Economics Questions

Re: What would/should happen to gold held by FRB

Mark B. — Wed, 17 Feb 2010 19:21:20 GMT

Inflation can occur without a central bank, but only a central bank can inflate to such a catastrophic extent as the Federal Reserve and other worldwide central banks. Inflation can occur in free banking, but banks are constrained to a severe extent in their ability to inflate. Inflation can occur via coin debasement, but obviously in a fiat money system that is a moot point.

Only a 100% reserve banking system with commodity currency and a prohibition on debasement would be inflation resistant.

But anything would be better than central banking.

Re: What would/should happen to gold held by FRB

Caley McKibbin — Wed, 17 Feb 2010 12:39:55 GMT

Bernanke said that they have been selling gold. They probably won't have any left before long.

Re: What would/should happen to gold held by FRB

Merlin — Wed, 17 Feb 2010 10:19:35 GMT

caravelle:

has inflation occurred without a central bank??

well, you might find this interesting.

Re: What would/should happen to gold held by FRB

Merlin — Mon, 15 Feb 2010 14:08:05 GMT

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.

Re: What would/should happen to gold held by FRB

Eric M. Staib — Mon, 15 Feb 2010 02:33:13 GMT

scineram:

The owners obviously.

Meaning the FRB governors, or the holders of U.S. Dollars?

Re: What would/should happen to gold held by FRB

scineram — Sat, 13 Feb 2010 10:59:59 GMT

The owners obviously.

Re: What would/should happen to gold held by FRB

Eric M. Staib — Sat, 13 Feb 2010 09:12:02 GMT

caravelle:

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.

Re: What would/should happen to gold held by FRB

Eric M. Staib — Sat, 13 Feb 2010 09:09:31 GMT

scineram:

Sell it.

For whose profit?