I think two simple things would lead to ending the Fed, both of which Ron Paul has on his agenda already.
The first is auditing the Fed. I do think that a serious audit would have built up such anger in the country it would have snowballed all the way to abolishment. I think that was Ron Paul's calculation all the way. Too bad we were sold out by some wuss Senator.
Competing currency. I've heard Ron Paul mention this already. I think it would be enough to destroy the dollar and end up killing the Fed in the process. Would kill for a gold backed currency or commody money, but not holding my breath just yet. Just repealing the legal tender law kills the Fed, imo.
The impending currency crash sometime in the next few years. No way does the Fed survive that, imo. And I think we get a gold commodity money or real gold backed currency. I don't see the people putting up with anything less after they see their fiat dollar pancake. I know I won't.
The Federal Reserve Act of December 23rd, 1913 is unconstitutional on it’s face and was only passed with 3 Congressmen present out of the entire House and Senate members who had gone to travel home across the nation for holidays! Further read “The Money Trust” by Senator Charles A. Lindberg Sr of New Jersey who came back in January 1914 to “discover” such a trecherous Act had passed illegally!
Ask the Federal Reserve to tell us what they were created for, and whether or not they're meeting the goals put forth with its inception.
Chloe, we've had currency crisis in our history, and they follow a typical pattern. First you have a gold backed currency, one that can be exchanged at any bank for full value in gold. Then the pyramiding of dollars begins (Fractional Reserve Banking) and, eventually, people notice the rise in prices and don't trust their money and start exchanging it back for their gold, but the bank cannot do this since it doesn't have the gold in reserve, so it stops allowing redemption of specie (usually the government is in cohoots). This causes even more problems and inflation sky-rockets and the currency does a nose-dive in value. At this point, a new currency has to be re-introduced because nobody wants the old one and, of course, it is backed by gold (or silver) and fully redeamable on demand.
The reason I say this will happen is because that's the pattern. I think commodity money because I think this currency crash will be so catastrophic and traumatizing to people that they won't trust a paper currency for a long time afterward. I also think this will discredit the FED like no other event. This depression hasn't been linked to the FED as the cause like, imo, a full blown currency meltdown with. On a more basic, public understanding, the dollar is linked with the FED moreso than, say, economic booms/busts.
As for the reaction of the government? I agree, it will cling to power rather than relinquish it. I see it as an organism, and self survival is paramount to any organism, so government clinging to power is probably in our cards. I doubt freedom will come without revolt at some point.
We'll see. This isn't going to be some far off event. It's probably within the next 2 election cycles.
razerfish:we've had currency crisis in our history,
Whose history? The pattern you describe, if it has occurred, will not occur in the U.S. (I'm referring to a return to redeemable money). The pattern that is in place is the march toward totalitarianism, not liberty. A central bank is critical to the survival of the state (that is, the people chosen by other people to hold power), not to mention the survival of the central bank's banking system and bond market clients.
The crash will occur, but your theory ignores reality. People do not, and will not, respond the way you describe. They will look to government for "help", and will give it any new powers it needs to provide that "help". Look at September, 2008. When people are desperate, they do not turn to themselves, they turn to Uncle Sam. They have been conditioned for several generations to behave this way (public schooling, media, state universities, politics).
Not very optimistic, but it is the truth. Imagine discussing what the future would bring in July, 1914 or August 1939. Nobody could have imagined what was about to unfold. Anyone who was close to describing the soon to be reality would have been called a kook, or cynical, etc. It is September, 2010.
I think I have the American voting public described very well. The voters do not want freedom or liberty, they want benefits. And that is what they will receive, they just don't yet realize the "price" they will have to pay for these "benefits".
"The market is a process." - Ludwig von Mises, as related by Israel Kirzner. "Capital formation is a beautiful thing" - Chloe732.