Should the Federal Reserve be abolished?

[itfitzme]

The thing is that money isn't anything but a contract, a promise to pay. Money is created out of nothing because it is nothing. The something is the stuff it buys. Money is just the go between for bartering. And it is brilliant because everyone accepts it. It is brilliant because it has zero value exept that value assigned to it by to parties in a transaction. It is free market supply and demand at it's purest form.

That is a double edged sword though. If nobody wants to lend money then the money supply begins to shrink. With less money supply, it is worth more each day. It can afford to command morem goods because it is in higher demand. Problem is, no one can sell for less than their cost. No one is going to produce whem it costs money to do so. No one wants to give up what ismso valuable and will be more so tommorow.

When money becomes the primary commodity, worth more than what it can buy, it becomes useless and the economy based on it collapse.

 

[g5000]

6. Abolishing the FED will lead to eventual balance budget.

BWA-HA-HA-HA!

It isn't the Fed that is spending more than it takes in in revenues, skippy!

 

[eagle1462010]

6. Abolishing the FED will lead to eventual balance budget.

BWA-HA-HA-HA!

It isn't the Fed that is spending more than it takes in in revenues, skippy!

I guess they didn't really need all those loans after the crash then skippy.

 

[Skylar]

WHY THE FED SHOULD BE ABOLISHED

There are all sorts of problems with your list. First, the links it offers don't substantiate its claims. For example, your website indicates that the claims have been extensively researched and offers a wikipedia link. But the wikipedia link makes no mention of this:

1. The US Congress has the option to buy back the FED at $450 millions (per Congressional Records). When the Congress does this, it will own back the billions of US Government Bonds held by the FED. The US Government will actually PROFIT by buying back the FED! Also, the US government no longer has to pay interests to the FED owners on those bonds.

There's no mention of a buy back clause for $450 million in the USC. So where did the article get this number and this clause? Nebulous and fantastically vague 'congressional records'.

Which, of course, it can't produce or verify in any way. Nor would congressional record trump the actual law passed by congress.....which makes no mention of any such buy back clause, at any such price.

And its more of the same as you go down the list:

2. Through their ownerships in the FED, FOREIGN POWERS CAN and WILL influence the US economy. By controlling our interest rates and money supply, they can actually create economic disaster in the US , should the US disagree with them.

Says who? Who says that the federal reserve is foreign owned? And of course, the Fed doesn't control interest rates and the money supply. The FOMC does. And they are dominated by US appointees.

3. Although the FED directors must be confirmed by the Senate, the awesome lobbying power of the FED owners makes this process meaningless. The owners of the FED can and will put whoever they wish in the position.

What lobbying? Which owners? And according to who?

4. Abolishing the FED will lead to lower inflation. At this moment, the FED prints as much money as needed to buy the US Government Bonds. Since the FED prints this MONEY out of THIN AIR, this leads to an INCREASE of MONEY SUPPLY, WITHOUT increase in GOODS/SERVICES. This, as all of us know it, leads to INFLATION.

Inflation has actually gone down since the FOMC began to increase the money supply through quantitative easing. The exact opposite of what the article predicts.

If the general public buy those bonds with money that they EARNED by providing GOODS/SERVICES, the money supply level is contant in relation to the goods/services level.

Unless, of course, the economy increases in size. Productivity increases, increases in the workforce, increases in total employment.......all can increase the economy. The article doesn't take any of that into account.

And of course, inflation is often caused by issues of supply and demand. Fuel prices increases, food price increases, college price increases, or housing scarcity can all result in increases in inflation.

The author ignores all of these factors as well. Insisting that none of these factors can result in inflation, despite the fact that all of them have already contributed to it in the past.

5. Abolishing the FED will reduce the national debt level. By buying back the FED at $450 millions, the US Government will buy back the billions of dollars of bonds held by the FED. Thus, the net effect is a reduction in national debt. After buying back the FED, the US Government does not have to pay interest on those bonds it buys back, further reducing the national debt.

The obvious problems with this reasoning being that there is no buy back clause. It simply doesn't exist in the USC. Nor can the article or its authors show us any evidence of its existence.

6. Abolishing the FED will lead to eventual balance budget. Today, even if the US Economy only grows by a meager 2% per year, the US Government should be able to put 2% of US-GDP dollars into circulation WITHOUT INFLATION.

Consider, if the goods/services grow by 2% and the money supply grows by 2%, the ratio of goods/services vs. money supply remains constant. Thus, no inflation is created.

The government can use this extra money supply to fund its project without raising taxes.
As long as the government does not print money more than the goods and services available in the US , there will be no inflationary pressures.

Once again, the article's author's position is opposite of reality. Inflation decreases our national debt by decreasing the value of what we we owe. Eliminating inflation would eliminate this roughly 2% decrease in our national debt's value each year. Which doesn't benefit us in any way.

Worse, the 'extra money' referred to by author doesn't follow. If the money supply is increased in proportion to the increases in the size of the economy, then where does this 'extra money' materialize from?

And of course, the 'increased money supply equals increased inflation' argument is starkly debunked by the reduction of inflation as our money supply expanded under quantitative easing. Clearly, there are other factors.

And of course, the elimination of the federal reserve has nothing to do with our deficit. As the government can still sell debt with the Fed or without. And its the federal government's spending in excess of revenue that results in the federal budget deficit.

This had in fact been done with Executive Order 11110 of President Kennedy. Kennedy ordered the Treasury Dept. to print a US GOVERNMENT NOTES (vs. FEDERAL RESERVE NOTES). In effect, Kennedy bypassed the FED by making the Treasury Department printed REAL US MONEY, instead of selling bonds to the FED for almost free.

Several problems with this. First, EO 11110 related only to silver certificates. The treasuries reserves of silver were plummeting as silver prices rose and EO 11110 was designed to phase out silver certificates and prevent this reduction silver reserves.

I again urge a revision in our silver policy to reflect the status of silver as a metal for which there is an expanding industrial demand. Except for its use in coins, silver serves no useful monetary function.

In 1961, at my direction, sales of silver were suspended by the Secretary of the Treasury. As further steps, I recommend repeal of those Acts that oblige the Treasury to support the price of silver; and repeal of the special 50-percent tax on transfers of interest in silver and authorization for the Federal Reserve System to issue notes in denominations of $1, so as to make possible the gradual withdrawal of silver certificates from circulation and the use of the silver thus released for coinage purposes. I urge the Congress to take prompt action on these recommended changes.

Economic Report Of The President January 1963

The purpose was to phase out silver certificates. Not to make them 'real money'. The term 'real money' is never used in the EO or by Kennedy is any of his discussions of his reason for the EO.

The author made that up, whole.

The entire conspiracy offered by the OP article gets utterly demolished yet again by kennedy signing into law Public Law 88-36.....which repealed the Silver Purchase Act under which the Treasury purchased silver and expanded the authority of the Federal Reserve in printing FRNs. Not limited it.

Worse, EO 11110 was redacted by Reagan in 1987. Making it utterly irrelevant to US monetary policy today.

7. By point (6) above, the US Government can actually reduce taxes on everybody since it has more interest free money to spent in the amount equal to the growth of the US GDP. KEEP IN MIND, THIS MONEY WILL NOT CAUSE INFLATION, since the money is printed along with the growth of the goods and services.

Where does this interest free money come from?

What you can do to save the United States of AmericaThe FED should either be AUDITTED every year, or be abolished. I have done my part providing this information. It is up to you to decide the future of the US economy.

The FED is audited every year.

Its US holdings are audited by the GAO every year. And all of its holdings are audited by an independent accounting firm every year.

 

[OohPooPahDoo]

1. The US Congress has the option to buy back the FED at $450 millions (per Congressional Records). When the Congress does this, it will own back the billions of US Government Bonds held by the FED. The US Government will actually PROFIT by buying back the FED! Also, the US government no longer has to pay interests to the FED owners on those bonds.

Prove all of this using specific citations to back up your claims. Allow us to read all of this in actual, legal documentation. If you are unable to prove most of this section, at the very least provide proof of the bolded portion.

The Congress can do what it wants with the Fed.

 

[OohPooPahDoo]

The FED is audited every year.

The teabagger fed protesters don't understand what an audit is. They think an audit means a record of ever transaction the Fed completes - including the names of the individuals, businesses, and institutions on the other side of the transaction - is posted for their internet consumption.

 

[eagle1462010]

The FED is audited every year.

The teabagger fed protesters don't understand what an audit is. They think an audit means a record of ever transaction the Fed completes - including the names of the individuals, businesses, and institutions on the other side of the transaction - is posted for their internet consumption.

The Freedom of Information Act requires it.
Since the Fed has influence over the value of the dollar, the American people have a right to know the Trillions going out, especially if it has an adverse effect on the value of our currency.

The Supreme Court justified that they must disclose, and the GAO reported the same via a Supreme Court order.

 

[OohPooPahDoo]

The FED is audited every year.

The teabagger fed protesters don't understand what an audit is. They think an audit means a record of ever transaction the Fed completes - including the names of the individuals, businesses, and institutions on the other side of the transaction - is posted for their internet consumption.

The Freedom of Information Act requires it.
Since the Fed has influence over the value of the dollar, the American people have a right to know the Trillions going out, especially if it has an adverse effect on the value of our currency.

The Supreme Court justified that they must disclose, and the GAO reported the same via a Supreme Court order.

So the Fed IS audited then.

What's your problem.

 

[Skylar]

1. The US Congress has the option to buy back the FED at $450 millions (per Congressional Records). When the Congress does this, it will own back the billions of US Government Bonds held by the FED. The US Government will actually PROFIT by buying back the FED! Also, the US government no longer has to pay interests to the FED owners on those bonds.

Prove all of this using specific citations to back up your claims. Allow us to read all of this in actual, legal documentation. If you are unable to prove most of this section, at the very least provide proof of the bolded portion.

The Congress can do what it wants with the Fed.

There is no buy back clause, at any particular price. So law would have to be passed. And congress doesn't pass those on its own. Worse, a $450 million 'buy back clause' would run into all sorts of 5th amendment issues. As it would essentially 'nationalize' enormous quantities of private capital.

Which would be an abysmal precedent. And almost certainly unconstitutional.

So not only is the buy back clause completely imaginary, its just an awful idea.

 

[Skylar]

The FED is audited every year.

The teabagger fed protesters don't understand what an audit is. They think an audit means a record of ever transaction the Fed completes - including the names of the individuals, businesses, and institutions on the other side of the transaction - is posted for their internet consumption.

The Freedom of Information Act requires it.
Since the Fed has influence over the value of the dollar, the American people have a right to know the Trillions going out, especially if it has an adverse effect on the value of our currency.

The Supreme Court justified that they must disclose, and the GAO reported the same via a Supreme Court order.

Actually, their shareholders require it. The fed is reviewed by an independent accounting firm every year. With balance sheets published every quarter. The GAO itself audits the US holdings of the FED every year.

So the FED gets audited twice a year by two completely different entities. One government. One independent. And they post their results online.

 

[percysunshine]

Prove all of this using specific citations to back up your claims. Allow us to read all of this in actual, legal documentation. If you are unable to prove most of this section, at the very least provide proof of the bolded portion.

The Congress can do what it wants with the Fed.

There is no buy back clause, at any particular price. So law would have to be passed. And congress doesn't pass those on its own. Worse, a $450 million 'buy back clause' would run into all sorts of 5th amendment issues. As it would essentially 'nationalize' enormous quantities of private capital.

Which would be an abysmal precedent. And almost certainly unconstitutional.

So not only is the buy back clause completely imaginary, its just an awful idea.

It has been a while since such mundane things as the Constitution or Passed Law were relevant to the Executive branch of government. The Treasury will do what ever they are told to do by their boss..

.

 

[Toddsterpatriot]

Prove all of this using specific citations to back up your claims. Allow us to read all of this in actual, legal documentation. If you are unable to prove most of this section, at the very least provide proof of the bolded portion.

The Congress can do what it wants with the Fed.

There is no buy back clause, at any particular price. So law would have to be passed. And congress doesn't pass those on its own. Worse, a $450 million 'buy back clause' would run into all sorts of 5th amendment issues. As it would essentially 'nationalize' enormous quantities of private capital.

Which would be an abysmal precedent. And almost certainly unconstitutional.

So not only is the buy back clause completely imaginary, its just an awful idea.

There is no buy back clause, at any particular price.

Since the Fed was never sold, how can it be bought back?
I guess the Fed could return the capital to the banks who bought "shares".
About $27 billion.

As it would essentially 'nationalize' enormous quantities of private capital.

What private capital?

 

[Toddsterpatriot]

The teabagger fed protesters don't understand what an audit is. They think an audit means a record of ever transaction the Fed completes - including the names of the individuals, businesses, and institutions on the other side of the transaction - is posted for their internet consumption.

The Freedom of Information Act requires it.
Since the Fed has influence over the value of the dollar, the American people have a right to know the Trillions going out, especially if it has an adverse effect on the value of our currency.

The Supreme Court justified that they must disclose, and the GAO reported the same via a Supreme Court order.

Actually, their shareholders require it. The fed is reviewed by an independent accounting firm every year. With balance sheets published every quarter. The GAO itself audits the US holdings of the FED every year.

So the FED gets audited twice a year by two completely different entities. One government. One independent. And they post their results online.

With balance sheets published every quarter.

They release a new balance sheet weekly.

 

[Toddsterpatriot]

The FED is audited every year.

The teabagger fed protesters don't understand what an audit is. They think an audit means a record of ever transaction the Fed completes - including the names of the individuals, businesses, and institutions on the other side of the transaction - is posted for their internet consumption.

The teabagger fed protesters don't understand what an audit is.

Why don't homosexuals know what an audit is?

 

[percysunshine]

Sorry....I thought this was the Enron thread, and the executives were leasing Nigerian oil barges.

.

 

[Skylar]

The Congress can do what it wants with the Fed.

There is no buy back clause, at any particular price. So law would have to be passed. And congress doesn't pass those on its own. Worse, a $450 million 'buy back clause' would run into all sorts of 5th amendment issues. As it would essentially 'nationalize' enormous quantities of private capital.

Which would be an abysmal precedent. And almost certainly unconstitutional.

So not only is the buy back clause completely imaginary, its just an awful idea.

It has been a while since such mundane things as the Constitution or Passed Law were relevant to the Executive branch of government. The Treasury will do what ever they are told to do by their boss..

.

The Treasury doesn't have the authority to 'buy back' the FED either. That part of the OP is simply imaginary nonsense. There is no such clause in US law.

Congress couldn't do it alone. There is virtually no will in congress to do so. None in the executive. And even less in the judiciary. All of which would have to agree for it to happen.

Its not going to happen.

 

[Skylar]

The Congress can do what it wants with the Fed.

There is no buy back clause, at any particular price. So law would have to be passed. And congress doesn't pass those on its own. Worse, a $450 million 'buy back clause' would run into all sorts of 5th amendment issues. As it would essentially 'nationalize' enormous quantities of private capital.

Which would be an abysmal precedent. And almost certainly unconstitutional.

So not only is the buy back clause completely imaginary, its just an awful idea.

There is no buy back clause, at any particular price.

Since the Fed was never sold, how can it be bought back?
I guess the Fed could return the capital to the banks who bought "shares".
About $27 billion.

As it would essentially 'nationalize' enormous quantities of private capital.

What private capital?

Each of the Federal Reserve Banks are a private corporation. Its holdings are private capital.

 

[percysunshine]

There is no buy back clause, at any particular price. So law would have to be passed. And congress doesn't pass those on its own. Worse, a $450 million 'buy back clause' would run into all sorts of 5th amendment issues. As it would essentially 'nationalize' enormous quantities of private capital.

Which would be an abysmal precedent. And almost certainly unconstitutional.

So not only is the buy back clause completely imaginary, its just an awful idea.

It has been a while since such mundane things as the Constitution or Passed Law were relevant to the Executive branch of government. The Treasury will do what ever they are told to do by their boss..

.

The Treasury doesn't have the authority to 'buy back' the FED either. That part of the OP is simply imaginary nonsense. There is no such clause in US law.

Congress couldn't do it alone. There is virtually no will in congress to do so. None in the executive. And even less in the judiciary. All of which would have to agree for it to happen.

Its not going to happen.

Clauses in US law are not relevant when you have a couple trillion dollars in your checking account and a friendly banker who will cash all your checks.

.

 

[eagle7_31]

The FED is audited every year.

The teabagger fed protesters don't understand what an audit is. They think an audit means a record of ever transaction the Fed completes - including the names of the individuals, businesses, and institutions on the other side of the transaction - is posted for their internet consumption.

Federal Reserve Transparency Act - Wikipedia, the free encyclopedia

you are only partly correct. The fed is audited, but on the inside so to speak. The GAO the auditing arm of Congress has not audited the fed if memory serves.

You can trash Ron Paul all you want be got 319 co-sponsors for his bill, which means a lot of Democrats support it.

 

[Toddsterpatriot]

There is no buy back clause, at any particular price. So law would have to be passed. And congress doesn't pass those on its own. Worse, a $450 million 'buy back clause' would run into all sorts of 5th amendment issues. As it would essentially 'nationalize' enormous quantities of private capital.

Which would be an abysmal precedent. And almost certainly unconstitutional.

So not only is the buy back clause completely imaginary, its just an awful idea.

There is no buy back clause, at any particular price.

Since the Fed was never sold, how can it be bought back?
I guess the Fed could return the capital to the banks who bought "shares".
About $27 billion.

As it would essentially 'nationalize' enormous quantities of private capital.

What private capital?

Each of the Federal Reserve Banks are a private corporation. Its holdings are private capital.

If that were the case, why does the Fed give over 90% of their annual profits to the US Treasury?