End the Fed?

edwardjulio

https://www.coinworld.com/news/paper-money/lawmakers-call-for-an-end-to-the-federal-reserve-system

coinkat

No

TennisCoach

Introducing legislation is a far cry from the end to the Federal Reserve System. It would be like a team going undefeated in the pre-season and saying, no need to play the season, let's just declare them Superbowl Champions! Those two things are worlds apart from happening, but not impossible.

Steve_in_Tampa

The current political atmosphere is ripe for radical changes.
I wouldn’t have ever thought that our neighbors to the north would be vilified, but here we are. Bizarro World.

sellitstore

The fact that this is being proposed now, in itself, is a significant move towards making this happen. Although, there have been similar efforts previously, times are quite different now.

The Fed has been successful in stabilizing an unstable, inelastic monetary supply for the last 110 years, despite claims from those pushing this legislation. How many countries can claim that the currency that they created 100+ years ago is still good and valid. Not many. The Fed works well. Congress sets the debt limit and controls gov't. spending, not the Fed.

If it ain't broke, don't fix it. What is the alternative that we are proposing? Nothing that I've heard yet.

dcarr

Here is one example of how the Federal Reserve Bank fleeced America.

Prior to the Treasury Accord of 1951, the Federal Reserve was allowed to keep 100% of their profits (which ultimately would go into the coffers of their member/owner banks).

From 1914-1933, all Federal Reserve notes issued had a "redeemable in gold" clause printed on them. So those notes were legally exchangeable for gold, on demand, at any Federal Reserve Bank. The problem was that the Federal Reserve had very little gold of their own and the US Treasury had about 6,000 metric tons. That 6,000 tons was already "over-subscribed" by the 16,000 metric tons worth of US Treasury Gold Certificates that had been issued. And then there was also the 10,000 metric tons worth of gold-clause government bonds outstanding in 1933.

But the far bigger problem was that the gold-clause Federal Reserve Notes issued amounted to 54,000 metric tons of gold. Why would the Federal Reserve issue that much currency without the backing that was promised ?

Federal Reserve notes do not pay interest. They show up on the Fed balance sheet as a liability (although they are likely under-reported as to quantity). For every Federal Reserve note that is accepted into circulation, that amounts to an interest-free loan to the Federal Reserve Bank. The total amount of the Federal Reserve notes issued amounted to 35 Billion dollars. The FED could then use that money to invest in Treasury Bonds or anything that paid interest or dividends. And the Federal Reserve Bank (and their member/owner banks) pocketed all the profits.

When things went bad during the Great Depression, Roosevelt bailed out the FED in 1933 by negating all gold-clause obligations.

I'd sure like to be able to borrow billions of dollars at zero interest, invest that money and keep all the profits, and have the government bail me out if things go sour.

In modern times, the Federal Reserve is allowed to keep up to six percent of their profits and is required to remit the rest to the US Treasury. But six percent is still a lot to essentially skim off the top of the economy (although the FED does not always keep all of that 6% and at their discretion they typically remit more than 94% of their profits to the US Treasury).

sellitstore

And what do we get in return?

How about the most stable monetary system in the world for the last century.

Before the Fed was established, the Treasury had that advantage of interest-free loans through Demand or U.S. Notes. So was it the Treasury fleecing us then and now it's the Fed? If you want a return on your dollars, don't hold them as cash-invest. This is America-we're free to choose to do that instead of holding paper that doesn't pay interest.