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Source link: http://archive.mises.org/10581/end-the-fed/

End the Fed

September 2, 2009 by

Most Americans haven’t thought much about the strange entity that controls the nation’s money. They simply accept it as though it has always been there, which is far from the case. Visitors to Washington can see the Fed’s palatial headquarters in Washington, D.C., which opened its doors in 1937. Tourists observe its intimidating appearance and forbidding structure, the monetary parallel to the Supreme Court or the Capitol of the United States.

People know that this institution has an important job to do in managing the nation’s money supply, and they hear the head of the Fed testify to Congress, citing complex data, making predictions, and attempting to intimidate anyone who would take issue with them. One would never suspect from their words that there is any mismanagement taking place. The head of the Fed always postures as master of the universe, someone completely knowledgeable and completely in control.

But how much do we really know about what goes on inside the Fed? With the newest round of bailouts, even journalists have a difficult time running down precisely where the money is coming from and where it is headed. From its founding in 1913, secrecy and inside deals have been part of the way the Fed works. BOOK EXCERPT by Ron Paul

{ 18 comments }

cy September 3, 2009 at 9:02 am

Dr. Paul,

Thank you for being the one elected representitive that actually cares about peace, human freedom, and human prosperity.

A. Viirlaid September 3, 2009 at 11:37 am

I second cy’s comment —— my personal deepest heartfelt THANK YOU to Dr. Ron Paul.

You are fighting not only for America and Americans, but also on behalf of all humans around the world who suffer under the completely unnecessary meddling of and damage done by central bankers and pseudo-central bankers.

We all learn from an early age to accept ‘money’ as a given.

We think it is like air, and whatever happens with it and to it, we have to ‘take it’ as inevitable.

You are part of — no, actually one of the main leaders of — a mass movement to awaken all of us.

Here’s to our inevitable eventual success to prevent future tampering with (and expropriation of) the value of all of our personal work and of our real savings!

And it is finally time, for all time, to STOP the grievous harm done by The FED.

En Em September 3, 2009 at 12:22 pm

I have the highest respect for Dr. Ron Paul. Before I read his article very closely, I would like to present the following idea: End the IRS……for several reasons. Its demeaning to hand over your life’s savings to highmen, it’s an evil organization and it’s an illegal organization.

The IRS is the henchman, the Capo, the Collector of our hard earned money. And it has “legal” authority to do so at the point of a gun. To quote Any Rand: “Under all that paperwork there’s a gun”. It is this unimaginable amount of loot that gives the government carte blanche access to financing wars, the DoD, favors, ridiculous clunker programs, greasing the palms of lobbyists, offering stimulus packages, etc. Without this centralized coffer to dip into the government would not be able to wield the enormous it presently does against its citizens nor promote its uncontrolled agenda.

The IRS must go down. It was created to temporarily address an emergency situation that had evolved from government inefficiencies to begin with and took on a permanent role when it was seen as an effective weapon in insidious power plays on Capitol Hill. Without its Capo, the Fed will go down in flames.

Sword of Damocles September 3, 2009 at 12:43 pm

En Em said:
The IRS must go down.

“If I do that, what would become of my revenue? I might as well shut up housekeeping at once!” ~ Lincoln, in response to the suggestion by the Virginian Commissioners to abandon the custom house of Fort Sumter.

lester September 3, 2009 at 2:25 pm

I’ve always felt that taxes were an invasion of privacy. Why should the government know how much i make and what i like to buy?

Christopher September 3, 2009 at 3:08 pm

Anyone have any idea how detangling of the Fed would work? What reprecussions would be felt throughout the world?

A. Viirlaid April 25, 2011 at 2:46 pm

Hi Christopher,

I don’t know if you ever come back to your prior posts, but here is something, VERY APROPOS, that I found recently, which was broadcast AFTER our discussions above in September of 2009 happened.

Namely, this “something I found” is a seminar session named “Economic Downturn — Cause and Cure”.

The specific talk I am referring here to was given at Economic Downturn: Cause and Cure (Mises Circle, Sponsored by Louis E. Carabini) Newport Beach, California, November 14, 2009.

Please see “A Pro-Free-Market Program for Economic Recovery” by George Reisman.

Doug French does a fine 2-minute introduction of George Reisman, Professor Emeritus of Economics at Pepperdine University, as the last speaker at the LOUIS E. CARABINI Seminar at Newport Beach on that day back in November 2009.

You can watch George Reisman at http://www.youtube.com/watch?v=pb5z1pM6q7c
or at
http://itunes.apple.com/ne/itunes-u/economic-downturn-cause-cure/id380680126
or at
http://mises.org/daily/3870

Wherever you watch him, you will see Dr. Reisman outline how conceivably The FED could be abolished.

You can also read the corresponding transcript at

http://blog.mises.org/11071/a-pro-free-market-program-for-economic-recovery/

And also you can read the 369 (!!!) or so comments Dr. Reisman’s contribution generated starting at

http://blog.mises.org/11071/a-pro-free-market-program-for-economic-recovery/comment-page-1/#comments

p.s. I did later notice that you had also participated in that discussion at that Comments location, so I will leave this note for others who might not know. Cheers!!!

A. Viirlaid September 3, 2009 at 5:59 pm

Hi Christopher,

This is not a trivial task. It will take time to wind down the obligations of The FED. Its tentacles reach into many areas.

The FED also has its own immense resources that can initially be used to chart out its own demise for the good of all Americans. This only needs an Act of Congress.

This work, to lay out the Winding-Down process, could be first done by The FED but would best be OVERSEEN by the House Financial Services Committee with a sitting Ron Paul, of course.

http://www.house.gov/paul/bio.shtml

http://blogs.myspace.com/index.cfm?fuseaction=blog.viewcustom&friendId=158537123&blogId=507217722&swapped=true

To minimize the repercussions which you properly draw attention to, this ‘winding-down’ would be coordinated with other countries and their respective economic leaderships.

For a start, you personally could study the functions of a ‘normal’ Central Bank (if there is such a thing), and try and decide for yourself what functions need to be retained, and by which agencies they might best be fulfilled.

One place to start is with ideas presented by Nobel laureate Milton Friedman.

Please see

http://blogs.myspace.com/index.cfm?fuseaction=blog.viewcustom&friendId=158537123&blogId=507217722&swapped=true

Friedman: I would prefer the Fed to follow a much simpler course: to take as its operating magnitude not the federal funds [interest] rate but the quantity of money. Pick whatever definition it wants—M2 [one of many measures of the money supply, including currency, savings, demand deposits, and certain liquid time deposits] is a good definition. I’d just as soon the Fed announce it will increase M2 by 5 percent per year, year after year, month after month. But they are not going to do that.

Reason: Why won’t they do what you suggest?

Friedman: They don’t want to become irrelevant. It’s human nature. You would do the same thing if you were there, and I’m afraid even I would.

Reason: But it would be preferable to abolish the Fed entirely and just have government stick to a monetary growth rule?

Friedman: Yes, it’s preferable. And there’s no chance at all of it happening.

One place to start your own investigations is right here on the http://mises.org/ site.

One article by Frank Shostak you might initially want to read is at http://mises.org/daily/3197

Indeed there are even problems with the so-called ‘Friedman Rule’, but having such a rule would still be an immense improvement over what we have today.

Today we have an institution like The FED which creates its financial booms and then promises to mitigate the pain thereby-caused by ‘managing’ the busts. This is pure and rather poor double-speak and hypocrisy.

To me, IMHO, this is an institution that is involved in fraud, deception, and extortion. I don’t know how else to put it. It may not be intentional, of course, but with the mandate handed to it, and the limitations of human beings in carrying out such objectives, and the tools that it has at its disposal, perhaps The FED is just about guaranteed to FAIL —— in other words, there is no way it can EVER succeed.

I happen to believe that this is true. And I believe that granting The FED more tools (which The FED has lately been clamoring for) will only make things worse — but thus often is the nature of such bureaucracies — they don’t know where to stop their growth for the supposed Good that they function on behalf of.

The FED has been at its ‘job’ for almost 100 years —— in only 4 years, it will be exactly 1 century of misery and suffering. No one should minimize how much harm Central Banks have done, starting with John Law, as the first ‘Modern Central Banker’ in around 1720.

http://en.wikipedia.org/wiki/John_Law_(economist)

Don’t we all agree that the time for FED-abolition is here?

Of course, The FED’s harmful activities are sometimes aided and abetted by the government’s actions or inactions. And sometimes by other countries’ Central Banks. And sometimes by our fiat currencies. And sometimes by our FRBS (Fractional Reserve Banking Systems). And sometimes by Political Interference.

Regardless, The FED simply cannot do The Job.

At the same time we look at the process of eliminating The FED we desperately need a reexamination of the entire Money System. Because man, it is BROKEN!

But I believe that Dr. Ron Paul may be right to focus his efforts initially only on The FED, because that job is so immense in itself.

A. Viirlaid September 3, 2009 at 6:06 pm

Sorry, that link to the quote from Milton Friedman should have been

Can We Bank on the Federal Reserve?

at

http://www.reason.com/news/show/38384.html

Andy von Guerard September 3, 2009 at 10:35 pm

I’m wondering, once Dr. Paul’s have been on the market for long enough, will they be offered somewhere online for free? I’m more than happy to pay for multiple copies of the book (which I have done) so I can get them to as many people as possible (donations to libraries, gifts to friends etc..) but there are only so many people who will buy the book and it would be better for our cause if it became free on the web after a period of time.

Does Dr. Paul have any plans for this on this book? Or have you guys at Mises talked to him about releasing some of his older books on here?

Rafael Garcia September 3, 2009 at 11:13 pm

End the Fed? How about: End the Government…

Sean September 4, 2009 at 12:27 am

I often think about what seperates Ron Paul from all the other members of Congress as well as virtually every other elected offive come to the conclusion that “the difference” actually presents the rare occasion where the answer to a seemingly comlex question really can be summed up quite perfertly with one word: VIRTUE. Mr. Paul is a sincerely virtuous man whose affinity for the truth has served as a shield against the forces of corruption that dominate all the other members of congress. Mr Paul so obviously stands out amongst all the others that I can’t help but wonder whether his presence forces upon them moments of introspective uneasiness.

liberty September 4, 2009 at 2:35 am

Dr. Paul could literally become the man who saved the world, think about it. We are on the verge of a complete dollar meltdown, which has been running its course since 1913. Should Dr. Paul’s efforts succeed (and I really believe it will, eventually), he will be laying the foundations for the restoration of a sound currency.

Thank you Dr Paul; not only for this book, and for your monumental contributions to the ideals of freedom, but also for curing my political and economic apathy. You are the main reason I became interested in the Austrian school and the LvMI.

Todd Marshall September 4, 2009 at 8:04 am

which put a break on the ability of the largest banks to expand credit without limit.

“break” should be “brake”

greg September 4, 2009 at 11:16 am

Always tells half the story!

Purchasing power has decreased from $1 to $.05 since 1913, however productivity has increased 2000 times since then. Bottom line, we are better off today than we were in 1913! Even with the Fed and no gold standard.

A. Viirlaid September 4, 2009 at 11:58 am

greg, no one disputes what you write. It is not half-of-the-story, at least not how you mean IMO.

Of course productivity is higher.

That’s no thanks to The FED though.

In fact there are strong arguments that The FED has hurt human progress. In other words we would be far further ahead if The FED had NEVER existed.

All the dead ends and bad investments INDUCED by The FED over the last century are pure WASTE —- and this waste is dead and gone forever —- in other words the Opportunities Lost with those wasted resources (All Thanks to The FED) will NEVER, EVER be recovered.

Just ask yourself what the dollar would be worth were it not for all this human and technological progress that you allude to —- probably about one one-hundreth of a penny? In fact, this progress is what allows The FED to hide its most grievous effects from its MoneyPulation and money-supply inflation.

Of course we are better off — we in the developed West live better than all the Kings and Popes of the past —- and many of them needed slaves to acquire their standard of living.

There is even a site dedicated to reminding people in the West that we underestimate how well off we are compared to everyone in the underdeveloped parts of the world. I forget what this site is.

Sean and Liberty, great comments BTW.

I can’t help but wonder whether his presence forces upon them moments of introspective uneasiness.

(Yeah, Dr. Paul does inspire and offer hope, that is for sure.)

I agree, while politicians might occasionally have a tinge of remorse (“moments”) they inevitably and tragically go right back to doing what they do or don’t do… except for the very few exemplified by R.P.

Michael Kirkby September 22, 2009 at 5:42 pm

Thanks for an interesting article and one with which I am in agreement with. I noticed however that you didn’t go into the 1920 fiasco that greatly affected the Mid and Southwestern banks; banks that supported the farmers and didn’t join the Fed back in 1913. That was just down right nasty and vengeful. I guess that one could change the system but then to affect lasting change one must change human nature, otherwise we end up with the same scenario but different people. Of course if you’re going to get rid of the FED, you have to audit and prosecute Wall Street, international bankers, the Ford Foundationa and all its satellite trusts and foundations; not to mention the International Policy Studies board whose sole aim is to destabilize by any means the moral, familial and economic factions that are the bedrock of the nation. These are the very same people that gave you LSD, the Weatherman not to mention a few other destabilizing things. I only wish your father was young enough to run for the presidency.

Jon Black October 7, 2010 at 3:51 am

I recently found out that things used to be very different before 1913… it is hard to imagine that we have been lied all our lives but some facts here are hard to ignore. This is definitely something we should open our eyes to and have an open rational debate.

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