Ron Paul's presidential campaign made the Fed a popular target. On totse and elsewhere, threads and posts were made calling for the dismantling of the Fed.

But what I don't hear are advantages to the current system. Can people name some?

Not really.
There are (arguably overwhelming) advantages to fiat currency as opposed to hard currency, but the federal reserve system and in particular the loaning of money into existence is patent insanity.
If you have fiat currency that the government is enforcing as the means of exchange, why the FUCK should they be borrowing it from a central bank?
They should just issue it.

There may be advantages to a fiat currency but there are no advantages to the Federal Reserve.

There is nothing positive by putting the control of the money supply in the hands of a group of secret bankers.

Fiat currency's great, mostly because you don't have to tie up a resource you can actually use to serve as currency (like gold, silver or other fancy metals).

Having the money in the control of a small group of people is bad, but things would be just as bad or maybe worse if control of the money supply was handed over to the government. Manipulating that at the drop of a hat (like politicians would) would cause some serious problems, worse than what we're seeing now.

I'm not sure I understand why it is better to have fiat currency over currency based on precious metals... can someone elaborate?

So private bankers are safer than the government? I can believe that, but who would be better than highly secretive bankers to regulate the money supply?

The Fed sucks, the fiat system sucks.

The making of a fiat paper currency can be monopolized, which means a certain group/institution can use it to it's advantage. They can issue demands (set interest rates) and generally manipulate because they alone are making something that everyone needs.
You can't monopolize the production of gold and yet it's rare enough in nature to prevent the system from becoming over-flooded with it.

Therefore issuing money (by the government) wouldn't be a problem, if the money was backed by something obtainable from elsewhere. It's the threat of a monopoly on producing money that makes a gold standard so important IMO.

Having the money in the control of a small group of people is bad, but things would be just as bad or maybe worse if control of the money supply was handed over to the government. Manipulating that at the drop of a hat (like politicians would) would cause some serious problems, worse than what we're seeing now.

Sorta, it would certainly be insane to allow congress or the president free reign over it however its worth remembering that institutions like the Supreme Court are also part of the government

There are plenty of countries around the world with central banks that actually do exist as government entities that make decisions ignoring politics.
It might be more difficult to make that work in the US with its poisonous political culture though.
As an example, the Reserve Bank of Australia raised interest rates in the middle of an election campaign in 2007 on the basis that inflation was above the target band.
That really made things a lot worse for the then government, but as far as they were meant to be operating it was the right thing to do.

The RBA is NOT a private institution

http://www.rba.gov.au/AboutTheRBA/overview_functions_and_operations.html

As well as being a policy-making body, the Reserve Bank of Australia (RBA) provides selected banking and registry services to a range of Federal Government agencies and to a number of overseas central banks and official institutions. Its assets, which include Australia's holdings of gold and foreign exchange, amounted to around A$101 billion at 30 June 2008. The Bank is wholly owned by the Australian Government, to which its profits accrue.


(the above isn't defending central banks and the loaning of money into existence, just noting that it is possible to get monetary policy which is ‘independent’ from politics from an institution still a part of government.)

There seems to be a consensus that the Fed is inherently pointless. I'm happy to see this.


1. So, the Fed is abolished and control of the money supply is given back to the Treasury, which does have oversight, and limits. This is good. We no longer have a groups of secretive megabankers stealing our wealth through institutionalized inflation.

2. But now we still have a fiat currency, which can still be manipulated, so:

3. We remove the constitutionally illegal (and relatively new) monopoly on the issuance of currency.

In a free market, competition between currencies is very good (albeit more complex). It prevents any one currency from becoming inflated, because individuals have the choice to abandon it at will, in favor of a stable, reputable currency.
Reputation plays a huge role in a truly free market, whereas in the paradigm we have in the US today, coercion is the main force in currency policy.

The operation NORFED had going recently was very successful, and serves a good precedent for the issuance of currency in the future, once the Fed finally faces the firing squad.

There are no advantages... Only the illusion of fake prosperity being that a central bank creates credit and spending. Of course, under a central bank the illusion of prosperity is maintained by inflation because the central bank produces more money. So a 1913 Dollar would be worth $20 Today. $1000 was worth a lot back in the day (Earlier than 1913) because it was real, today $1000 couldn't even help with Tuition at a Community College because, of inflation. Incredible how the illusion has maintained itself for the past 100 years. Today people would like to win the lottery which recently was (in NY) $127 Million, whereas back than $1000 meant you were living comfortably. Tell me, which seems humbler and simpler?

I like the film America: Freedom to Fascism and I think you should watch it to. On top of the above when the Fed lowers interests rates, everyone jizzed there pants thinking that it helps, in the short term it does but in the long term it creates more dollars, when you have 0% interest (as it is right now) what happens is you produce infinitely and freely there is no limit, just spend. What happens to the value of something when you have a lot of it and it is essentially free? Its Worthless. The same is true of our dollar its being devalued. All to blame for government intervention in the economy.

Therefore, NO Purpose, NO Use, No Reason for a Central Bank.

There seems to be a consensus that the Fed is inherently pointless. I'm happy to see this.


1. So, the Fed is abolished and control of the money supply is given back to the Treasury, which does have oversight, and limits. This is good. We no longer have a groups of secretive megabankers stealing our wealth through institutionalized inflation.

2. But now we still have a fiat currency, which can still be manipulated, so:

3. We remove the constitutionally illegal (and relatively new) monopoly on the issuance of currency

What is this thing that you speak of? Could you elaborate please?



In a free market, competition between currencies is very good (albeit more complex). It prevents any one currency from becoming inflated, because individuals have the choice to abandon it at will, in favor of a stable, reputable currency. .

Firstly I just want to say that I know nothing about economic theories so I am sure you could be right about the prevention of inflation. That being said, the fact that we would want currencies to "compete" against each other just strikes me as very, very odd. Currencies are not businesses. They are created solely for the purpose of facilitating nations' economies. They are not meant to be "pitted" against each other. In fact, I am not even sure how this could be done. But that's not the point. The point is, currencies are meant to be used as a unit of exchange and I believe that's all they should ever do.

Having the money in the control of a small group of people is bad, but things would be just as bad or maybe worse if control of the money supply was handed over to the government.

uhm

It's not just a small group of people. It's a small group of PRIVATE bankers. With the democratically elected government at least the people will have some semblance of control (as in, they could in theory vote out the ones who are not doing good enough a job..etc. As for how effective this is it's a whole other matter)

My point is, yes putting a nation's money supply in the government's hands does have its drawbacks, however it appears to be the lesser of the two evils. I mean, think about it. Why should a nation's money supply be in the control of PRIVATE hands? Seriously.

The Federal Reserve was created too make and keep people in debt it doesn't help at all

uhm

It's not just a small group of people. It's a small group of PRIVATE bankers. With the democratically elected government at least the people will have some semblance of control (as in, they could in theory vote out the ones who are not doing good enough a job..etc. As for how effective this is it's a whole other matter)

My point is, yes putting a nation's money supply in the government's hands does have its drawbacks, however it appears to be the lesser of the two evils. I mean, think about it. Why should a nation's money supply be in the control of PRIVATE hands? Seriously.

I'm not about to trust the average voter to understand monetary policy, economics is not compulsory here. If there was "democratic" control of the reserve bank in Australia (even though as dichromate explained it is not private like the Fed) at the last election things would've gone awry.

You're not supposed to be able to vote about it. The reserve bank's meant to keep inflation under control and the economy stable. Sometimes doing that isn't the popular thing, like raising interest rates late last year in Australia. The reserve bank in my country is not private like the US Fed, but it is outside of the voter's control.