Why Donald Trump must shut down The Federal Reserve

I don't know if USA's economy might status will still be valid under a gold oriented economy.

 

The Fed sets an interest rate (what happens after that is up to firms and households and their desire for external funds). In other words, creditworthy borrowers, both individuals, and business determine the amount of money in circulation. The Fed can influence this indirectly through rates, but it does it, historically, as a reaction to carry out its mandate imposed upon it by Congress and not simply with the goal of controlling the money supply.

The idea that the Fed injects reserves which lower the interest rate or, worse, the Fed injects money which lowers interest rate”. Under normal circumstances (i.e. pre-Great Recession, which is what most people have in mind when saying this), the Fed does not proactively inject reserves, it waits for banks to ask. And, the Fed’s monetary policy never injects money (via consumption), i.e. never deals directly with the public (M1).

 

Besides the fact that gold-based economies are an anachronism, I think the problem with gold-based economies in the modern era is that if you are a large net importer, you are effectively exporting your gold, if dollars were ever redeemable for some quantity of gold. If you have a soft backing, 1934-1971 it would be a little different, but in either case we'd only survive as a next exporter, which is something we could do, but not overnight as we are such a massive importer.

It's fun to think about in fantasy, but as long as the US is a global power, I just can't ever imagine that the US would ever let it happen.

 

What worries me, is that while presently the economy was run on trust of the US economy and investment through T-bills, how could we maintain an economy as large as the US relying on gold reserve at hand. Then are our exporting prowess competitive enough? what about if it falters.
Please correct me if I'm wrong, I also wanted to learn from your most educated side.

 

You need to rephrase your question because I'm not exactly sure what you're asking

 

Okay,
we are reliant now with the Trust of investors with US economy making their investment through T-bills,
will the investment schemes continue if the federal reserve is abolished?

 

It should comfort you to know that the system we have in place, while I see no reason to worry about investment, is strictly voluntary. That is, the government sells bonds to offset expenditures (not fund them), because it chooses to, not because it has to. As long as the US economy is willing to consume $1.8-$2.2 trillion dollars of the world's goods in the form of imports, the world is going to have a large supply of US dollars they wish to invest.

Most people don't realize just how many US dollars the rest of the world holds. Most people think about foreign Treasury holdings where Japan and China compete for the lead, around $1 trillion each, but most people don't realize how much non-security dollar assets the world owns.

Check this out!

China and Japan are holding ever $4 trillion dollars combined in, well, dollars.

The whole world, minus the US, holds $10 trillion dollars in Fed accounts.

Think of Bonds as savings in US dollars and FOREX reserves as a checking account in US dollars, the purchase of bonds is just like moving money from a checking account to a savings account.

Now the idea that investors are ever going to decide not to buy securities is suicide for them.

So many of the nations that buy our securities rely on our business. The only real way to stop buying our treasuries is to stop selling us goods. China cannot stop selling us stuff, we make up for what? 60% or is it 40%? I can't remember, either way, it's huge.....

The fact is, unless US consumers can't maintain demand for foreign goods, we're all in this together.

I can't see why not, I'd suspect it would get worse, but, if I'm being honest, I'm just guessing.

 

Wow, thanks, quite a very informative reply.
I hope you don't mind, If I have further questions.
What will happen with the Foreign Exchange Reserve if the Central Bank is abolished?

 

Given that abolishing the world largest and most powerful central bank has never been done, your guess is as good as mine.

The New York Fed reserve bank is technically a private bank and the largest and most powerful of the Regional Fed banks, so if I were to throw something out, I'd guess it would go there, but that's just a guess.

 

Thanks for your time,
and quite intelligent replies.

 

Mosler published his theories in October 2009, and it interesting to see that little has been done by the Fed, the FDIC, the Treasury Department, or any other "player" to make fundamental, beneficial changes in any of this "oligopolological", tangled mess. Thus, Mosler provides mostly a commentary on how we got where, and recommends a number of "band-aid" remedies, but not even his relatively timid measures alter the fact that the Federal Reserve System holds all the power, and exerts all the control.

We could explore this misbegotten "Gordian Knot" from both the Cournot and Stackelberg "game" perspectives, but again, whether we have "leaders" or "followers" ultimately in control, the conjecture is meaningless so long as all the power and all the control is held by one power-bloc -- the Federal Reserve System. I used to believe that the only way to deal with this "Gordian Knot" is to do what Alexander did -- slice it in half instead of trying to unravel it... i.e., "abolish the Fed". And, as I've already said, I can't advocate that now, if only because the whole "central bank" oligopoly phenomenon is planet-wide and cannot simply be "abolished" without the concomitant catastrophic effect of complete economic collapse, chaos, and anarchy all over the world.

But, I do believe, in my own simplistic way, that the Federal Reserve should NOT have "all the power and all the control"! Many would disagree and say that the president has control over who runs the Fed, but that's about the weakest, most unconvincing comment I can imagine. Look at two recent examples of a "president" having "control" over the Fed. HA! Idiot Bush and Idiot Obama both have been pathetic, roll-over stooges for the Wise Men who run the Fed and who project absolute control over every important facet of our economy.

Who would be able to do a better job of it, then? Perhaps no one -- but, this is one case where I definitely feel that, with all its many faults, the Congress should have a much more active role in governing economic policy than one mere "president" and a largely lifeless Treasury Department that has had a compliant backseat role to the Fed for over one hundred years. The theory is advanced that "too many cooks spoil the broth", but too few unelected decision-makers caused both the Great Depression and the Great Recession. The role of the Fed should be scaled back to one of providing advice and council -- not in unilaterally and dictatorially proclaiming what the money supply(s) should be, who should be "winners" and who should be "losers", and perhaps most importantly, what interest rates must be. Free-market Capitalism is poorly served by too much total control exerted by the Federal Reserve in all of those areas.

Back to reality... nobody cares what I think, and the frustration and futility in all of this is certainly not new to me. Eventually, we will have a "new reality" in the world that is disturbingly similar to what Orwell described in "1984" -- especially in "The Theory and Practice of Oligarchical Collectivism". Anyway, have a nice weekend. Bush didn't change anything, Obama didn't change anything, and Trump won't change anything, either. And the world goes on singing "Ob-La-Di, Ob-La-Da"....

 

Brilliantly stated Econ4Every1......
My all time record for getting myself excommunicated from Christian churches is
two...... in roughly one month..... .back in 1991.

The main problem that I found with these churches was that the leadership was
overly obedient to authority figures....and the ideas and teachings of those authorities.....
reminiscent to me of the
Milgram Experiment......

On the other hand if the USA government were to come out with a law forcing people to
accept some sort of computer chip inside their bodies.....
I can well understand why many of my religious friends would
take great risks to refuse to comply with an order like that.......

I quoted one of your posts over in another discussion to begin to
get somebody to rethink their really awful view of how
illegal immigrants from Mexico should perhaps be treated......

Some religious authority figures exaggerate people's fears.... and thus increase their own power and control over people.

http://www.politicalforum.com/showthread.php?t=490522&page=4&p=1066976717#post1066976717

Thread: How to save money building the wall

 

As the person who began this discussion I must plead guilty to
going with a title for this thread that was a quotation from an article that
I was NOT completely in agreement with.......

but I knew that the title would tend to generate more discussion than would
occur with a more politically correct title to this thread......

My motives were not good........
I was seeking a little extra fame that I thought might turn into
a career as one of the most famous political commenTators.... with
terrible grammar and spelling habits........

Sorry??! My bad?!
http://www.politicalforum.com/canad...tional-leader-canadas-conservative-party.html

 

Wow!

Brilliant reply as always Econ4Every1.

I bolded the last two sentences of your reply and I will concentrate on
these two questions........
I admit that I may be wrong but.....
I am of the belief that sales people at some massive USA companies are so desperate to
earn higher and higher commissions and benefits that .....
they could well set in motion a series of events that could eventually destroy the USA and
Canadian agricultural industry.

I am of the belief .... at least in theory.. .that
a State coin....... that is banked up by a State bank....
that is combined even with local currencies in that State.....

could become so popular that that State Dollar.....
eventually pays off the USA national debt.......

so that we begin thinking and planning in terms of
a surplus rather than define ourselves as
so far in debt......

Yes... I know that this is a totally different approach than you are taking.....
but you may find this intriguing none the less.......

http://www.politicalforum.com/polit...-could-utah-state-dollar-save-usa-dollar.html

Could a Utah State Dollar save the USA Dollar?

......
I should also give you a link to this article so that you know a little better what I mean by this.

http://money.cnn.com/2012/01/17/pf/local_currency/index.htm?iid=F_Jump

Peoples fears have a certain reality.....
they cause certain negative trends to get worse.....
so if a Utah State coin and Salt Lake City Volunteerism Hour or Dollar could
decrease people's fears........
then...... this proposal is worthy of consideration.

Back in 2006 when I campaigned at the provincial level I actually did advocate a
Nova Scotia provincial currency unit of some kind.....

BankingSystemFlaws.blogspot.ca/

 

OK.... I admit it......
to whatever degree a week or two ago I suspected that perhaps.....
the USA Federal Reserve needed to be seriously revamped......

I do feel a higher level of Shalom / peace of mind that perhaps there
exists a much less dangerous alternative......

.... but I can't help but imagine Latter Day Saints...... loaded with essentially
infinite financing in terms of Utah State Dollars.......
and they visit people.... and ask people... .if there is anything that they can do for them.....
and they are not kidding,.........

Maybe L.D.S. proselytizes could be hired.... as actors.... playing the role of themselves.....
and a series of semi- reality science fiction films could be initiated......
perhaps supposedly on January 20, 2013 when Mr. Mitt Romney becomes
President of the USA... in an alternate time line.....
example of Multiverse........
and then..........
the Artistic President Mitt Romney with his "mantle of Darius' proceeds to figure out a way to
PAY FOR.... much of the good stuff that the Cyrus style President Donald Trump wishes to
accomplish????!


http://www.politicalforum.com/relig...osophical-implications-multiverse-theory.html
The Philosophical implications of Multiverse Theory?

 

It's far better if in time we would know that something needs some polishing or changes,
as what a healthy discussion should end up. Me in my own opinion could consider that the abolishment of the federal reserve is such a good thing for now, but perhaps a gradual transition into gold oriented one could be considered, but not now.

 

I am of the belief that technology is improving so rapidly that
well trained people will soon be so astonishingly productive that
we will have to figure out a new way to give people something
constructive and meaningful to do with their time.

 

Yup,
It's not also healthy that the central bank controls that most vital sector which is the nation's economy. BUT for the giant economy that we have presently knowing it's dependency with the nurturing of the Federal Reserves any transition into government controlled gold based economy is somehow ominous considering that we need a lot of gold to sustain the change. We still have to establish competitiveness afterwards which also challenging mostly if the global market nowadays is inundated with so much cheap products from China, even with the market at home it would be quite challenging to establish marketing of home grown products.

 

True......
but some of the policies of central banks are deliberately planned to
make us look bankrupt on paper........
partly to give bureaucrats for more and more and more and more cutbacks.

 

The productive capability of USA workers is higher than ever before so
the backing for the USA dollar is stronger than ever.

Highly unethical companies could destroy our agricultural industry though.


http://www.thefutureoffood.com/About.html

 

True.....
local currencies are one possible answer.

www.CalgaryDollars.ca/

 

Isn't it funny how money is used by us daily, yet most of the public does not really understand money?

 

Can you imagine you leave your state, find in the next state you must exchange some of your money for that states money only to keep driving and need fuel so must convert to the next states money system?

Frankly I believe a one currency model works best. No varying exchange rates or other problems. Back in the 60s when I was in Germany, Dollars to Marks and then in Holland to Guilders was a bit of a hassle. Some places gave more for the dollar than did other places.

If is fun to speculate but until you tried it, you are assuming just good but no bad.

 

Shutting down the federal Reserve is impossible it owns America. Every Debt has to be paid back and since our financial existence is solely based on debt guess what ? Not going to happen.

 

On the other hand many residents of Calgary, Alberta, Canada are walking down the street with
perhaps a thousand Calgary Dollars in their wallets..... and perhaps much less Canadian dollars.

If they are looking for a haircut and see that a particular stylist or barber accepts Calgary Dollars for fifty percent of a cut...... chances are they may choose to give their business to them.

Companies that accept Calgary Dollars often unload them in extra advertising through newspapers or radio stations that accept them so that they don't have to pay tax on them....... because they are taxed at exactly the same rate as if Canadian dollars had been earned.

They promote local business.

They are helping some newspapers and radio stations to stay afloat.

They are a great way for a new web developer to get their start in the industry and earn a reputation, without having to volunteer.