Thoughts on Fiat Currency
Hey Steemit Community!
So a Buddy of mine was questioning some of my ideas on US federal Reserve. He forwarded me a article from a highly recognized institution https://www.brookings.edu/testimonies/the-case-for-preserving-the-federal-reserves-dual-mandate/
Disclaimer---I do believe the Fed system is doing an average job right now. However I seriously believe it is creating more BAD than GOOD. Other disclaimer when I say the word FED I mean the Fed reserve which is the independent agency that is in control of the USD supply and makes key monetary decisions on its own interest (even though the say it’s for America’s interest) So here are some of my thoughts:
1-First point the Author makes “I would like to make clear at the outset that I believe a strong, independent central bank is essential to keeping the United States economy functioning as productively as possible without unnecessarily costly swings in economic activity.”
Strong? How is the fed reserve strong? It has power. It has control over the production of USD. (Fed Reserve Act of 1913 Section 16 part 1 and 2)* It has influence of the majority of the minds of Americans. This sounds a lot like a certain type of government that has control over its people. It almost sounds like communism.
2-Next- She said “Monetary policy, along with fiscal policy, can help moderate booms and busts” She does not give examples of booms OR busts. I don’t think it’s a good idea to LIMIT success and also on the flip side I don’t think its good limit busts.
3-Another point she says- “There is always huge uncertainty about how the complex machinery of the economy is actually working and what results monetary policy can expect to achieve.” True there is uncertainty about the economy. HOWEVER, she is setting up her next point by indirectly explaining to her reader that is SO complicated that only a few people can understand the complex economy and that is set for the people that work at the Fed
Is it on of the two: The general public will never be able to understand the complexities of the economy? OR could it be that the FED reserve does NOT WANT the general public to understand the complexities of the economy? I sure hope it’s the first one.
4- She continues, “controlling inflation is a crucial element of the larger objective because high and, especially, rising inflation is a serious threat to sustained growth. How the heck do you CONTROL inflation? Oh I know—you print money and then print some more and more and more and more. Oh and by the way America is becoming more and more in debit. Funny how that works out?
But Ryan we needed that to go into debit to fight two wars in Iraq and Afghanistan! But we needed that money for Medicaid, unemployment benefits expansion, blah blah blah** I get it, there are DOZENS if not Hundreds of reasons why we are in debit the way we are. The biggest problem I have is with the ethics and the mindset behind going into debit. The mindset with the Government acting like getting in debit is OK. The Government acts as though it’s a GREAT thing do go into debit as long as it justifies the means. They act as though there is no consequence to do into debit. Today there may not be consequences to be going into $19.9 TRILLION in debit*** However, there will be HUGE consequences for going into debit-that we are going to personally see and our children are going to see that will change every paradigm that is current.
Followed by- indsight indicates that monetary policy makers overestimated potential growth and did not tighten soon enough to avoid the acceleration of inflation at the end of the decade. Okay so is talking about the past success. Great now let’s talk about today and the future- We are already in 2017 and Americans and actually the world is catching onto what is going on behind America’s Central Bank. They are catching on to how it is not backed by anything of value. Ever since 1971 it has become a Fiat Currency****. This is a serious red flag that goes off in my mind because they can create and destroy paper currency whenever they ‘feel’ like it. How messed up is that? There are millions of Americans who are working hard every day to pay bills and make a decent living and then this public entity is determining what the dollar is worth in their own eyes. Which comes back to my first point-the Fed is acting very similar to communism.
5-Lastly she says I fault the Fed for not using its regulatory powers, in conjunction with other regulators, to raise underwriting standards for mortgage lenders, punish predatory lending, and rein in excessive financial leverage. While we should not have needed a catastrophe to learn this lesson, the Dodd-Frank Act now gives the Fed and the Financial Stability Oversight Council (FSOC) responsibility for financial stability and new tools with which to help achieve it. I appreciate her admitting Fault of the FED during the 2008 Crisis.
In conclusion, I would be very cautions of what the FED reserve tells the American people. Before the financial crises, Alan Greenspan (Formal Fed Reserve Chairman) before the 2008 Crises said everything was going great with the economy then BAM. Then he later admitted he made a mistake***** Of course he HAS to tell the American people everything is fine right before the biggest financially collapse. If he told the TRUTH everyone would have panicked. Moreover when Janet Yellen says “n testimony Thursday before Congress, walked back comments she made recently that there would not be another financial crisis "in our lifetime."******
REALLY? Really? Don’t get me wrong. My war is not against her or any other members of the FED. My fight is against the system that has been in place for over 100+ years. This idea of a centralized monetary system is old, outdated, and in place to benefit a few elites at the top. And there is no repercussion for the negative decisions they have made. They are all fine and dandy when the economy when to shit. But for the average American? How hard of hit did they take when the economy took a dump in 2008. Real hard.
A decentralized monetary system is the best solution and we have reached just the tip of the iceberg with the creation of the block chain technology.
Here are a few ways people can avoid a next big economic down turn:
1-Read read and read, Gain as much knowledge as possible
2-Diversify assets
3-Invest into Block chain, digital assets, and physical assets such as Gold.
*https://www.federalreserve.gov/aboutthefed/section16.htm
** http://www.marketwatch.com/story/heres-how-the-us-got-to-20-trillion-in-debt-2017-03-30
***http://www.usdebtclock.org/
**** http://www.investopedia.com/terms/f/fiatmoney.asp
******http://www.cnbc.com/2017/07/13/yellen-can-never-be-confident-wont-be-another-financial-crisis.html
Cheers,
Ryan17