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It must drive you crazy.

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fireworks_god said:


No, the entire thing isn't privately owned. Private member banks are privately owned. The Federal Reserve consists of more than private member banks.

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What other parts are these? Are there public banks of any kind?

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The board of govenors is a federal agency. The govenors are appointed by the President of the United States of America and confirmed by the United States Senate.

The fact that you are presenting us with completely false information is astounding, especially since this information is so readily available. A quick Google search will take you to Wikipedia entries on the Federal Reserve system and a separate page for the Board of Govenors. That page cites Title 12 of the U.S. Code.

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Yes, you are correct. I totally misspoke; I was thinking of the individual banks' governing boards when I said that, my mistake. I feel like an idiot   

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It's just a misunderstanding of the fact that Congress has specifically created the Federal Reserve to accomplish these tasks and have passed laws governing how this takes place. Nothing in this is unconstitutional.

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The Fed's three stated objectives at its inception were maximum employment, stable prices, and moderate long-term interest rates. Their charter is so all-encompassing that what they are doing does not violate their charter- but I will argue instead that the Fed's charter itself is unconstitutional- The carte blanche charter allowing the fed to regulated employment, prices, and interest rates represents an intrusion to the economy that has no real oversight or checks and balances.

I understand you have beat me on some semantic arguments, firework, but do you really believe the amount of power the Fed has is constitutional? Apparently you do think so, so I ask ya this: are you for that amount of power? What do you think about the fact that the Federal Reserve is not even audited? (I'm not trying to divert the conversation, as you said before, I really want to know- are you for a central bank that has hardly any oversight?)

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Seuss said:
read up on fractional reserve banking.

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I have read a good bit on central banking, just kinda had a brain fart . I agree, Fractional Reserve banking is the key to it all. Ya, its kind of sad- I would venture that 95%+ of people in the United States probably could not tell you what fractional reserve banking even consists of.

I would actually be fine with a central bank if they both operated on a 100% reserve policy and allowed for competing currencies (or atleast abolish legal tender laws).

It is the fractional reserve policies (as I'm sure you know) that allow for the Federal Reserve to do all these things we were talking of earlier (Inflation ad infinitum, Quantitative Easing, Appropriating unapproved funds, interest rate manipulation, instability in the banking system, Boom bust cycle).

Someone mentioned bubbles- The most sensible explanation I have found places the Fed squarely responsible for our business cycle. The Austrian Theory of the Business Cycle states that artificial bubbles are created when the federal reserve manipulates interest rates- resulting in markets misallocating huge amounts of capital. This misallocation of resources results from a distortion of time preference.

Here is much more elegant (albeit long)explanation of this theory (if you don't feel like reading it, the bottom line sums it up pretty well):

However, it would help to consider the course of economic development from a simplified example, that of an isolated "Robinson Crusoe" situation. The circumstance faced here is that one must somehow combine one’s labor with available resources to produce goods for consumption (e.g., food, shelter, etc.). For example, I can pick berries by hand, and this will produce a certain level of consumption. However, if I wish to have a greater level of consumption, I must create some means of increasing my berry collecting—for example, by building a rod to knock berries from bushes and a net to collect them as they fall to the ground.

Unless these means are nature-given, however, I must build them myself, and this will take time—time during which I cannot pick and consume berries with my old method. Thus, during the time I am making my new, presumably more efficient, method, I must have some way of sustaining myself. This can only come about if I have saved (i.e., abstained from consuming) a sufficient amount of berries in the past, so that I may work on other approaches now]. (For more on this process, see Rothbard [1993], ch. 1.)

Let us be clear about what is happening here: One is not simply switching from consumption to production; rather, one is switching from one form of production to another. One cannot consume something until it has been produced, so all production processes involve foregoing consumption. The question, though, is what must be done to switch to a supposedly more effective means of production.

Obviously, if the rod-and-net system, presumably more productive, had required the same amount of time to construct as the hand-picking method, I would have engaged in this approach to begin with. Since acquiring the increased productivity comes with a cost—namely, time spent away from using the old method to facilitate production and, thus, consumption—there must be some means of paying that cost.

Of course, not all lengthier production processes are more productive. But at any given time, man always chooses those production processes that can produce a given amount of output for consumption in the shortest amount of time. A process that takes longer to arrive at the final stage of output will only be adopted if it is correspondingly more productive. In the Austrian conception, greater savings permit the creation of more "roundabout" production processes—that is, production processes increasingly far-removed from the finished product. This is the role of savings, and we can ask what determines a particular level of savings. Quantitative easing and monetary stimulation creates the illusion of saving- without the actual savings

Time preference is the extent to which people value current consumption over future consumption. The key point of the Austrian business cycle theory is that interventions in the monetary system create a mismatch between consumer time preferences and entrepreneurial judgments regarding those time preferences.

Let us return to the Crusoe example above, and consider attempts to construct more productive means of berry extraction. What constrains me in this endeavor is my level of time preference. If I so enjoy current consumption that the thought of increased future consumption cannot sway me from foregoing sufficient berry-eating now, my rod-and-net system will not be built. In the context of fractional reserve banking, printing up berry-tickets cannot change this fact.

As a numerical example, consider the case where hand-picking yields twelve berries a day, and I am simply unwilling to go without less than ten berries per day. Suppose further that my time preference falls so that I am willing to save two berries a day for seven days (leaving aside issues such as perishability, which obviously do not apply to a monetary economy). I will then have a reserve of fourteen berries. Assume I work one-fourth of a day on my new method of berry production and spend the remaining three-fourths of the day on producing berries with the old technique. The old method will give me nine berries a day, and I can use one berry from my savings to meet my current consumption needs.

If I can finish the rod-and-net system in fourteen days (the extent of my reserve), then everything is fine, and I can go on to enjoy the fruits of my labor (no pun intended). If I misjudge however, and the process takes longer than fourteen days, I must temporarily suspend production (or at least delay it) to fund my current consumption, as, by assumption, I value a certain level of current consumption over increased future consumption (the essence of time preference). The point is, sufficient property must exist for me to lengthen the structure of production, and this property can only come from (past) savings]. If my time preference does not enable sufficient property to become available for creating this production process, my efforts will end in failure.

Lest it be thought this example is artificial, consider the situation where my needs are nine berries a day. It would appear that I can still work one-fourth of a day on the new technique without having a previous cache of savings, since the remaining three-fourths day of labor with the old method will meet those needs. Two things should be noted, however. First, my time preference must first fall from a daily consumption of twelve berries to nine berries. Second, and this is the key point, had I saved previously, then I could spend that much more time on building the new method, thus bringing it into increased production of berries that much sooner. Savings remain key to this process of capital construction, and savings are driven by time preference. Indeed, time preference manifests itself in savings.

This same process of using savings to fund current production for future consumption goes on in more complex economies. (Of course, with the introduction of more than one individual, recognition of increased productivity under the division of labor becomes possible, thus raising man above the subsistence level and making possible a pool of savings.) At any given time, the individuals in society are engaged in production to meet some "level" of consumption needs. In order for more lengthy—and, hence, if they are to be maintained, more productive—processes to be entered into, it is necessary that some individuals have refrained from consumption in the past so that other individuals may be sustained and facilitated in assembling this new structure, during which they cannot produce—and thus, not consume—consumption goods with the methods of the old structure.

The thrust of the Austrian theory of the business cycle is that credit inflation distorts this process, by making it appear that more means exist for current production than are actually sustainable (at least in some renditions; see Hülsmann [1998] for a "non-standard" exposition of ABCT). Since this is in fact an illusion (printing claims to property ["inflation"] is not the same thing as actually having property; see Hoppe et al. [1998]), the endeavors of entrepreneurs to create a structure of production not reflecting actual consumer time preferences (as manifested in available savings for the purchase of producer goods) must end in failure.

....This analysis is not a moralistic insistence that an economy be ultimately founded on something "real." It is a recognition that mere subjective wants cannot will more property into existence than actually exists. Should a monetary system give the illusion that the time preferences of consumers, as providers of property for production purposes, is smaller than it actually is, then the structure of production thus assembled in such a system is inherently in error. Whatever plans appear to be feasible during the early phase of a boom will, of necessity, eventually be revealed to be in error due to a lack of sufficient property. This is the crux of the Austrian business cycle theory."

I know most people won't take the time to read this but, really take the time if you have it- really brilliant stuff, in my opinion.

SOURCE: http://mises.org/daily/672

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In 1971, libertarian economist Murray Rothbard criticized Friedman's efforts to make the government more efficient as detrimental to individual liberty, concluding "...as we examine Milton Friedman’s credentials to be the leader of free-market economics, we arrive at the chilling conclusion that it is difficult to consider him a free-market economist at all."[66] Friedman's position on governmental control of money changed since 1971 when this criticism was made.[67] In a 1995 interview in Reason magazine he said the "difference between me and people like Murray Rothbard is that, though I want to know what my ideal is, I think I also have to be willing to discuss changes that are less than ideal so long as they point me in that direction." He said he actually would "like to abolish the Fed," and points out that when he has written about the Fed it is simply his recommendations of how it should be run given that it exists.

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zappaisgod said:
Nice cut and paste from L. Ron's favorite loon.  Maybe you might want to consider another economic theorist.  I might recommend Milton Friedman.

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Seuss said:

> There (sic) ability to manipulate the market to meet there needs gives them a heads up to tell whomever they please.

This would be insider trading.

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CheesePlease said:

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Seuss said:

> There (sic) ability to manipulate the market to meet there needs gives them a heads up to tell whomever they please.

This would be insider trading.

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You hit the nail on the head.

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Shill said:
My guess is Shins

http://www.shroomery.org/forums/banlist.php

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