Is there anyone here willing to take up a protagonist position FOR: (1) Present fractional reserve requirements, OR (2) Private Centralized Banks RSVP, merci. ... Does anyone else find it odd that Paul Wolfowitz has been appointed to head the World Bank? Greetings
I don't see anything especially wrong with them. Edit: You could make a good argument that fiat money is basically a government scam to impose a “stealth tax” on people through inflation that lets them get away with taxing people a lot more than they would otherwise be able to get away with. But the fractional reserve system and private central banks aren’t really essential to a fiat money system, and I don’t see anything especially wrong with them in and of themselves. There’s a lot of wild conspiracy nonsense floating around on the internet about the Federal Reserve. I would really encourage you to read a reputable book on the banking industry before you conclude that the Fed is the spawn of satan.
I basically agree with you. I think he Fed has done a reasonable good job of coping with the twin deficits, neither of their making, but the low interest rates of recent years (which cause the housing bubble and sustained consumer spending with mortgage refinanced dollars in pockets) will come home to roost - soon. I.e. just when stagflation is hitting and the economy needs more consumption, there will be higher rates to get some foreigners to continue financing the debt and no more room to refinance the mortgage.
Edit: asides... Where should one begin with the problems of The Fed? Float? Discount Rate? Metals Market hegemony? Corporate Welfare? FDIC short-run swapping? FR Dividends and inherent inflation? ... I'm ready for the challenge of discussing pseudoelastic currency supply and demand with someone who doesn't dismiss criticisms of such monopolies as "conspiracy theories." Who denies that under the current system in the US that new money is created SOLEY by the issuance of new debt? ... Historically, Benjamin Franklin was (among other, more apparent talents) a gifted monetary economic thinker who published over a dozen works on the subject. His views are best summarized as Mercantilian; that labor, not gold, is the correct measure of value. To paraphrase Franklin, "the worth of a note is roughly the same as that of a bond; however one is promise to pay, whose value is equal to that work which serves the public good, and the other is a promise to pay which earns interest for the issuer while indenturing the public."
