Should we return to Free Banking?

[monorprise]

Currently most all of the world uses some kind of Government backed and controlled banking system. The U. S. A. currently uses a Federal Reserve system, which dominates the dollar connected world.

It may seem inconceivable to many people but this was not always nor even originally the case.

It is in fact primarily the case simply because Governments thou out history had a consist demand for large amounts of money, a preference for not being seen as taking it directly from the people.

This fact got nearly all of them into the banking and currency system. In the USA this last happened during the Civil war when the Union government forced all banks to effectively finance their war efforts via buying (with the people's savings) government war bonds.

A requirement that would destabilize said banking for decades to come, followed finally by the current Federal Reserve in 1913.

The disastrous history of which we still debate today:

The fact is there is an alternative, we can return to a free banking system where we the people have the right to choose in whom we trust our hard earned wealth.

There is nothing beyond goverment itself requires that Goverment politicians control our money.

[NamerOfStars]

Well, are you proposing that the dollar ceases to be a fiat currency as well? If so, then what exactly are you proposing pegging it to? Even if you combine gold AND silver, the entire planet hasn't had enough of that for over a century. Do you have a better option? I can't think of one, but I'm willing to hear you out.

Because if you don't, it would just mean going back to major panics and currency crushes every twenty years. And if you DO, then it would mean major panics and currency crashes every time someone announced a major discovery of more of whatever your resource was.

[monorprise]

@NamerOfStars I think your confusing the forest for a tree.

We don't actually need to agree on a medium like Gold, silver, or even bitcoin as the guy in the video pointed out.

This is in many ways always been true as a expressed in the Idea of money. Today with computers able to instantly calculate and tract even the smallest of values it is simply easy and more practical for people to claim ownership of a basket of anything and everything much like you might claim to buy/sell a mutual or even index fund stock.

So if you want Gold you can have it, but you can also have anything and everything else in any ratio you choose. Today we can instantly give you a relative price to make whatever you choose meaningful.

A currency is simply a claim upon a share of everything that that might be traded for it. It doesn't need to be anything in particular.

Does this make sense to you?

[NamerOfStars]

You misunderstand my objection. Fiat currencies don't HAVE any inherent value; they're worth something simply because we all agree they are. Currently, the only reason that a dollar is even worth the paper it's printed on is because of the economic and military might of the United States government. Remove that, and you have a lot of worthless greenish paper. The only alternative that would actually WORK is to value the dollar based on something else- gold, traditionally. Gold was chosen because it was rare- but not TOO rare- pretty, and useless. The decision of what to peg the value of a dollar to isn't meaningless: it COULDN'T be "anything and everything else in any ratio you choose"; that would just be making it a fiat currency with no power backing it- you're back to fancy toilet paper.

[OddBeMe]

Well…couple of things.

A. Yes during the civil war our govt did some fascistic stuff to keep the Union together. It’s actually interesting. Lincoln was one of our best presidents but he nearly jailed the Chief Justice of the Supreme Court. Imagine that today.
B. FDIC insures all our invested money in bank accounts should that bank go under, get robbed, etc. So having a govt backed Fed is not bad.
C. A monopolized money supply isn’t necessarily a bad thing. It’s when big business banks become too big to fail. Quantitative easing hasn’t been shown to not work.

[monorprise]

A: The justifiably of Lincoln's totalitarian actions rest upon both the ends can justify the means beleive
1) That Lincoln did in fact "save the Union" rather than destroy it replacing it with an lawless and involuntary tyranny of the majority. Where a president may disregard the limits of the law to achieve whatever goal he alone deems necessary in an "emergency" he himself declared.
And
2) That said goal of forcing all people to submit to a particular goverment against their elected will was desirable.

When I was a kid I believed this to be true as i was taught only to learn later upon reading myself of the true nature of liberty and the natural rights of men that it was but a short sighted excuse to enslave men of every kind to the corrupt will of other.

As pointed out by our founders men Must be free to govern themselfs, governments MUST exist only with the consent of the governed.
People's easily manipulated and broad ignorance of the world and people beyond their line of sight cannot entitle them to claim lordship over said people without their consent.

[monorprise]

B: I uses to think FDIC insurance was nice too, until i realized how much money on a regular basis by bank who simply refuse to take responsible measures to secure it.

In effect FDIC insurance is a too big to fail program that finances reckless bank behavior, while making every bank evermore a mere division of the Federal Goverment.

[monorprise]

C: Are you arguing against a monopolize money supply that finances Quantitative easing of big banks or for it?

[OddBeMe]

I guess that evidence was allayed with Lincoln’s landslide re-election. The majority of the US didn’t want the Union to collapse. This always what you conservatives miss. Like storming the Capitol building. “It’s my building!” No it’s ours and the vast vast majority don’t want you handing pelosi or assassinating Pence.

The vast vast majority want a government, even though their logic about it is flawed: “Get your govt hands off my Medicare.” For example. Lol.

[monorprise]

@OddBeMe If you want to go down the rout of claiming an election entitles a president to ignore the constitution then you don't have a Constitution.

Seeing as by 1864 Lincoln had already committed the north to great investment in both treasure and blood in the conquest of the south, while at the same time as a typical tyrant shutting down much of the opposition's ability to speak against him or his efforts. It really isn't possible to gauge the true sentiments of the people of the union states under said conditions.

Not that their current opinion was of any more legitimate concern regarding the rights of the separate and now independent people of the Southern States to govern themselfs than was the people of England in 1776.

Regardless such a crooket election was not a question of their constitutional judgement even among the Northern States. Nor was Lincoln's victory enough even if it had been to overcome the 3/4th consent requirement. Unless you acknowledge the independence of the 11 southern states.

[OddBeMe]

Crooked election? Every state that wanted to voted. Maybe the confederates shouldn’t have left the govt just to keep their slaves.

But ultimately we do agree on Lincoln. It’s a tough situation, a civil war. Ironically, Jefferson Davis was even more of a despotic tyrant. Did you know the south was the first to institute a military draft?

[OddBeMe]

But also, Lincoln…and Washington…stopped being “tyrannical” after the crisis was over and gave power back to the people. Irony.

[monorprise]

@OddBeMe Really? So your telling me an 'election' in which much of your opposition is censored and outlawed, and a large share of the electorate including those posing as many states is under the direct command of 1 side is a honest one?

If so I can see why nobody in their right mind would trust you enough to share a "democracy".

Regardless the election of 1864 was not discussing the constitutionality of Lincoln's actions but rather whether or not Lincoln or his approved opposition George B. McClellan was better suited to finish the war already nearing an end.

[monorprise]

@OddBeMe Washington never became lawless like Lincoln. It hardly matters what excuse of 'crisis' is given for suspending the rule of a Constitution (or any law) particularly one declared unilaterally by the one so suspending.
For claiming the power to do so is claiming the power to only follow the constitution when you choose.
As such its kind of irrelevant when or wether or not you choose to follow the Constitution again.

That said we cannot know what Lincoln would have done as the "Crisis" he used to justify his lawless acts never ended in his life.

Not that it really matters

[OddBeMe]

Lawless is relative as Washington nearly became king. He also did do some despotic shit during the rev and then was offered king of America. He created the presidency.

[OddBeMe]

But our elections are secure and your side has an unfair advantage with the electoral college. And still bitch and moan.

[monorprise]

@OddBeMe Washington did not nearly become king it was only imperialist like Hamltion who had any desire for him to lord as a king.

The states would not have agreed to give anyone including George Washington that much power. Even the federalist didn't think they could get away with creating a federal goverment even close to that.

[monorprise]

@OddBeMe In a fair & secure election all sides get heard and votes are cast in a transparent easily traceable way.

Neither of those qualifications exist, as such we are neither free to know what both sides have to say nor are we free to know that the ballots cast actually came from voters.
Therefore there is nothing fair or secure about said election.

[OddBeMe]

All I can quote are from the books I read. There was obvious public desire for Washington to “rule” the only way they knew how really. That’s where the genius of founders came in and wrote the constitutional law. Washington did create the idea of the four year presidency, that much is certain.

[OddBeMe]

But the 1864 election wasn’t crooked because the liberals left out its opposition. The conservative slave holders didn’t vote. Every citizen in the confederate state could have voted as Lincoln said it wasn’t the states that rebelled it was the people in them.

[Curmudgeon]

Given what is going on in DC lately, I totally understand that point of view.

However, "Free Banking", was Gold and Silver Banking. And roughly every 20 years there was a "bank panic" and an economic crash. It wasn't all great back then either.

[monorprise]

We have a panic every 20 years or less today with the Federal reserve, we also have a currency that has lost 90%+ of its value in the 100 years since 1913 in contrast to a currency that doubled in value in the 100 years prior.

As was discussed in the video the banking panics that happened in the US only are attributable to goverment laws which mandated responsible investment while restricting competition.

[Curmudgeon]

A gold standard does mean that currency devaluation, or "inflation" is zero, zip, nada. True, and that IS awesome for savers. Inf act, with increasing productivity, we get deflations. But entrepreneurs and innovators are necessary too, and those people get hit hard by deflations. Deflations do have their own problems, and massive deflationary depressions are no picnic either, just ask any elderly people left alive who went through one.

[monorprise]

@Curmudgeon A gold standard does not mean zero inflation (New gold is constantly being brought into the market and its relative value is changing) nor is such a standard in itself required for free banking.

Indeed although the Free Banking era of the US did indeed have such a standard and as such was not so free. The real currency was the banknotes themselfs, who's fluctuating values was like the modern federal reserve's notes a reflection of the reliably expected exchange of said notes.

A problem as discussed in the video that was not better managed via the competition of different banking options even thou it was legally hamstrung in the USA via limited operating domain and said reserve and medium of exchange,

A true free banking system would not nessarly even have those restrictions, you could use a bank which offers any kind of backing for their note, and operate anywhere. With modern tecnoligy that allows us to instantly know the repetitive price of anything this is very practical.

[Curmudgeon]

"A gold standard does not mean zero inflation (New gold is constantly being brought into the market and its relative value is changing) nor is such a standard in itself required for free banking." - In effect it does, in fact it is DEflationary, because productivity increases have always exceeded any increase in the gold, silver and other precious metal supply. In fact, until the last two and a half years now, productivity increases even exceeded the "Fiat" money supply. Sadly, this is certainly not the case now, and we are seeing stagflation exceeding even the dismal 1970's.

[LiamJHayden]

A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.

[monorprise]

@LiamJHayden I agree, although unlike many other systems capitalism is very adaptable and simply raises the price to compensate for restrictions.

What is proposed in a return to free banking is a system by which the market of banks rather than a central Goverment bank controls the currency again.

[CuriousMufuxka]

I hope you're not suggesting bitcoin or the like lol

[monorprise]

@CuriousMufuxka As the video indicated I don't nessarly suggest anything in particular as a particular as that is not really what is used as money.

Sure you can select a particular item like Gold or bitcoin and guarantee an exchange rate to give people claiming a share of the same confidence in its value, but really everything and anything people have confidence in is good.

Countries using a flat currency are effectively using everything produced by said countries to the extent people have faith that their prices will not change quickly.

If you ask me a basket of goods and services like a index or mutual fund may be a more appropriate to better reflect the broad scope of what is traded for in a market while guaranteeing a rate of exchange in that your actually claiming spesfic ownership shares of everything.

But we need not restrict ourselves to any particular medium but rather allow anyone to use whatever they want.

[CuriousMufuxka]

I particularly invest my money in an FDIC insured bank. I don't even go mutual or bonds for I have no faith in any growth. I'll just keep what I have and believe that is free banking :)

[monorprise]

@CuriousMufuxka An FDIC insured bank is not free banking, but rather an institution operating under the control of the central US Bank using the currency to buy said control.

The same currency which is inflating away between 2-9% a year while your share of the dividend from the banks own Goverment insured investments with your money amount to a small fraction of that.

As such you are in fact paying quite a lot of money to the state for said "insurance".

[CuriousMufuxka]

Eh, I'll just keep investing in myself.