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Termyn8or -> RE: Federal Reserve Board Abolition Act (10/17/2008 7:47:17 AM)
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It may seem strange, but it would not be the sky falling. First of all there is a fallback, for congress to take on it's Constitutional duty to issue the money.
Granted, it is a tricky situation to have, but it could be a good thing in the long run. Of course all the options would have to be considered carefully before even thinking about abolishing the fed.
Basically printing money would then be under the jurisdiction of congress. If they were to authorize printing more, the inflation caused thereby would be reflected immediately in inflation rates, rather than having the dollar's "value" propped up by foreign debt.
Credit would be tight, and permanently so, therefore prices would drop. This effect might offset some of the inflation caused when they decide to release more currency into circulation.
But remember one thing, even now that the effect is clouded by debt, add up all the dollars in existence and altogether they represent a certain amount of wealth, and printing more does not increase that wealth. Printing without borrowing would make that effect more noticable.
Interesting to note, if most people knew the ramifications of abolishing the fed they would be against it. What everybody wants is an endless supply of low interest money to spend on junk. The people living beyond their means would suffer sooner.
There would be a drastic change in the patterns of investing, it would be harder to make money with money. The system would be forced to shift back to production. That could take some time. It could happen, because there are at least a million millionaires in this country, and most of them are small businessmen. They would have an incentive to get together and meld their resources into creating larger, more productive facilities.
So far so good.
The problem is that in that type of times, while fortunes will be made, some are going to lose the shirt off their back.
I read that proposal quite some time ago, and IIRC there was not alot in it about just how the transition is to be made. It was too late anyway. The fact is if we were to have abolished the fed about ten years ago, we would just about be *catching our breath. In the current climate given this "crisis" they created to rape the People even more, *the air is quite rarified (*metaphorically).
Yup, years ago we could've taken a hit like that and bounced back and been stronger for it, but now it's too late. Too many people are already losing their assets, and no matter what the long term benefits this plan would have, it is just not a good time. It's like kicking someone when they're down.
So it's a typical human situation, lack of foresight has caused our eventual financial collapse. You notice I said caused. It is coming, the bailout means nothing.
I got a friend to whom I absolutley refuse to lend any money. I don't care what the reason. Would you like to know why ? Because he is the type who would call and say he needs to borrow a hundred TODAY because rent is due. Well you stupid shit, my phone worked yesterday ! Geez. Can't think five minutes into the future. We remain friends, and I don't even plead poverty I just told him one day "Not one penny is ever again going from my hand to your's". He's a good guy you can trust with your life, just not a dollar. And in this case he's not really untrustworthy, just totally in the dark when it comes to finances. He needs to be one of those guys who just signs their paycheck over to his olady and says like give him a hundred to get through the week. Realize though, that a smart olady will make sure to keep an extra fifty around for when he runs out of money before payday. Then GASP ! he might have to use the bank card. If that happens you know the withdrawal will never get written in the ledger.
That is so very close to the way I think of the government when it comes to money it is scary. Almost exactly the same. The major difference is that my friend has some talents and redeeming qualities, so far I have yet to see that in the government.
Like Obama said, no matter who you vote for "To fix the medical (not quite verbatim) first you have to fix Washington". In other words, taking the power of the fed and handing it carte blanche to congress does not sit well with me. This is due to their proven track record of greed and corruption. I know it's bad now, but don't ever think it can't get worse.
T
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