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Old 12-14-2018, 11:06 AM
Kamaski Kamaski is offline
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Why do libertarians always want to abolish the FEDERAL RESERVE

What is the federal reserve? Iím not the smartest person in the world, nor am an economics expert. Why is it so important? I did learn some stuff about monetary policy in high school, but didnít understand a lot of it. I actually like libertarians, usually they are very chill people, but donít understand a lot of their philosophy.
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Old 12-14-2018, 11:25 AM
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Since this is framed as a political question, let's move it to Great Debates.

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Old 12-14-2018, 11:30 AM
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The Federal Reserve is the US central banking system. The board is appointed by the president but otherwise it's an independent, unelected agency that sets its own policy. The Fed controls the US money supply and sets the interest rates that banks use to access said money, which has wide ranging effects on the economy and therefore pretty much every American. However, as normal citizens there's essentially nothing we can do if we don't like what the Fed is doing. This should probably be disconcerting to all Americans, but it's especially so to Libertarians who don't like the idea of not having any control over their own lives. However, the alternatives to an independent central bank haven't always worked out very well in the past, so a lot of their objections tend to fall along ideological lines as opposed to practical considerations.
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Old 12-14-2018, 11:45 AM
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I think the general libertarian view on the Federal Reserve is shaped by two streams of thought.

First, some libertarians have an earnestly held view that the Fed is bad policy.

Second, libertarians as a group include an awful lot of cranks who embrace all sorts of conspiracies and other bullshit about many things, from the moon landing didn't happen, to vaccines cause autism, to racist international banking conspiracies.
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Old 12-14-2018, 11:51 AM
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It's also the monopoly aspect of Central Banking that libertarians take issue with.

The Federal Reserve has a government-protected monopoly on issuing currency.

That explains why so many libertarians have jumped onto the cryptocurrency train.
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Old 12-14-2018, 11:51 AM
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I think the idea is that banks, like any other business, should compete in the market. The Fed is the worst kind of crony capitalism: It's a private business that has a government-enforced monopoly and lots of special privileges.

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This should probably be disconcerting to all Americans
It probably would be, except the Fed has worked way better than the pre-Fed system. Not saying that it's the best system, or that it's philosophically sound, but people tend to worry about actual current problems more than hypothetical philosophical ones.
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Old 12-14-2018, 11:55 AM
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There is generally a large overlap between people who are hostile to the federal reserve and gold standard advocates. I am not one of those people, but have talked with them enough to gather that the main complaint is that the federal reserve generally tries to keep the money supply at a point where there is a small amount of annual inflation. Libertarians don't like inflation, because it means that cash holdings lose value over time, which they see as a subtle form of taxation. They prefer the gold standard, which often leads to deflationary currency. That basically gives people who hold on to a pile of gold free money over time, which is very appealing to them. I definitely don't want to turn this into the 58th thread debating the gold standard so I will not delve into whether any of this is good or bad.
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Old 12-14-2018, 11:58 AM
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It probably would be, except the Fed has worked way better than the pre-Fed system. Not saying that it's the best system, or that it's philosophically sound, but people tend to worry about actual current problems more than hypothetical philosophical ones.
And this is the problem with Libertarianism in a nutshell. I'm someone who's very sympathetic to the ideology, but as you say, while I agree with the hypothetical issues, "abolishing the Fed" seems like a terrible, terrible idea. It's hard to take Libertarians seriously when they espouse blowing up things that actually work reasonably well.

Of course, in Libertarian circles I'm sure there's plenty of "evidence" that the Fed isn't working reasonably well, but then you get into the conspiracy theories that Ravenman mentioned
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Old 12-14-2018, 11:58 AM
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The Fed doesn’t have to be abolished outright. Ron Paul, the most libertarian political figure in modern U.S. history, proposed that we end the Fed by repealing legal tender laws, allowing hard money to compete with government paper.
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Old 12-14-2018, 12:00 PM
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The Fed doesnít have to be abolished outright. Ron Paul, the most libertarian political figure in modern U.S. history, proposed that we end the Fed by repealing legal tender laws, allowing hard money to compete with government paper.
And just who issues this hard money?
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Old 12-14-2018, 12:03 PM
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And this is the problem with Libertarianism in a nutshell. I'm someone who's very sympathetic to the ideology, but as you say, while I agree with the hypothetical issues, "abolishing the Fed" seems like a terrible, terrible idea. It's hard to take Libertarians seriously when they espouse blowing up things that actually work reasonably well.

Of course, in Libertarian circles I'm sure there's plenty of "evidence" that the Fed isn't working reasonably well, but then you get into the conspiracy theories that Ravenman mentioned
I donít think it is a conspiracy theory to suggest the Fed was completely blindsided by the last crisis. What is your standard to claim the Fed works ďreasonably wellĒ?Seems like that is pretty wishy-washy.
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Old 12-14-2018, 12:04 PM
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And just who issues this hard money?
Anybody could. Currency could be traded in the marketplace like anything else.
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Old 12-14-2018, 12:04 PM
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And just who issues this hard money?
That would be settled by the market. Thatís like a Soviet citizen asking about who would issue the shoes in a capitalist system.
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Old 12-14-2018, 12:09 PM
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The Fed is the worst kind of crony capitalism: It's a private business that has a government-enforced monopoly and lots of special privileges.
The Federal Reserve is a government agency.

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Originally Posted by Federal Reserve Website
The Federal Reserve, like many other central banks, is an independent government agency but also one that is ultimately accountable to the public and the Congress.
People get confused about this because the 12 regional Fed banks were privately chartered when they were originally created. Technically, those charters still exist. But in the 1930s, Congress centralized the ultimate decision-making of the system under the government agency in DC. Even if someone wanted to argue that the various regional banks are still "private", based on their original charters which have since been neutered, they are not private businesses in any typical sense. Most notably, their "shares" can't be sold, traded, or used as collateral, and dividends paid is not according to the shareholders or regional boards but rather according to act of Congress.

They act as Congress and the Board of Governors tells them to act. And in fact, Congress recently decided to reduce the dividend paid on those shares to the larger banks in the country.

Last edited by Hellestal; 12-14-2018 at 12:10 PM.
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Old 12-14-2018, 12:10 PM
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I donít think it is a conspiracy theory to suggest the Fed was completely blindsided by the last crisis. What is your standard to claim the Fed works ďreasonably wellĒ?Seems like that is pretty wishy-washy.
Well I'm not sure how much the Fed could have done to prevent the 2008 recession, seems that was more congress and the SEC, but they were able to print a bunch of money and drop interest rates in order to get banks to start lending again. I'd like to think that the recovery happened faster than it otherwise would have because of the existence of a central bank.

Of course whether or not you call that a success is pretty subjective, but I'm not familiar with any countries without central banks that are handling their economies better than those that do have central banks.
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Old 12-14-2018, 12:11 PM
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That would be settled by the market. Thatís like a Soviet citizen asking about who would issue the shoes in a capitalist system.
Good move. Not worry about the actual implementation of a fucking stupid idea.

I don't want to have to haggle over the value of dozens of different coins from different sources.
Especially since there's no actual rate of exchange, you would have no idea of what your money is worth.
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Old 12-14-2018, 12:11 PM
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And just who issues this hard money?
Anybody could. Currency could be traded in the marketplace like anything else.
And how do we value this "hard money" in the marketplace? Won't it be traded in USD terms? And in that case, isn't that essentially what corporate bonds are?
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Old 12-14-2018, 12:12 PM
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The Fed doesnít have to be abolished outright. Ron Paul, the most libertarian political figure in modern U.S. history, proposed that we end the Fed by repealing legal tender laws, allowing hard money to compete with government paper.
Legal tender laws today are vestigial. They're not relevant for anything.

Repealing legal tender laws would do absolutely nothing to displace the Federal Reserve.
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Old 12-14-2018, 12:13 PM
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I think the cryptocurrency experiment has been pretty interesting in that regard. For the most part, the value of all cryptocurrencies are locked to Bitcoin, which itself is only ever exchanged in terms of USD. It's still in its infancy so maybe that will change, but so far nobody's looking at Bitcoin as anything other than a stand-in for dollars.
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Old 12-14-2018, 12:15 PM
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Of course whether or not you call that a success is pretty subjective, but I'm not familiar with any countries without central banks that are handling their economies better than those that do have central banks.
Are there any countries without central banks?
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Old 12-14-2018, 12:16 PM
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And how do we value this "hard money" in the marketplace? Won't it be traded in USD terms? And in that case, isn't that essentially what corporate bonds are?
How do we "value" anything in the marketplace? By what someone is willing to exchange for it.
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Old 12-14-2018, 12:19 PM
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Are there any countries without central banks?
Surprisingly there are some.
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Old 12-14-2018, 12:19 PM
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I think there are too slightly different groups of pseudo-thinkers which advocate against the Federal Reserve.

A "populist" group sees the Federal Reserve as the tool of big banks and, perhaps of a coven of (Jewish?) super-rich. Some of these people might prefer the government to control money supply and interest rates directly. If the FRB resists Trump's calls for inflationary policies to keep the good times rolling, this group may find its voice.

A "libertarian" group sees the Federal Reserve as the tool of government (and again, perhaps a possibly-Jewish coven). These people want interest rates and money supply to be set by "the free market." Some want to return to gold-as-money. Others might like new currencies, e.g. Bitcoin. Some would be happy to accept gold and/or Bitcoin as the market sees fit ó anything but the government-controlled FedRes dollar.

While the first group might be happy to let inflation erode the value of the dollar as long there is full employment with rising wages, the second group is especially concerned with inflation. But their concerns show extreme confusion.

In 1792 it took $19.39 to buy an ounce of gold. During the Civil War Lincoln's greenbacks were traded at a discount but the government eventually redeemed these greenbacks for gold and in 1932 gold could be purchased of $20.67 ó almost the same price as 140 years earlier! The dollar-to-gold ratio was the epitome of stability. But with the establishment of the FedRes, gold-as-money fell into disuse and American citizens were even restricted from owning gold. After Nixon finally ended the gold standard, the price of gold rose rapidly and is now $1243.

Expressed in terms of gold, the net annual inflation rate of the dollar from 1792 to 1932 was less than 0.05%. From 1932 to 2018 that rate was 4.88%. Is that inflation good, bad, or indifferent?

Libertarian gold bugs would have you believe it is very very bad. Every year the banks (or gnomes? or members of a non-Christian cabal?) steal, on average, 4.88% of your money and ... (do what with it exactly?) If your life-savings were $1,000,000 in 1932 and you converted it all into paper dollars and put it under your mattress you could buy only $16,600 worth (reckoned at the 1932 price) of gold today. The government has cheated you out of $983,400 !!

Of course anyone who has the slightest clue of how money works knows this is absurd. For starters, in 1968 when inflation was 4% and rising, the yield on AAA bonds was 6% and rising. Real people don't keep their cash under their mattress. In 1981 when inflation was almost a whopping 11%, the AAA yield was more than an even whoppinger 15%.

One give-away to learn how much respect to give a commentator: His webpage will have a graph showing, e.g. the price of gold over time. Look at the scale of dollars on the vertical axis. If someone is trying to educate you the vertical axis will always use a logarithmic scale. If they're trying to exploit your ignorance and frighten you the vertical axis will use a linear scale.
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Old 12-14-2018, 12:27 PM
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Are there any countries without central banks?
Surprisingly there are some.
Looking at that list, none seem to have their own currency. I saw Euros, USD or Australian dollars used by those (very small) countries. So there are central banks involved, just not domestic ones.
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Old 12-14-2018, 12:28 PM
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Well I'm not sure how much the Fed could have done to prevent the 2008 recession, seems that was more congress and the SEC, but they were able to print a bunch of money and drop interest rates in order to get banks to start lending again. I'd like to think that the recovery happened faster than it otherwise would have because of the existence of a central bank.

Of course whether or not you call that a success is pretty subjective, but I'm not familiar with any countries without central banks that are handling their economies better than those that do have central banks.
The Fed caused the recession and the one before it by manipulating interest rates and facilitating artificial credit expansion.

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Good move. Not worry about the actual implementation of a fucking stupid idea.

I don't want to have to haggle over the value of dozens of different coins from different sources.
Especially since there's no actual rate of exchange, you would have no idea of what your money is worth.
That wouldnít be a problem. In the past, even during primitive capitalist economies, there have been clearinghouses, and Iím sure modern entrepreneurs can handle it today.

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And how do we value this "hard money" in the marketplace? Won't it be traded in USD terms? And in that case, isn't that essentially what corporate bonds are?
Corporate bonds are a medium of exchange? Nah.

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Legal tender laws today are vestigial. They're not relevant for anything.

Repealing legal tender laws would do absolutely nothing to displace the Federal Reserve.
True, but itís necessary in tandem with his other proposals which would drive government money out of circulation. If legal tender laws stood, it would lead to a Greshamís law situation.
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Old 12-14-2018, 12:37 PM
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Good move. Not worry about the actual implementation of a fucking stupid idea.

I don't want to have to haggle over the value of dozens of different coins from different sources.
Especially since there's no actual rate of exchange, you would have no idea of what your money is worth.
That was the first thing I thought of... you'd need to be able to instantly convert and keep track of all the exchange rates and fluctuating values, which mind you, would probably fluctuate with the stock prices of the issuing companies/organizations, or with the public perception if they aren't traded openly.

It would be a high tech version of "I'll give you three chickens and an old toothless goat for your five jugs of wine, 3 jugs of olive oil and a loaf of bread." type situation.
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Old 12-14-2018, 12:42 PM
Exapno Mapcase Exapno Mapcase is offline
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It's always wise at this point to take a step back and remember that no country in the world has gone back to hard money since abolishing it. None. Not the strongest dictatorship under a crazy leader who could do whatever he wanted and damn the consequences, not a country enduring dire inflation or depression, not a modern country employing the most advanced economic thinking, not even supposed libertarian paradises like Singapore.
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Old 12-14-2018, 12:43 PM
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If your life-savings were $1,000,000 in 1932 and you converted it all into paper dollars and put it under your mattress you could buy only $16,600 worth (reckoned at the 1932 price) of gold today. The government has cheated you out of $983,400 !!
Depending on how well you cared for your mattress, though, the numismatic value of those 87 year old bank notes could be more than face value. Especially if it was in the form of a two hundred out-of-print $5000 bills.

Last edited by eschereal; 12-14-2018 at 12:43 PM.
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Old 12-14-2018, 12:46 PM
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To the contrary, there probably wouldn’t be a lot of currencies. Gold and silver would probably resume their duty as the worldwide money in some form or another.
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Old 12-14-2018, 12:48 PM
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It's always wise at this point to take a step back and remember that no country in the world has gone back to hard money since abolishing it. None. Not the strongest dictatorship under a crazy leader who could do whatever he wanted and damn the consequences, not a country enduring dire inflation or depression, not a modern country employing the most advanced economic thinking, not even supposed libertarian paradises like Singapore.
Yes there is no incentive for a government to relinquish its hold on money. Similarly, no government has decided to stop taxing its populace or borrowing to finance various schemes.
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Old 12-14-2018, 12:53 PM
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I think there are too slightly different groups of pseudo-thinkers which advocate against the Federal Reserve.

A "populist" group sees the Federal Reserve as the tool of big banks and, perhaps of a coven of (Jewish?) super-rich. Some of these people might prefer the government to control money supply and interest rates directly. If the FRB resists Trump's calls for inflationary policies to keep the good times rolling, this group may find its voice.

A "libertarian" group sees the Federal Reserve as the tool of government (and again, perhaps a possibly-Jewish coven). These people want interest rates and money supply to be set by "the free market." Some want to return to gold-as-money. Others might like new currencies, e.g. Bitcoin. Some would be happy to accept gold and/or Bitcoin as the market sees fit ó anything but the government-controlled FedRes dollar.

While the first group might be happy to let inflation erode the value of the dollar as long there is full employment with rising wages, the second group is especially concerned with inflation. But their concerns show extreme confusion.

In 1792 it took $19.39 to buy an ounce of gold. During the Civil War Lincoln's greenbacks were traded at a discount but the government eventually redeemed these greenbacks for gold and in 1932 gold could be purchased of $20.67 ó almost the same price as 140 years earlier! The dollar-to-gold ratio was the epitome of stability. But with the establishment of the FedRes, gold-as-money fell into disuse and American citizens were even restricted from owning gold. After Nixon finally ended the gold standard, the price of gold rose rapidly and is now $1243.

Expressed in terms of gold, the net annual inflation rate of the dollar from 1792 to 1932 was less than 0.05%. From 1932 to 2018 that rate was 4.88%. Is that inflation good, bad, or indifferent?

Libertarian gold bugs would have you believe it is very very bad. Every year the banks (or gnomes? or members of a non-Christian cabal?) steal, on average, 4.88% of your money and ... (do what with it exactly?) If your life-savings were $1,000,000 in 1932 and you converted it all into paper dollars and put it under your mattress you could buy only $16,600 worth (reckoned at the 1932 price) of gold today. The government has cheated you out of $983,400 !!

Of course anyone who has the slightest clue of how money works knows this is absurd. For starters, in 1968 when inflation was 4% and rising, the yield on AAA bonds was 6% and rising. Real people don't keep their cash under their mattress. In 1981 when inflation was almost a whopping 11%, the AAA yield was more than an even whoppinger 15%.

One give-away to learn how much respect to give a commentator: His webpage will have a graph showing, e.g. the price of gold over time. Look at the scale of dollars on the vertical axis. If someone is trying to educate you the vertical axis will always use a logarithmic scale. If they're trying to exploit your ignorance and frighten you the vertical axis will use a linear scale.
If this is the defense of fiat currency and the Fed, I think Iíll just take a nap.
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Old 12-14-2018, 12:59 PM
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The idea that each monopolistic geographical entity should have their own little bank and own little pieces of paper with dead people on them is so 20th century provincial nationalism. Libertarians envision a global monetary integration under an unmanipulated currency. Very metropolitan, chic, and forward-looking.
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Old 12-14-2018, 01:00 PM
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The Fed doesnít have to be abolished outright. Ron Paul, the most libertarian political figure in modern U.S. history, proposed that we end the Fed by repealing legal tender laws, allowing hard money to compete with government paper.
There is nothing wrong with walking around with bits of gold and buying stuff with it. Actually I have heard of people doing just that at Renfairs and such.

You can print out WillFarnaby certificates all you want. The Fed won't stop you. All you have to do is convince all the hard-working Americans to take them and use them as a store of value.
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Old 12-14-2018, 01:00 PM
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Some years ago I recall some trade being done via barter. That does not require any sort of currency, just someone to keep track of value traded. Not sure if it could work on a large scale, but on the other hand, most of this country's money is already just numbers on hard drives.
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Old 12-14-2018, 01:01 PM
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If this is the defense of fiat currency and the Fed, I think I’ll just take a nap.
Seems to me that that was not a defense of the Fed, but an explanation why the Libertarian criticism of the Fed is not based on reality.

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Yes there is no incentive for a government to relinquish its hold on money. Similarly, no government has decided to stop taxing its populace or borrowing to finance various schemes.
And that to me shows that the Libertarian idea here is worth less than many ideologies that actually made their views become reality; the libertarian idea here is DOA, many times over already.

Last edited by GIGObuster; 12-14-2018 at 01:02 PM.
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Old 12-14-2018, 01:02 PM
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The idea that each monopolistic geographical entity should have their own little bank and own little pieces of paper with dead people on them is so 20th century provincial nationalism. Libertarians envision a global monetary integration under an unmanipulated currency. Very metropolitan, chic, and forward-looking.
Like bitcoin or any one of a dozen crytocurrencies? Sure, nothing stopping anyone from doing so. Apparently not as many people want these "unmanipulated" currencies as Libertarians seem to think.
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Old 12-14-2018, 01:09 PM
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That's because people want money to be boring. They want it to be stable. They want to know that what the money have will basically be worth tomorrow the same's it's worth today, and they want to know that things cost exactly what they say the cost. Currency is nothing more than a tool, a means of converting labor to goods and services. I don't think how decentralizing and deregulating it will make things better.
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Old 12-14-2018, 01:10 PM
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Yes there is no incentive for a government to relinquish its hold on money. Similarly, no government has decided to stop taxing its populace or borrowing to finance various schemes.
Yes, "governments" are obviously hermetically sealed packets dropped down from space by aliens who have no connection to the rest of society. That's why no one objects when governments of every conceivable kind manage to resist a policy that would make everything about the world better.

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The idea that each monopolistic geographical entity should have their own little bank and own little pieces of paper with dead people on them is so 20th century provincial nationalism. Libertarians envision a global monetary integration under an unmanipulated currency. Very metropolitan, chic, and forward-looking.
The EU thought a smaller version of this. It seems to have some problems. Nothing that couldn't be cured by eliminating all nation-states as individual entities, of course. You just have to think big. If everybody in the world thought exactly alike, libertarianism would work wonderfully.

But so would anything else.
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Old 12-14-2018, 01:11 PM
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There is nothing wrong with walking around with bits of gold and buying stuff with it. Actually I have heard of people doing just that at Renfairs and such.

You can print out WillFarnaby certificates all you want. The Fed won't stop you. All you have to do is convince all the hard-working Americans to take them and use them as a store of value.
No. There are impediments to using gold in exchange on a large scale. Taxes for one.

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Like bitcoin or any one of a dozen crytocurrencies? Sure, nothing stopping anyone from doing so. Apparently not as many people want these "unmanipulated" currencies as Libertarians seem to think.
Yeah, they are also subjected to taxes besides probably being inferior to gold and silver.
  #40  
Old 12-14-2018, 01:12 PM
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What is the federal reserve? Iím not the smartest person in the world, nor am an economics expert. Why is it so important? I did learn some stuff about monetary policy in high school, but didnít understand a lot of it. I actually like libertarians, usually they are very chill people, but donít understand a lot of their philosophy.
Well, I haven't read any of the responses so far, but my take is that there would be two issues that some libertarians would have. One is with fiat currency, which is part of what the Federal Reserve manages. The other would be with a government agency managing ANY aspect of the US banking system, especially using things like interest levels to turn up or cool down the economy. Libertarians HATE that sort of thing and, instead, want market forces to dictate how things progress. If we get a huge recession or even a depression, well, that's a correction that will inform later investors to not do the sorts of things that got us into that in the first place. A lot of libertarians put things like the Great Depression or corporate monopolies squarely at the feet of the government and see something like the Federal Reserve as another lever used to incorrectly manipulate part of the economy by the government.

That's my take on why some don't like it, FWIW.
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  #41  
Old 12-14-2018, 01:14 PM
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That's because people want money to be boring. They want it to be stable. They want to know that what the money have will basically be worth tomorrow the same's it's worth today, and they want to know that things cost exactly what they say the cost. Currency is nothing more than a tool, a means of converting labor to goods and services. I don't think how decentralizing and deregulating it will make things better.
It would be more boring and more stable.

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Originally Posted by Exapno Mapcase View Post
Yes, "governments" are obviously hermetically sealed packets dropped down from space by aliens who have no connection to the rest of society. That's why no one objects when governments of every conceivable kind manage to resist a policy that would make everything about the world better.



The EU thought a smaller version of this. It seems to have some problems. Nothing that couldn't be cured by eliminating all nation-states as individual entities, of course. You just have to think big. If everybody in the world thought exactly alike, libertarianism would work wonderfully.

But so would anything else.
Nah. The Euro situation is not a parallel. We can also pretend governments are not interested in maintaining their grip over people.
  #42  
Old 12-14-2018, 01:22 PM
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Originally Posted by GIGObuster View Post
Seems to me that that was not a defense of the Fed, but an explanation why the Libertarian criticism of the Fed is not based on reality.
Yeah a straw man.


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And that to me shows that the Libertarian idea here is worth less than many ideologies that actually made their views become reality; the libertarian idea here is DOA, many times over already.
Libertarian ideas are worthless to governments. I agree they are DOA as long as there is not overwhelming education about the nature of money and government predation.

Last edited by WillFarnaby; 12-14-2018 at 01:26 PM.
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Old 12-14-2018, 01:22 PM
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It would be more boring and more stable.
How can a plethora of competing unregulated currencies be boring?
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Old 12-14-2018, 01:35 PM
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Originally Posted by Alessan View Post
How can a plethora of competing unregulated currencies be boring?
Like I said, gold and silver would probably win out. It wouldn’t take too long. If there is some technological breakthrough that introduces something better, it will be ushered in by stodgy Board of Directors types and heavy capital investment.

You are thinking competition will be like social network competition with new upstarts popping up all the time. Is competition in cheap ink pens exciting? No, Bic is on top. No. This will be very boring like the oil industry.

Are we worried about which station to by gas from? Nah.

Last edited by WillFarnaby; 12-14-2018 at 01:36 PM.
  #45  
Old 12-14-2018, 01:45 PM
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Another good parallel would be the insurance industry where reputation and conservatism win out. That’s how banking should be if the feds weren’t so involved.

Last edited by WillFarnaby; 12-14-2018 at 01:46 PM.
  #46  
Old 12-14-2018, 02:16 PM
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Nah. The Euro situation is not a parallel.
Mea culpa. I forgot that absolutely nothing that happens in the real world can be a lesson about why libertarianism wouldn't work in libertopia.
  #47  
Old 12-14-2018, 02:38 PM
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Like I said, gold and silver would probably win out.
I'm curious how this plays out. There's in the ballpark of $1 trillion of gold (at today's prices) in government vaults worldwide I think. M1 for just the U.S. and Eurozone exceed $10 trillion. Would the price of gold adjust to ten times its present level? Would people melt down their wedding rings to help out?

Will paper money be introduced? By whom? I suppose it's caveat emptor all around. Are you aware that shortage of specie led to frequent financial crises in gold-standard economies?

Alessan: "How can a plethora of competing unregulated currencies be boring?"

Is that why the gold standard is such a great idea? Cheap thrills?
  #48  
Old 12-14-2018, 03:00 PM
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And this is the problem with Libertarianism in a nutshell. I'm someone who's very sympathetic to the ideology, but as you say, while I agree with the hypothetical issues, "abolishing the Fed" seems like a terrible, terrible idea. It's hard to take Libertarians seriously when they espouse blowing up things that actually work reasonably well.

Of course, in Libertarian circles I'm sure there's plenty of "evidence" that the Fed isn't working reasonably well, but then you get into the conspiracy theories that Ravenman mentioned

remember that some Libertarians claim that the income tax is unconstitutional even though it was voted in by states!
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Old 12-14-2018, 03:02 PM
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Originally Posted by WillFarnaby View Post
Another good parallel would be the insurance industry where reputation and conservatism win out. Thatís how banking should be if the feds werenít so involved.
The insurance industry is super regulated, at least in the US.

As for the OP - I'm a libertarian, and I'm pretty indifferent about the Fed.
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Old 12-14-2018, 03:15 PM
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Originally Posted by septimus View Post
I'm curious how this plays out. There's in the ballpark of $1 trillion of gold (at today's prices) in government vaults worldwide I think. M1 for just the U.S. and Eurozone exceed $10 trillion. Would the price of gold adjust to ten times its present level? Would people melt down their wedding rings to help out?

Will paper money be introduced? By whom? I suppose it's caveat emptor all around. Are you aware that shortage of specie led to frequent financial crises in gold-standard economies?

Alessan: "How can a plethora of competing unregulated currencies be boring?"

Is that why the gold standard is such a great idea? Cheap thrills?
i think after a few panics and bank failures after some dumbasses tried to corner the gold market and failed would solve this argument forever bill gates would have to save the country instead of jp morgan
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