What do you think about the Fed?

[Reverenddel]

Was talking with another Libertarian... he got me thinking, and I agree... I think the Fed should be audited, and I would like an inventory of Ft Knox, and I want it published.

He convinced me with one sentence, "It's your money, it's your gold, you're a citizen, you pay taxes... why shouldn't you know what's going on with your money?"

[OakRidgeStars]

I'm all for the truth.

[MarcSpaz]

Ft. Knox only has about $175 billion in gold in it. It is a name-sake at the very best. All Federal Reserve Bank locations combined have enough money to run the country for about 1 year.

Truth is, a private central/national bank for the government to use is good, but they are too big and have too much influence over US and global economics. We have been very lucky that the FRB has not been charging any interest because the government is their biggest customer and that cost gets passed onto the tax payers. It also makes it more affordable for Americans to barrow money. However, what the heck is going to happen if someone takes control of the bank and decides its time for them to make a profit because the US government is a poor risk?

Do I think they should be audited? Sure.. why not? There is nothing wrong with making sure the spirits of Bernard Madoff's sons aren't stealing the money. However, not by the government.

Don't mean to speak ill of the dead... their deaths were tragic. Just trying to illustrate a point.

[ShotgunBlast]

The Federal Reserve has waged a successful campaign on the poor (and everyone else) by destroying their purchasing power over the last 100 years and have hung older folks out to dry by destroying their interest-producing accounts.

Americans should be lining up with pitchforks in protest if they weren't too busy sitting on the couch watching American Idol.

The US Treasury needs to go back to issuing the currency of the country that's backed by gold, but I don't spend a lot of time dwelling on that pipe dream.

[ Post made via Mobile Device ]

[MarcSpaz]

Our nation would plummet into instant poverty of we ever went back to the gold standard.

[Swampman]

Better explain that one.

[MarcSpaz]

We have $175 billion in gold and the government spends $3.5 trillion a year. Seems like a basic math problem to me.

Edit. Sorry. $4.5 trillion in gold... Not $175.

[Reverenddel]

I understand your point, but is there possibly a way to start shifting FROM FIAT money BACK to Precious Metal backed funds?

Maybe make an Ounce of Gold equal to $1000 of our dollars, and Ounce of Silver equal to $20 of our dollars, split amongst the difference, and roll.

[MarcSpaz]

I don't disagree. I think getting away from the Gold standard was a bad idea, but literally the entire world switched to GDP in 1944, ten years after the US invented it to replace GNP, so they could do business with the US. That lead to the creation of the International Monetary Fund, European Union, OECoD, and the United Nations and World Bank.

If we bail after over 200 countries changed the way their monetary systems work so they could trade with us, can you imagine how bad that would be for the US on the world stage? There are so many other countries that are dependent on the US and the US has grown dependent on the global market. I wouldn't be shocked if it led to a massive war as countries try to position for control while they kick our butts.

[ShotgunBlast]

And that's why I don't dwell on it. lol

On one end of the spectrum you have what should happen (gold-backed currency). On the other end of the spectrum you have what most likely will happen (currency and/or debt-based crisis).

It's a lot easier preparing for the latter than wasting a bunch of energy trying to push for the former.

[Swampman]

[ShotgunBlast]

A good article in Zero Hedge today about the debasement of our currency. Some highlights:

...

It costs 1.7 cents to make a penny and 8 cents to make a nickel, according to the U.S. Government Accountability Office. The U.S. government loses tens of millions of dollars every year putting these coins into circulation.

Why is it wasting money and time making coins almost no one uses? Because phasing out the penny and nickel would mean acknowledging currency debasement. And governments never like to do that. It would reveal their incompetence and theft from savers.

...

The $100 bill has been the largest ever since. But it has far less purchasing power than it did in 1969. Decades of rampant money printing have debased the dollar. Today, a $100 note buys less than a $20 note did in 1969.

...

For perspective, consider what a penny and a nickel would be worth under a sound money system backed by gold. From 1792 to 1934, the price of gold was around $20 per ounce. Under this system, it took around 2,000 pennies to make an ounce of gold. At today’s gold price, a “sound money penny” would be worth about 55 modern pennies. A “sound money nickel” would be worth about $3.

...

Unless Congress puts an end to the Fed’s loose monetary policy and returns to a sound and stable dollar, the issue of U.S. coin composition will be revisited every few years until inflation finally forces coins out of circulation altogether and we are left with only worthless paper.”

http://www.zerohedge.com/news/2016-02-1 ... omes-trash

[MarcSpaz]

Depending on where you stand on the issues, the paper is already worthless.

[ShotgunBlast]

All I know is that in the 1920s when a $20 bill could be redeemed for an ounce of gold, you could use that money and buy a really nice suit.

Today an ounce of gold will still get you a really nice suit, but that $20 bill is lucky to get you a shirt.

[dorminWS]

All I know is that in the 1920s when a $20 bill could be redeemed for an ounce of gold, you could use that money and buy a really nice suit.

Today an ounce of gold will still get you a really nice suit, but that $20 bill is lucky to get you a shirt.

>>>>>>>>>>>>>>>>>>>>>>>>>

Nice example. Now consider that you must pay income taxes on enough money to have that $1,200 or so left to buy that suit today as opposed to the 1920-level taxes on the $20 for that same suit. Inflation is just a back-door way for the feds to take more of what's yours.

[ShotgunBlast]

No doubt. They definitely get you coming and going.

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[MarcSpaz]

I know that you guys know what I am about to write.... this is not directed to you, but rather people reading this and are losing their minds because they can't believe what they are reading.

In the last 60 to 80 years, America has not been experiencing inflation.

I know... you think I am nuts; don't know what I'm talking about, etc. Well, true inflation is the result of capitalism working. Someone produces a desired product or service; people want the product or service and purchase it. Then as the desire for this service or product exceeds the supply, the prices will go up briefly, but if the inflation in demand is sustained, the producers will hire more people and ramp up production.

This produces more jobs, which gets more money distributed, and more money in circulation and adds more wealth to the economy. True inflation is market driven buy this affect, as the cost of items goes up. However, the rate of income and the growth in wealth exceeds the growth of cost of products and services.

This aforementioned process creates wealth, even though prices increase. Its better for everyone.

The phenomenon we have been experiencing for about 80 years, though commonly referred to as inflation, is actually a US Federal Government induced devaluation of the US Dollar. The federal government passes laws that doesn't increase the value of products in services, but increases the price. The increase in price goes directly to the government, in which they produce nothing.

So now we are at the point where, because the government interfered in the private market, what cost me $1 yesterday now cost me $3 today. No new wealth is being produced.

Here is another example that may be easier to understand...

In capitalism, there are 32 people want to have dinner and 4 of them decide to make a pizza. The other 28 people don't want to make the effort.

The 4 people make a pizza 18 inches in diameter and cut the pizza in 4 slices. Then, the other 28 people who didn't do anything for dinner are now demanding some pizza.

In true inflation driven by capitalism, the other 28 people would make 7 more pizzas and everyone would be able to have pizza.

What we are experiencing is, the US Government is forcing the people who made the 18 pizza to cut the pizza into 32 slices instead of 4, and then forcing those 4 people to give a slice to each of the other 28 people.

Well, there was no wealth created (no more pizza made). Instead, we still only have one 18" pizza, its just that now, the people who worked to create the pizza don't get to keep what they earned. Instead everyone got pizza, but much, much less pizza.

See, because the government doesn't create ANYTHING, especially wealth, the only way they can force everyone to be financially equal (aka everyone gets their *fair share*), the only option is to bring EVERYONE down to the lowest denominator.

BUT, the Government exempts themselves from living by these rule, cuz... you know... they aren't stupid.