Jason's or the LP's stance on money creation

[Swammerdami]

I'm delighted to learn that Jason will soon tell us how money creation works in his vision.

The way message-boards work is I ask YOU for YOUR opinions on minor(?) topics like "abolishing the Fed" and MONEY creation. If YOU can only respond with a copy-paste from Saint Gary's teachings, that's fine....

And I said "start a thread on the topic" because this topic has nothing to do with McCarthy opening impeachment inquiries. One more time and I'm alerting the mods.

Over to you, Jason.

 

[Swammerdami]

The opening post might not be the best OP to introduce the topic of LP's stance on money creation or even definition. But Jason did repeatedly insist that I should be the one to start the thread ... a thread on a topic of which I am ignorant. I do think those calling for the elimination of the Federal Reserve System should reveal the alternative they envision.

Jason, when you've composed your OP the Mods can make it into the thead's first post.

 

[Swammerdami]

Meanwhile, YOU asked ME, TWICE to start a thread discussing the LP's alternative to the Federal Reserve System as the mechanism to define and influence U.S. money. I have started that thread, per YOUR request. But we have yet to hear from you in that thread!

Bully for you. I'll have to look for it so that we can discuss the entire philosophy and history of money and banking.

That's good to hear. Even a few cogent paragraphs would be well-received. I think we could all use a brief tutorial, so Thank You.

 

[Cheerful Charlie]

From the official federal reserve website.
The Federal Reserve System is the central bank of the United States. Founded by an act of Congress in 1913, the Federal Reserve’s primary purpose was to enhance the stability of the American banking system.

Federal Reserve History

Explore the Federal Reserve's history

www.federalreservehistory.org

 

[ZiprHead]

Jason, when you've composed your OP the Mods can make it into the thead's first post.

No, we can't.

 

[Loren Pechtel]

Jason, when you've composed your OP the Mods can make it into the thead's first post.

No--it could be split into a new thread where it would be the first post but posts within a thread are chronological, we can't change that.

 

[Swammerdami]

@Jason Harvestdancer -- so it sounds like the best thing is for you to start your own thread. Call it "Money Creation à la LP" or whatever.

 

[RVonse]

The opening post might not be the best OP to introduce the topic of LP's stance on money creation or even definition. But Jason did repeatedly insist that I should be the one to start the thread ... a thread on a topic of which I am ignorant. I do think those calling for the elimination of the Federal Reserve System should reveal the alternative they envision.

I have no idea what Jason's opinion is. But I do know what my own opinion is of the fed and it is very low. So maybe I should offer up my opinon to your question while waiting from a response from Jason.

The US does not need a fed and never needed a fed, because the country did just fine before Woodrow Wilson. The fed is a private club responsible for our economy and you ain't in it. The fed is by far the most undemocratic institution the US has.

At the very minimum if you insist we should have a fed, we should at least attempt to make this institution more accountable and democratic to the public. For example, if someone like Ron Paul wants a fed audit he should get a fed audit if the fed has nothing to hide. Also the fed should not just be judged on inflation but on wealth disparity statistics as well. Because almost all of their efforts have directly or indirected resulted in the poor becoming poorer and the already rich becoming richer.

There should be no revolving doors between the fed chairman and the banks. And the picking of the fed chairman needs to be more carefully and democratically picked. The fed chairman should be accountable like any other employee or government servant and fired and replaced if he (she) does a bad job.

 

[laughing dog]

The opening post might not be the best OP to introduce the topic of LP's stance on money creation or even definition. But Jason did repeatedly insist that I should be the one to start the thread ... a thread on a topic of which I am ignorant. I do think those calling for the elimination of the Federal Reserve System should reveal the alternative they envision.

I have no idea what Jason's opinion is. But I do know what my own opinion is of the fed and it is very low. So maybe I should offer up my opinon to your question while waiting from a response from Jason.

The US does not need a fed and never needed a fed, because the country did just fine before Woodrow Wilson.

You need to define what you mean by "did fine". There were plenty of banking panics before Woodrow Wilson and recessions.

The fed is a private club responsible for our economy and you ain't in it. The fed is by far the most undemocratic institution the US has.

The Fed is a quasi-public institution. Congress can alter it any time Congress wishes to do so.

At the very minimum if you insist we should have a fed, we should at least attempt to make this institution more accountable and democratic to the public. For example, if someone like Ron Paul wants a fed audit he should get a fed audit if the fed has nothing to hide. Also the fed should not just be judged on inflation but on wealth disparity statistics as well. Because almost all of their efforts have directly or indirected resulted in the poor becoming poorer and the already rich becoming richer.

The Federal Reserve is audited annually, so what are you talking about?

There should be no revolving doors between the fed chairman and the banks. And the picking of the fed chairman needs to be more carefully and democratically picked. The fed chairman should be accountable like any other employee or government servant and fired and replaced if he (she) does a bad job.

What revolving door between the Fed chair and banks are you talking about? If my memory serves correctly, not one chair in the past 50 years has moved from the Fed chair into a bank.

 

[Elixir]

The US does not need a fed and never needed a fed, because the country did just fine before Woodrow Wilson.

For the 27 years between the War of Northern Aggression and Wilson’s time in office?
If Trump wins, whoever follows him will probably be looked back upon fondly too.

 

[Swammerdami]

I'm glad to see this thread has come to life.

I will prepare some "objective" posts for a thread titled History of money, 20th century and earlier and will start that thread in a day or two. Many ideas for 21st-century money are novel compared with the long history of money. I think a clear understanding of the History of Money (and how it has worked in spite of itself!) may be helpful for this discussion.

 

[Elixir]

I do think those calling for the elimination of the Federal Reserve System should reveal the alternative they envision.

I suspect that the Fed would have been like a bicycle for a fish, when the gold standard was in effect (which included the time between the Civil War and Wilson's time. It was taken down during his second term). But trying to eliminate fiat money at this point would be a real nightmare.

 

[Cheerful Charlie]

Panics in pre-Fed America in the late 1800's. Why the Federal banking
system was created in 1913.

.....
At the time, like today, New York City was the center of the financial system. Between 1863 and 1913, eight banking panics occurred in the money center of Manhattan. The panics in 1884, 1890, 1899, 1901, and 1908 were confined to New York and nearby cities and states. The panics in 1873, 1893, and 1907 spread throughout the nation. Regional panics also struck the midwestern states of Illinois, Minnesota, and Wisconsin in 1896; the mid-Atlantic states of Pennsylvania and Maryland in 1903; and Chicago in 1905.
.....

Banking Panics of the Gilded Age

Explore the Federal Reserve's history

www.federalreservehistory.org

 

[Jimmy Higgins]

The opening post might not be the best OP to introduce the topic of LP's stance on money creation or even definition. But Jason did repeatedly insist that I should be the one to start the thread ... a thread on a topic of which I am ignorant. I do think those calling for the elimination of the Federal Reserve System should reveal the alternative they envision.

I have no idea what Jason's opinion is. But I do know what my own opinion is of the fed and it is very low. So maybe I should offer up my opinon to your question while waiting from a response from Jason.

The US does not need a fed and never needed a fed, because the country did just fine before Woodrow Wilson. The fed is a private club responsible for our economy and you ain't in it. The fed is by far the most undemocratic institution the US has.

At the very minimum if you insist we should have a fed, we should at least attempt to make this institution more accountable and democratic to the public. For example, if someone like Ron Paul wants a fed audit he should get a fed audit if the fed has nothing to hide. Also the fed should not just be judged on inflation but on wealth disparity statistics as well. Because almost all of their efforts have directly or indirected resulted in the poor becoming poorer and the already rich becoming richer.

There should be no revolving doors between the fed chairman and the banks. And the picking of the fed chairman needs to be more carefully and democratically picked. The fed chairman should be accountable like any other employee or government servant and fired and replaced if he (she) does a bad job.

You could have simply said, "I don't know anything about American economic history between 1790 and 1920" and saved yourself some time.

 

[Loren Pechtel]

The opening post might not be the best OP to introduce the topic of LP's stance on money creation or even definition. But Jason did repeatedly insist that I should be the one to start the thread ... a thread on a topic of which I am ignorant. I do think those calling for the elimination of the Federal Reserve System should reveal the alternative they envision.

I have no idea what Jason's opinion is. But I do know what my own opinion is of the fed and it is very low. So maybe I should offer up my opinon to your question while waiting from a response from Jason.

The US does not need a fed and never needed a fed, because the country did just fine before Woodrow Wilson. The fed is a private club responsible for our economy and you ain't in it. The fed is by far the most undemocratic institution the US has.

The inflation rate would like to have a word with you.

Specifically, the far greater variability in the era before the Fed.

At the very minimum if you insist we should have a fed, we should at least attempt to make this institution more accountable and democratic to the public. For example, if someone like Ron Paul wants a fed audit he should get a fed audit if the fed has nothing to hide. Also the fed should not just be judged on inflation but on wealth disparity statistics as well. Because almost all of their efforts have directly or indirected resulted in the poor becoming poorer and the already rich becoming richer.

The Fed has no role in wealth disparity.

And what did he want audited? Sounded more like noise than anything else.

There should be no revolving doors between the fed chairman and the banks. And the picking of the fed chairman needs to be more carefully and democratically picked. The fed chairman should be accountable like any other employee or government servant and fired and replaced if he (she) does a bad job.

The Fed is specifically isolated to avoid this--because the greater threat is the Fed being made to respond to political pressure. Politicians would always like to have low interest rates during election season, the inflation would hit after the election.

 

[RVonse]

Panics in pre-Fed America in the late 1800's. Why the Federal banking
system was created in 1913.

.....
At the time, like today, New York City was the center of the financial system. Between 1863 and 1913, eight banking panics occurred in the money center of Manhattan. The panics in 1884, 1890, 1899, 1901, and 1908 were confined to New York and nearby cities and states. The panics in 1873, 1893, and 1907 spread throughout the nation. Regional panics also struck the midwestern states of Illinois, Minnesota, and Wisconsin in 1896; the mid-Atlantic states of Pennsylvania and Maryland in 1903; and Chicago in 1905.
.....

Banking Panics of the Gilded Age

Explore the Federal Reserve's history

www.federalreservehistory.org

I'm not saying bank panics were good. But the panics were still better than the wealth disparity problem we see today. Wealth disparity is a HUGE issue approaching disparity we saw during the late 20's. Such wealth disparity represents a serious societal problem fully capable of bringing down our country into civil war.

Furthermore, during all those panics the US was doing very well. The US was the most robust economy of the world from the late 1890's until 2005 or so.

 

[RVonse]

The Fed has no role in wealth disparity.

My point is that they should. Their low interest and fiat money printing causes the rich to see immediate investment gains while the middle class pays more in inflation. It is an unfair and untenable position for society at large.

 

[Jimmy Higgins]

Panics in pre-Fed America in the late 1800's. Why the Federal banking
system was created in 1913.

.....
At the time, like today, New York City was the center of the financial system. Between 1863 and 1913, eight banking panics occurred in the money center of Manhattan. The panics in 1884, 1890, 1899, 1901, and 1908 were confined to New York and nearby cities and states. The panics in 1873, 1893, and 1907 spread throughout the nation. Regional panics also struck the midwestern states of Illinois, Minnesota, and Wisconsin in 1896; the mid-Atlantic states of Pennsylvania and Maryland in 1903; and Chicago in 1905.
.....

Banking Panics of the Gilded Age

Explore the Federal Reserve's history

www.federalreservehistory.org

I'm not saying bank panics were good.

I believe the words you said was that "the country did just fine" prior to Wilson. You didn't say the economy was susceptible to runs on gold and bank panics.

But the panics were still better than the wealth disparity problem we see today.

JFCoaS! Wealth disparity and the late 19th century? Are you kidding me?! Musk is worth a small fraction of what Carnegie was worth.

Wealth disparity is a HUGE issue approaching disparity we saw during the late 20's. Such wealth disparity represents a serious societal problem fully capable of bringing down our country into civil war.

The alt-right wants to fight a war over CRT, LGBT, and pizzeria basements. Not because their parents are scraping by on Social Security.

Furthermore, during all those panics the US was doing very well.

Especially during the depressions in the 1820s, 1850s, 1870s, 1890s.

 

[RVonse]

What revolving door between the Fed chair and banks are you talking about? If my memory serves correctly, not one chair in the past 50 years has moved from the Fed chair into a bank.

The Federal Reserve's Too Cozy Relations With Banks

Working at the Fed shouldn't be an audition for a Wall Street job. Waiting periods and other reforms are needed.

www.hoover.org

From 1984 to 1990, Powell worked at Dillon, Read & Co., an investment bank, where he concentrated on financing, merchant banking, and mergers and acquisitions, rising to the position of vice president.

You won't ever find a fed chairman who was some kind of economics professor. They are all recruited from banking positions.

 

[Jimmy Higgins]

The Fed has no role in wealth disparity.

My point is that they should. Their low interest and fiat money printing causes the rich to see immediate investment gains while the middle class pays more in inflation. It is an unfair and untenable position for society at large.

Technically inflation makes debt cheaper for all parties. Sure, prices rise, but my Mortgage didn't increase during the post-pandemic inflation.