Can government be trusted with the money supply?
MrEureka
Posts: 24,270 ✭✭✭✭✭
Interesting online seminar. Mark your calendars for April 17.
The Federal Reserve's contribution to the current financial crisis, far from being exceptional, is typical of central banks' frequent, myopic mismanagement of money. So why, given their dismal record, do we allow governments to manage money at all? The standard answer is that were money left to private enterprise, bad money would drive good money out of circulation.
In Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775—1821 (University of Michigan Press, 2008), George Selgin reveals a forgotten episode of private coinage that proves the contrary. At the onset of Great Britain’s Industrial Revolution, the British Royal Mint proved utterly incapable of meeting the monetary needs of an industrializing economy; and it was only thanks to private mints and their "commercial" coins that Great Britain managed to avoid slipping back into feudalism.
We hope that you will be able to join us and hear Professor Selgin discuss this fascinating, important, and unjustly forgotten episode in the history of money.
Cato events, unless otherwise noted, are free of charge. To register for this event, please fill out the form below and click submit or email events@cato.org, fax (202) 371-0841, or call (202) 789-5229 by noon, Thursday, April 16, 2009. Please arrive early. Seating is limited and not guaranteed. News media inquiries only (no registrations), please call (202) 789-5200.
If you can't make it to the Cato Institute, watch this forum live online.
If you plan to watch this event online, there is no need to register.
More details here.
The Federal Reserve's contribution to the current financial crisis, far from being exceptional, is typical of central banks' frequent, myopic mismanagement of money. So why, given their dismal record, do we allow governments to manage money at all? The standard answer is that were money left to private enterprise, bad money would drive good money out of circulation.
In Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775—1821 (University of Michigan Press, 2008), George Selgin reveals a forgotten episode of private coinage that proves the contrary. At the onset of Great Britain’s Industrial Revolution, the British Royal Mint proved utterly incapable of meeting the monetary needs of an industrializing economy; and it was only thanks to private mints and their "commercial" coins that Great Britain managed to avoid slipping back into feudalism.
We hope that you will be able to join us and hear Professor Selgin discuss this fascinating, important, and unjustly forgotten episode in the history of money.
Cato events, unless otherwise noted, are free of charge. To register for this event, please fill out the form below and click submit or email events@cato.org, fax (202) 371-0841, or call (202) 789-5229 by noon, Thursday, April 16, 2009. Please arrive early. Seating is limited and not guaranteed. News media inquiries only (no registrations), please call (202) 789-5200.
If you can't make it to the Cato Institute, watch this forum live online.
If you plan to watch this event online, there is no need to register.
More details here.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
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Comments
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Can government be trusted with the money supply? >>
Our system of Gov't not only supports our own economy but supports others as well.There is ..No.. return for giving to other countries in the form of aide.With this aide there is a delusion that they will be our ally in the future.This has proven false and detrimental most of the time......So to answer your question.....Let's take a vote...!!
<< <i>Can government be trusted with the money supply? >>
No, government can be trusted with nothing. Trust implies control without supervision. Government inherantly is corrupt and can not operate in a trustworthy manner without direct supervision for any extended period of time.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
But on the flip side you can't trust the private sector with it either. Look at what happenend with the major banks and insurers. Since they didn't have direct control of the money system, they created their own shadow banking system with off balance sheet products of massive leverage. What do you call CDS, MBS, and other derivatives other than a fake monetary system where these guys made fortunes on paper and were paid their inflated salaries, bonuses, and stock options? And we're going to give them control of the actual currency as well? Think again.
But let's not pat the govt on the back either. The FED and Treasury also found new exotic ways to circumvent congress when it came to increasing the money supply. So in essence, a private corporation (the FED) has been in charge of our money supply since 1913. In reality we didn't even trust our own govt and gave the money supply to the financial backers of the dozen or so FED reserve banks.
To be honest, even when we had gold as our currency, private and even national banks sprung up over the past 200 years that still expanded the paper bills (ie money supply) without backing it with gold.
roadrunner
<< <i>
<< <i>Can government be trusted with the money supply? >>
Our system of Gov't not only supports our own economy but supports others as well.There is ..No.. return for giving to other countries in the form of aide.With this aide there is a delusion that they will be our ally in the future.This has proven false and detrimental most of the time......So to answer your question.....Let's take a vote...!! >>
That's OK all they have to do is crank out a few trillion dollars more to help pay for everything, of course some here will claim this isn't inflationary and PM's like Silver will trade between $5-$15 forever or Gold will trade between $300-$1,000 forever.
more or less?
Forgot to answer the question. No! But like RR said the private showed us what they can do with trust. So, who you gonna trust.
as the majority of citizens are upstanding folks and trustworthy. once
a country passes the critical point of having more untrustworthy people
versus trustworthy... you will arrive at a point where things get mismanaged.
it just all depends on the people who make up the country.
<< <i>i think a govt can be trusted to maintain the money supply as long
as the majority of citizens are upstanding folks and trustworthy. once
a country passes the critical point of having more untrustworthy people
versus trustworthy... you will arrive at a point where things get mismanaged.
it just all depends on the people who make up the country. >>
So considering everything that's happened in the financial system do you think the country has been managed correctly or do the citizens have a valid reason to distrust those in charge?
<< <i>
<< <i>i think a govt can be trusted to maintain the money supply as long
as the majority of citizens are upstanding folks and trustworthy. once
a country passes the critical point of having more untrustworthy people
versus trustworthy... you will arrive at a point where things get mismanaged.
it just all depends on the people who make up the country. >>
So considering everything that's happened in the financial system do you think the country has been managed correctly or do the citizens have a valid reason to distrust those in charge?
I think that we are at a point where we have too many people not paying
attention and staying educated which leads to becoming untrustworthy
to make judgements on who to elect to govt and for what reasons.
It remains to be seen if the majority can be shocked or persuaded
to choose a better path in my opinion. Is my opinion correct? I would
like to think so... that is a smaller federal govt that remains within
its budget.
That's nearly as funny as the other guy saying something about it being ok depending on the people who make up the country.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
The average person today is probably far more educated about politics than people of the past. I think the real issue is people wanting something for nothing and having been told for decades by everyone from economists to presidents that such a system is workable and in fact desireable. What has changed is everyone buying up the Keynesian crap that debt is money, deficits don't matter, and that a target inflation rate of a "couple of percent" is necessary for a growing and vibrant economy. There have been politicians offering a better path but as soon as one of them them mentions "honest" money or accountability in their campaign they've already lost half the vote.
roadrunner
Keynes himself of course knew that deficits mattered, and would undoubtedly be mortified with the reckless way that money is borrowed and spent these days.
<< <i> Ii think a govt can be trusted to maintain the money supply as long
as the majority of citizens are upstanding folks and trustworthy. once
a country passes the critical point of having more untrustworthy people
versus trustworthy... you will arrive at a point where things get mismanaged.
it just all depends on the people who make up the country. >>
<< <i>The average person today is probably far more educated about politics than people of the past. I think the real issue is people wanting something for nothing and having been told for decades by everyone from economists to presidents that such a system is workable and in fact desireable. What has changed is everyone buying up the Keynesian crap that debt is money, deficits don't matter, and that a target inflation rate of a "couple of percent" is necessary for a growing and vibrant economy. There have been politicians offering a better path but as soon as one of them them mentions "honest" money or accountability in their campaign they've already lost half the vote.
roadrunner >>
I think you guys are both spot on. A lot of people are pointing to the current crisis as proof that capitalism doesn't work. Moral, hard-working capitalism works just fine. It's corrupt entitlement capitalism that doesn't work, and I'm afraid that's what we've got right now.
I think you're about 35 years too late with the question.
<< <i>
<< <i> Ii think a govt can be trusted to maintain the money supply as long
as the majority of citizens are upstanding folks and trustworthy. once
a country passes the critical point of having more untrustworthy people
versus trustworthy... you will arrive at a point where things get mismanaged.
it just all depends on the people who make up the country. >>
<< <i>The average person today is probably far more educated about politics than people of the past. I think the real issue is people wanting something for nothing and having been told for decades by everyone from economists to presidents that such a system is workable and in fact desireable. What has changed is everyone buying up the Keynesian crap that debt is money, deficits don't matter, and that a target inflation rate of a "couple of percent" is necessary for a growing and vibrant economy. There have been politicians offering a better path but as soon as one of them them mentions "honest" money or accountability in their campaign they've already lost half the vote.
roadrunner >>
I think you guys are both spot on. A lot of people are pointing to the current crisis as proof that capitalism doesn't work. Moral, hard-working capitalism works just fine. It's corrupt entitlement capitalism that doesn't work, and I'm afraid that's what we've got right now. >>
This is exactly what we have right now, it's every man for himself. The hogs (CEO's, CFO's, Presidents, VP's, Wall Street bankers, Politicians)are feeding at the top end of the trough, the pigs (upper middle class and business owners) are in the middle and the poor little piglets (middle class and working poor)are on the bottom. Of course you have the welfare recipients who always seem to have their hand out but don't really want to work but it's tough to get to far ahead living on welfare.
Reminds me of the class warfare that errupted in the 30s.
In 2008 a bill was under consideration to place the BEP and USMint under the controls of the FED (ie give all power over our money to the FED). Fortunately, I think that bill is dead and it would raise a stink if it showed up again.
The founding fathers knew that the govt couldn't possibly be trusted with the money supply because 2 thousand years of recorded history proved it. Not one example of an eduring paper currency regime....most failed after 25-75 years. Why should we be surprised at what's happened since 1971? Basic laws of economics, money and greed cannot be changed.
roadrunner
<< <i>The hogs (CEO's, CFO's, Presidents, VP's, Wall Street bankers, Politicians)are feeding at the top end of the trough, the pigs (upper middle class and business owners) are in the middle and the poor little piglets (middle class and working poor)are on the bottom.
Reminds me of the class warfare that errupted in the 30s. >>
Listen we're all guilty of this thing called greed, I was merely pointing out the different levels of hogish behavior inherent in most any person living today. I don't buy into the class warfare argument that the Democrats constantly drag out, let's get real here most of them are multi-m illionares so why in God's name would they want to go after themselves to benefit the poor and middle class???
You have to admit that the greed in this country is reaching epic proportions, just look at the bonuses the wall street bankers and upper management are being payed out for the pathetic performance at their companies. Where is the board of directors in all this, I've been on a board of directors at an agricultural co-op for 14 years and I constantly grill management about benefits and compensation so unless the CEO's are hand picking a bunch of yes men you can't tell me that these board members are this ignorant as to what is going on around them?
Because "they" are the selfless (?) heroes (?) of the downtrodden, standing up to the exploitative, oppressive, manipulative abuses of the corporate hierarchy. So, to combat such injustice "they" create and feed a governmental bureaucracy that no one can match in terms of exploitative, oppressive, manipulative abuses of the working stiff.
If you're in the middle class, you have *no* friends. None. Well, maybe Ron Paul, but no others.
I knew it would happen.
<< <i>Can government be trusted with the money supply? >>
Does this question really need an answer with the recent news events...
This private paper was generally accepted in trade (if accepted at all) at an often sizable discount to gold, reflecting the perceived risk that it would not be redeemed at full value by the issuer. Back then there were plenty of alternative forms of money to choose from. Today the entire world is on a paper standard (or its electronic equivalent), and there is no practical alternative to government-issued currency for use in everyday commercial transactions.
My Adolph A. Weinman signature
That's all money is, just an instrument of commerce, a way to keep score and a way to move goods between people ie if you bought a bunch of cows you may not necessarily want to park 200 bales of cotton and a truck load of strawberries in trade on someones corporate parking lot nor would you necessarily want to have a few 18 wheelers full of cows sitting on your loading dock so it's just easier to swap some money and send the goods to where they need to go.
I'm still waiting for some nation to issue a PM backed currency. They would not be able to print the notes fast enough and that would be the end of the USD backed only by the full faith in something that at last tally had a 9% public approval rating. I'm still kind of amazed/amused that all the govts. just hand out this paper that has no real merit other than the govt. says it's good for commerce but not really worth anything.