his ranting about it falls on deaf ears anyway.  So few people understand what the Fed, or any other central bank, is up to that he might as well be speaking in some extinct language.  Manx, perhaps?  And that's how the Fed likes it.  It's like a priesthood.  All the holiest myths are kept secret or proclaimed in turbid jargon.  Most people shrug and leave it to the experts who just happen to be the Fed or their toadies.

Ron Paul doesn't really get it anyway.  His advocacy of a gold back currency is proof enough.  In and of itself, accomplishes nothing.  There's nothing magic about gold.  Basing our currency on silver would be more practical, but only marginally so.  Circulating receipts for metal stored away in vaults doesn't get to the heart of the problem.

The heart of the problem is what we call money.  In the current system, money is debt.  All the value created in our economies is represented as bank credit for which we all pay interest to private banks.  We pay rent on all the value we create simply because we use bank credit as a medium of exchange.  All bank credit comes with an interest charge.  Money is constantly loaned at interest and then repaid.  As these debts are discharged, more money is lent to start the cycle over again.  As long as bank credit is the medium of exchange, a class of bankers siphons off value for doing nothing more than conjuring up money out of nothing!  The fraction of your income tax that services the federal debt is an interest payment to bond holders, the largest of which is the Federal Reserve.  The bonds are typically for things that no sane person would raise taxes for.  Ask yourself when was the last time you drove a tank to work or took your child to a fighter jet to get a dental check-up?  A large chunk of the federal debt can be attributed to the Pentagon.  War is expensive and that's why it's so profitable both for the bond holders and the weapons dealers.  No problem.  The Fed will lend the government all the money it wants for kill toys.

The answer is to issue money as value.  First, we take the power to issue away from all banks, not just the Fed.  Second, the government issues debt free currency to pay for the labor and materials we need to keep our country running.  Next, the government taxes some of this money out of the overall stock of money to preserve price stability.  It can retire this money or use it to cover expenses.  As the economy grows the stock of money can increase at a commensurate rate.  All of this can be done interest free because what circulates is value, not debt.  Of course banks could still operate, but they could only lend what they actually possess.  There would be no fractional reserve lending, which is to say that banks would not be allowed to lend 9 bank credit dollars for every 1 dollar they hold in reserve.  Also, the notion of interest would have to be rethought.  Bankers would have to work for salaries instead.  Loans would include fees to cover the labor involved.  Interest, or usury,  would be again outlawed as it once was.

In a fractional reserve system, the idea of using gold as the reserve is no better than just using debt money.  In fact it's in some ways worse.  For starters, there isn't enough gold in the world at current prices to back all the currency at a 9:1 reserve ratio.  Second, it still doesn't address the problem of letting banks create credit money out of thin air.  They would still have a license to counterfeit and profit by it.  Thirdly, it's inherently undemocratic to put the power to issue in private hands.  We've seen where that gets us.  CDO's and phoney baloney mortgages.

There's a problem here that goes deeper than just what sort of monetary system we should use.  Since the 1980's the corporate propaganda machine has been hard at work convincing everyone that government  is bad and "big government" is worse still.  The Reaganites coasted into office on this message and we've been the worse for it ever since.  We need to deconstruct this.  You'll notice that these big government haters are generally silent when it comes to  the government spending money on weapons or commodity crop subsidies.  They have quite a bit to say about diminishing regulation of banks and corporations.  You'll also notice how that question is framed in terms of "getting government off your back".  The purpose is to give the finance sector carte blanche to swindle and the industrial sector carte blanche to pollute, price gouge, move jobs offshore, produce shoddy products, etc.  The method it to create a false sense of community between the working people and the corporate owners.  Do working people benefit from low wages, dangerous products, unemployment?  Corporations sure do.  Who benefits from 22% interest on credit card debt?  When regulations are weak, financiers and industrialists benefit.  That's when "big government" is bad.  We the working people have been systematically indoctrinated to believe that government is bad.  All of this has been orchestrated to give elite sectors of the economy a virtual license to steal.  We've been fed the same old trickle down theory in many different forms.  One version has it that free markets and private initiative are always better than a government program.  And this is true if the purpose is to enrich private unaccountable power.

Part of the money issue is changing people's attitudes about how government can be a benefit to people's lives.  It's about making democracy work for the many instead of the few.  It's about the rule of law and the striving for justice.  It's about making the economy work for everyone, not just an over represented elite minority.  It's also about accountability and transparency.  Government has to answer to everyone, not just those who profit from wars, pollution, usury, oppression, secrecy, etc.  By convincing us that government is bad, the elite opinion makers have created in us a cynicism that they've exploited for their own gain.  We've given up trying to make government work and they've taken over.

When I say that government should have the exclusive power to issue, I mean a government free from the influence of avarice, a treasury with open books and regular audits and reports.  I mean to send the bankers and financiers packing, perhaps wearing some tar and feathers for good measure.  I mean that when you saving your money, its value is protected forever.  There will be no need to earn interest in an attempt to keep up with inflation.  No banker will ever be allowed to lend it out ten times over and collect interest.  No banker will ever be allowed to conjure up money out of thin air to lend to some swindler and then come crying to the government when that loan turns toxic.  When we put our money under public control, we build a barrier against private tyranny.  But that's not enough.  It also takes vigilance.  The enemies of our freedom are in our midst.

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Re: Ron Paul and the Fed Reserve

Durangokid

Yes, the Fed is private.  It also enjoys a charter from the federal government.  One might call it extra-constitutional.  The Constitution says the government should regulate the currency, but it doesn't say that it can't outsource it to a private corporation or consortium.

I'm really enjoying reading your post.  I must admit I still haven't finished reading what you wrote because I'm short on time at the moment but I promise to read it all.  I'll try to keep this short and simple. :) 

I don't call the Fed extra-constitutional, I call it un-constitutional and here is the reason why.

You're correct when you say that the government should regulate the currency.

Article 1 section 8 states.

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To coin Money, is a action, or is other words, congress has the responsibility to create money, but we all know that the government creates no money at all.

I'm in disagreement with you is where you said that the consitution doesn't prohibit the Federal Government from outsourcing the creation of money or allowing the Federal Government to charter banks (create corporations).

The tenth ammendment states

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

I am not aware of anywhere in the constutition where it authorizes the Federal Government to create corporations or outsource congresses duty to create money as clearly called for in the constitution.

Ok back to reading the rest of what you wrote. :)

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Re: Ron Paul and the Fed Reserve

The heart of the problem is what we call money.  In the current system, money is debt.  All the value created in our economies is represented as bank credit for which we all pay interest to private banks.  We pay rent on all the value we create simply because we use bank credit as a medium of exchange.  All bank credit comes with an interest charge.  Money is constantly loaned at interest and then repaid.  As these debts are discharged, more money is lent to start the cycle over again.  As long as bank credit is the medium of exchange, a class of bankers siphons off value for doing nothing more than conjuring up money out of nothing!

Amen brother!

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Re: Ron Paul and the Fed Reserve

DurangoKid,

Excellent! 

Are you by any chance affilitated with ICA?

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Re: Ron Paul and the Fed Reserve

What's with the 9 to 1 reserve ratio? Is that written in stone somewhere? Seems like any ratio would work as long as it's consistent.

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Re: Ron Paul and the Fed Reserve

"Ron Paul doesn't really get it anyway.  His advocacy of a gold back currency is proof enough.  In and of itself, accomplishes nothing.  There's nothing magic about gold.  Basing our currency on silver would be more practical, but only marginally so.  Circulating receipts for metal stored away in vaults doesn't get to the heart of the problem."

First off, watch number ten of the Crash Course on inflation. Getting people to accept paper not PM's is magic. instead of wasting time fighting the Fed repeal the legal tender laws so people can use what they want to trade with. (this is called freedom). As far as letting the govt print it's own money interest free to pay for it's spending, go ahead, but with the absence of legal tender laws who would accept paper currency?

"So if sound money is such a good thing, what is stopping people from simply trading with each other in gold and silver? Why are you still being paid in fiat dollars, and why can’t you pay for gas in gold? The answer is that the government has enacted policies that provide considerable stumbling blocks to such transactions.

One of the main stumbling blocks is Federal legal tender laws, which state that government-controlled fiat currency MUST be accepted for many kinds of monetary transactions.

In light of this, Gresham’s Law takes effect. Gresham’s Law states that bad money drives out good money. Meaning, if someone is forced to accept your bad money, it is to your advantage to pass it off, like a hot potato, in exchange for something of value. Any good money you have, you will hoard. Eventually, real money is driven out of circulation and under people’s mattresses, so to speak. In the absence of legal tender laws, people are free to accept the medium of exchange of their choice, and are likely to insist on payment in something of real value."

http://www.ronpaul.com/2008-09-28/ron-paul-on-legal-tender-laws/

aggrivated,

"It would have to be  weight based coins with a floating  $ value to work."

Make it simple, price everything in ounces of whatever pm's are being used.

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Re: Ron Paul and the Fed Reserve

Durangokid – your solution to the currency crisis seems to be give Congress day to day control over our money supply.  Or,  have them attempt to manage the proper level of an unbacked currency, based on the nation’s GDP.  One of your premises, it seems, is that Congress would have only noble intentions, and would not want to inflate the money supply to allow increased spending on their new programs, which causes them to be reelected.  Quite the opposite as occurred in history. In fact, Nixon closed the gold window to allow increased federal spending and debt.  As Dr. Martenson has pointed out, the exponential growth of U.S. debt began shortly after Nixon slammed the gold window.

Your understanding of Ron Paul’s plan to end the fed appears to be limited, and may be based on soundbites. Congressman Paul does not simply want a currency backed by gold, nor does he want to End the Fed tomorrow.  Rather, Congressman Paul has introduced legislation to allow competing currencies.

http://www.dailypaul.com/node/153039

His plan provides a free market solution to our currency crisis brought to us by Congress and the Federal Reserve.  By providing U.S. consumers competing currencies, and allow them to choose a strong commodity backed currency, Federal Reserve Notes would eventually be pushed out.   To allow competing currencies, his bill “legalizes the constitution”.    This includes repealing legal tender laws written the by the banksters, which gives the Fed their money monopoly (or is that monopoly money?).

Unfortunately, Congressman Paul will have only marginally more ability to change our currency system now as chair of Domestic Monetary Policy.  As a subcommittee chair, Dr. Paul does not have subpoena power, and is unlikely to get The Bernank near a committee hearing.

IMO, perhaps the most promising challenge to the Fed’s stranglehold will come from individual states.   Dr. Edwin Vieira has done amazing work in this area.  Here, he testifies to the state of Montana.   

http://www.montanasoundmoney.org/files/Vieira_3-12-09_Montana_Testimony_...

Sound money legislation at the state level has also been introduced in New Hampshire, Missouri, Idaho, Indiana, South Carolina, Utah, and Washington.

Allowing and using commodity backed competing currencies has always been the path to controlling inflation.   Indeed, chapter 10 of Dr. Martenson’s crash course shows a period of 250 years of stable price levels when we used gold and silver backed currencies, and allowed competing currencies.

Our current inflation began when the currency was taken off the gold standard and “the populace did not have another form of currency to which it could turn." – C.M.

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Re: Ron Paul and the Fed Reserve

A Follow Up

1. Post hoc ergo proptor hoc.  This is one of the logical fallacies.  Was Nixon's closure of the gold window the cause of an increase in the money supply, or was the desire for more money the reason to abandon the gold standard?

2.  Tender laws are necessary if for no other reason than to make contracts enforceable and collect taxes. Every country has the right to issue its own currency and demand it for payment of taxes and debts.  The problem is with our Federal Reserve bank credit currency, not the tender laws per se.  If you want to form your own local currency, fine.  Just be aware that the Fed will try to thwart you should your idea take hold and displace Federal Reserve currency.  Talk to me of revolution when you're ready to eat grass.

3.  There are two contradicting opinions on who should control the currency.  One says the Constitution demands congress mind the till.  The other says congress is inept.  I favor congress on two counts.  One, the constitution says so and two, democratic control of the currency is preferable to private interests however imperfect it may be.  Notice that further down in my essay I also said in so many words that it's up to the citizens to hold congress' feet to the fire.  I think it's time that the average American plan and execute some general strikes and prolonged massive demonstrations in the streets to put the fear back in congress.

4.  We must be careful and measured in our speech.  That wingnut on a shooting rampage from Arizona has been quoted as raving about currency issues in the press.  I haven't heard anything specific except the old "conspiracy theorist" label so often trotted out by the liberals and corporate media.  The tendency might become to equate those who distrust the Fed with gun wielding crazies.  We can take a lesson from Noam Chomsky who, while denouncing the actions of the fellow who flew his plane into an IRS building, addressed the real anger and grievances of the working class.  Chomsky was very clear about the sense of betrayal so many people feel.  The corporate class has reneged on its deal to provide a good living to those willing to work and obey the rules.  Congress has become a servant of corporate elites.  The promise of democracy has been betrayed.  These feelings of rage and despair are real and justified.  What actually tipped this person over the edge we may never know.  At this point I would not exclude the possibility that anti-government rage and confusion played a big part in his motivation.

We might also consider that taking care of those who cannot care for themselves is part of the social contract.  One aspect of this story is that this man's problems were no secret.  If it's in the public interest that this man be cared for, why did the public not step up to the plate?  One reason is that Arizona has some of the worst funding and facilities for public mental health in the US.  Arizona has taken this rugged individualism and turned it into every man for himself.  What sort of community does this foster?  How about a community that ignores the mentally ill, allows them to buy semi-automatic weapons, and then act out their inner turmoil on nine-year-old girls?  Sound familiar?  This is antigovernmentalism run amok.

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Re: Ron Paul and the Fed Reserve

Excellent posts everyone, I'm truly getting an education about some of this stuff. Maybe one of you should run in 2012?

I like the idea of "massive, prolonged demonstrations in the streets to put the fear back in congress." YES, YES, YES!

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Re: Ron Paul and the Fed Reserve

"to coin money"  and  " regulate the value thereof"       

Reality  Check:

Gold coins are "debt free" money.     When the FR was created, its notes had 40% gold backing and gold coins circulated along with them.    FDR signed Executive Order 6102 in 1933,  confiscating Americans private gold holdings to be surrendered to the Federal Reserve. Then  by the next year the Gold Reserve Act titled all gold held by the Federal Reserve to the US Treasury.   

Now why would a US President, and Congress pass such laws,  is it to "regulate the value thereof"?     Hardly.   US Treasury bonds were payable in dollars which were in turn redeemable in gold.   This tie to gold prevented FDR, Congress, the Federal Reserve and the bankers from issuing as much debt and notes without the threat of the American people showing up at their doorsteps to exchange their funny money for the real thing.    Ask yourself ----who benefit from passing such laws?    Certainly not the American people.

The freedom to choose what money to transact in allows the American people to escape tyrants.   If Ron Paul represents is but one step on a thousand mile journey,  Amen brother  

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Re: Ron Paul and the Fed Reserve

3.  There are two contradicting opinions on who should control the currency.  One says the Constitution demands congress mind the till.  The other says congress is inept.  I favor congress on two counts.  One, the constitution says so and two, democratic control of the currency is preferable to private interests however imperfect it may be.  Notice that further down in my essay I also said in so many words that it's up to the citizens to hold congress' feet to the fire.  I think it's time that the average American plan and execute some general strikes and prolonged massive demonstrations in the streets to put the fear back in congress.

Preach it brother!

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Re: Ron Paul and the Fed Reserve

"to coin money"  and  " regulate the value thereof"       

Reality  Check:

Gold coins are "debt free" money.

If they are debt free then why does someone have to go into debt in order for those coins to go into circulation?

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Re: Ron Paul and the Fed Reserve

What's with the 9 to 1 reserve ratio? Is that written in stone somewhere? Seems like any ratio would work as long as it's consistent.

The question is if we all have to borrow it, and pay interest on it, where does the money come from to pay the interest on the borrowe money?

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Re: Ron Paul and the Fed Reserve

Thomas,

The US mint now produces gold coins and sells them trough dealerships accross the nation.    There is no need to get in debt to purchase one.

However, if you bought one and deposited it in a bank,    because of the  deposit contract , banks have the right to give you other forms of money upon withdrawal.    Your gold coin becomes part of the existing money system http://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html

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Re: Ron Paul and the Fed Reserve

Hi   Dogs _ Pile

sorry - just had to abbreviate it. I have watched the the crash coarse and found it very informing.

I have little or no understanding of how the fed reserve works, but I think that the monetary system should be controlled by the people,  and  set up in such a way that it can't be manipulated ( tyler's cycle seems a good reason to keep it from the public's will to manipulate it) unless it is absolutely necessary and that it must be returned to it's original state asap by constitutional law. To break the monopoly on the money, a second currency, which was Red Seal notes, previously printed by the US Treasury, and new can be printed again, would need to put monies back in circulation and backed be a tangable asset. Once the people figure that their money is backed something of value, they would start moving away from the debased federal reserve currency. The Red Seal, US treasury notes would then replace the Fed Reserve moneys placing the power back into the people hands through the US treasury.

But with a shift like that, how would that effect day to day life for us commoners.

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Re: Ron Paul and the Fed Reserve

realasset,

Red seal notes are turned in to the Treasury for destruction whenever they turn up in the banking system.      Remember, government removed gold from circulating as money then the legal tender statute forced acceptance of government approved money.    This monopoly benefited banks and the political party in power, which have taken turns to see who could  expand government more thoroughly, on the backs of our people.

Americans should be allowed to transact in any form of money that is acceptable to them, and their foreign trading partners.  If the money is good, then it  would be widely accepted.  BS money would be used to heat homes in the winter.

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Re: Ron Paul and the Fed Reserve

The US mint now produces gold coins and sells them trough dealerships accross the nation.    There is no need to get in debt to purchase one.

And what exactly are the dealerships paying for these coins with?

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Re: Ron Paul and the Fed Reserve

realasset wrote:

Hi   Dogs _ Pile

sorry - just had to abbreviate it. I have watched the the crash coarse and found it very informing.

I have little or no understanding of how the fed reserve works, but I think that the monetary system should be controlled by the people,  and  set up in such a way that it can't be manipulated ( tyler's cycle seems a good reason to keep it from the public's will to manipulate it) unless it is absolutely necessary and that it must be returned to it's original state asap by constitutional law. To break the monopoly on the money, a second currency, which was Red Seal notes, previously printed by the US Treasury, and new can be printed again, would need to put monies back in circulation and backed be a tangable asset. Once the people figure that their money is backed something of value, they would start moving away from the debased federal reserve currency. The Red Seal, US treasury notes would then replace the Fed Reserve moneys placing the power back into the people hands through the US treasury.

But with a shift like that, how would that effect day to day life for us commoners.

real -

'Dogs' works just fine, and so does "Hey you"

You've underscored the point I was trying to make - very few people understand how the Fed works, and that's the problem.  What we need is a lot more transparency in what the Fed does.  We need Congressional oversight of what the Fed does, as outlined in the Constitution.  I think Thomas Hedin wrote in one of his posts the the Fed is 'extra-Constitutional' and that is a problem.  Not above the Constitution, or next to it, but within it.  Most people have a working knowledge of what the various Cabinet positions "Do".  Ask 10 people what the Federal Reserve does and you will probably get 6 blank stares, 3 wild conspiracy theories and 1 "something to do with money" answers. 

Open the books and shine a bright light on the cockroaches running the Fed, watch them scatter, account for where all that money went, answer up for it, roll with the resulting systemic shock waves and fix it.

It may turn out that Congressional oversight of the Fed and the Nation's monetary policy is just another thing for Congress to screw up, but at least they'd be screwing up a responsibility that was given to them by the Constitution.  In a weird way, I'm okay with that - because we the people also have it within our power to fix that problem as well.

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Re: Ron Paul and the Fed Reserve

Carl Veritas wrote:

realasset,

Red seal notes are turned in to the Treasury for destruction whenever they turn up in the banking system.      Remember, government removed gold from circulating as money then the legal tender statute forced acceptance of government approved money.    This monopoly benefited banks and the political party in power, which have taken turns to see who could  expand government more thoroughly, on the backs of our people.

Americans should be allowed to transact in any form of money that is acceptable to them, and their foreign trading partners.  If the money is good, then it  would be widely accepted.  BS money would be used to heat homes in the winter.

Those red seal notes are the last re-issue of Lincoln's greenback currency.  They are treasury notes and NOT Federal Reserve notes.  No interest was ever paid on any of these notes.  Any surprise that the Fed would want them called in and destroyed?  By the way, I have two of them.  One in five dollars (Lincoln) and another in two dollars (Jefferson).   My two favorite presidents.  Both men were complex and struggled with their internal contradictions.  Y' gotta love 'em!

Here's a thought.  What if we were to call ourselves the Red Seal League?  The treasury note money issued by Lincoln was a great success.  It took the Federal Reserve (boo!, hiss!) to finally destroy it.  Maybe it's time has come again.  It would certainly put the Wall Street gang and the banksters on the defensive.  Just think: money of the people, by the people, and for the people!  Abraham Lincoln would not have died in vain.

Carl Veritas's picture
Carl Veritas
Status: Gold Member (Offline)
Joined: Oct 23 2008
Posts: 294
Re: Ron Paul and the Fed Reserve

This is a link to the website of the Federal Reserve Bank Of New York.        Start with "About The Fed (What We Do)"

http://www.newyorkfed.org/markets/openmarket.html       

Durango Kid,

Red notes, Bank Notes, Federal Reserve notes,   Greenbacks, Wealth Money, Funny Money and other forms should be allowed if that is what Americans want to transact in.      What are they afraid of,  the American people?

A. M.'s picture
A. M.
Status: Diamond Member (Offline)
Joined: Oct 22 2008
Posts: 2295
Re: Ron Paul and the Fed Reserve

Carl Veritas,

Quote:

The Federal Reserve Bank of New York is one of 12 regional Reserve Banks which, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Fed, as the system is commonly called, is an independent governmental entity created by Congress in 1913 to serve as the central bank of the United States. It is responsible for

  • formulating and executing monetary policy,
  • supervising and regulating depository institutions,
  • providing an elastic currency,
  • assisting the federal government's financing operations, and
  • serving as the banker for the U.S. government.

Isn't this enough to launch a substantiated inquiry into the constitutionality of the FED?
Every single point here strikes me as a substantially worse idea than the previous.

...Especially "serving as the banker for the U.S. government", as the U.S. government is an electorate body of citizens with no specific assets attached. Yikes. I can't see a good reason *not* to put some heat on this organization with regards to the debauchery of our currency that's occurring.

Maybe simply asking "who has ownership in the FED?" would be a good place to start, since it's a "ndependent governmental entity". 
Congress needs to start thinking about abolishing the monster it created. 

Thanks for sharing this. 
Cheers,

Aaron 

realasset's picture
realasset
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Joined: Dec 30 2010
Posts: 4
Re: Ron Paul and the Fed Reserve

Sorry Dogs, a little too heavy on the wobbly pops. Wasn't trying to be malicious, just playing with the words.

The treasury note money issued by Lincoln was a great success.  It took the Federal Reserve (boo!, hiss!) to finally destroy it.  Maybe it's time has come again.  It would certainly put the Wall Street gang and the banksters on the defensive.  Just think: money of the people, by the people, and for the people!  Abraham Lincoln would not have died in vain.

That's what I was thinking

What has not been addressed is the impact that the introduction of these notes  would have. I know that it would be an instant success, but how would the rest of the world react and how would that effect the economy. I think upon it's release, it may first be taken with a  "why this, is it funny money, what's going on?" but latter on when they find out that the notes are backed by a tangable asset, it may be treated more like gold or silver  than paper money. I think that it may need to be issued slowly, or the rest of world  will dump the Fed Reserve notes making them worth nothing. This I fear would destroy many innocent though ignorant people's lives. Possibly civil unrest, and worse, rioting ect. How it is done would have to be considered very carefully, and done with the utmost care.

China and Japan need to be considered as well. Both of those countries hold most of the US debt. Put your feet in their shoes. What do you think they are thinking. If they decided to cash in all those T Bills ect, what would the US do?

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Two Beers with Steve

Interesting that Stef points out that in a real free society fractional reserve banking would exist, each person would take the personal responsibility of knowing the risk/reward involved, including social ostricism of being involved with inflating whatever currency(s) the bank is storing.

Carl Veritas's picture
Carl Veritas
Status: Gold Member (Offline)
Joined: Oct 23 2008
Posts: 294
Re: Ron Paul and the Fed Reserve

Greg,

There is no need to ban fractional reserve banking or fiat money as long as people are free to transact in any money they choose. This way the people have the liberty and the recourse to keep tyrants at bay.     Monopoly on issuing money is the issue.

If private merchants or individuals are free to refuse a type of money,   the market would ruthlessly flush out  garbage money,  real fast.

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: Ron Paul and the Fed Reserve

Carl

I agree

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