By using this site, you agree to our Privacy Policy and our Terms of Use. Close
Kasz216 on 06 January 2014
Edit Thread
sc94597 said:
Kasz216 said:
sc94597 sai


Short answer?   Because govornments are notoriously untrustworthy.  The US Government is near the top of that for the OCED.

You'd never get a situation that goes on more then 10 years before Congress fucked it up.

 

The Feeral reserve exists, to avoid populist pandering that would only destroy the economy, advocated by polticians who can't even balance a checkbook let alone understand how the economy works.

 

So you believe it's more of a practical issue of the existence of government being in conflict with the existance of a free-market fiscal system, inherently, and that is why we can't have competing currencies? I can agree with that, albeit I still think that if the opportunity arises in which it is possible to have a free-market in currencies, that it shouldn't be ignored. With the proper education on economics the government can stay out of the way.  

Can you elaborate on the bolded? Do you mean it was a form of compromise between those who wanted to maintain decentralization (why we have regional Federal Reserve banks) and total centralization (the populists you refer to wanting this.) If that is the case, I don't disagree with that assessment, but nevertheless feel that compromising isn't always the way to go, and the damage done to the economic landscape by the federal reserve should be mitigated further, especially in a time when socialism and marxism are much less popular than they were in the Progressive Era. 



Well first I question how a free market fiscal system can work.  It's too random, even when tied to things like Gold, because even gold is being mined every year.

The Bretton Wood's system was argueablly the most successful, but that basically relied on having one huge nation (The USA) able to basically dictate all the economic stuff going on, and being willing to take loses of money to have that control as other nations would buy low and sell high.

Were there a unproduceable, indestructable asset.  That'd be another thing.

 

 

As for the bolded.   Less compromise.... more a populace or government bleeding the country dry.

The most important function the Fed does is that they hold on to a portion of the money in the world... and lend that to banks quickly, because otherwise it's too complicated for banks to lend to each other in a timely manner.

Fed actually makes the government a lot of money that way.

 

Now countires that don't have a big wall between government and their central banks?     First time they hit hard times or want to win oer voteres?

They basically cash out some of their investments to buy a new swimming pool.

Then you eventually don't have enough actual hard assets to keep your banking system run smoothly.   You get all kinds of hiccups, and could basically face widescale bank failure that effects things way more then the financial crisis ever threatened.

 

You end up with a country like Venezuela that steals money from it's central banks to buy votes.