What if a President Ron Paul did end the Federal Reserve?

[erislover]

I think anti-fed types assume that the Fed has a lot more power than it does.

[BrainGlutton]

@erislover

I think anti-fed types assume that the Fed has a lot more power than it does.

Does it really have any, over anything but interest rates?

[BrainGlutton]

@erislover

I think anti-fed types assume that the Fed has a lot more power than it does.

Also, at least subconsciously, when they chant “No More Fed!” they might be using the word as a metaphor for, and the Federal Reserve as a scapegoat-avatar of, the whole post-1932 federal-government establishment.

[Lobohan]

@DeptfordX

Don’t blame me, i voted for Horus

Pardon, but the Ordo Hereticus would like a word with you.

[erislover]

@BrainGlutton

Does it really have any, over anything but interest rates?

Not much more. All its powers are quite indirect, relative to the Fed’s charge.

[epolo]

@xtisme

It’s true that in the past we didn’t have a Federal Reserve, but I don’t think we could stuff the genie back into the bottle now and not have the whole thing fly apart. Think about it just from the basics. What would our currency be? Presumably gold. Trying to stuff our economy back onto the gold standard would implode the whole system. How would you fit trillions of dollars in capital and assets back into a few hundred billion dollars worth of gold, or whatever we could lay our hands on? Just from that perspective I don’t see how it would be possible, and that leaves out a ton of other problems and issues that would arise…such as the fact that our currency would go from being traded on a global market to being backed by some fixed asset. What would happen to all of that investment flowing into the US from other countries? How would we value our treasury bills and bonds and other such instruments with such a radical departure from our current system? Why would other countries continue to value our bond and treasure instruments at anything like the current rates, and why would they continue to shelter their assets here??

-XT

Assuming a best case scenario (not that there’s any particular reason to, other than yucks), we would have at least a few months between the election of President Paul and the abolition of the Fed, right? Couldn’t sane and reasonable people use that opportunity to pull together and save the world economy from going over a cliff?

Maybe Google creates a new financial instrument called GoogleBucks and signs up every retailer in the country to accept them as tender (under pain of being dropped from search results forevermore if they don’t comply). They then negotiate with all the major banks to store reserves for them in GoogleBank and create a board that sets the interest rate. Theoretically, couldn’t they replicate all the functions of the Fed? And it would be a private, market-based solution and therefore acceptable to the new administration.

It seems like the main impediment would be developing the huge reserve of authority and goodwill (and capital) that would be needed to get the ball rolling. But if everyone were terrified enough of global meltdown, I assume it would be possible.

[FinnAgain]

@Frodo

Ron Paul Atreides?

Nah, that’d be a cross between a human/word hybrid and that crazy uncle everybody has but they’re afraid to let their girlfriends meet.

[XT]

[QUOTE=epolo]
Assuming a best case scenario (not that there’s any particular reason to, other than yucks), we would have at least a few months between the election of President Paul and the abolition of the Fed, right? Couldn’t sane and reasonable people use that opportunity to pull together and save the world economy from going over a cliff?
[/QUOTE]

It’s such a low probability event (I mean, not only would Ron have to get elected, but he’d also have to be made king AND given near absolute power over all aspects of the US government) that I have no idea. I doubt that if the US went down in flames in this way that there would be any chance for the rest of the world to pull their shit together and fill the gap. I mean, the EZ is ALREADY having issues, and China isn’t doing all that great either. I see visions of dominoes falling one after another, but I’m no expert at this stuff, so maybe I’m overblowing the problem here.

Maybe Google creates a new financial instrument called GoogleBucks and signs up every retailer in the country to accept them as tender (under pain of being dropped from search results forevermore if they don’t comply). They then negotiate with all the major banks to store reserves for them in GoogleBank and create a board that sets the interest rate. Theoretically, couldn’t they replicate all the functions of the Fed? And it would be a private, market-based solution and therefore acceptable to the new administration.

I don’t see that being likely. More likely is that some other currency would become the defacto currency (probably the Euro, despite their current troubles) and try and bridge the gap there. I suppose it would depend on whether the Ronster did all this suddenly, or whether it was a long slow build up, as to whether the entire worlds economy would collapse like a house of cards hit by a whale from orbit, or whether it was just the US economy that went tits up.

-XT