Could the fedreal reserve be at fault?

[christ_ambassador]

Since the Federal Reserve runs this country, I now understand that the paper money we have is worthless. Could it be that the federal reserve is at fault for this failed economy? we used to be on a gold standard which protected our currency. shouldn't our government go back to the gold standard and print our own currency?:thinking

any thoughts?

[Old 33]

Even when we were on the gold standard, the Federal Reserve printed the money...

[Issachar]

Only a minute or so here ...... Go to library; hopefully find "Creature from Jekyll Island". It is a well documented expose' of how the federal reserve came to be and what it is about and why we don't have a gold backed currency and much more ....
Issachar

[jds6958]

Since the Federal Reserve runs this country, I now understand that the paper money we have is worthless. Could it be that the federal reserve is at fault for this failed economy? we used to be on a gold standard which protected our currency. shouldn't our government go back to the gold standard and print our own currency?:thinking

any thoughts?

The central banks for the most part, actually run the world. The USD is not worthless, as it can still be used as a median of exchange and is worth more in purchasing power than the ink and paper that is used to create it. However, it has the capacity of becoming worthless. The government, U.S. citizens, and Federal Researve share the responsibility of our current economic condition. However, the CB's have had the most influance and the powers behind the CB's don't see this a problem, just an opporunity. I believe we will be going back to a gold standard, however, the only way that it could be implemented is on a global scale. Some currencies backed by real money and some currencies still functioning as fiat would be an impossible mess. The government should print our currency, that would be constitutional.

[jds6958]

Even when we were on the gold standard, the Federal Reserve printed the money...

True, but the Federal Reserve is a private entity outsourced by the government to print money. This is not exactly constitutional. Also, during the gold standard, the Fed could only circulate as much USDs as it could back by cash, unless it altered the USD price of gold.

[jds6958]

1. There isn't enough gold in the world to make every currency gold backed.

How much gold do you need? I am not sure I understand the statement. You could make any dollar denomination worth a certain amount of gold. Whether that be 1% of a gram or 100 troy oz.

2. Gold isn't the only thing of value is there anything else you could back your currency with?

It is the easiest and has 5,000 years of proven history behind it. Things such as property, sea shells, huge stones, and other items have all failed throughout history and also risk instability.

3. Wealth is not printed paper bills. Things and assests that don't quickly lose their value are wealth.

exactly

4. For as long as every one trusts in the fiat currency a dollar is something of value with which we may buy and sell. Which is why we use it.

We use it because of ease of manipulation and the hidden tax of inflation. People only trust it because they do not understand and because there is know real alternative or competing currency to the USD.

5. Since we are already in this fiat currency and everyone else is in one trying to change that overnight could cause problems with trading with other countries, maybe. So the qustion to ask now is what if we changed to a value back currency, what things would happen.

It would mandate that we pay off the national debt in something of real value like gold. We do not have enough gold to pay off our national debt. We are better of trying to pay off our national debt and personal debt with devalued dollars and then subscribe to a asset backed system to bring back stability.

6. Is the Fed to blame? They are a partner in this matter but they are not the only party to blame. The Fed is messing with the interest rate and pushing inflation harder by printing too much money while the interest in keeping the USD is going down with some countries. The Fed needs to reinforce the value of the USD and if that means taking a recession now then so be it.

Other CBs are also debasing their currencies. It will be a race for the bottom bringing forth a global distrust in fiat currency and government.

7. It will be better to take a significant recession now and correct things like the interest rates and money supply gradually. The other option is to continue print too much money and go into larger inflation rates to inflate out the debt but reduce the value of the USD and make it look like we are not doing a recession (when we are.). This is a sweeping the dust under the rug solution that will result in a bad ending.

They are both bad situations imho. There are so many excesses in the system right now that it would be painful either way. However, if we did just go in to a recession with out Fed intervention, their would be a systematic global financial breakdown do to a collpase of overleverage financial entities. Money would cease to flow. The alternative is to inject money into the derivatives hole and keep money flowing at the expense of global purchasing power, offering us a rather recoverable platform to start fresh.

8. You (USA) are in a real recession right now (it started in nov 2007.) the govern't and the fed and everyone else is lying to you about that and they won't admit that it is a recession. If the fed continues to jack up the inflation rate by printing too much money to mask the recession problem it will make a much bigger problem in the long run.

If real inflation is factored in to adjust the GDP, then we have been in a real recession since 1999/2000. The symptoms have been few till now because no one really realized it, therefore no one reacted. Now that it is a concern, people and employers are reacting, fueling more symptoms, and so on and so on until all excesses are purged and stability is reached.

[RobertB]

Only a minute or so here ...... Go to library; hopefully find "Creature from Jekyll Island". It is a well documented expose' of how the federal reserve came to be and what it is about and why we don't have a gold backed currency and much more ....
Issachar
Excellent suggestion.

[MajinFro]

I can't find the article but I recently read one regarding the misreprensentation of gold as the be all in financial situations. The article claimed things weren't much better on the Gold Standard and bottom line is that even if our goverment had all the known gold in the world, it would only be something like a 45 foot block and worth a trillion dollars.

[jds6958]

Uh that's about 3 trillion and a doubles Tennis size court 45 feet high. So really there isn't enough gold to make all currency backed by gold 100%.
And the artical is here:
http://www.raptureready.com/featured/hahn/h4.html

Not at gold's current prices...hmmm...

[Issachar]

Going back to a gold standard is not a viable option outside of their first being a nearly complete crash of the economy. I doubt it even being viable then. It's no secret that I am a staunch believer that the world is headed into a New World Order / One World Government. I happen to believe that a very major part of that happening is the economy. What we are seeing today MUST be due to stupidity on the part of the world bankers or MUST be a plan of sorts. Imho, the world bankers, while being worldly and not having wisdom, are NOT stupid.

The construct of the current world's economy, from mortgage lending to gross levels of hedge funds and everything in between, has been carefully crafted for quite some time. Again, imho, the world bankers (as opposed to the local banker on Main St.) are not concerned for their livelyhood in an economic downturn. I believe that all they are trying to do is control the downturn, not stop it. Through a complicated process, downturns, especially the current one, is nothing more in the end than a transfer of wealth from the populations of the world into the hands of a few who see themselves as "the enlightened ones" that believe "they know what is good for all." Right.

Only our Lord knows exactly how all this will be played out and in what time frame.

Just a note that is pretty much a moot point now: There were definitely economic problems under the gold standard. Going back to the gold standard is not a means of preventing economic turmoil. Rather, it limits the scope of the turmoil. The more debt that exists prior to a downturn, the harder the downturn and the more tumultuous. Without a gold standard (fiat), debt increases at high rates; national, state, corporate, personal ... So the advantage of being on a gold standard, while not eliminating problems, is that it limits the debt levels severely; hence, limiting the scope of turmoil in downturns.
How fast, back and forth, can you swing a bowling ball? Take any heavy object into your hands and try pushing it out and back as fast as you can. Now try it with just a piece of paper in your hand. With the latter, you can go much, much faster with much, much less effort. When the economy is based on a gold standard, gold being very dense, very heavy, a central bank cannot swing money supplies around very easily and the amount they can, takes a lot of effort. However, when the economy is based on nothing but federal reserve notes; paper, whooohoooo ... they can yank the economy any which way very fast.

Issachar