This page has been archived and commenting is disabled.
What Would Happen If There Was No Central Bank?
The establishment would have us believe that a world without central banks would be 'like all the worst parts of the bible', but as Professor Lawrence White notes, as failures among central banking systems mount, it is time to reconsider the alternative of free banking. Private banks would be able to circulate money by issuing notes and checks redeemable for coin. Trustworthy banks would make arrangements to accept each other's notes and checks. Banks would have better incentives than the federal government to ensure their currency retained its value, because if it didn't, people would bank elsewhere. By contrast, White notes, central banks controlled by the government are able to devalue currency as they see fit and can even quit redeeming notes for coins of real value if they want to do so. It sounds like social-science fiction, but there are numerous real-world examples in history of successful free-banking systems.
»
- 18738 reads
- Printer-friendly version
- Send to friend
- advertisements -
People would just have to exchange goods at face value and with immediate price discovery. The horror.
The people, in real terms, would be far wealthier
The distribution of stocks would be far more equitable.
You wouldn't be able to buy a $400,000 house for 3% down, but the house would likely cost less than half that.
Sorry, but I'm having a hard time picturing life sans vampires.
How would I know when to buy stawks if there is no POMO?
What would happen?
The same thing as when they pull a tapeworm out of someone's gut - they begin to thrive!
Actually, they do not usually pull tapeworms from the body, but instead merely give the patient ONE single pill which acts like a 'neutron bomb" on tapeworms, dissolving every cell membrane in both them and their eggs. The patient then defecates the homogenized residue.
Now, don't ask me why I know that much about the topic ...
So the raw tobacco didn't work ?
Let's just say that the absinthe worked .... partially.
fact.. if there were no central banks.. tens or more millions of innocents would be alive today and be able to contribute to society.
figure it out and stuff it up your QE butt.
Hey.. Obamb-bernank.. how many armed drones do you have in the air at this very second?
the good news here is that until they arrest the poser and throw his dark ass in jail, we get to transition from omanb-bernank to ombmba-yellen (crazy stuff?).
and throw his dark ass in jail
Comments:
Per Antal Fekete, the "Real Bills" system must be restored. The bankers eliminated them during WW1, they couldn't implement global central banking while Real Bills still circulated.
okay...then let's throw his white ass in jail. That's cuz I hate his fuckin' white side just as much as his "dark" side, but neither as much as his entire Marxist, treasonous, sociopathic, scum sucking, satanic side. There...better? Hope so...thank you ;-)
ok.. i don't care that his dark ass is dark anymore that I care that Vlad the Impaler had a slightly less dark ass.. the fact remains that both have dark asses.
be aware.. there won't be much more time to call things like they are or to call a spade a spade. .
-CH.. I cannot junk you because you are correct and the darkness of his half-breed origins are not the point...
the point is that the mo-fo is illegal and illicit from the get-go and needs to be in jail.
not impeached.. that is for somebody legally in office.. but arrested by the seargent at arms of the house,
Nice to see your true colors on display...
Great protest sign.
DEFECATE THE HOMOGENISED RESIDUE OF THE FED NOW!
But then where would the the trillions in free cash that support our markets and bank bonuses come from?...
But then where would the the trillions in free cash that support our markets and bank bonuses come from?...
There enlies the problem. It is not that we have a central bank, it is we have a central bank that is criminal in nature. Get the Fed out of POMO and other BS it has no business in, our economy would thrive. Give capitalism a chance!!
Can someone please tell me why it's a bad idea for states to create their own bank?
CORRECTION: central banks control the gov, via PDs (the true owners of gov).
A little OT, but Hitler loses his doctor is hilarious.
http://www.youtube.com/watch?v=cgqcra7el14
That was one of the best "Hitler" videos I've seen in a while.
"Maybe I can bring this up with the President when he helps me with my NCAA brackets in March"-- classic.
. . . and "We should have made him show his passport."
i am just about to watch this one for the first time..
i cannot comment yet but i am very sure that anything a guy can do with a Hitler capture, a text overlay and half a brain has got to be good.
Hitler is the best.
omigosh.. likely the best one so far.... muiltiple levels of complex sarc.. i might be having the big one now.. ooohh...
hey VD, vast-dom, abe foxman whoever the fuck u r..........francis_sawyer sends his love!
~~~~~
francis_sawyer wrote..........''all I know is that 99% of the 'ills' that plague the world & keep billions oppressed [slavery, corruption, war, environmental pollution, stupidity] are the DIRECT RESULT of money printing... I don't print the fucking money... But as you so casually point out... Fucking Indiana Limestone quarried buildings do that... No 'people' are involved...
- that they are almighty.....omnipotent........that they have remained this way since the dawn of civilization.......unopposed
I DIDN'T say that... I said they cleverly usurped, what was, the Hapsburg dynasty & have more or less had their way [globally] since, around, the time of the French Revolution...
- that no member of this "whatever you call it" has ever done good for society, or even for another fellow human being...
I say that most NEVER SAY A WORD about the larger angle [but they never miss a beat in talking about the Holocaust]...
and watching neil diamond does not make for "interaction" with a cheespope
Yes it fucking does... Why?... Because to interact with brainwashed people, you have to toe the 'politically correct' line [Hell ~ nowadays you even have to do it on Zero Fucking Hedge]... Thou shalt not say anything bad about these people or thou shalt be banished... The first thing that happens when you open your mouth [with whatever truth], & the 'labels' start flying... Tell me just how successful I might have been if I'd run down to the Capitol yesterday, made my way to the front of the stage among the crowd cheering Neil Diamond's praise of our brave military, and held up a sign that said 'Ban the Fed' & get the fuck out of Syria...''
say hi to Francis from me and all his friends on the KKK forum. dick.
No, fuck you VD. f_s simply pointed out some fairly obvious shit, that anyone who paid attention already knew.
guess that's why f_s got banned, right? maybe you and dick need to move on to the greener KKK forum pastures. so fuck you pal!
Dunno, I am not aware of a list of banned zh'er's. Besides, this ain't the NSA- f_s could be here under an easily recognizable pseudonym if he wanted to, couldn't he?;)
The one I really miss is slewie. That was one sick, twisted S.O.B. The ADL may have banned him just because they (like me) just never were able to figure out if the fucker had a clue or not. It was fun, though.
Oh yeah, fuck me.
Ah that explains it...
Yes, you can get banned...
Tyler has too good of a gig going here to let some hateful bigot ruin it...
I don't know...let's find out
Politicians would turn into Skittles-shitting unicorns?
That sounds too freedomy. We're too stupid to be trusted with our own freedom, remember? And if we're not too stupid yet, they'll keep educating us until we are.
Yes, freedomy, even libertyish...
OK, sounds fabulous, let's have it!!!
First, the government controlled central banks will be subject to regular audit. Second, elected officials will be held accountable for running of the monetary system. Given just these 2 arguments I say shut down the fed and turn it over to government control.
I don't think you're paying close enough attention here.
I was thinking not at all.
Hobo, in light of the well-documented record of governments being congenitally unable to exercise fiscal control or restraint, I have to conclude that you are not in fact very pragmatic.
A monetary free market?
No legal tender laws?
People free to choose?
No economy-stimulating inflation?
Horrors! Just think of the anarchy!
Yes, you can't really have a political ideal without government. A lot of confusion around that word I see.
OMG ! We might even have SOUND MONEY. Elites would be jumping from tall buildings.
Don't worry, they all got golden parachutes already!
And there won't be enough money to cover Social Security, Unemployment, Disability, SNAP...
(or suppressing the oil price or Obamacare)
So what do propose to cut from the first list and how are you going to sell that to the masses?
"If you like your central bank you can keep it"
Well, here in Mid-Michigan they have been toying with competing currencies. Not sure how popular it is now.
http://www.dailypaul.com/139999/local-news-story-competing-currency-bein...
Frank Shostak
Frank Shostak, Mr. Money Pump, is clueless about proper management of any Medium of Exchange (MOE). Money, plain and simple, is "a promise to complete a trade". The only thing that can hurt trade is broken trading promises. And worse, if these are facilitated by money and not mitigated with equal interest collections, the entire marketplace suffers inflation of the MOE. That is bad.
Governments never keep their trading promises. They just roll them over ... and that is default. They are the most irresponsible of traders and should incur high interest collections (equal to their defaults) which would make their trading promises totally unacceptable to the marketplace.
What is needed to sustain an economy is proper management of the MOE. That means certifying trading promises and recovering those certificates and extinguishing them when the promise is delivered. In this way there is an exact balance between the supply and demand for the MOE.
In the meantime, those certificates circulate in simple barter trading because they are valued. They are valued because under proper management they are known to never lose value.
Proper management entails monitoring for DEFAULTs and immediately collecting an equal amount of INTEREST such that INFLATION is zero as given by the relation INFLATION = DEFAULT - INTEREST.
The only MOE I'm interested in is HOWARD.
management, proper or not, means authority and authority corrupts as much as any government. can you explain what's the difference between your proposed system and central banks who also regulate interest rates to achieve monetary stability(at least in theory)? of course they also tend to have other objectives such as full employment, industrial development (not to mention enrichment of financial elite) etc but besides that? edit: your remark about cb reserves further down the comments is an intresting one.
problem lies within the management or how can it be really independent? in my opinion, it can't be, even free market will ensure that majority(who mostly consume cheap crap) will dominate, which is as 'perfect' as democracy, the mob rule, if i may compare the consumer to electorate.
" can you explain what's the difference between your proposed system and central banks who also regulate interest rates to achieve monetary stability(at least in theory)? "
Proper management entails monitoring of DEFAULTs and collection of an equal amount of INTEREST. In the present system, INTEREST is "what the market will bear". That's wrong and it's the single most important knob on TPTBs farming operation. Ever hear of LIBOR? Diddling the interest knob arbitrarily is what causes the so-called business cycle.
"they also tend to have other objectives such as full employment, industrial development (not to mention enrichment of financial elite) etc but besides that? "
This is a ruse for TPTB to get their foot in the door. Proper management of the MOE is only interested in zero inflation (of the MOE itself) and free certification of trading promises (net of interest collected from irresponsible traders) at all times everywhere. It has no interest in anything social. It doesn't even have any interest in prices.
"your remark about cb reserves further down the comments is an intresting one."
Reserves are a construct of capital leverage. They are there to prevent bank runs. With a properly managed MOE there is no such thing as a bank run because capital doesn't "back" trading promises ... the market as a whole does that through interest collections exactly equal to defaults.
"problem lies within the management or how can it be really independent? "
KISS: Keep it simple stupid. It's very easy to keep DEFAULTs and INTEREST collections totally transparent. They are totally "objective" measures. Management has "no" discretion. If they collect too much interest they create deflation. If they collect too little they create inflation. The exact right amount to collect is equal to defaults. It's robotic. Refinements can be competitively managed in a distribution chain (yes ... you would have wholesalers and retailers of money). There is very little difference in proper management of any MOE and proper management of an insurance company. In fact, it's much simpler to scrutinize and more difficult to game than an insurance portfolio. Individual classes of traders may be improperly treated but the marketplace is "always" properly treated ... inflation is guaranteed to be zero. Mistreatment of trader classes can be mitigated with natural competition at the retail trade promise certification level.
" even free market will ensure that majority(who mostly consume cheap crap) will dominate, which is as 'perfect' as democracy, the mob rule, if i may compare the consumer to electorate."
To most of the society, money is simple barter. They don't make trading promises and get them certified. Rather, they make deals with their employers who agree to pay them daily, weekly, or monthly as agreed. But everyone could buy a house and make a trading promise to pay 100 equal monthly payments in the future in return for a house to live in today. If they don't default, that promise would incur no interest charge. Actuaries would fine tune the process to classify traders according to their propensity to default, just as insurance underwriters classify risk.
But observe, proper operation is verifiable at all times by inspecting default history and comparing it to interest collections. They must equal each other at all times everywhere for all creators and distributors of money (i.e. managers of trading promises).
Also observe, multiple MOEs can exist simultaneously just like multiple insurance companies and credit card companies coexist. Any that can't prove zero inflation would be rejected by the marketplace. Otherwise, they would be ranked by traders according to the fairness of their treatment. Exchange rates would never change. Actually, as the system reaches steady state "all money" regardless of who manages it, would have the same value. Exhange rates would naturally be 1.000 throughout the world marketplace.
For a good view of how authority comes into play (or rather doesn't) read Larken Rose on that. "The Most Dangerouse Superstitution" is a good place to start.
Answer: Less theft, less war, less poverty, less misery.
Gaddafi r.i.p
those maggots will kill us all before they lose their grip
those maggots will kill us all before they lose their grip
Just stop obeying them!
No parasite class can survive disobedience.
Correct. Polite non-compliance is the best response and typically leads to the fascist's head exploding. It can be quite entertaining.
@CH1
That's also something that, if absolutely necessary, is actually worth dying for, imo.
I don't think there's anything worth dying for. But there seem to be more and more things worth killing for.
Absolutely right.
The Discourse of Voluntary Servitude - Etienne de la Boetie (circa 1555)
"Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces."
http://mises.org/document/1218
And if a frog had wings it would'nt bump it's ass everytime it jumped...
THANK YOU FOR POSTING THIS. With a free banking system, the US would be forced to cut spending because the interest rates would crush them. End the Fed.
So long as the depositors and shareholders may execute the owners and management of any private bank that fails (insuring real consequences for bad behavior), then yes, I agree. This is a great system. The fed (a private bank) will end regardless. However, replacing one private system with another accomplishes nothing without addressing the issue of moral hazard...
Re: issue of moral
Issues of morals, period. Which is why we the only system that is possible.
The adults (those with fungible morals) always create a system to screw those confused about the purpose of "morals".
The laws of Nature and physics really don't give a shit either way loser...
sorry, did you have a point? Sounds like you would prefer to live in a society where people continually try to screw one another. Good luck with that, plenty of options in the world today.
Silver predictions people? In two minds whether to buy again this year.
People could have a portfolio of different notes, and when they swipe their cards, it could tell them which currency is the strongest VS whatever good or service in question they want to buy. The service would finance itself by taking a cut of whatever savings were done.
Serious question: How does a country without a strong central bank mobilize for war against attacking countries who do have a strong central bank?
Rest assured, the "strong" central bank will be more than happy to lend to the country they are invading (at the right interest rate of course). Central Banks have been lending to both sides of major conflicts for quite some time now...
Just anecdotal here, but historically speaking, those countries with strong banks and liberal banking practices tend to rule those countries who don't.
By "anecdotal", do you mean that you have launched wars yourself and wish to share your personal experiences?
Wars are conducted by oligarchs within nations, employing the nations' resources via confiscatory means, and war is only conducted by oligarchs, regardless of how they camoflauge themselves with layers of bureaucracy or how thickly they buttress their regimes with the carapace of supposed popular representation.
Historically, soldiers cross borders that goods and value-adding services do not. Exchange stops when parties don't agree to terms, which is wildly possible when trafficking in volatile exchange mediums. Parties that can't agree terms can simply opt to not do business, but that's only the domain of the rational.
Well, the USA seemed to manage to engage in any number of wars just fine without a strong central bank prior to 1913.
But oh, wait, the USA was never (with one exception) actually attacked in any of those wars ....
Really? So ghosts just landed and burned Washington DC in 1814? Or landed troops in New Orleans in 1815?
Please explain exactly who killed American soldiers during the Thorton Affair of 1846 which kicked off the Mexican-American War?
Again, who exactly performed the raid on Colmubus, New Mexico in 1916?
Perhaps you overlooked the phrase "with one exception".
And the 'Thornton Affair'? Really? And Pancho Villa's raid on Columbus NM? You are going to consider those invasions?
Did you happen to attend the Paul Wolfowitz School of Neocon Fearmongering and Hyperbole?
whoa.. that's a liitle deeper than I have gotten before, and I thought I already got to damn near the bottom..
i guess the rabbit hole is way deeper than I suspected.
With universal gun rights and no controls on weapons, the PEOPLE become an unstoppable headgehog purchasing equipment for their hobbies capable to stopping an invading army COLD.
When the Constituion was ratified individuals owned their own ships of the line (18th century equivalent of aircraft carriers and battleships)
..with enough cooperation we can 3D print a ship of the line.
--I'll do the ASW and AA stuff.
..:-) give me a good enough printer and I'll give you a CWIS and a SWASH.
Adopt the Swiss model. It's easy to bomb Switzerland, but you'll never occupy them because they're armed to the teeth and train in the use of those arms regularly. And even if you bomb the hell out of them, they have a large system of underground protection.
http://www.swissinfo.ch/eng/swiss_news/Bunkers_for_all.html?cid=995134
Their per capita defense bill is miniscule compared to that for the USA. Of course, with the USA, it's an "offense" bill that we pay.
"Unrestricted" issuance of money? Yeah, okay. When do I get my printer? I am all for the concept of free banking and finance based on savings and other good behaviors, but there must be some connection to reality and real consequences. So, if in fact the shareholders and depositors at a private bank may execute the owners and management of said bank, should it fail, then yes, I am all for such a new private banking system.
In all seriousness.......there was a wonderful time many moons ago when private bankers were personally responsible for losses the bank incurred.
It was a time when the newspapers were not filled with story after story of frauds and thefts perpetrated by bankers.
But then came the govt regulators who were so easily corrupted.
There was never a time of no corruption. Stop peddling skittles.
True, but there sure as hell have been periods of consequences...
I must never teach my children about "good old days". I would rather teach them that some problems in history required guillotines.
"Unrestricted" issuance of money? Yeah, okay. When do I get my printer? I am all for the concept of free banking and finance based on savings and other good behaviors, but there must be some connection to reality and real consequences.
Strictly speaking, it's not unrestricted issuance of 'money', but of individual currencies. You don't like a bank's currency? Then demand another's, or negotiate a discount that reflects the risk of holding that bank's currency.
Similar to trading in different national currencies, but the currencies would be issued by banks, not nations.
That would put too much pressure on Congress..... Their approval rating might drop.... even more
Free banking is already happeing in US. Federal Reserve is a private bank and is printing its own currency. It just doesnt want competition from other 'private banks' to print currency.
This just makes to much sense.
The lack of a central bank might bring joy in Mudville, but it wouldn't solve one problem: that society is now having a lot of trouble producing wealth.
The ones who produce wealth without relying on the debt system are very few. Very, very few.
Another non-solution. The intent of this propaganda is to ensnare everyone so their wealth can be evaoporated. And by the by, the Government doesn't control the banks, the banks control the government. The FED / HSBC / JPM / GS / UBS / BA / BOJ / etc etc etc are Private Banks. OK, they're not printing their own currency, but they're all printing currency to steal. Like the Libor scandal and market manipulation proved, and as Ford / GM proved with other car manufacturers, there is rampant collusion, and the parties who are not aligned with the corrupt are eliminated.
We don't need to think within the box of banking. We don't need to think within the box of currency. We need to think structural change in the very fabric of how our value is assessed and integrated into our civilization. We need a revolution in socio-economic theory equal to Einstein's theories... reconsideration at such a deep level that we're no longer locked in the historic prison.
Nice try though. At best, a very limited and transitory solution to a very different kind of problem.
WOW! Someone who can actually think for him/her self!
I most definitely agree that this will all require some evolutionary-level "solution," though I do not wish to prescribe what that might be, nor would I want anyone else doing so. I think that should people be given the opportunity (and the ability to free-flow information) that there will be ample "solutions" (plural)
Eventually we'll come to better understand what "natural capital" means...
Re: We need to think structural change in the very fabric of how our value is assessed and integrated into our civilization.
I've heard there's a few sociopaths working on a new manifesto which will result in the "change in the very fabric of how our value is assessed". There are lots of dumbasses ready to follow these sociopaths too:
And people wonder critically why I have to write such long fucking posts to convey such simple ideas. It's because people refuse to consider the merit in my brevity.
I gave each of you a thumbs up because I can relate to what you're saying / actually concerned about, and please understand that the following is not directed at either of you entirely. I just chose to expand on the reasoning after having thought about what you said. Pardon my enthusiasm and colorful language... I love a good melodrama. ;-)
_______________________________
Look, you must recognize most of the people here are not exactly inventing shit. You're following ideologies that were placed there for you to follow, so the bankers could rape your families while you were on the trail. Or maybe you're the rapist bankers. In any case, most of you are not espousing any sort of radical socio-economic policies, you're mouthing one of a handful of economists, theorists, schools of thouight, what have you. Not many though. So to give me crap like we don't want to be told what to think... leave us alone so we can be individuals... what a crock of shit. You guys might believe you're individuated, but you're sheeple like most. You may truly believe in the arguments and rhetoric of those historic ideologies, but it doesn't make you right or visionary. And for god's sake, just because you can find a flaw in a proposal doesn't mean the whole fucking proposal is flawed, work on resolving the flaw so the proposal can succeed. History does not repeat, so what happened before will not happen again. And if you know history, structure the future in such a way that the beneficial features are available, but the detrimental features are kept in check or addressed.
What I said is perfectly accurate and correct. We are in the nightmare resultant from an unwillingness by our predecessors (and ourselves) to reevaluate the fair value for human labor in a civilization where demand for labor is declining. The consequence of that condition is the fucking poverty you see all around you, even if the bankers were not stealing what they could. The fact is, most individuals, maybe as high as 80 - 90% are doing meaningless jobs that add no value, and actually remove value from civilization. But it requires continuous and honest assessment of how value for human labor is determined in ever changing conditions. In any case, if you look at the long term trend, demand for labor is declining significantly, and therefore the level of poverty is increasing, because we as a civilization have not figured out how to redefine work / work week / job / so on.
In a world with an increasing population and declining labor demand, a healthy civilization would determine that everyone should work less and share the work if work is how one acquires a portion of the productive capacity. What you sadists decided is to let the fuckers without jobs die. I am trying to tell you that is a primitive mindset in the kindest ways I can find, but you refuse to understand kindness... and I can see why, you have none.
Whether people understand it or not, the world is changing, rapidly and dramatically. It is causing harm to a lot of people needlessly because so many refuse to work together to actually move our conceptions of life forward. Instead, people are repeating the same bullshit. If your idea is to watch people die because you have no solution to offer, then shut the fuck up and let others speak. If you have a better solution then out with it, I'm more than willing to listen.
Bring on public banking!
but we already have a privat bank. its call FED
I don't see this working out for one reason. Eventually the larger bank buys the smaller bank until eventually it is all owned by one or a slect few bankers and we're right back to the same crap we're in now.
Exactly. eXactly!
Re: Eventually the larger bank buys the smaller bank until eventually it is all owned by one or a slect few bankers and we're right back to the same crap we're in now.
And, don't forget the bullshit created for the dumbasses about how big banks are better for competition. And anybody who trys to stop banks from merging is nothing but a govment loving liberal who hates free-enterprise, and the troops.
Like the Italian Bank of America under Giannini and his Transamerica Holding
How would governments be able to obtain loans for military campaigns, that profiteer corporate entities, under the guise of national geostrategic requisiteness?
then who would fund .gov deficits, you heartless bastards
If I remember correctly, it was a relatively short time after Jesus knocked over the money changers tables that he found himself crucified.
And, it was not too long after Andrew Jackson had an attempted assassination after wanting to dismantle the Bank of the United States. Of note, ONLY Jackson has gotten our national debt to zero or near zero.
Just historical and scriptural footnotes of course....
I predict the sociopaths would figure out a way to screw the dumbasses regardless of the banking system being used.
The exist Fed was the result of the sociopaths screwing the dumbasses a bit too much.
In Scotland, currency is still issued by the major banks. There are 3 sets of Scottish notes for example. None of which are "legal tender" yet all are still universally accepted within the country.
These days the scottish notes are backed by the Bank of England.
Clydesdale bank notes:
http://www.scotbanks.org.uk/banknotes_current_clydesdale_bank.php
Royal Bank of Scotland (yes, that RBS) notes:
http://www.scotbanks.org.uk/banknotes_current_royal_bank_of_scotland.php
and The Bank of Scotland notes:
http://www.scotbanks.org.uk/banknotes_current_bank_of_scotland.php
Free banking isn't entirely stable. Banks did fail and depositors (as investors) did lose everything. But then the nature of banks is that they are not stable organisations.
Overall it worked, can't say it's any worse than RBS needing hundreds of billions of pounds to keep it running.
If it's not Scottish it's crrrrap!
Captain, this Romulan Ale is CRRRRAAAAP!
Kirk : Mr Spock, Emergency beamup!
Get Scotti out of there, he the only one who's urine can reform the dilithium crystals, take him to sickbay immdiately and give him the wisky IV Bones!
Agreed!
enjoying some 15 year old now..
No No.. Scotch!
Replace FED with one Ray Dalio and one Ken Griffin, and let the rest play bridge or canasta, and teach the Ivys.
Isn't that what gold and silver are for. To insure that fiat is tied to something of real value? Oh who I am I kidding, print print print!!
The PROBLEM is that tying to the physical projects us all toward the ONE thing that we'll never face up to- the notion of limits of ALL physical things.
I'd recently remarked to someone that fresh water was only 3% (it's actually a bit less, but round numbers are easier to work with) of all the planet's water. He seemed pretty shocked to hear that: and the guy's in his 50s. Imagine us looking around at all 7+ billion of us and admitting this? (now we know the REAL reason why the Palestinians are being shoved around- one need only look at the geology beneath things over there to figure it out- we don't talk about this because it's hard to demonize someone for wanting access to the basics of life [when you're trying to take it from them])
You can buy weapons and bomb the hell out of them, or you could teach them how to build desalination plants so you don't have to spend the money on bombs, while simultaneously avoiding blood on the hands. But some people are just born to be butchers.
Fresh water comes "automatically" from salt water. It's called evaporation. We get it back through rain and snow. Just collect it before it returns to the salty sea.
Also observe that some of the best collection points (i.e. where our crops do well) are also where our population is concentrated. Move the population to the deserts and rocky areas (actually entice them to migrate there because that's where the sun shines). It's stupid to build cities and factories on good arable land. Actually, with the communications we now have, it's stupid to build cities period! Free up the good collection areas for more collection.
This planet has enormous capacity for additional growth and little motivation to continue growing. Note that it is poor people who are having all the babies. The affluent people don't have even enough babies to regenerate themselves.
The more we spread the wealth around (actually remove wealth sinks like bankers and governments) the more sustainable our existence becomes. Nature does a spectacular job of balancing things and only man's arrogance could suppose man has any measurable effect on nature ... beyond soiling his immediate nest that is.
Free banking.. is that anything like free checking?
The notion was that Savings Deposits were not safe in a banking system not backed by a Central Bank. Transactions and payments systems are different from Savings.
The way in which banks have hypothecated Savings into a global daisy chain of Derivatives is the basic cause of the mess. The Supervisors sold out to the Crooks in an escalating Fraud from the S&L Debacle through LTCM to the CMO Scam and breaching of Glass-Steagall by Sandy Weill and Jamie Dimon before they paid Congress to repeal.
If you bend the laws to suit the crooks it does not matter who issues Currency and how much risk Bank Customers are prepared to bear - Contracts have to be Honoured and Honest
There's still the pressures of increased returns. The floodgates to the housing bubble were opened when HSBC bought out Household Finance. The race was on to not get left in the dust. It's the dilema of allowing "dumping" over letting things play out. If your business/company gets trashed then it's game-over. I see it as most banks pretty much had to follow along if they wanted to stay in business.
I'm not saying that there aren't nefarious actions going on, but market forces are also at play, and if we don't come to grips with the fact that there are downsides to "capitalism" then we'll just allow ourselves to get trashed over and over again (though, I figure, there's a limit for how long it can compound). Others have noted that consolidation is pretty much guaranteed- those that don't approve have to reconcile this with the notion of Liassez-faire. I have no "answers," I do not propose "solutions;" I just think that we ought not pretend that we don't have ugly step-children.
In a properly managed Medium of Exchange, the exchange media is "a promise to complete a trade". Requiring "backing" is a contrivance imposed by one segment of the marketplace on all other segments. It gives that segment an advantage over all trade. In the end, they employ so much leverage there is no backing at all.
The way to back a trading promise is to reward responsible traders and penalize deadbeats. This is done by measuring DEFAULTs and collecting a like amount of INTEREST. This guarantees zero INFLATION by the relation INFLATION = DEFAULT - INTEREST.
Responsible traders enjoy zero interest and their trading promises are quickly certified. Irresponsible traders (those with a propensity to DEFAULT) are locked out of the marketplace. The marketplace functions at its most efficient possible level with this discipline.
Savings plays no role in a properly managed MOE.
Notice how well your unicorns are selling here?
?????
what would happen if we had no central bank ?
Easy : we would never have had capitalism : the Venetian and Florentine banks; and the good news for LIBERTARIANS is that if we had never had capitalism we would never have had MARXISM, SOCIALISM AND WOOOOOOORSE : KEYNESIANISM....
Oh, the mercy of not have known those evils!
Why oh why did we invent capitalism and unleash all those other ills worse than the devil?
It begs the other question : what if we had never had the BIBLE? Where would we now be ?
Singing Apache songs?
Lol, little big man would have won not only Custer's last stand but the whole shooting match !
Capitalism is a segment of the market declaring a "fair" advantage for themselves. It is totally unnecessary.
We do not have capitalism.
If you do not control your nations bonds and treasury you are not soverriegn.
It said central banks.
The power to coin money and the power to grant bank charters is what you need to be concerned about before you pursue your dream of capitalism. Central banking has increased the velocity of theft for the deisre to increase the velocity of transactional business. A stupid deal with the devil since you gave him your printing press.
I tend to think that the best solution is for...
Everyone to be their very own Central Bank.
In other words, I don't even need what today is called, a bank, as far as I'm concerned.
At this point in the comment thread after reading some of the ho-humming about how we'd eventually end up with big banks again, I feel the need to share something that a wise man once told me:
Don't let perfect be the enemy of good.
End the Fed
Period
I'd like to add this from Eric Sevareid:
"The chief cause of problems is solutions."
Yes, no real harm in ending the Fed. Lots of dust. Wait for things to settle and then see what's real before trying on any "new" "solutions."
Trustworthy banks... Ha, ha, ha, ha, ha... Print their own currency... ba, ha, ha, ha, ha... Got to catch my breath... HA, HA, HA, HA, HA....
Whew - that was a good one. As we all know the free market worked for electricity in California, so what the heck, now let's do it with our monetary system!
Oh, by the way, who owns the Fed? Let's make sure those guys aren't in charge of this system...
So I tried to come up with a sound argument for central banks....
I've got nothing.
Can anyone come up with a decent argument in favor of central banking?
Surely a smart hedger can render an argument.
None exists. And there is no need for reserves either. Since money is "a promise to complete a trade", what is a reserve? It is simply an admission that the Medium of Exchange (MOE) is being mismanaged (actually manipulated).
Re: Can anyone come up with a decent argument in favor of central banking?
Well, in theory, you'd know where all the top sociopaths were doing their banking. Unfortunately, even when you know, there's nothing you can do to keep them from screwing you.
Yeah. Not the government monopoly counterfeiter central banks with the legal tender laws.
Say you had a precious metal standard. You put your stash in a bank. You want to buy something, but are not carrying your stash with you. So have an account with the precious metal bank. You write a check or make a digital transaction assigning it to someone (debit card, which is essentially a check). For someone on the other end to accept it, they might say "I don't know your bank. It needs to go through my clearinghouse."
You can have central clearinghouses that hold PM reserves to facilitate transactions on behalf of customers. The clearinghouse is going to have certain rules: you have to keep a certain % with them. You must be able to clear PM requests when made. You cannot have more than X outstanding. You can have x ratio of gold to make up a silver transaction. The clearinghouse credits might clear as their own inter-bank currency.
So this actually happened at one point in history. It was called the Suffolk Bank.
Is any place using bank notes besides Hong Kong?
Got some $100's from The Hong Kong and Shanghai Banking Corporation Limitied, $20's from Standard Chartered, and $10 issued by the Gov't Of The Hong Kong Special Administration Region. Haven't been through there in years so I don't know.
Government should not even be in the coining business, as history proves they try to default on that too. They should be there to make sure contrats are enforced, which they cannot fairly do concering upholding the value of money when they themselves are one of the parties in the contract. Get government way out of the money business and decentralize control of everything, submitting government itself to the marketplace. It is the only practical way we can preserve, excuse me, RESTORE at this point, freedom. http://www.amazon.com/Localism-A-Philosophy-Government-ebook/dp/B00B0GACAQ/ref=pd_rhf_pe_p_t_2_GB3H
Larken Rose: "The Most Dangerous Superstition"
http://www.larkenrose.com/
real-world examples in history
Note in history. The problem when you embark on the Keynes program of borrow and deflate you will never have the money to pay off the debt and flip to any alternative. So which nation wants to default first then? Anyone?
In this instance history has no part to play except to show how the human race was sold out by governments and bankers.
Notice how this presentation ends with "a gold standard" subliminally imprinted on your psyche as the road to the solution. Watch out folks. Buy into this and it's out of the frying pan, into the fire for us.
Someone put a lot of work (and thus money) into this presentation. Follow the money.
Never mind Central Banks...
What Would Happen If There Was No Banks at all?People who have gotten ahead, financially, would lend money to others, who seemed trustworthy, within their local communities, to build a house or start a business, just like they used to.
The raping and pillaging would be over.