Visiting Ron Paul’s Fed-free utopia

I agree with the premise that the book didn’t properly illustrate the pain that would take place with the deflation that would occur after an abrupt end to the Federal Reserve. I don’t believe that’s what Paul is arguing for, however. He has laid out a plan for a gradual phasing out of the fiat dollar system in other writings and public interviews and speeches.

The arguments about The Federal Reserve should start with the fundamental question: Is anyone smart enough to be able to sit in Washington and manage an entire economy from a board room? I think the answer to that question is no. Market forces have a way of eventually forcing a reckoning, as was shown in Asia and Latin America at the end of the 20th Century. The United States has had the luxury of being the reserve currency of the world after the collapse of the Bretton Woods agreement collapsed, and that system is now itself collapsing.

Paul has said many times that he is a proponent of gold, but he is not against Hayek’s idea of a basket of commodities, or even competing currencies. In fact, I believe he introduced legislation to repeal the legal tenders laws to allow competition just recently. I think the underlying idea that market forces should determine interest rates, and that no unelected official should have the power to create money without oversight is sound policy.

Long Term Capital Management becomes almost impossible under our current bailout economy. Market actors are not given accurate indicators of when to save and when to spend money. Consumers are confused because we have stagflation if you remove government spending from GDP, and our dollar is continually losing its value relative to the Euro and other world currencies. All of these problems could be avoided if Washington didn’t have a magical money machine that allows them to run 1 or 2 trillion dollar deficits.

A lot of our policies at home and abroad would be different if all levels of government had to shakedown the wallets of citizens for their money rather than resorting to currency debasement.

This post sums up all the issues I’ve had with Ron Paul and similar minded folks. Their critiques are dead on but their answers seem blissfully unaware of human nature. Interestingly, the same thing can be said about Marx and socialism. I think the problem is that people like Paul get so entrenched in their ideologies, they get very involved with the way things should be and get detached from how they really are.

With regards to points 3 and 7:

The Austrian school views credit expansion through fractional-reserve banking as the source of the business cycle, bubbles, spectacular booms and busts – and, obviously, bank runs. I’m not sure if Paul addresses this specifically in his books, but simply having a “gold standard” or fixed money supply isn’t enough to resolve these problems, even in theory. There were massive booms and busts in the pre-Fed, Gold Standard olden days because banks still possessed the power to create money on a whim. This is also why all the fixed currency regimes eventually collapsed: you obviously can’t have a stable currency value of the overall supply of currency is wildly fluctuating, as it does under fractional-reserve banking.

The solution would be to either greatly increase reserve requirements under the present system, or move to a regime where “deposit accounts” are abolished entirely as a method of funding. Checking accounts would pay no interest and in fact a small “warehousing” fee would likely be charged, while banks would raise money through bond or and share offerings – so you would need to invest in these instruments if you wanted to earn interest. At the very least it would greatly smooth out the ups and downs in the economy, though there would still be economic cycles – they’d just be much shallower and longer in duration.

Thank you for taking the time to read and give an honest review of Paul’s “End the Fed”. I have not read it but as an avid supporter of Paul I already know the contents.

I agree with you that there is a certain Utopian aspect to the push to reign in and then abolish the Fed. Having said that, Paul’s motivation is simply based in the fact that the system is set up to benefit the banks at the expense of the average American. The Fed inflates the currency (faster and faster these days) which destroys the savings and earning power of the working man. Wages never keep par with price inflation, caused by monetary inflation. The banks, however, benefit by being the first to use new money before it is further debased. Simply put, the average American pays an inflation tax that Americans have no control over. Consider that the Constitution gives Congress the sole authority to “coin money”. Congress allowed the Fed to usurp that authority in 1913 and the phrase “no taxation without representation” comes to mind. Wilson famously lamented his signing of the Fed Act, while on his death bed. Andrew Jackson fought to end a previous central bank and nearly paid for it with his life. Now he’s on the Federal Reserve Note $20 bill. Go figure.

No monetary system will ever be perfect. But many of us would like a system that benefits us, the taxpayers, instead of the Fed and the Fed’s international banking buddies and investors. It is our purchasing power being destroyed by the actions of the Fed.

Paul never claims to back paper with gold. 90% of your arguments are wiped out right there. He wants banks to back their money with whatever they deem best at a given time, gold will likely be used for that backing most of the time but the choice to use something else would keep gold honest. This is what has been lacking in previous monetary systems that were backed by gold and still had faults because gold was manipulated. If gold is manipulated in a basket commodity consumers will look elsewhere.

[...] Source [...]

I can only assume that some of your conclusions were stated incorrectly due to ignorance and not to be intentionally misleading.

Austrians (such as Mises & Hayek) do not claim that ending the central bank would do away with the Austrian Theory of the Trade Cycle entirely. What they explain is that manipulation of moneycredit creates long-term production investments which are unsustainable and always must lead to busts. There are many historical examples absent of a central bank where speculative investments got out of hand. All of these incidents stemmed from the same cause…banks lending out more money then they actually had and that leading to speculative booms. But wherever there were physical limitations these booms were incapable of being blown bigger and bigger because the paper currency was backed by a commodity (ie, gold). People maintained the power to call the banks on the fraud by redeeming their paper claims on their real money deposits (show me the money!) and this helped to put a ceiling on how big the bubble could get, putting an end to dishonest practices as quickly as possible after the fraud was allowed to happen.

The Federal Reserve and the fractional-reserve banking system was instituted for the benefit of the banks and politicians and the 98% decline in the dollars value proves that. We have instituted a fraudulent system and I think Ron Paul is merely trying to warn people, in as simple a way he knows how. I’ve often heard him say that that the free market offers the best way to take care of the maximum amount of people in a society. I have never heard him spout utopian ideals. Actually he and other Austrians school themselves in reality with their study of praxeology, not in how they think they can formulate a coercive central plan to manage the price of money (or even what money should be for that matter).

There was a 17% increase in purchasing power (ie, the dreaded DEFLATION) over the 1800′s when we were on a free-market commodity money and I find that hard to condemn. The central planners (both bankers and politicans) brought on and exacerbated the speculative boom that led to the 1929 crash. The government expanded with pricewage control measures, burning food while Americans starved and then confiscated the peoples gold and still we wallowed through the Great Depression for another 10 years.
People really interested in understanding how the GD got as bad as it did should really visit mises.org. The ominous parallels to our current predicament are truelly alarming.

To glance off RP and his message as kooky or utopian is a serious mistake. But at the very least hopefully people can agree that in the “land of the free and home of the brave” we can allow a little freedom of choice and competition in the monetary system (afterall, our constituion does say only gold and silver can be money). If people are happy with the irredeemable paper standard I will not force them to CHANGE! Just as long as I and other consenting adults are free to use whatever currency we deem to best suit our needs.

Right now constitutional & honest money is prohibited. Until the People educate themselves and understand why the framers so explicitly defined what money was and who were accountable for it we will only have disappointments and tyranny to look forward to. However, those of us who know history will not be easily silenced. This is a very important issue which America may have to fight to defend once again.

Freedom, Prosperity & Peace!

db

Hey, if you’re happy with the current system, then stick with it. Afterall, isn’t this entire country founded on the backs of hard working people who work themselves to death, not knowing the entire system is stacked against them from the beginning?

My parents taught me one thing – TRY. If something is broke, fix it. If things don’t work – make them work. Don’t blindly accept the world as everyone else wants you to see it.

http://www.noneoftheaboveforpresident2012.com/

BILL

“Guess he’s more of a typical politician than I’d been led to think.”

How very disingenuous of you. He is every bit the “typical politician” you thought he was. If he wasn’t your agenda wouldn’t be so glaringly clear. While you make a good point or two others here, including myself, have a much better handle on economics and the fed relationship. Others have already explained to you were you went awry so I won’t cover old ground. However, when you go in with the intent of “proving” someone wrong, you’ve already lost credibility as an objective fair minded journalist or columnist or whatever it is you call yourself. It’s in the personally offensive manner in which you refer to Dr. Pau, his ideals and ideas and your backhanded compliments that expose you as having an agenda. Paul, a typical politician? This is Ron Paul you’re talking about? That’s as offensive and as nutty as Stein accusing him of being an Anti-Semetic. Ron Paul is a ‘doer’. Someone whose dedicated much of his life to actually trying to better America, someone who takes action. Without people like Ron Paul there wouldn’t be a need for people like you, who do nothing but give their biased opinions about others who actually take action.

I really appreciate the review Justin. However, I strongly disagree with conclusion. I don’t think you meant it, but it came off pretty pretentious. I would recommend you take a closer look at the Austrian school’s theory of the business cycle. Hayek won the Nobel Prize for it, so it’d be worth your time reading it. And even though there wasn’t a central bank involved in every financial panic/recession this country had, you will see that it was government intervention in the economy that contributed directly to those crises. I found Tom Woods’ Meltdown a good book on this. Thanks for the review Justin!

In addition, Justin you mentioned Irving Fischer as if he’s some kind of genius. This was the same Irving Fischer who said “Stock prices have reached what looks like a permanently high plateau” a few days before the stock market collapse of 1929.

“It turns out to be a curious mix of the sensible and the delusional.”
I have a feeling that blurb is not going on the cover of the paperback.

Time, and the author of this diatribe, are obviously delusional!!!! They’ve lost the grip of what is really real and continue to fund, with words of deceit, the lie of MONETARISM, as distinguished from the Physical Economy, relevant, useful, products that the usa Republic delivered at one time. The TIME is now…and it is not this author or “Time.”

I would never expect a un-biased review out of the statist and establishment-owned Time magazine on a libertarian subject; once again I am proven right. I am surprised one of Time’s writers took time away from buying into the false left/right paradigm to even give Ron Paul a look.

The author discredits himself immediately with his first point in suggesting “Paul wants to replace the Fed with a return to a strict gold standard—in which dollars would be redeemable in gold.” I read End the Fed, and Ron Paul clearly states that he would legalize competing currencies to allow the cream to rise to the crop. If the author wants to keep using fiat money backed by nothing but debt and faith – that would be his prerogative. I would prefer to use currency based on gold, silver, or an asset more tangible than the author’s faith in the state.

Well, Justin, I did read your link to Irving Fisher. And while it is true we had booms and busts before the Fed, Fisher discloses that there had never been as much debt issued in nominal or real terms ever as occurred by 1929. We can lay the cause that steaming mess right at the doorstep of the Fed.

Now the Fed is proposing to borrow money from the banks and basically pay the banks guaranteed interest, so they won’t lend to the public. Justin, this has gone beyond absurd, and you know it.

Since several people bring this up: Paul does say in the book that he wants to replace the Fed with a system where basically anybody can issue currency, and that he’s agnostic about what commodity/ies would be used to back this currency. But he also makes clear what he thinks would happen—the same thing that has happened during past episodes of “free banking”: gold would quickly emerge as the standard upon which the banks’ paper currencies were based. So I don’t think it is all misrepresenting him to say he advocates a return to a strict gold standard.

I’m wondering if it’s very fair to cite the 1930′s as an example of such harsh deflation since the Fed had already been in existence since 1913 and supported policies which had much to do with the cause and the prolonging the reason that era was burned into our collective minds.

Having read some of Paul’s material in the past, I get the idea that fractional-reserve banking is probably a bigger issue than the Fed itself. I assume the only reason it wasn’t written on more extensively is because the book is centered on the Fed.

Also, I wouldn’t describe fractional-reserve banking as an “economic liberty”. I mean, liberties only extend to where they aren’t entrenching on the liberty of others. Theft is not a liberty. This may not be the principle of fractional-reserve banking but it sure is in the practice.

Justin, honestly, I’m sure we would both agree there’s some grey area to it all and no system is infallible, but it just doesn’t look as good for your position when you begin your critique by boasting of how quickly you read the book.

How many of our depressions (including the Great Depression) came while we were on a “Ron Paulian” economic system?

The Great Depression came on the heels of six consecutive years of federal debt reductions. It would have ended with the deficits of the early ’30s, but debt hawks ruled, and we temporarily stopped spending. The depression finally ended with the deficits of WWII.

Thrashertm said, “If the author wants to keep using fiat money backed by nothing but debt and faith – that would be his prerogative. I would prefer to use currency based on gold, silver, or an asset more tangible than the author’s faith in the state.”

A “tangible” currency requires the same full faith and credit as an intangible currency. Gold has very little intrinsic value. It’s value is based solely on the “greater fool” theory. The dollar, at least, is backed by the full faith and credit of the U.S. government. Gold is backed by nothing.

See: http://rodgermmitchell.wordpress.com/2009/10/28/fools-gold/ for a quick discussion of the gold standard.

Rodger Malcolm Mitchell

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Calling his critique delusional seems a bit much to me. That has a lot of connotations. To your points:
3. It’s not utopian fantasizing. We’ve never had such bad business cycles as with central banks (or after wars). He’s just fantasizing for a “less bad” system. Moreover, the lack of a central bank enforces a faster market correction (although it can also occur with one as in pre-Keynesian days in the 1920-1921 depression).
4. There would be no deflation if there was no fractional reserve banking.
6. Again, wanting a “less bad” system. If the banks have less power, the effects of corrupt collaboration are lesser.
7. Fractional reserve banking is NOT a product of free-market capitalism. Ron Paul makes it clear that it is fraud, pure and simple, and it has only ever been allowed through Government laws. How can anyone lend more than they have? That is fraud and would be prosecuted under free-market capitalism. The other argument that it is an “enabler” is a fair one, although that can be critized too. Perhaps if we didn’t gave this “fake” growth (money created out of no where), then we wouldn’t be over-utilizing our planet, but would, over time, still reach the same standards of living.
9. There is a well-known argument that the aggregate supply of money does not have to grow with population. Just as every other item in a free-market system, as demand increases and supply stays more or less flat, the value of money would increase. This would have a limited (and even then positive) effect on all.

Mr. Fox,

Although, I must admit, at first I thought about writing a long response to this article (and I still may, posting it on my own blog), I think that ultimately such an endeavor would prove rather fruitless. I do not believe that either of us would be persuaded within a few short exchange over the internet. So, in lieu of a full blown response, I just wish to make some points.

First, on the topic of deflation, your argument is somewhat misleading. While it is true that monetary deflation on the level of that of the Great Depression, which took place as a necessary readjustment of the credit market, is harmful, there is simply no evidence which suggests that price deflation over the long run, caused by an increase in productivity (opposed to a decrease in the supply of money), is harmful. Indeed, even the great Milton Friedman and Anna Schwartz, in their pioneering magnum opus A Monetary History of the United States, admit that given evidence from the so-called Long Depression of the late 19th century they are not sure that their opinions on price deflation are as correct as they would have otherwise believed. So, in short, a distinction between price deflation as a result of an increase in productivity and price deflation as a result in the decrease of the supply of money must be made.

Second, I wholeheartedly agree with you that ending the Federal Reserve would fail to immediately bring about a return to prosperity. Let us be honest; Congress would never surrender their powers to control the money supply to the private sector. Instead, they would reserve their Constitutional right to print money, just like they did during and after the American Civil War. Furthermore, I also agree with you that ending the Federal Reserve would not end the business cycle. The business cycle is not a product of central banking, simply exacerbated by it; the business cycle is the product of the expansion of fiduciary media. Whilst I believe that business cycles would take place in a free market for banking, I also believe that they would be much more localized than they are currently (although, again, this assumes a free-market in money, as well) and overall much less harmful.

Third, related to my first point, I do not think that Irving Fisher is a worthwhile source to link to. His monetary theory was refuted in the second decade of the 20th Century, and then later critiqued again in the coming years. The most hard pressing ridicule of Irving Fisher’s mechanistic theories on money came, probably, in Benjamin Anderson’s 1917 book, The Value of Money. A much sounder theory of money, thank Irving Fisher’s, came five years prior to Anderson’s book, by the name of The Theory of Money and Credit. This seminal treatise on money and money substitutes was written by Ludwig von Mises, who remains the most important economist of the 20th Century. As I mentioned in the first point, it is worth something when your greatest students (Milton Friedman, in this case) doubt you based on further empirical evidence (not just theoretical and logical opposition).

Without risking writing an essay and boring you, I will end here. Hopefully, my first point in particular will cause you to revise some of the opinions you hold, and will at least persuade you to take a deeper look in Austrian economic theory (and, you do not have to believe in their business cycle theory to agree with their monetary theories).

Sincerely,

Jonathan Catalán, EconomicThought.net

this was never meant to be an honest “critique”… as Mr. Fox makes it a point to mention how short the book was, how few words per page there were and how fast he read it, and how Ron Paul must be a typical politician and not that other guy he’s heard so much about…. if only Ron Paul could have added some pictures to his pretty book it may have helped, right…. but what would you expect from a guy who writes for a CIA rage like TIME… this is nothing more than a smear job, and not a very sophisticated or eloquent one if I might say so myself…

correction… that is TIME magazine is a CIA RAG…. not rage… must have been a Freudian slip…

The world of economics changed in 1971, so quoting hypotheses written before then, or even written by economists educated before then, leaves one open to the criticism, “Things are different now.”

The changes include:
1. Prior to 1971, the U.S. government was limited in its ability to create money. Post 1971, that limit no longer exists.
2. This ability means federal borrowing and federal taxes no longer are necessary as fund-raising exercises (though both continue), because the government creates spending money ad hoc. In fact, tax money is not used for spending, but rather is destroyed upon receipt.
3. Thus, it functionally is impossible for the U.S. ever to be unable to pay its bills or to service its debts — even without borrowing or taxation.
4. Because the government itself cannot go bankrupt, no agency of the government can go bankrupt. This includes the agencies Medicare and Social Security, which often are said to be on the road to bankruptcy. Both can be financed in full by the federal government.

Also, not necessarily related to the end of the gold standard, every recession since 1971 has been preceded by reduced federal deficit growth, and every recovery has coincided with increased federal deficit growth.

Since 1971, there has been no relationship between interest rates and GDP growth, nor has there been a relationship between deficit growth and inflation.

Finally, the much touted federal debt/GDP ratio is meaningless. Federal debt merely is a measure of net federal money created over the life of this nation; GDP is a measure of goods and services created in one year: The ultimate apples/oranges comparison.

All of the above, taken together, indicate the fundamental debt hawk beliefs in the prudence of low or eliminated federal debt simply do not square with the facts. They have intuitive relevance, but so did the variable speed of light before Einstein.

Much of the above is discussed in greater detail at http://rodgermmitchell.wordpress.com

Rodger Malcolm Mitchell

I like Bill Still’s view of the issue better:

HIs last two documentaries did a great job of historical perspective of the problem and he gives some good ideas on how to fix the issue with the Fed…

On the same subject – Id like to hear your opinions and review of this dvd from Bill Still:

It covers similar grounds but actually provides a different answer – its not a gold bug viewpoint.

His older documentary “Money Masters” is also worth watching.

Mr. Mitchell,

If you believe that the government can spend, and finance said spending through the creation of fiduciary media, without any harmful side effects you are severely mistaken. You are ignoring the effects of monetary inflation on the stability of the currency. This includes the standard of living of the average citizen using that currency, and also the threat of hyper devaluation, or otherwise known as hyperinflation (or, when these citizens lose trust in the stability of the currency).

The idea that government can finance debt through money creation is not new. In fact, it has been spouted by mercantilists since the 17th Century. Indeed, it was John Law who persuaded the government of such sophistry, only to bring about the Mississipi Bubble and economic woes and devastation for France, however temporary (thankfully, they did not hold the same disingenuous and injurious “solutions” to depressions as governments do today).

It seems rather dishonest to discard liberal ideology written before the 1970s, but yet fall back to fallacious economic theory that has existed for a great deal of centuries.

Sincerely,

Jonathan Catalán

Mr. Catalan,

Sometimes facts disprove intuition. In 1979, the federal debt was about $800 billion. Today, it is about $12 trillion, a 1,400% increase in only 40 years, the fastest debt growth in our history.

In that time, inflation has been what the government wanted it to be and I see no signs of hyperinflation. Lately, there have been concerns about deflation.

If we repeat that experience for the next 40 years, the debt will be $168 trillion in 2049, inflation still will be under control, and I suspect the debt hawks still will be predicting the end of the world.

Since 1971, the federal government has had complete control over both the supply and the demand for money, which means it has control over inflation. It hasn’t uniformly used that control to best advantage, partly because of mistaken ideas based on intuition, but the control is there.

The world of economics changed as much in 1971 as did the world of physics in 1905. Unfortunately, economists are much more wedded to intuition than are the physical scientists, who are more respectful of facts.

If you are prepared to let go of intuition, and consider facts, please go to the various posts at http://rodgermmitchell.wordpress.com/2009/09/07/introduction/

Rodger Malcolm Mitchell

I’ve seen several comments about “fractional reserve” banking, perhaps the most frequently misunderstood concept in economics.

Most people would describe fractional reserve banking this way: First, the bank receives deposits, which are its reserves for lending. Then the bank lends a multiple of these deposits (or reserves), usually 5 to 1 or 10 to 1.

Wrong.

A bank with $0 deposits can lend millions, limited only by its own capital (not reserve) requirements. The act of lending creates the reserves, and whenever a bank is short of reserves, it merely borrows from another bank or from the Fed window, which never refuses.

Just thought you’d like to know.

Rodger Malcolm Mitchell

Please give me the “whims of the gold mining industry” over Justin Fox’s “enlightened” sociopaths in Washington and Wall Street any day.

I wonder if some day historians will look back and wonder how so many people were ever so masochistic that they WANTED their wealth systematically raided by malicious central planners and big finance… not to mention their economy hopelessly distorted.

I think the essence of Paul’s mistake is in the notion of ‘fiat currency’.

Fed Reserve backed bills are ‘fiat’. Gold, on the other hand, has a mysterious status as real. A holder of real value.

But obviously that is wrong.

Both types of currency express ideas of value, and also measure value, but BOTH are FIAT.

That means that BOTH are defined by law and subject to law. They are not outside the law. Gold has no mysterious properties, other than the fact there is (for now anyway) a limited quantity of it.

The truth of my view is shown in that the law stripped the value of gold as currency when we went off the gold standard.

Gold is subject to law, not superior to it. It’s value is defined by law, not prior to it. It can also be devalued by law, as the move away from the gold standard shows.

The only question is, is it useful to have a limited amount of something, such as sardines, or lead, or uranium, or gold, to peg our currency to, to force us to have a constant monetary base, or is it useful to be able to inflate our monetary base in some contexts?

It is well known that the countries that went off the gold standard pulled out of the Depression more quickly, so we have our answer – no need for the gold standard.

First: You don’t mention Ron Paul’s bill before Congress, re: legal tender. It’s germane. Hello?

Second: Why does this have to be a critique? Why not an appreciation?

Is it cooler to be snide? – we need more intelligent affirmation and validation of our idea people, not one more critic when the US has such rampant problems with lobbyists and bogus policies that only private parties now keep track of M3 (money supply) issues. The US govt doesn’t even care how much printed paper is out there.

You can do better, and soon.
Step up.

Paul’s ideas and those of thinkers like him make interesting philosophical arguments. They depend on a view of humanity that has proven false, but the real point is that philosophy is not governance, that conceptions of entirely different and essentially imaginary systems are not actual alternatives but are at most philosophical constructs which can, again at best, illuminate some of the problems we have with our actual methods and systems.

The problem is that people actually believe we can and should delve into a nearly science fiction alternative reality scheme for our actual financial and political system. That is delusional. By contrast, imposing any new healthcare regime – from insurance coops to nationalization – has been tried in many locations and we can see how it goes.

Another delusional aspect is something you hit on in your post, that Paul and the people who think like him take a few connections to real ideas and real history which can be evaluated and extrapolate wildly from them. If you search the net, you’ll see this kind of thinking evidences certain well-described forms of fallacious argument. It also fails the famous crackpot tests, though without references to Newton or Feynman.

My belief is that a main attraction of Paul’s beliefs is the very fact that they can’t be implemented. They are thus always full of unrealized promise. It doesn’t matter that the ideas are full of leaps of faith because they aren’t “real” and thus the believers feel psychically and emotionally bound to and empowered by what could only be if only we …

It’s interesting to note in my conversations with these people that they see the fallacies in the beliefs of others – such as environmentalists who believe we can reform human behavior to think for the betterment of the group – and yet they can’t see the same fallacies in their own belief system.

But what can one expect in an age when the concept of faith has been perverted. In old days, faith was intended to be rational: you didn’t know how the universe actually worked and maybe magic was possible and maybe you even saw it every day. Now faith has become counter-factual, a thing you believe in despite the evidence. So you believe evolution is wrong because that is your faith and your faith isn’t able to adjust to facts that have been learned since that faith formed. So you believe in thinking like Paul’s despite the facts against it because your faith in it becomes what matters.

This is the problem with Austrian School of Economics which view all economic conditions as a result of governmental actions. They fail to realize that boom and bust cycles are as natural as the sun rising and setting each day. Yes, governmental policy does have much to do about the state of the economy but even if we were on a gold standard such cylces would continue.

Maybe a reading and understanding of the year of jubilee found in the old testement combined with a study with the work of Kondonkiyk (sp) would be a good start for these folks.

Don’t get me wrong, the Austrian School of economics is 90% right but they miss the boat all together when they fail to understand the economic law of cycles.

2. Indeed, there’s little connection between welfare and central bank per se, but it truly is so, that when you destroy the Fed, you take away the instrument from the government which can (and WILL) be used for the embetterment of certain groups of population.

So the indirect connection is still there.

3. Paul is wrong here, I think, since destroying the Fed doesn’t stop business cycles. He should read up on Hayek who theoreticized that to stop business cycles, one must not only abolish the Central Bank, but also destroy the state fiat currency (which means that all business operating in the US HAVE to accept US dollars or face criminal charges) and take away its money printing monopoly (not in a sense, that any bank will be able to print dollars, of course, since that would just be counterfeit money, but that any bank will be able to print any sort of currency, and any business can use it as money, alternative to government-provided currency).

4,9. That’s why sticking to gold standard is not such a good idea, I agree here. But its still better, than endless inflation, if you have to choose.

The best choice for the people would be freedom to choose out of many currencies, that don’t have ‘standards’, but rather pin their value to their purchasing power of certain kinds of goods (depending on the geographic area, the area of business, etc.) – for certain narrow branches of industry, ‘oil money’, that are pinned to the amount of barrels that can be purchased would be more suitable, for most people – it would be some currency pinned to the basic needs goods basket, for example, 100 units of some other currency can be used to buy 30 litres of milk+ 30 loaves of bread + 15 kg of pork, etc.

And as soon as the people see, that 100 units of this currency have lost their purchasing power, they’ll see another bank offering them a more stable currency, which doesn’t inflate.

The main goal being to keep both inflation and deflation to virtually zero.

5. Its obvious. Inflationist policies take away your savings, its like additional taxation on storing money – the purchasing power of these money will be quietly disappearing.

It’s okay to disagree with Ron Paul. But your disagreement can and should stand on your logical arguments. There was absolutely no need to call him “delusional.” That slur diminished my belief in your impartiality.

http://elainemeinelsupkis.typepad.com/money_matters/2008/05/elaine-meinel-9.html

In the above link, ‘Gold As Regulator, Gold As Libra’ I explain that gold operates as a restrictor of creation of ‘money’. That is, due to being rare compared to other things and due to the difficulty in finding gold, gold being not-infinite, means that anything denoting value using gold as the gage of measurement leads to stability in pricing.

Let us be frank: humans love infinite wealth. Anyone who devises a system that can lead to infinite wealth via adding numbers to something, will do this. Of course, in the real world, all this does is debase whatever is being driven to infinity.

The obvious example of this was Zimbabwe: during the last 2 years, the Zimbabwe dictator paid for everything via printing endless zeros to paper money which was then passed out to the populace. Eventually, this led to intense, Weimar level inflation leading to the collapse of the entire banking and commerce systems of that African nation.

Now, for some curious reason, the news about this massive hyperinflation didn’t stir much interest in US media. Ron Paul noticed this inflation and talked about it but other than blogs like my own, http://emsnews.wordpress.com/2009/06/20/dr-fekete-talks-about-bond-markets/
there was virtually no comments about this in mainstream media.

I suspect this is because we are all ‘whistling past the graveyard’ of currency collapses. The shocking fact that Asia now holds over $3 trillion in cash in their FX reserves as well as another $5 trillion in US public debt should frighten our rulers as well as our laggard media bosses…many of whom are now facing bankruptcy, themselves, and desperately want to be bailed out.

Inflation degrades debts. The US is frantic to pay off old debts by adding zeros to pieces of paper and then handing this over to the Asian export powers and thus, discharge all of this reckless debt with worthless paper. A deflationary system will drive us into bankruptcy!

And the author of this piece should be fired. He states that governments don’t go bankrupt??? That is sheer insanity. History is littered with the corpses of collapsed governments driven off the cliff by debts! This is the chief cause of the death of all empires and all empires die in the long run. Government defaults are extremely destructive, just look at post-Soviet Russia!

The social and political chaos of bankruptcy is extremely dangerous, the bankruptcy of the Weimar Republic and how it was replaced by Nazi Germany should be a very strong warning about the dangers of bankrupting a government. France went bankrupt in the late 1700′s and this led directly to a revolution, just for example.

China’s plan for the US is very simple: they will give us credit so we can continue to borrow from them and they will capitalize our government debts….and they are by far, the biggest alien holders of our debts….and eventually, they will force us into bankruptcy and thus, destroy the mighty US empire and drive us out of Asia for good.

And by running all our systems deep in the red and deinudstrializing our own economy, we are playing straight into this scheme and in another 20 years, will greatly regret our ‘funny money machine’.

It is clear that Time Magazine has lost all credibility and is just another publication for the banking elite. People are now going to Zero Hedge and Market Ticker to find the real news. Here is the latest from Zero Hedge;
http://www.zerohedge.com/article/good-morning-worker-drones-week-mayhem-16

Its funny Time Magazine fails to mention the covert monetization of US treasury debt by the Fed, the lack of prosecution of a wide range of financial crimes by the Obama administration, the lack of any meaningful financial regulation such as Glass Stegall, Wall St’s dependence on $500 billion to $1 trillion dollars in laundered drug money every year (think Afghanistan), or the use of financial derivatives to skim off the productivity of every American.

Lets face it too Obama is a sock puppet for the banking elite too. He has done nothing except continue the same policies as Bush. And now that the private insurance industry needs a bailout, well now we have to hand over our money to private insurance companies in the name of healthcare.

I prefer “CIA rage.”

I still don’t understand the anti-fiat money people. If I really want to store my total accumulated value in the form of gold, I am already free to do it. As far as I know, the government doesn’t force anybody to use dollars, people do so of their own free will. If fiat money was so awful and hard currency was so good, why isn’t everyone rushing to get rid of their dollars? There are plenty of commodities they can choose from, whether it be wheat or pork bellies.

Well, people won’t accept pork belly futures as payment you say. But isn’t that their choice? If people demand fiat money, give them fiat money. If they demanded hard currency, then they would use hard currency.

Rodger… I’m sure Brazil felt in control of it’s currency shortly before 30377% inflation. The illusion of monetary control only goes so far–does the govermrent tell inflation to jump and it replies ‘how high’? If there was even a fraction of the control you assert, there would be no bad times.

It’s amusing that whenever we have some sort of temporary economic crisis, the entire system is judged by many to be useless, corrupt, invalid, in need of radical reform. (Fill in the appropriate descriptive.)

A few other remedies for keeping the current system viable are certainly available.

Better enforcement of rules and laws is first among them. Criminalizing civil infractions are among the options. Higher taxes on some portion of the profits on extremely risky investments – exotics – is another. The purpose of this would not be to penalize the risk-takers but to insure against crashes. Democratizing the governance of money is another option. The Fed and other institutions are simply too intellectually elitist, being governed only by economists, business types, etc. There is room for other voices.

The notion of returning to a gold type of standard is ludicrous. The notion of money and credit has always been conceptual, and now that we have the means to extend that conceptual-ness, only a fierce Luddite would want to go back. (When we had steam engines, it took less time for a train to go between New York and Boston than it does today. Therefore, we should return to steam engines?)

Further, the libertarian notion that all government is bad borders on the lunatic, particularly in a democracy. Engagement in their ontological fantasies is absurd. Practically 7 billion people on the face of the earth and it’s recommended we revert to some prelapsarian system? Making me laugh out loud.

Jimmy, of course the government forces everyone to use dollars.

The United States Coinage Act of 1965 states (in part):

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts.

That’s why legal tender arguement is all about. You can’t deny to accept US dollars when you run your business in the US. As well as you can’t print your own money, since the government is the only one who has the right to print money.

Nobody rushes to get rid of dollars because currently there’s no alternative, dollar is the best of the worst. There is no hard currency, that has enough liquidity to complete with the dollar.

Pork belly futures aren’t a currency, thus the example isn’t valid.

I think the fed/no fed debate and emphasis on the free market places much to much faith in human nature, praxeology or not. As only a single historical example, of which there are many, the ancient Romans had many booms and busts with considerable harsh effect on the “plebians” often caused by manipulation of commodity markets such as grain by very wealthy individuals. In our own time, the current financial crisis was not, IMHO, created by the fed, but by the completely unregulated, i.e., free, CDW and CDS market, which was and is nothing more than legalized gambling, and which was made illegal shortly after the 1929 crash and made legal again in 1998 upon the urging of the free market’s greatest advocate in government, Alan Greenspan, and others. Greenspan was a disciple of Ayn Rand, as vehement an advocate of the free market as one can get. And, Greenspan famously admitted before Congress that he was wrong in placing unreserved faith in the free market.

By some accounts, at the point of failure of AIG without the government bail-out, there was over 560 TRILLION dollars of CDW/CDS contracts out, all betting on sub-prime mortgage backed securities. Now, one might argue that the sub-prime mortgages were the fault of the fed, the banking system and debased currency, and I might agree, except for the fact that sub-prime mortgages had simply replaced DOT.com stocks and crude oil futures (a commodity) as the object of greed and speculation which caused the bubble. Business cycles are, IMHO, a function of human greed and the herd mentality, and as Jesus says of the poor, they will always be with us. And as Joseph told the Pharoah, fill the granaries during the good years because there are bad years coming. Some heed this advice. Some do not. Some profit in good time and suffer in bad times. Some profit in good and bad times.

Whenatlastwego,

the economic libertarian notion is not that all government is bad, but that government doesn’t possess the whole range of information to make a good decision with regards to market politics.

The reason for that is that it doesn’t exist yet – the information, that is necessary for ‘good market regulation’ (I use this term loosely here), may be created only through unrestricted and free enterprise with the Enterpreneur being the main researcher of market trends.

But that would put the ends at odds with the means, wouldnt it?

[...] A critique of Ron Paul’s ‘End the Fed’ – The Curious Capitalist – TIME… After being urging to do so by several readers, I finally read Ron Paul’s End the Fed. I was about to buy it for the Kindle I got for Christmas, but when I got to work Monday morning there was a package in my mailbox from Gary Howard at Paul’s Campaign for Liberty with two copies of the book. I gave one to my colleague Stephen Gandel, and started reading the other. I had told Hunter Lewis that I was going to read his Where Keynes Went Wrong first, but when I saw how short End the Fed was (and how few words per page it contained) I figured I could finish it in a couple of hours. It took about three, and it was worth the time and effort. I didn’t learn anything new about monetary economics or the Federal Reserve, but I did learn a lot about the thinking of Ron Paul. It turns out to be a curious mix of the sensible and the delusional. To put it differently, Paul has wrapped a mostly cogent critique of central banking in general and the Fed in particular inside a decidedly utopian view of what a world without central banks would look like. At one point in the first chapter he warns that “ending the Fed is not a magic pill to usher in Utopia.” Then, throughout the rest of that chapter and the rest of the book he describes how ending the Fed would usher in a state of affairs that sounds an awful lot like, well, Utopia. [...]

Doublethinker – I hear what you say about the means and ends and private enterprise. But, as to libertarians in general, sorry… they are pretty much hands-off types, especially Mr. Paul. That he at least states he never votes for legislation that is not expressly contained in the Constitution tells me he would like to roll back the clock to what? Some now discredited notion that the Constitution is the only worthwhile document of the last 230 years? It is also very telling that one of his idols is Grover Cleveland, a person who was whipsawed by silver, gold, Depression and labor strife.

Monetary policy is a reflection of the social goals of the society. In the US it is economic growth, consumerism and consumption through expanding credit, both for the individual and the government. I have often wonder why if Ponzi schemes are so bad, the US government runs the biggest in history.

As an illustration, Lycurgus, who was told by the Oracle at Delphi that the love of money would be the downfall of Sparta, outlawed gold and silver money and instead made heavy iron disks the currency, did so to promote the Spartan social order he believed that reflected the greatest society possible.

In the US and west, we believe that the society that provides the greatest availability of goods and services to the greatest number of people is the greatest society possible. This philosophy has been taken to the point that entitlements have been created to make up for any inability, through planning, effort or chance, of individuals to provide for themselves. Since the system of production and distribution of goods and services that has emerged in the last century plays to the greed and sense of security craved by individuals, both the poorest and the wealthiest but in different ways, it is not likely that the objective of society will change short of revolution or destruction from internal collapse of social order (which some predict from the current financial/economic situation) or external invasion.

Paul, as I understand him-admittedly poorly-and other Libertarians want to revise not just the financial system, but the philosophy of US society. Alas, Ron Paul is not an American Lycurgus, if for no other reason than there is no Oracle at Delphi, (Omaha notwithstanding), only the latest opinion poll by whatever organization is pushing its view.

Still, I would rather live in the US, with a Fed, and US ponzi scheme, than anywhere else I know. At least for now.

Whenatlastwego,

on the contrary, I believe he’s quite coherent. It’s not a ‘hands-off’ approach, its a laissez faire approach.

He simply stands out out as a ‘hands off’ guy because there’s not a single law proposed that actually reduces insteas of increasing government meddling in the economics – the main difference between republicans and democrats being which way to spin it.

Since the triumph of neoclassical/neokeynesian model, it has become part of ‘conventional wisdom’ that some sort of state meddling is absolutely necessary, that state economic interventionism can be positive if you do it right, that upwards and downward trends of the market can be predicted, that you need to play around with inflation to spurr economic activity etc.

That’s a whole layer of bogus ideas, that austrian school has been trying to dispell for some time, quite successfully I believe.

This month I posted an article about how the UN is about to mint silver and gold bullion coins to function as a global savings currency.

http://humanist.ws/?p=630

This of course is “Future News”, “Good news ahead of its time”, a trial balloon for discussion purposes – which – as you might gather from this article and its comments, indeed needs exposure because I’m not seeing much reference here to the possible global dismounting from the dollar and its consequences. (The coin dealers and gold bugs did just about go crazy, though ..

As a Humanist I look forward at last to responsible species governance via the UN, and an end to Forex, carry trades, and fiat paper money fiascoes.

If a worker anywhere in this world can save up some currency he should be assured that it is not going to be declared worthless, and his labors made a mockery of the day he attempts to retire.

If pension funds and citizens in the US had not been railroaded into the stock market parimutual then we wouldn’t have the millions of destitute seniors we have now, or the vacuous real estate market that floated on too-easy credit. The only counterweight to greed is fear, and we now have plenty of the latter.

Competition is a cornerstone of the American economy, and the circulation of UN bullion coins would not only help fund the UN, it would keep a whole hell of a lot of people’s fingers out of our piggy banks, or at least keep them from smashing them to pieces right before our eyes.

If a currency could not compete with the Uno or Oro I postulate, then it should step aside and allow citizens to sleep at night. Two thousand years on the gold standard can’t be wrong.

No one forces you to take on dollar denominated debt. The only time you are truly forced to use dollars is when you pay your yearly income taxes. In that case, once a year you can exchange some portion of your pork bellies for dollars and be done with it.

Jimmy,

Debt made in any other form of payment can still be repayed with dollars.

once again:
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.

It doesn’t matter what your debt was made in if you reside in the US.

Also, you ignored my point about the problem with liquidity.

doublethinker8 – of course the expressions “Laissez faire” and “hands off” mean basically the same thing. So, not sure what you’re driving at. As to what the Austrian school believes, it has yet to be practiced in even a vague way anywhere at anytime in recorded history. So, they’re abstractions are more ontological masturbation. What you call meddling another person may call governing. Governments have been involved with economies as long as economies, as we know them, have existed. Those involvements may not have been with monetary policy as defined today; but surely as long as coinage has existed, for instance, debasement of same has gone on. Protectionism is also as old as history itself. Your goat meat is not coming onto my side of the river. I think the philosophical difference here is that if you believe in your fellow citizens, you believe in government. If you think of your fellow citizens as incapable of forming a government, you end up against any government legitimately brought forth by the people. It is a short putt to then deconstruct all government institutions and live in anarchy. The history of the West is essentially the movement to de-privatize all sorts of institutions: armed forces, justice, travel, water and other resources, and so forth. Why anyone would want the money system in private hands defies reason. If you think you can’t trust the markets now, imagine how hopelessly erratic they would be without intervention.

I meant: So, their (not they’re) abstractions are more ontological masturbation. (When talking about the Austrians.)

What a great idea: let’s go from a completely intrinsically worthless paper standard to a nearly equally intrinsically worthless gold standard in which places like South Africa have the most gold. Nothing like having one meaningless standard replacing another meaningless standard.

And by the way, the notion that paper currency is necessarily worthless means that shares in a company are equally worthless.

Ron Paul may be not the most effective communicator. His book is probably more intended for the average joe rather than for someone who already has basic knowledge on economics, as it appears most of you already are. If you would like a much clearer and detailed reasoning behind his arguments, I would recommend you read Murray Rothbard’s “The Mystery of Banking” which is available as a free pdf: http://mises.org/Books/mysteryofbanking.pdf

Justin Fox’s red-herring charge of utopianism betrays his slavish devotion to “crackpot realism” (C. Wright Mills’ term), which he uses to curry favor with his *Power Elite* (the title of Mills’ book) handlers at *Slime* magazine. Every time a libertarian sets forth a common sense, free market alternative–who on earth can object to the abolition of legal tender and the competing currencies that would ensue?–to the statist quo, the statists parry with their usual pack of lies, half-truths and innuendo.

Thus, putting one’s faith in the the morally and fiscally bankrupt U.S. leviathan’s flimsy green certificates is “realistic,” while permitting the most marketable commodity to serve as currency is utopian, half-baked, cooky, cranky and no doubt anti-Semitic. Now let’s move on to more important subjects. Is Brittany Spears still sporting a navel ring? Doesn’t she know that’s why the terrorists hate us?

To Tonypivetta: Putting faith in a semi-shiny metal is less crackpot than putting faith in currency? Puleez. The entire world economy would come to a standstill within days. Maybe hours. While I agree that there is a huge disparity of income and wealth in the world, you can’t realistically think that gold (or some other metal or commodity) isn’t owned disproportionately likewise, or believe it will continue to be so. Blaming currency on wealth disparity is like blaming wheat for stale bread.

Reading your coments on your artical should clarify what you have missed in reading the book. One way or another the monitary messes are caused by the government and the fed. Get rid of them and we would advance civilization. But Cane will still beat Able over the head.

People who hold up the economics of the 1800s in the U.S. as a model generally ignore the 2 most important economic factors of that century:

1) Free and dirt cheap land doled out as a result of the Louisiana Purchase and the land grabs of Texas, New Mexico and California. This was the engine of the economy — in addition to enabling average people able to set up shop as farmers with virtually no investment, huge tracts of land with enormous mineral deposits (coal and iron especially) were very easy to acquire or control. The transcontinental railroad (a government project paid for in great measure with land grants) fueled every aspect of the economy. There is nothing in the modern economic landscape that offers such easy pickings.

2) Most people didn’t use a whole lot of money. A large portion of commerce was conducted as barter. In a predominantly agrarian society, the average Joe didn’t get a paycheck or have a bank account. There was virtually no consumer credit. Comparing buying power or savings ratios then and now is comparing apples and oranges.

One thing you neglect to mention, is that in the decade heading into the current crisis, the supply of currency was expanded by no more than it would have been under a gold standard. What the economy looks like today, deflation and recession, is what you will always get under monetary policies that resemble a gold standard.

Also, while Paul claims eliminating the Fed would end the corrupt influence of banks, this policy is exactly what these corrupt banks want most. Money lenders always favor deflation and a strong currency, as it means they get paid back in more valuable dollars than they lent. And, those with wealth always favor low inflation, because inflation is in essence a tax on wealth. One is accustomed to hearing from Paul supporters though such absurd arguments as “inflation hurts poor and working classes most”–which is essentially a non-sequitor. Really, his argument is a kin to suggesting we could end the corrupt influence of the mob by eliminating the FBI.

But the so called Austrian School is less a school of economics than one of political rhetoric. When you read what they have to say, there is little actual study of economics involved.

What we are dealing with here I think is a difference in socio-economic philosophy. Ultimately, maintaining strong economic growth requires a socio-political system which achieves some balance between the protection of property rights and the equitable distribution of wealth. At the one extreme, communists seem to make equality such an absolute, that they are willing to sacrifice the economic well being of all to achieve it. The so called Austrians seem to be at the other extreme, with a similar result. The preservation of wealth is made so paramount, that they would gladly sacrifice economic growth and national well being for the many, so long as the permanence of property is made an absolute. The end result is something like feudalism; economic growth and innovation is curtailed in order to preserve an existing imbalanced class structure.

It makes little sense then to argue with them that the policies they propose would naturally lead to a deflationary spiral; a deflationary spiral seems to be their preferred outcome, leading to cheaper labor costs and relative gains for those who hoard wealth rather than invest it.

You know, it is really irritating reading some of the comments here. Here is the problem as I see it:

Why does one man have a right to do something which another would be imprisoned or shot for if he did the same thing? Someone, Bernanke, Obama, ect. can just print up money, however much they want, and keep some, and give some to others who recieve it for nothing. If I were to do the same, what would be the consequences?

You people who want Fiat money, should have that right, a right which you are not willing to allow others to have, you would gladly see me thrown in prison or shot if I printed my own Fiat money.

That one man has a right another doesn’t have brings about a Master/Slave relationship. Which no honest person would support. Of course the Masters like this situation, but is is the obligation of the Slaves to fight it, and the Government to support them. It is, after all, the duty of a JUST government to respect all its citizens equally, not favoring some over others. Such a Government is UNJUST, and should be overthrown.

I see it as your right to use Fiat money, and the government’s obligation to protect your right. It is also my right to not be forced to live under your system, and the government’s duty to protect my right in this. If they refuse to protect my rights, why am I obligated to follow their laws?

When the government claims that only FRN’s are legal tender for all public and private debt, it gives a tremendous advantage to the Fiat money people at the expense of the hard asset people. This is unfair, and should immediately be abolished. And don’t ask me what I would replace it with, because I am not so arrogant as to think that my idea should be forced on anyone else. All I can say is: replace it with nothing, let the FREE MARKET work that out for itself, (and it would).

I don’t want to hear your nonsense about the booms and busts prior to the Fed. You cannot tell me there wasn’t any government and banking manipulation and dirty deals going on then that caused it. How can a Farmer, for example, cause a boom or bust? Your arguments are, in my opinion, nonsense. You are free to have them, however, just don’t force me to have to accept your opinions, as I am forced to do now with the Fiat money. I cannot, for example, get my employer to pay me in gold, because he is afraid of the government and it’s tax laws. So don’t tell me that I am not being forced to accept it. I cannot “opt out” of the social security pyramide scheme, which only accepty Fiat money, and will only “pay me back” (laugh) in fiat money. Now the fed wants to force me to buy health insurance, also payable only in Fiat money. Where is my right not to have to accept it, or use it?

dragooshka said: “Why does one man have a right to do something which another would be imprisoned or shot for if he did the same thing? Someone, Bernanke, Obama, ect. can just print up money, however much they want, and keep some, and give some to others who recieve it for nothing. If I were to do the same, what would be the consequences?”

Ummm you can’t really believe ONE MAN is making all these decisions, can you? We go to a voting booth, we elect a government, the government makes choices. Don’t like the choices? Work harder to elect people whose positions you like. Run for office yourself. Start a political party. Spend your money backing candidates. If you lose, you lose. You win – bully for you.

As to being in an involuntary society… living under any social governing system is involuntary. Being in a group means, prima facie, surrendering of personal freedom. We all live that way. Most of us don’t see it as a stumbling block to success or broader freedoms. Even if you could reduce humanity to operating only as basic units – the family, or a small tribe – don’t you think you’d be under some form of “coercion” to conform? Of course you would. Unless you want to live alone, perhaps in some wilderness, you can’t escape unfortunate, or even damaging decisions. Just the nature of living in society. You sound like some sort of ranting hermit-to-be, hoping for a fantasy world.

Finally, the term “fiat money” is utterly meaningless. Money is backed by all sorts of physical things – production of real goods, for instance. Gold, which has very little intrinsic value beyond jewelry, filling teeth and a small handful of industrial applications, is, in truth, a parallel fiat currency. Let’s pretend that you are a worker who comes to me for a job. I am paying in gold. I don’t know much about you and you have no experience, but I might be willing to take a chance on you. Another worker who comes highly recommended and has 10 years experience also wants a job. Who would be paid more gold, and why? I can choose the worker who will turn out more goods of higher quality but that would cost me more gold. If I choose you, then I get fewer goods and poorer quality. The gold has instantly turned conceptual. Its intrinsic value didn’t change, but the value it could be traded for is in question. The paper money you call fiat, is simply a stand-in for the equally uncertain trade value of gold. It carries the same information as the gold, but in a far more complex and more thorough manner. How would you store and transport your weekly pay in gold? Who would weigh it? who would cut it up? How would standards of purity be established? By a central gold governing board, you can bet your life.

Further, Dragooshka, you ask: “How can a Farmer, for example, cause a boom or bust?”

Certainly one farmer can’t cause a boom or bust. But, if all the farmers in the country got together and decided not to sell, for instance, wheat or corn for a year, you’d see some pretty serious chaos. But, under raw free market rules, which sounds like what you’re advocating, the farmers group (cartel) could do just that. Confusing government inadequacy and the effects of human behavior is silly, at best. Plus, a government has a responsibility to protect the REASONABLE rights of an individual, not every half-baked economic scheme that comes down the pike. When the government issues a speeding ticket, it is not infringing on the speeder’s “rights,” but rather preventing damage to the whole group. Simple logic.

There never has been anything remotely resembling a free market since ancestor Org traded a shred of mastodon meat for a handful of wild berries from ancestor Irg. But even then, you can believe that some sort of social norm or conditioning, no matter how primitive, was at work determining the relative values of the meat and berries. And if the two ancestors came into conflict, you had also better believe that they went to the chief or a tribal council to hash things out. (You know… like the Fed of its time.)

Your argument that Paul believes the business cycle is caused only by the fed leaves out one crucial aspect of his (and his source Rothbard) argument. They both argue that it is fractional reserve banking (and corresponding inflation and deflation with the ebb and flow of money supply as banks exp various stress) that is the true source of the business cycle. The fed merely allows this fraudulent ponzi scheme system to exist by being the lender of last resort.

To add on to what I am saying, the only way to stop the business cycle is to:
1) Prevent banks from inflating and deflating the currency (the ultimate cause of boom and bust).
2) Banks are allowed to inflate the money supply about 9 to one for each dollar of money created by the central bank. As is Paul’s argument in the nature of the Fed chapter, when a bank makes a contract to return your money to you on demand and then turns around and lends it to your neighbor in a long term loan, this is an inherently unstable system and is a fraudulent contract. When the system breaks down the Fed rides to the rescue using your money (labor) to bail them out.
3) In a Paul / Rothbard world, banks would not be allowed to lend money which is guaranteed to a depositor in a short term contract. Long term contracts would be required (think 2-5 year CDs which are NOT able to be withdrawn until maturity) this is a true contract that a bank under stress could fullfill. Otherwise if it is a demand deposit the bank would have to the ENTIRE demand deposit in reserve.

So your argument that he is claiming the FED is the cause of the business cycle falls short of what his book actually says. Its the fractional reserve banking stupid!!!!

“How can anyone lend more than they have? That is fraud and would be prosecuted under free-market capitalism.”

If I–as a private individual–promise to pay you money in the future that I do not currently possess, is that fraud?

This is the exact same thing that banks do when they “lend more than they have.” They are not actually lending more than they have–they are simply loaning out deposits. If they loan out too much, the bank will go out of business (well, it would have before the Fed and federal deposit insurance). This process can only be considered fraud if depositors don’t know how the bank works.

When you deposit money into a fractional reserve bank, it is a loan to the bank, to be repaid under certain contractual conditions. The bank is not a money warehouse. This must first be understood.

Of course, government guarantees have taken the risk out of banking and perverted the incentives beyond recognition. At this point it probably could be considered fraudulent.

However, a truly free banking system would not exclude voluntary fractional reserve banking any more than it would exclude individuals from making promises to each other to repay in the future.

George Selgin and others have outlined how such a system could work absent government involvement (and has in some places, although it was never practiced in the US). From what I gather, he believes that competitive fractional reserve note issue would tame sudden changes in the demand for money (preventing harmful deflation and inflation episodes), while still resulting in gradual price deflation over the long term.

I too like utopia having read such things as Small is Beautiful, The greening of Mars, and I think “Utopia” where the North West (n. Cal, Or, Wa) leave the rest of the good Ol’ USA. But I also know in utopia of any kind the big boys win and the rest of must live in colorful little huts with thatch roofs or some such cute English environment. Give me a little government control that works to protect us little folks. Make it illegal for lobbyist to communicate with the fed or people who take care of financial problems so I (a little person) know they are making “rational” decisions in my favor and the big boys will survive. They always do.

PS
I am sorry the curious capitalist is leaving Time. I enjoy his stuff.

“Why does one man have a right to do something which another would be imprisoned or shot for if he did the same thing? Someone, Bernanke, Obama, ect. can just print up money, however much they want, and keep some, and give some to others who recieve it for nothing. If I were to do the same, what would be the consequences?”

First of all, there are plenty of cases where A can do something that B cannot. I can’t lock someone up because they’re suspected of committing a crime. I cannot demand that the CEO of Ford appear before me and my buddies to answer questions. I can’t declare a patent to be valid.

Secondly: it’s not like Ben Bernanke can just grab a thousand dollars off the press, stuff them into his wallet, and walk away. That’s not how this works at all, and I expect you know it. New bills are channelled through appropriate currents.

I don’t agree with your supposition that because we live in a society that necessarily means we have to give up our freedom.

When the money is printed up, you say, it is sent through the proper channels. What channels might they be, certainly not to my pocket. Someone else is getting that money…..for free. I.e. they didn’t work for it, they are just getting it. Don’t really care who is getting it, or why, if they haven’t earned it, like the rest of us have to earn our money, it is theft. I bet you think the ‘proper channels’ are whatever the politician says it is.

When extra money is printed up, it devalues everyone else’s money, which means everyone else is paying for it. It is just a slimy, sneaky form of Taxation.

“Ummm you can’t really believe ONE MAN is making all these decisions, can you? We go to a voting booth, we elect a government, the government makes choices. Don’t like the choices? Work harder to elect people whose positions you like. Run for office yourself. Start a political party. Spend your money backing candidates. If you lose, you lose. You win – bully for you.”

You are a bit childish to think that voting will make things better. What if I don’t want anyone ruling over me? What choice do I have? The government rufuses to allow a ‘none of the above’ choice on the ballot. I either have to vote for the left wing of the big government party, or the right wing. It is just two wings of the same party. Have no other choice.

When I say ‘one man’ it is an expression, not a point of fact.

It wasn’t your idea to give all power over to the Federal Reserve. Wasn’t mine either. We had no say in the matter, and aren’t allowed to vote on this now. We aren’t obligated to follow their rules, if we had no say in the process. The Fed is so powerful, even congress cannot controll it. There’s something wrong there.

The government ran up so much debt, our future, not yet born, children, will have to pay. Why are they obligated to pay this? Because they mistakenly were born into the wrong society? It is like saying that if someone was born into slavery, he sholdn’t have the right to throw off his chains.

“When the government issues a speeding ticket, it is not infringing on the speeder’s “rights,” but rather preventing damage to the whole group. Simple logic.”

Really, when the cop is hiding at the bottom of a hill, and writes you a ticket for going 1 mile over the limit? Who sets the limits? an why do they have that right? Was it given to them in a free and fair vote? Or did they just take that power to themselves and never allow it to be voted on?

Are the speeding tickets really to prevent damage, or are they to raise revenue? If no damage occured, why the ticket?

“What if I don’t want anyone ruling over me? What choice do I have?”

None – exactly my point. Why not head to the deepest recesses of northern Canada and be a society of one? You’re obviously unsuited to live among fellow mankind.

The cop can hide anywhere he/she wants. One mile over the limit is one mile over. Why not just go the limit and spare yourself? (I know… we should have no laws and trust to the good judgment of our fellow citizens.) Of course we don’t vote for individual cops. We vote for people who hire cops. Cops just don’t go out and “take that power.” Do they make mistakes? Of course. Don’t we all? They are just human beings like the rest of us, not gods who are perfect. The point about speeding laws among others is precisely to prevent problems. You can’t go around shooting a gun into the air on a crowded street and say – great no damage, so no harm, see ya in church this Sunday. Speeding causes accidents. I think a few months in jail with some time to think and not just fire off absurd comments would do you a world of good.

“I either have to vote for the left wing of the big government party, or the right wing. It is just two wings of the same party. Have no other choice.”

But you do have a choice. Start your own party. Move to another country. Do civil disobedience and go to jail to make your point. (Sit down in front of the Fed or some such.) You want to be impotent, so you’ll remain impotent. Your problem, not mine.

“But you do have a choice. Start your own party. Move to another country. Do civil disobedience and go to jail to make your point. (Sit down in front of the Fed or some such.) You want to be impotent, so you’ll remain impotent. Your problem, not mine.”

Yes’ massah!! Anytin’ yo say massah!!! You are the slave who just love to kiss his masters ass.

You go to canada. Take Obama with you.

Does anyone else on this thread really think Obama is an honest man? Or any other politician, for that matter? If you want to be ruled over by a bunch of liars, that is your choice. You are the impotent ones. What have you ever done to ‘change’ anything? Are you really happy with our situation? If not, you ‘change’ it.

“The cop can hide anywhere he/she wants. One mile over the limit is one mile over. Why not just go the limit and spare yourself? (I know… we should have no laws and trust to the good judgment of our fellow citizens.) Of course we don’t vote for individual cops. We vote for people who hire cops. Cops just don’t go out and “take that power.” Do they make mistakes? Of course. Don’t we all? They are just human beings like the rest of us, not gods who are perfect. The point about speeding laws among others is precisely to prevent problems. You can’t go around shooting a gun into the air on a crowded street and say – great no damage, so no harm, see ya in church this Sunday. Speeding causes accidents. I think a few months in jail with some time to think and not just fire off absurd comments would do you a world of good.”

You really are an idiot. You think I should go to jail for having an opinion you don’t like. Well, Heil Hitler!!!

People get killed Skiing, Bicycling, Boxing, Smoking, Overeating, Falling off Ladders, Slipping in the Shower, and so on. I suppose these things should be outlawed too? And anyone should be thrown in Prison who disagrees?

I think you spent too much time in government school. Get a real education.

I’m very happy, in fact. I understand the nature of my duty to self and I understand my duty to society. I love my country regardless of who is in power, although I prefer liberal government. For instance, I did not like Ronald Reagan’s policies, but I recognized his authority and respected him, if not for what he believed in, as the keeper of the presidential flame. You’re a ranter. Unhappy. Undirected. Quacking like Donald Duck running after Chip and Dale. Can barely keep yourself under control, eh? You are probably alone for good reason. And I truly understand why you’re all worked up about serving anyone or anything. Authority issues. Daddy issues. Or did mommy put the diaper on too tight? Poor baby.

“What if I don’t want anyone ruling over me? What choice do I have?”
None – exactly my point. Why not head to the deepest recesses of northern Canada and be a society of one? You’re obviously unsuited to live among fellow mankind.”

There are millions of people like me, who don’t want your government. Why should we all have to leave? Stop shoving your bullshit down other peoples throats and we could all get along just fine.

Hey, whenatlastwego, I suppose if the majority of americans were catholic, they could ‘vote’ that everyone has to be catholic, and whoever refuses would be imprisoned. And they would also have the right to attack and conquer foreign countries who aren’t catholic, kill them and take all their stuff: You would agree with this, because it was ‘voted’ for.

I think you should go and sit someplace quiet – a nice secluded lake, anywhere – to think through your anger, frustration and most likely, your failings in life. It was a joke saying jail. Get over yourself. The world doesn’t care that much. MILLIONS of people like you? You mean there are millions of impotent little boys in this country? Wooo – I’m shakin’ in my boots. And I’m not shoving, my little mouse friend. I’m voting. And guess what? we’re winning.

“People get killed Skiing, Bicycling, Boxing, Smoking, Overeating, Falling off Ladders, Slipping in the Shower, and so on. I suppose these things should be outlawed too?”

You’re equating skiing, bicycling, boxing, etc. with speeding on a public street? How empty is that head of yours?

As to the majority vote by Catholics nonsense… you’re obviously very unfamiliar with the Constitution. Plus worrying about what people might do is a lazy man’s way of dealing with what really is. (I’m guessing you’re a Catholic hater, among other things.)

I beg of you… don’t have children.

I vote we do what Andrew Jackson did, but that’s just me.

“You’re a ranter. Unhappy. Undirected. Quacking like Donald Duck running after Chip and Dale. Can barely keep yourself under control, eh? You are probably alone for good reason. And I truly understand why you’re all worked up about serving anyone or anything. Authority issues. Daddy issues. Or did mommy put the diaper on too tight? Poor baby.”

“MILLIONS of people like you? You mean there are millions of impotent little boys in this country? Wooo – I’m shakin’ in my boots. And I’m not shoving, my little mouse friend. I’m voting. And guess what? we’re winning.”

“How empty is that head of yours?
As to the majority vote by Catholics nonsense… you’re obviously very unfamiliar with the Constitution. Plus worrying about what people might do is a lazy man’s way of dealing with what really is. (I’m guessing you’re a Catholic hater, among other things.)
I beg of you… don’t have children

Yeah, i’m a Ranter. O.K. you’re not, You are completely level headed and clear.

If you are, what you call ‘winning’ then you are, by nature a loser. Do you have a job? Only a welfare queen or government employee would be so in love with the government as you are.

And I am not going to compare accomplishments with you here, you’d probably just lie anyway. Suffice it to say, I am not alone, Have children, Great Carreer, Great Education, Money. Everything you would want in life. These are not my problem. My problem is people like you, the know it all’s, who think they can tell others how to live, and steal their money to provide ‘services’ for them they don’t want or neede.

Wow Justin, big topic to tackle with two days left. You’ve obviously attracted a lot varied interests here.

I think that I’m going to side with some others here and mention that I too think that “ending the fed” is probably a bad idea or a least a move in the wrong direction.

I think that it would be far easier to remove the “fractional reserve banking” system and replace it with something less volatile.

Honestly, I’m OK with fiat currency. It has a bunch of weaknesses, but they’re relatively easy to mitigate. If we’re going to let people invent money, it should really only be one group of people and those people should be required to be highly transparent.

The problem, of course, is that making such a change basically requires a dismantling of the current banking system. So it’s unlikely to happen unless we make change whole-sale.

Honestly, I’m OK with fiat currency. It has a bunch of weaknesses, but they’re relatively easy to mitigate. If we’re going to let people invent money, it should really only be one group of people and those people should be required to be highly transparent

You know, you make a good point….for yourself. You should be able to use that money that you think is the best for you. Problem I have, is when it is the only ‘legal tender for all debts public and private’, requiring everyone to accept it.

We have different religions, races, languages, and ideas. They generally live peacefully alongside one another. Conflict comes only when one group tries to impose its ideas on another group.

We could have competing monies. We could even have competing governments in one geographical area. Why cannot we have 20 governments in the United States? It would be no more difficult than having 20 religions.

Generally I don’t like to quote others, but one thing I totally agree with is…..all men are created equal, and endowed by their creator with certain inaliable rights….life, liberty, and the pursuit of happiness.

If you believe that, then government is impossible.

In the last 100 years, governments have killed over 500 million people. Have stolen countless trillions of dollars. Have kidnapped and imprisoned over a billion people for crimes that haven’t harmed anyone, from political crimes, to getting caught with a forbidden plant.

People think we need governments to protect us from the bad guys….I say the government is the bad guy.

There’s a world of difference between fiat money and gold – gold has a lasting value, while a piece of paper does not.

It was worthy of 1 load of bread yesterday, it will be worth of only half as much tomorrow.

Gold is less prone to such fluctuations, since you can’t ‘print’ gold.

Why do you mix the Fed, and its money value control function. with the regulatory role of the government?

These are two independent functions.

whenatlastwego – And what if the constitution didn’t include the 1st Amendment, or we voted to repeal it? Would dragooshka’s example of the majority voting to force Catholicism on the rest of society be wrong?

If so, you believe in rights that even the government cannot remove from you.

The constitution exists to restrain the will of the majority:

“A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”
-Thomas Jefferson

“All, too, will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will to be rightful must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression.”
-Thomas Jefferson

“A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.”
-Thomas Jefferson

Now that I think about it if the Fed and some of the federal agenices like Fre and Fnm were gone the banks would do just fine, because they would have to follow their own due dilligence. This would elimante the systemic risk of moral hazard and casino behavior of the banks esp, because their money is at risk i.e. there’s no backstop insurance. Let the market set the interest rate and see how banks and comsumers behave then!?

If you read a little history you’ll discover that “casino behavior” was a huge problem before the Fed, maybe more of one. There were huge booms and busts and credit bubbles. The only difference was that banks just folded and you were out your money prior to FDIC. Also, banks used to write their own notes, so there was no uniform paper currency.

Ron Paul has latched on to a *small* issue and imagines it is a major root cause. Sadly he is 100% wrong. The private nature of the FED is a big issue but not the root cause of the massive problems of our economic system – the profits of a central bank should be distributed back to the people – not put into the hands of a select few. Since not a single poster has pointed out the real root cause I imagine doing so would fall on deaf ears. I will leave it at this: so long as we collectively do not identify the true root cause of poverty and the business cycle we will collectively cycle the drain until the day that we are destroyed.

Ironically the root cause of poverty and cyclic business behavior was exposed in great detail back in the 1800s by a very smart bloke (American no less) but getting his message takes some serious study and the very people who are smart enough to get it are too blinded by their own smarts to open their minds. It is so sad and frustrating.

If you are a Kensian, Austrian, or Ron Paulian but have this sneaking sense that not all is quite right please keep digging. If enough people can see though the fog and get a clear view it is still possible to save our society. Oh, by the way, Marx did sort of identify the root cause but his remedy is certifiably moronic. The guy had absolutely no grip on human behavior.

Peace.

[...] Fox, Time's "Curious Capitalist" blogger, recently read End the Fed and professes to be disappointed. He says Ron Paul, "succumbs to the temptation of promising an easy way out. Guess he's more of a [...]

[...] Magazine’s Justin Fox wrote an interesting, and in many ways correct, analysis of Congressman Ron Paul’s book End the Fed.  Before I give too much credit to Justin Fox, [...]

Zirb (comment #20) is correct that fractional reserve banking cannot really be characterized as an outgrowth of free markets. It was a legal question (revolving around the definition of financial fraud) that was settled by the courts in the 19th century in both the US and Britain. It was hotly contested and the outcome at the time was uncertain. If the courts had decided otherwise, the economy today would be far different. I personally think we would have had more, not less, economic growth.

Re Justin’s post (paragraphs 6 & 8), the problem of corruption takes a variety of forms. On form is that much of the Fed’s newly printed money flows to Wall Street, and Wall Street in turn sends back a portion to Washington in the form of campaign contributions. There was an enormous amount of this going on prior to the crash and no less since. Of course it is not just Wall Street. Fannie and Freddie may have been set up as ostensibly private companies precisely so that their employees could make campaign contributions.

Hey, whenatlastwego. You wrote this: The cop can hide anywhere he/she wants. One mile over the limit is one mile over. Why not just go the limit and spare yourself?

And this: Cops just don’t go out and “take that power.” Do they make mistakes? Of course. Don’t we all? They are just human beings like the rest of us, not gods who are perfect.

Your logic is perfect……for a cop!!!

When a citizen makes a ‘mistake’ by going one mile over the limit, they should be punnished. But when a cop makes a ‘mistake’ they should not be punnished, because they are only human and make mistakes.

Why not just turn that around. When the ‘servant’ makes a mistake, they should be punnished, but when the ‘master’ makes a mistake, they shouldn’t?

Fact is, we all know cops get away with murder. All
they have to say is: ‘I thought he was going for a gun.’ and he can shoot whoever he wants. What if I shot a cop, and said: ‘I thought he was going for a gun.’?

When I speed, I get a ticket…..when a cop speeds, who gives him a ticket? If I lie in court, I will be charged with perjury….if a politician lies….it is expected!!!

Your ideas are really screwed up.

Thanks for illustrating just how bizarre your ideas are. You’re actually a pretty amusing person. Voters give politicians power, politicians and the administrators they choose give cops power. Cops make plenty of mistakes. Like most other citizens, sometimes they get caught. sometimes they get punished. Sometimes they don’t. Don’t get your diaper in a knot over it. If you feel like such a servant, why not pack up and head to the wilderness where you can be free? Everyone serves somebody in society. Freedom is an illusion… it’s also a trade off between giving up some rights in order to have some peace of mind. You’ll learn that once mommy let’s you out of rubber pants.

In fact, Dragooshka, you’re wrong yet one more time. You are a tiresome, one note singer. I have been an entrepreneur my entire life – from age 25 anyway… so 33 years now. I simply don’t let the the whole government thing bother me. It obviously has you paralyzed. One more time… go out and change it if you don’t like it. As to your great career… I’m guessing it isn’t one that demands great spelling or writing skills? I am still hoping that you don’t have children… maybe you did not actually father them?

[...] MONEY: Sneering at Ron Paul and “End the Fed” http://curiouscapitalist.blogs.time.com/2009/12/29/visiting-ron-pauls-fed-free-utopia/?xid=rss-topst... [...]

I’d take any of your alternatives over the federal reserve. Bring it on. I can’t wait. Oh wait! The bankers and the global elite will never let that happen…so we don’t have to worry about any of your alternatives.

[...] the financial crisis where there seemed to be a strong movement from both the left and the right to restrict the power of the Fed. Even Dodd was for a smaller Fed. But now it looks like the Fed's [...]

I have read Mr. Fox’s review and the responses and have yet to notice the most relevant observation – from Mr. Fox, the “smartest” Keynesians, or supports of Dr. Paul. That observation is simply: DR. PAUL WAS RIGHT. The “simpleton” Austrian school with Dr. Paul as its spokesman predicted the crash – and why it happened.
Going back to 2002 you can see Dr. Paul taking directly, without hedging himself, in front of Congress that this financial disaster was going to happen. His courage may be simple but it is just that:courage. If he is full of incorrect notions how did he get this right?
By contrast the Keynesians’ most prominent representatives Mr. Greenspan and Mr. Bernanke both said it that things were fine. As late as May of 2008 Mr. Bernanke testified that Fannie and Freddie would be fine and that the country would avoid recession. I wonder Mr.Rodger Malcolm Mitchell what were you saying? Can you provide me a link of your analysis during that time before the crash? Who has shown the most insight? Who has been right? What line of reasoning should we follow, The one that got us into this mess?

So you can all talk down about the Austrian school but is is so much gibberish (good word) of overblown egos who have been unable to use their theories and back them up with reality. Where I come from people with Ben Bernanke’s record are ousted, along with all the failed Bankers. But instead the academics and theorist have kept them in power – and guess what? – now Europe needs a trillion. Maybe having an open mind in the most vulnerable time ever would do us all some good? Or is that too utopian? Any theories Mr. Fox or Mr. Rodger Malcolm Mitchell?

Read more: http://curiouscapitalist.blogs.time.com/2009/12/29/visiting-ron-pauls-fed-free-utopia/#ixzz0nlfLovj7

25.1

I have read Mr. Fox’s review and the responses and have yet to notice the most relevant observation – from Mr. Fox, the “smartest” Keynesians, or supports of Dr. Paul. That observation is simply: DR. PAUL WAS RIGHT. The “simpleton” Austrian school with Dr. Paul as its spokesman predicted the crash – and why it happened.
Going back to 2002 you can see Dr. Paul taking directly, without hedging himself, in front of Congress that this financial disaster was going to happen. His courage may be simple but it is just that:courage. If he is full of incorrect notions how did he get this right?
By contrast the Keynesians’ most prominent representatives Mr. Greenspan and Mr. Bernanke both said it that things were fine. As late as May of 2008 Mr. Bernanke testified that Fannie and Freddie would be fine and that the country would avoid recession. I wonder Mr.Rodger Malcolm Mitchell what were you saying? Can you provide me a link of your analysis during that time before the crash? Who has shown the most insight? Who has been right? What line of reasoning should we follow, The one that got us into this mess?

So you can all talk down about the Austrian school but is is so much gibberish (good word) of overblown egos who have been unable to use their theories and back them up with reality. Where I come from people with Ben Bernanke’s record are ousted, along with all the failed Bankers. But instead the academics and theorist have kept them in power – and guess what? – now Europe needs a trillion. Maybe having an open mind in the most vulnerable time ever would do us all some good? Or is that too utopian? Any theories Mr. Fox or Mr. Rodger Malcolm Mitchell?

Read more: http://curiouscapitalist.blogs.time.com/2009/12/29/visiting-ron-pauls-fed-free-utopia/#comments#ixzz0nmjZaApZ

[...] that far-fetched these days. (One of CC's most popular posts ever explains why Tea Party favorite Ron Paul thinks the Fed should be "ended.") TIME recently did a cover story on the militia movement, and many said these groups are powder [...]

[...] than grandstanding about the hugeness of the gold standard. Those lawmakers who advocate “Ending the Fed” might better turn their considerable talents toward ending the fiscal debacle that has for [...]

[...] President Richard Fisher stated: Those lawmakers who advocate “Ending the Fed” might better turn their considerable talents toward ending the fiscal debacle that has for [...]

[...] the best critique of End the Fed, Paul's little, very little in fact, book on monetarist policy. A critique of Ron Paul's 'End the Fed' | The Curious Capitalist | TIME.com For example: It would “build prosperity for all Americans.” Paul does a pretty [...]