A quick question after trying (key word: trying) to understand monetary policy. So basically my question is, how did the money supply increase before the fed in 1913 and who printed the money?
Fractional reserve banking existed well before then as well. I don’t recall the details though.
If I’m not mistaken, the Federal Reserve Act of 1913 was pretty much “same sh*&, different day” (and perhaps some difference in the specific private entities profiting and some detail differences) rather than anything radically new.
[quote]bluefloyd wrote:
A quick question after trying (key word: trying) to understand monetary policy. So basically my question is, how did the money supply increase before the fed in 1913 and who printed the money? [/quote]
Prior to the Great Depression, the government had a non-intervention policy. Historically, before the Fed was used, Congress has made economic policy by focusing on microeconomic decisions. Fuck knows who actually printed the money. The problem with Congress was that it had limited ability to manage economic decisions from a nationwide perspective because it was torn between its constitutional responsibility and its membership parties, where ideology,religion and interest varied.
So the congress still determined the money supply, assuming with the help of economists and what not, but then who actually printed the money?
[quote]bluefloyd wrote:
So the congress still determined the money supply, assuming with the help of economists and what not, but then who actually printed the money? [/quote]
I do not think they determined anything, since the dollar was tied to gold.
They could try to guess how much “money”, or really receipts for stored gold, got lost or accidentally destroyed and re-print them.
That alone was probably quite a challenge for a currency that was always used as a de-facto currency all around the world.
The ECB has the same problem with the Euros used in ex-Yugoslavia.
No, dollars were created by fractional reserve banking prior to the Fed as well.
You have to go considerably further back in history to find when money was actually receipts for stored gold.
[quote]Bill Roberts wrote:
No, dollars were created by fractional reserve banking prior to the Fed as well.
You have to go considerably further back in history to find when money was actually receipts for stored gold.[/quote]
Prior to 1933. That’s pretty far back.
[quote]bluefloyd wrote:
A quick question after trying (key word: trying) to understand monetary policy. So basically my question is, how did the money supply increase before the fed in 1913 and who printed the money? [/quote]
Read “The Mystery of Banking” by Murray Rothbard. It gives a historical overview of money in general and fractional reserve banking.
Here it is in pdf format:
[quote]LIFTICVSMAXIMVS wrote:
Bill Roberts wrote:
No, dollars were created by fractional reserve banking prior to the Fed as well.
You have to go considerably further back in history to find when money was actually receipts for stored gold.
Prior to 1933. That’s pretty far back.[/quote]
You need to learn more about it. Most assuredly there was not 1/35th ounce of gold held by the government or anyone for every US dollar in existence, regardless that the Treasury would sell gold at $35/oz. Each dollar was NOT a receipt for its nominal value in gold. As I said you have to go much further back for that.
You, in fact, are so much not paying attention that even though the topic clearly brings up the Federal Reserve Act of 1913 and is specifically on the question of how money was created, you don’t understand even the Fed’s role in that from 1913 on.
[quote]bluefloyd wrote:
So basically my question is, how did the money supply increase before the fed in 1913 and who printed the money? [/quote]
State banks printed money based on gold reserves but all currencies competed against each other. Since money was actually tied to a commodity and congress regulated the standard there were no problems with valuation between these competing banks because each dollar was worth precisely 1/20oz gold.
The money supply could only be increased by an increase in the supply of the commodity, the issuance of bank credit, and the issuance of bank receipts for gold that did not exist. Many bankers would issue receipts for gold in excess of what they had in reserves (hence the term fractional reserve banking).
It was the commodity backing that kept banks in check because if banks got too carried away with issuing receipts for nonexistent commodities and their customers got wind of it it could ruin them. Today this practice is very common and is what all banking is based on. It is the ultimate pyramid scheme.
In 1933 the ownership of gold by citizens was outlawed and this was the start of the Breton Woods Agreement. It was completely done away with in 1971 by Nixon, effectively ending the gold standard. Nixon basically canceled gold payments to all of our creditors overseas. Now we just issue IOUs.
[quote]Bill Roberts wrote:
LIFTICVSMAXIMVS wrote:
Bill Roberts wrote:
No, dollars were created by fractional reserve banking prior to the Fed as well.
You have to go considerably further back in history to find when money was actually receipts for stored gold.
Prior to 1933. That’s pretty far back.
You need to learn more about it. Most assuredly there was not 1/35th ounce of gold held by the government or anyone for every US dollar in existence, regardless that the Treasury would sell gold at $35/oz. Each dollar was NOT a receipt for its nominal value in gold. As I said you have to go much further back for that.
You, in fact, are so much not paying attention that even though the topic clearly brings up the Federal Reserve Act of 1913 and is specifically on the question of how money was created, you don’t understand even the Fed’s role in that from 1913 on.
[/quote]
Whatever dude, stick to giving advice about training until you learn some history on the subject.
I can guarantee you I know more than you do based on the answer you gave.
I will allow others to deal with your ignorance.
If you had the reading comprehension, even the link you posted yourself would educate you sufficiently to understand or at least become dimly able to grasp what I am talking about and to see that each statement was correct.
[quote]Bill Roberts wrote:
No, dollars were created by fractional reserve banking prior to the Fed as well.
You have to go considerably further back in history to find when money was actually receipts for stored gold.[/quote]
We need to keep two things separate here.
One is the role of the government, printing dollars, and those were most definitely backed by gold until 1933, for private persons, or 1971 (ß), for foreign central banks.
Insofar, they were receipts.
The money that is created in the banking system through fractional reserve banking is not paper money, it was always backed by nothing whatsoever. It is basically a fraudulent system.
Anyhow, the money that can be created by banks is limited by the money there actually is, which was backed by gold back then.
Insofar, the US government did not have to do anything but make sure it had enough gold to honor every presented dollar bill.
[quote]Bill Roberts wrote:
I will allow others to deal with your ignorance.
If you had the reading comprehension, even the link you posted yourself would educate you sufficiently to understand or at least become dimly able to grasp what I am talking about and to see that each statement was correct.[/quote]
That depends what you call “money” and that is not as trivial a matter as it looks at first glance.
[quote]Bill Roberts wrote:
LIFTICVSMAXIMVS wrote:
Bill Roberts wrote:
No, dollars were created by fractional reserve banking prior to the Fed as well.
You have to go considerably further back in history to find when money was actually receipts for stored gold.
Prior to 1933. That’s pretty far back.
You need to learn more about it. Most assuredly there was not 1/35th ounce of gold held by the government or anyone for every US dollar in existence, regardless that the Treasury would sell gold at $35/oz. Each dollar was NOT a receipt for its nominal value in gold. As I said you have to go much further back for that.
You, in fact, are so much not paying attention that even though the topic clearly brings up the Federal Reserve Act of 1913 and is specifically on the question of how money was created, you don’t understand even the Fed’s role in that from 1913 on.
[/quote]
The original purpose of the Fed was to provide loans to banks suffering runs, something fiat money is prone to having. Seperating dollars from gold backing started in 1933, when the USA powers-that-be knew that having a worldwide empire meant that they had to have the power to abuse the currency — as no one would want to pay taxes to fund that.
Anyway…to get back to the OP’s question: Look, we can’t have a worldwide government where the money supply is out of the hands of our rulers. Don’t worry about such things.
[quote]Headhunter wrote:
Look, we can’t have a worldwide government where the money supply is out of the hands of our rulers. Don’t worry about such things.
[/quote]
In other words, if you can’t beat 'em join 'em.
[quote]LIFTICVSMAXIMVS wrote:
Headhunter wrote:
Look, we can’t have a worldwide government where the money supply is out of the hands of our rulers. Don’t worry about such things.
In other words, if you can’t beat 'em join 'em.[/quote]
Well, whether we like it or not, we’re going to have a socialist world, with severe price controls and government simply printing up whatever they need. You will be completely controlled and currency will actually no longer exist.
Democracy and freedom are incompatible, because the majority will always vote for those who promise jobs, healthcare, and the like. That means they have to create a government that confiscates resources from those who have, to give to those who do not. You will, in a sense, be ‘free’ to be a milch cow, or the recipient of the milking.
Best site for eyeballing the dollar.
[quote]LIFTICVSMAXIMVS wrote:
bluefloyd wrote:
So basically my question is, how did the money supply increase before the fed in 1913 and who printed the money?
State banks printed money based on gold reserves but all currencies competed against each other. Since money was actually tied to a commodity and congress regulated the standard there were no problems with valuation between these competing banks because each dollar was worth precisely 1/20oz gold.
The money supply could only be increased by an increase in the supply of the commodity, the issuance of bank credit, and the issuance of bank receipts for gold that did not exist. Many bankers would issue receipts for gold in excess of what they had in reserves (hence the term fractional reserve banking).
It was the commodity backing that kept banks in check because if banks got too carried away with issuing receipts for nonexistent commodities and their customers got wind of it it could ruin them. Today this practice is very common and is what all banking is based on. It is the ultimate pyramid scheme.
In 1933 the ownership of gold by citizens was outlawed and this was the start of the Breton Woods Agreement. It was completely done away with in 1971 by Nixon, effectively ending the gold standard. Nixon basically canceled gold payments to all of our creditors overseas. Now we just issue IOUs.[/quote]
thanks