Any ideas as to what would/should happen to the gold held by the FRB if the Fed was ever abolished?
Say we went back to a gold backed currency.
I have read arguments using this as a reason why we shouldn't go back to a gold standard. Not sure why though.
Cluesaw: Any ideas as to what would/should happen to the gold held by the FRB if the Fed was ever abolished? Say we went back to a gold backed currency. I have read arguments using this as a reason why we shouldn't go back to a gold standard. Not sure why though.
This is purely a hypothetical, since the government would never voluntarily disband their printing press.
But IF it happened.
The dissolving FED and/or government would have to redeem each and every one of those outstanding Federal Reserve Notes. They would do so with all that gold. The question is, what price would the FED set as par for redeeming each note. I can assure you that it is the holder of the FRNs and not the government that will get screwed in that transaction.
Sell it.
It would become convertible for Federal Reserve Notes, ending the expropriation of the holders of these notes.
The fallacies of intellectual communism, a compilation - On the nature of power
scineram: Sell it.
For whose profit?
caravelle: i believe this post was referring to the end of the federal reserve so there wouldnt be federal reserve notes.
i believe this post was referring to the end of the federal reserve so there wouldnt be federal reserve notes.
The dollars are still and would still be physically in existence. The proposal is that people would be able to turn in their existing dollars for tiny amounts of Gold (that's all it would amount to given the expansive money supply) which would then be circulated and eventually deposited in exchange for REAL money notes on the market.
The owners obviously.
scineram: The owners obviously.
Meaning the FRB governors, or the holders of U.S. Dollars?
If I knew that the US government would obey my every command, I’d just have them abolish legal tender laws and then privatize (really, not formally) the Fed. Its gold would of course go to the purchaser. This is not only a good idea, but indeed the only way possible to escape form inflation. Redeeming dollars for gold, ala Mises/Rothbard, as I’ve argued elsewhere, runs counter to the Money Value Theorem, and would never work.
caravelle: has inflation occurred without a central bank??
has inflation occurred without a central bank??
well, you might find this interesting.