4 ms·

You don't 'need' the fed. The country lasted 150 years without one, and shortly (less than 20 years) after its introduction, a deflationary cycle and great dep

You don't 'need' the fed. The country lasted 150 years without one, and shortly (less than 20 years) after its introduction, a deflationary cycle and great depression ensued. The fed preventing a deflationary cycle has been thoroughly and mercilessly disproven. Either the fed is powerless to stop the economic crisis we've suffered, or they're too incompetent to manage them. Either way it looks like they need dissolved.

mensetmanusman 5y ago
The fed couldn’t possibly stop a deflationary cycle when the currency/population ratio was determined by how many atoms of non-oxidizing noble metals happens to be in the earth’s crust.
- notch656a 5y ago
  The federal reserve themselves disagree with you [1]. Also note [2]: "In 1913, this problem was addressed by the creation of the Federal Reserve System (Fed).33 The Fed was to remedy the situation in a two ways. First, it would provide a means by which banks could borrow in times of stringency to satisfy their customers’ demand for cash. Second, it could create a new form of money, Federal Reserve notes, which could be expanded or contracted in quantity to respond to the need for more cash." "The creation of the Federal Reserve had little if any effect on the gold standard. The dollar was still defined in terms of gold. Federal Reserve notes were redeemable in lawful money. The Fed not only operated under the gold standard, but was charged with maintaining it, and kept a percentage of gold cover for its notes. Gold still dictated the value of the dollar. " [1] https://www.federalreservehistory.org/essays/great-depression#:~:text=The%20Federal%20Reserve%20could%20have,collapse%20was%20unforeseen%20and%20unprecedented https://www.federalreservehistory.org/essays/great-depressio.... [2] https://sgp.fas.org/crs/misc/R41887.pdf https://sgp.fas.org/crs/misc/R41887.pdf
  - mensetmanusman 5y ago
    [1] says: “ Because the international gold standard linked interest rates and monetary policies among participating nations, the Fed’s actions triggered recessions in nations around the globe.” That’s what I was alluding to, sorry for not being clear :)
    - notch656a 5y ago
      > the Fed’s actions triggered recessions in nations around the globe. >the Fed's actions triggered recessions I don't think this strengthens the case for justification of the fed.
chii 5y ago
There's not been a run on banks since the Fed's existence. The country needed a "Fed" - you can only say that they're unneeded because you have not experienced a time when they didn't exist and bank deposits couldn't be secured. It's like people who ask why they need to be vaccinated for polio now that there's very few cases of it.
- notch656a 5y ago
  >There's not been a run on banks since the Fed's existence. False, false, and false. "Despite the creation of the Fed, a wave of bank runs resulted in massive bank failures over the period 1930-1933." https://sgp.fas.org/crs/misc/R41887.pdf https://sgp.fas.org/crs/misc/R41887.pdf , pg. 9

mensetmanusman 5y ago

The fed couldn’t possibly stop a deflationary cycle when the currency/population ratio was determined by how many atoms of non-oxidizing noble metals happens to be in the earth’s crust.

notch656a 5y ago
The federal reserve themselves disagree with you [1]. Also note [2]: "In 1913, this problem was addressed by the creation of the Federal Reserve System (Fed).33 The Fed was to remedy the situation in a two ways. First, it would provide a means by which banks could borrow in times of stringency to satisfy their customers’ demand for cash. Second, it could create a new form of money, Federal Reserve notes, which could be expanded or contracted in quantity to respond to the need for more cash." "The creation of the Federal Reserve had little if any effect on the gold standard. The dollar was still defined in terms of gold. Federal Reserve notes were redeemable in lawful money. The Fed not only operated under the gold standard, but was charged with maintaining it, and kept a percentage of gold cover for its notes. Gold still dictated the value of the dollar. " [1] https://www.federalreservehistory.org/essays/great-depression#:~:text=The%20Federal%20Reserve%20could%20have,collapse%20was%20unforeseen%20and%20unprecedented https://www.federalreservehistory.org/essays/great-depressio.... [2] https://sgp.fas.org/crs/misc/R41887.pdf https://sgp.fas.org/crs/misc/R41887.pdf
- mensetmanusman 5y ago
  [1] says: “ Because the international gold standard linked interest rates and monetary policies among participating nations, the Fed’s actions triggered recessions in nations around the globe.” That’s what I was alluding to, sorry for not being clear :)
  - notch656a 5y ago
    > the Fed’s actions triggered recessions in nations around the globe. >the Fed's actions triggered recessions I don't think this strengthens the case for justification of the fed.

chii 5y ago

There's not been a run on banks since the Fed's existence. The country needed a "Fed" - you can only say that they're unneeded because you have not experienced a time when they didn't exist and bank deposits couldn't be secured. It's like people who ask why they need to be vaccinated for polio now that there's very few cases of it.

notch656a 5y ago
>There's not been a run on banks since the Fed's existence. False, false, and false. "Despite the creation of the Fed, a wave of bank runs resulted in massive bank failures over the period 1930-1933." https://sgp.fas.org/crs/misc/R41887.pdf https://sgp.fas.org/crs/misc/R41887.pdf , pg. 9