Finance, Forex and Investments

Is a central bank like the Fed truly necessary?

My AP Gov teacher was saying that a central bank is necessary. Who else going to give out loans to struggling banks and they also control interest rates. They are just making Congress's job easier. Zenmeister: Nice response. So are we all agreeing that Alexander "I want a Central Bank" Hamilton was an idiot.

Public Comments

1. Not really the government can supply their own money.
2. no no no no and no. Interest rates in a free market, should be based on a savings rate. The higher the savings rate of the nation, the lower the interest rate. This would prevent the booms and the busts we know as the business cycle from occuring. They create a moral hazard for the banks by being there. Without the fed reserve banks have to be more prudent in their business affairs because they know that no one will be there to bail them out with OUR money! They are making our lives much worse! Also congress in our constitution has the right to set the value of money, but its up to the states to coin money, and they can only use silver and gold, according to the constitution. So its not like congress really has much to do anyway. tortuga- you have no concept of monetary policy. When the fed prints more money, this doesnt mean it is increasing capital. It just devalues the money already in circulation..... sigh we are losing the intellectual war..... Alexander Hamilton was an agent for the Rothschilds..... He was a POS.
3. Think about it for a moment. Who, if not a central bank, would ensure that the local banks are obeying laws? Those same local banks would store all of their money inside their own vault, making it a ripe target for criminals. Yes, a central bank is needed. It ensures the whole system runs smoothly. Yes, some of our current problems now are due to lack of proper oversight, but that should be fixed soon.
4. Off course. The FED, besides controlling interest rates, has the power to print money. When the economy tanks, like it has, that is really the FED's only security. Technically, the US Gov't can't go broke, they can print as much money as they need. However, in doing so (if you did), you'd decrease the power of the dollar to equal that of a Russian Ruble.
5. it isn't, the gov't operated just fine without the central bank system. the federal reserve doesn't do this for free, we're paying for it, it would be much cheaper if our gov't just printed our own money at cost instead of paying for it.
6. "If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks, and corporations that grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. I sincerely believe the banking institutions, having the issuing power of money, are more dangerous to liberty than standing armies! Already they have set up a monetary aristocracy that has the government at defiance. The issuing power [of currency] should be taken from the banks and restored to Congress and to the People, to whom it belongs!" -Thomas Jefferson "The bold efforts that the present bank has made to control the government and the distress it has wantonly caused, are but premonitions of the fate which awaits the American People should they be deluded into a perpetuation of this institution or the establishment of another like it...If the People only understood the rank injustice of our money and banking system there would be a revolution before morning!" -Andrew Jackson "The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe." -Abrahan Lincoln on European central banks (before ours was created) "If this mischievous financial policy [of creating a debt-free currency], which has its origin in the American Republic, shall become permanent, then that government will furnish its own money without cost! It will pay off its debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world...That government must be destroyed or it will destroy every monarchy on the globe!" -The London Times after Lincoln had the Treasury just print their own bonds John F. Kennedy, on June 4, 1963, via Amendment 1110 to Executive Order #10289, authorized the issuance of $4 billion in debt-free, unborrowed United States Notes. These would have been United States Silver Certificates, "redeemable in silver, against all silver bullion or standard silver dollars in the Treasury..." After Kennedy's assassination his Executive Order was rescinded and the silver certificates that had been printed were destroyed. Instead, Federal Reserve Notes, "non-redeemable" in silver and repayable with interest, were released into circulation. Kennedy's Silver Certificates, and the prosperity they promised, were buried with him. "The high office of the President has been used to foment a plot to destroy the American's freedom and before I leave office, I must inform the Citizen of his plight." -Kennedy about the central banks Isn't there a pattern here? Speak out against the central banks, get killed (at least for the last two who tried it). Shouldn't something be done to regulate or destroy our slavery to the dollar?
7. 1) People with money give out loans. Banks with money give out loans. If a bank is struggling, then it should not exist, it should fail. If banks had a 100% reserve, meaning they could not lend out money they dont have, this problem would NEVER OCCOUR! Savers pay the bank to hold the cash, or the sign a contract to keep the money in the bank long term, the banks can lend out the cash, and the saver can earn interest (with risk). It is that risk, of losing money of the long term saver and in return harming the bank, that keeps banks lending to the right people. Without that risk, with the ability to lend out $1,000.00 for every $100, insane and unrealistic risks are taken. And ultimately the government steals form citizens to pay the bankers for their mistakes. 2) Interest rates are supposed to be controlled by the free market, not a dictator in a room. It is the fact the fed plays with the interst rates, that the current crisis occurred. Real market set rates would have prevented what is called malinvestment. When 'the fed' sets interest rates, supply and demand mean nothing. What would normally not make profits for a company and would have been avoided, now appear to be profitable. The markets are distorted by these fed set rates. 3) Congress cannot delegate away its power. Only congress has the power to print money, and inflate the monetary base. It should be rare. But with congress, atleast it would be public what they were doing. As it is, the fed is secretive, and not subject to oversight. It is effectively the 4th branch of government. Central banks, throughout history, have funded both sides of all wars with the peoples money. These banks are made of unelected, unaccountable thieves. The power to control the value of the money in your pocket, is the most powerful position to have in the world. Control of the currency, means control of all people. Please watch this documentry "Money, Banking, and the Federal Reserve". http://video.google.com/videoplay?docid=-466210540567002553&ei=gBrdSde8DaDA-AGe1q2NAQ&q=money+banking It is an amazing video on the Federal Reserve. I highly recommend it.
8. It's a "necessity" in communist countries, like the former USSR. It's one of the tenets of the Communist Manifesto Your teacher is either brain-washed, a liar, or very naive. We didn't have the Fed.Reserve until 1913, so just ask your teacher how did the government function from 1776 to 1913 if it was so necessary? It is the government's responsibility to create and distribute currency, not a private bank's! Think about that: the FR is a PRIVATE BANK!
9. Tell your teacher that controlling interest rates is PRICE FIXING and he is a communist if he likes price fixing. Also, ask him, if a central bank is neccesary then how did we manage without one from the 1830's until 1913 when they re-enslaved us with it?
10. Panama doesn't have a central bank... And their economy is doing great.
11. "Freedom to Fascism" nuff said! If you don't know google it or ask somebody! AWAKE THE MASSES! Hamilton was not an idiot he was a puppet. Thus he tried linking us back to the banking (Marionette) cartel "De' Rothchilds". The true IRONY is Andrew Jackson on a fiat central bank note! I laugh a little every time I see a $20 pfffft!!!