Perhaps it has something to do with it being a legal monopoly and the fact that it is controlled by government, in the end.
If the Fed were completely privatized, as in no mandated monopoly (the true definition of 'monopoly'), then I would be fine with it because we could choose not to do buisiness with it.
The whole point of the federal reserve is to deal with federally mandated currency. If it were privatized, and we could choose not to do business, then it would just be a reserve bank, which many libertarians are perfectly comfortable with. The "banks" in a lot of libertarian and Austrian theory are often endowed with the ability to print and regulate their own money supply (though they're typically not allowed to commit fraud in the form of unbacked notes, they would probably be allowed to do this if they never promised to back them in the first place; it's unclear whether people would want to give their money to such an institution...). So in that sense, libertarians are in favor of "privatizing" the functions of the federal reserve. Privatizing the reserve itself would be sort of odd, though.
Even if the Fed were a privatized monopoly, it would still be better for us than the current situation, as the Fed would then be inclined to stop inflating to protect the value of the dollar instead of providing emergency rate cuts that ruin the currency because the government fears the stock market.
The fallacies of intellectual communism, a compilation - On the nature of power
ViennaSausage: Libertarians/Austrians posit that almost everything (depending on your camp of libertarianism) should be privatized. Then why are they against the private Federal Reserve? Perhaps because it quasi-private-public? Because it is a government mandated monopoly on money and interest rates? True libertarians oppose any and all institutions that are coercive. The Fed certainly is a coercive institution. "If we look at the black record of mass murder, exploitation, and tyranny levied on society by governments over the ages, we need not be loath to abandon the Leviathan State and ... try freedom." --Murray Rothbard byreasonandreality.blogspot.com | Post Points: 20
True libertarians oppose any and all institutions that are coercive. The Fed certainly is a coercive institution.
Hard_Money:True libertarians oppose any and all institutions that are coercive. The Fed certainly is a coercive institution.
Perfectly stated.
ViennaSausage:Libertarians/Austrians posit that almost everything (depending on your camp of libertarianism) should be privatized. Then why are they against the private Federal Reserve? Perhaps because it quasi-private-public? Because it is a government mandated monopoly on money and interest rates?
Or maybe because it has to do with the fact that an independent government agency is still a part of the government... SHOCK!
That Russo movie really sucked, btw.
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One principle even with a private concern that it must operate on is to conduct itself in no way by the use of fraud. That said, the Federal Reserve and it's banking underlings operate using the process known as Fractional Reserve Banking which as I see it would meet the definition of a fraud. I also agree with the earlier comments of the forced monopolistic system we must all operate under. Try taking like minded souls together and forming some type of alternative economy or barter exchange and watch the Hounds of Perdition come down upon you for daring to operate outside their system.
Free markets is all about open competition and the best coming to the top whereas we have no such thing with the Privately owned/Publically regulated Federal Reserve. Good question however.
My issue with the Fed comes, not from its relationship with the government, but the massive amount of fraud that comes along with it. The Fed is allowed to inflate our money supply, destroying its value. It then turns around and allows member banks to do the same thing! We are forced to use a currency which has no backing and which can be inflated or deflated at the whim of the globalist bankers.
I don't have a problem with a "reserve" bank. My problem stems from their issuance of unbacked currency. If the Fed were allowed to operate under the condition that each note printed was backed by an equal amount of silver and it could not print more notes than it had silver in reserve that would be fine. Nor could it loan more than it had in reserve (a condition that must apply to all banks) that would be fine as well. I'd much rather see the Fed go away and people allowed to use silver and gold again as currency.
"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds. " -- Samuel Adams.
kingmonkey:My issue with the Fed comes, not from its relationship with the government, but the massive amount of fraud that comes along with it. The Fed is allowed to inflate our money supply, destroying its value. It then turns around and allows member banks to do the same thing! We are forced to use a currency which has no backing and which can be inflated or deflated at the whim of the globalist bankers.I don't have a problem with a "reserve" bank. My problem stems from their issuance of unbacked currency. If the Fed were allowed to operate under the condition that each note printed was backed by an equal amount of silver and it could not print more notes than it had silver in reserve that would be fine. Nor could it loan more than it had in reserve (a condition that must apply to all banks) that would be fine as well. I'd much rather see the Fed go away and people allowed to use silver and gold again as currency.
The state is needed to force people to use the currency it issues. If the state did not protect its monopoly competitive pressures would drive it out of existence.
To borrow from an example used by someone else, who would accept a bill that said '10 Rothbards' on it? A few of us would for novelty's sake, but not much beyond that. No one is forcing anyone to use Rothbard notes as currency.
Bottom line.... The Federal Reserve is an institution that violates the Natural Law.
JohnDelano:The state is needed to force people to use the currency it issues. If the state did not protect its monopoly competitive pressures would drive it out of existence. To borrow from an example used by someone else, who would accept a bill that said '10 Rothbards' on it? A few of us would for novelty's sake, but not much beyond that. No one is forcing anyone to use Rothbard notes as currency.
There is also taxation. How would the state tax unless there was some basis of legal currency? I can't pay the tax in Rothbards, or in chickens, or pounds of iron.
My preferred answer to that is to abolish taxation, since coercion is a lousy form of personal interaction anyway.
JohnDelano:To borrow from an example used by someone else, who would accept a bill that said '10 Rothbards' on it? A few of us would for novelty's sake, but not much beyond that. No one is forcing anyone to use Rothbard notes as currency.
I wouldn't accept a "Ten Rothbard" note unless it was given to me as a joke. I might as well accept a Hell Bank Note that's allegedly worth ten thousand dollars. However, if somebody handed me a note issued by the Rothbard Bank of New York City that I could redeem for 10 ounces of gold or its equivalent in the fiat currency of my choice, I'd accept it if I knew that the Rothbard Bank had a good reputation.