Jump to content
Objectivism Online Forum

Stick it to the Federal Reserve: Use sound money

Rate this topic


coirecfox

Recommended Posts

LOL...okay McGroarty you win that one. To be honest, I had no idea that precious metals had achieved the type of market that you guys are talking about. I would definitely agree that some of these other solutions are more sound than the Liberty Dollar.

I still want to stick it to the Fed though...to the mints I shall go... :D

Link to comment
Share on other sites

I would definitely agree that some of these other solutions are more sound than the Liberty Dollar.

I still want to stick it to the Fed though...to the mints I shall go...

I see a larger moral to this: someone making the right philosophical statements is not necessarily philosophically sound. Some will say the right things but not act on it. Others may say a few of the wrong things, but act morally. And there will always be a few who will say anything to make a quick buck.

Link to comment
Share on other sites

This is a good idea, but I don't see why the Fed would have convulsions. Why would they care?

The portion of the money supply consisting of gold and silver would be outside of their control. The more of the money supply outside of their control the worse it is for them. There would be no way for them to manipulate it, aside from selling their own reserves of metal to suppress the price on the open market. That would lower the value and increase the amount needed to buy things - a way to inflate even good money. It would be a temporary measure, though. Their reserves are big, but not unlimited, and once their reserves are gone the problem will still be there, only now with even more sound money in circulation. All of their games with the printing press and the actions of the Federal Open Market Committee would be useless. It might actually have to be much greater than 10% to start things going. I don’t know.

I think it is important to not only advocate sound money but to attempt to institute a separate money supply that uses it, making the benefit of sound money clearer to the majority of the population. People would see that the purchasing power and wealth of those with gold money stays the same or goes up while theirs is going steadily down. If the dollar collapses and inflation takes off, the benefits will be painfully obvious and the conversion to real money will accelerate. The existence of an alternative will ease some of the economic shock as well. At some point in the decline no one will want paper money if there is an alternative. Not that I think it is likely soon, but given the nature of fiat currency it will happen eventually. The government’s only option at that point will be to accept it or, like the 30s, make private ownership of gold illegal.

Link to comment
Share on other sites

I have a serious question on this. Why have a Reserve? I'm not well versed in Economics so I really question what uses are there to a Reserve versus letting market forces reach their natural equilibrium.

And is there any decent books on this that I should pick up sometime?

-- Bridget

Link to comment
Share on other sites

I have a serious question on this. Why have a Reserve? I'm not well versed in Economics so I really question what uses are there to a Reserve versus letting market forces reach their natural equilibrium.

And is there any decent books on this that I should pick up sometime?

-- Bridget

Do you mean why is there a Federal Reserve? Or why do central banks have reserves of gold and silver?

Sorry, I am a little unclear about what you mean.

Link to comment
Share on other sites

I think she means Federal Reserve. There is no good reason to have one, or any government involvement in money at all. Bridget, try reading the essay "Gold and Economic Freedom" by Allan Greenspan (yes, the Fed chair) http://www.usagold.com/gildedopinion/Greenspan.html

Link to comment
Share on other sites

R.W. Bradford writes in Liberty magazine that, as Fed chairman, "Greenspan (once) recommended to a Senate committee that all economic regulations should have fixed lifespans. Senator Paul Sarbanes (D-Md.) accused him of 'playing with fire, or indeed throwing gasoline on the fire,' and asked him whether he favored a similar provision in the Fed's authorization. Greenspan coolly answered that he did. Do you actually mean, demanded the senator, that the Fed 'should cease to function unless affirmatively continued?' 'That is correct, sir,' Greenspan responded."

Bradford continues, "The Senator could scarcely believe his ears. 'Now my next question is, is it your intention that the report of this hearing should be that Greenspan recommends a return to the gold standard?' Greenspan responded, 'I've been recommending that for years, there's nothing new about that. It would probably mean there is only one vote in the Federal Open Market Committee for that, but it is mine.'"

I'm glad to hear that he still believes his own essay. My question is still: Why is he the Fed chair? Why didn't he refuse?

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...