Here's a post I saw on Yahoo! Answers the other day
I haven't considered it yet, but what does happen next? This post jumps out:
"If Ron Paul holds the view that abolishing a central bank is a good idea, then he is even more naive than I gave him credit for. Money has the property of collecting where there is other money. Taken to its conclusion, that process naturally results in a dominant bank, in fact, a central bank. Now, you have a choice: either you can just let it happen and let the free market let all that power rest in one spot as poor dumb Ron would have us do, or you can have some modicum of control over the central bank by having its executives subject to confirmation by the political establishment. Either way, you WILL have a central bank, in the end. That can be a particularly poignant decision when national policy has to override economics, as we did in the run-up to WWII, when our oil embargo on Japan came into conflict with debt collection from the huge amounts of loans out to Germany during the interwar years. You should also note that the fiat system works, unlike the commodity backed system, which led to numerous wars when the underlying commodity, usually gold, but also spices, or other things in other parts of the world, was less abundant than needed to support growing and changing economies during both the Renaissance and the Industrial Revolution."
The guy misses the mark at most points, granted, but I do see the point that there will probably a bank that does the most business and consequently owns a lot of money. Is this how it will work out? Will this ultimately impede economic growth? Will this harm the consumer? What happens after the Federal Reserve is abolished?
If I had a cake and ate it, it can be concluded that I do not have it anymore. HHH
Rothbard writes about a "central bank" that the market produces in his History of Money and Banking.
The kid is partially right, but wrong on all of his implications. It was called the Suffolk Bank. And it was simply a centralized check clearing house. it didn't have the ability to expand credit.
Tell that kid that the fed creates money and that money doesn't hold attractive properties to other money. He sounds like a complete ignoramous.
"Money is gravitational" hahahahahah
He's also right when he says gold led to wars, but fiat has led to world governemnt. I'd rather have war. and the "fiat system" is an experiment in world history. NEVER has the whole worlds credit system been dependent on afiat money. In fact, most attmepts at paper money throughout history have only lasted around one decade. We have four decades of it today.
Eating Propaganda
What do you mean i don't care how your day was?!
While I do plan on reading Rothbard in the near future, would you please explain what would happen?
The guy misses the mark at most points, granted, but I do see the point that there will probably a bank that does the most business and consequently owns a lot of money. Is this how it will work out?
There are two answers to this.
First, there is no theoretical or historical reason to believe this is the case. The idea that money is gravitational, as Jacob well put it, is laughable. Money is a medium of exchange. In an honest property economy, the amount of money held by an individual roughly correlates to the real wealth of the individual. There is no reason why banks should be especially profitable businesses, even though they handle a lot of cash. Western Union and Brinks Security also handle a lot of cash but nobody thinks that there will, of necessity, be a "central money transmitter" or a "central money transporter". All the money held by banks is not their own, so the perception that banks are "rich" because they secure a lot of money is, on its face, childish.
Second, from the point of view of property rights, the "distribution of wealth" is a non-issue. Even if there were a single water source on the planet, owned by a single wealthy family, the theory of property rights would still hold. The wealthy owners of the water source would still need people to do things on their behalf (for example, build a luxury car) that they could not do or would not be willing to do on their own. Hence, their wealth would naturally "spread" so long as property rights (self-ownership, homesteading, voluntary exchange) were enforced and respected. If governments are any guide, however, we could expect that such an enormously wealthy family would do everything in its power to undermine property rights. This should give us a hint as to the attitude we should take regarding government propaganda and programs that weaken private property rights.
Will this ultimately impede economic growth? Will this harm the consumer? What happens after the Federal Reserve is abolished?
Actually, astute readers will know that Ron Paul has said that we do not need to explicitly abolish the Federal Reserve (I don't have the quote on hand but he's said this). Rather, all we need is to open up the market in currency issue and the Federal Reserve will die naturally because it will be unable to compete in the free market. Who knows what will happen and it doesn't really matter so long as property rights and free exchange are respected and enforced in the market of currency issue.
Clayton -
people are scared of the "free market" cause they think that the bankers will take it all over and that their only defense is the government.
It's amazing how successful propaganda can be in turning things around exactly backward. The bankers have already taken over the entire economy... with the aid and support of the government.