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Debates Forum

Debates Forum

  1. 24 Jun '12 12:55 / 1 edit
    Why is the Federal Reserve not considered to be a monopoly?

    I just love legal gymnastics and will hold up flash cards from 1-10 in judging upon each response. Let the games begin!!
  2. 24 Jun '12 13:04
    What does it matter whether or not the Fed is considered a monopoly?
  3. 24 Jun '12 13:44
    Originally posted by KazetNagorra
    What does it matter whether or not the Fed is considered a monopoly?
    Monopolies are suppose to be illegal.
  4. 24 Jun '12 17:18
    Originally posted by whodey
    Monopolies are suppose to be illegal.
    No they aren't, and the Fed is not a business so it's not a monopoly. In any case it's immaterial whether you call the Fed a monopoly or not. A monopoly is not the same as a cartel - for instance Microsoft has a (near) monopoly in the operating systems business (though its market share is a bit lower compared to a few years ago), but that's not because it is stopping competitors from entering the market.
  5. Standard member skipper2666
    Why so serious ????
    24 Jun '12 18:35
    Originally posted by whodey
    Why is the Federal Reserve not considered to be a monopoly?

    I just love legal gymnastics and will hold up flash cards from 1-10 in judging upon each response. Let the games begin!!
    The Fed is a Gang, run by gangsters for gangsters to control money and benefit the Gang.
  6. 24 Jun '12 20:04 / 1 edit
    Originally posted by KazetNagorra
    No they aren't, and the Fed is not a business so it's not a monopoly. In any case it's immaterial whether you call the Fed a monopoly or not. A monopoly is not the same as a cartel - for instance Microsoft has a (near) monopoly in the operating systems business (though its market share is a bit lower compared to a few years ago), but that's not because it is stopping competitors from entering the market.
    So they get around the monopoly tag by saying that they are not a business?

    Hmm? I'll give you a 6 out of 10 rating.

    Anyone else?
  7. 24 Jun '12 20:07
    Originally posted by skipper2666
    The Fed is a Gang, run by gangsters for gangsters to control money and benefit the Gang.
    Many of the Founders fought against a central government run bank for obvious reasons.
  8. Subscriber AThousandYoung
    It's only business
    24 Jun '12 23:27
    Originally posted by whodey
    So they get around the monopoly tag by saying that they are not a business?

    Hmm? I'll give you a 6 out of 10 rating.

    Anyone else?
    The army and police have monopolies too.
  9. Subscriber no1marauder
    It's Nice to Be Nice
    24 Jun '12 23:33 / 1 edit
    Originally posted by whodey
    Many of the Founders fought against a central government run bank for obvious reasons.
    Most of them voted for one in the First Congress.http://www.britannica.com/EBchecked/topic/617346/Bank-of-the-United-States
  10. Subscriber no1marauder
    It's Nice to Be Nice
    24 Jun '12 23:37
    Originally posted by whodey
    Why is the Federal Reserve not considered to be a monopoly?

    I just love legal gymnastics and will hold up flash cards from 1-10 in judging upon each response. Let the games begin!!
    In a monopoly, one or more persons or companies totally dominates an economic market. Monopolies may exist in a particular industry if a company controls a major natural resource, produces (even at a reasonable price) all of the output of a product or service because of technological superiority (called a natural monopoly), holds a patent on a product or process of production, or is otherwise granted government permission to be the sole producer of a product or service in a given area.

    http://legal-dictionary.thefreedictionary.com/monopolies


    What "economic market" do you think the Fed "totally dominates"?
  11. 25 Jun '12 01:38
    Originally posted by no1marauder
    In a monopoly, one or more persons or companies totally dominates an economic market. Monopolies may exist in a particular industry if a company controls a major natural resource, produces (even at a reasonable price) all of the output of a product or service because of technological superiority (called a natural monopoly), holds a patent on a product or ...[text shortened]... opolies


    What "economic market" do you think the Fed "totally dominates"?
    They control the economy itself
  12. Subscriber no1marauder
    It's Nice to Be Nice
    25 Jun '12 01:49
    Originally posted by whodey
    They control the economy itself
    They do? So the Fed can automatically determine rates of growth and inflation by fiat?
  13. 25 Jun '12 01:51 / 1 edit
    Originally posted by no1marauder
    Most of them voted for one in the First Congress.http://www.britannica.com/EBchecked/topic/617346/Bank-of-the-United-States
    Jefferson said it best, "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their chidren wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

    By all accounts Jefferson was on to something. It seems the main threat to the Republic is the mounting debt and inflationary ways of the Fed, not to mention tax payer bail outs of corporate America.
  14. Subscriber no1marauder
    It's Nice to Be Nice
    25 Jun '12 01:57 / 1 edit
    Originally posted by whodey
    Jefferson said it best, "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their ebt and inflationary ways of the Fed, not to mention tax payer bail outs of corporate America.
    Jefferson lost that argument; his opinion was in the minority of the Framers.

    The idea that the " the main threat to the Republic is the mounting debt and inflationary ways of the Fed" is hysterical nonsense. Historically, there has been much greater economic growth and stability in the 100 years since the Fed was created than there was in the 100 years before which were marked by periodic bank panics which led to depressions.

    BTW, the quote is a right wing hoax:

    The first part of the quotation ("If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered" has not been found anywhere in Thomas Jefferson's writings, to Albert Gallatin or otherwise. It is identified in Respectfully Quoted as spurious, and the editor further points out that the words "inflation" and "deflation" are not documented until after Jefferson's lifetime.[3]

    The second part of the quotation ("I believe that banking institutions are more dangerous to our liberties than standing armies..." may well be a paraphrase of a statement Jefferson made in a letter to John Taylor in 1816. He wrote, "And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."[4]

    The third part of this quotation ("The issuing power should be taken from the banks and restored to the people, to whom it properly belongs" may be a misquotation of Jefferson's comment to John Wayles Eppes, "Bank-paper must be suppressed, and the circulating medium must be restored to the nation to whom it belongs." [5]

    Lastly, we have not found a record of any publication called The Debate Over the Recharter of the Bank Bill. There was certainly debate over the recharter of the National Bank leading up to its expiration in 1811, but a search of Congressional documents of that period yields none of the verbiage discussed above.

    http://wiki.monticello.org/mediawiki/index.php?title=Private_Banks_%28Quotation%29&printable=yes
  15. Standard member finnegan
    GENS UNA SUMUS
    25 Jun '12 12:46 / 3 edits
    Originally posted by whodey
    Why is the Federal Reserve not considered to be a monopoly?

    I just love legal gymnastics and will hold up flash cards from 1-10 in judging upon each response. Let the games begin!!
    I imagine this claim is based on the belief that the Federal Reserve can create money or remove it from crculation at will. It is shared by Bernanke:

    In 2002, following coverage of concerns about deflation in the business news, Bernanke gave a speech about the topic.[49] In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money. Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. He said "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." (He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.) Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter printing press." In a footnote to his speech, Bernanke noted that "people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation."

    http://en.wikipedia.org/wiki/Ben_Bernanke

    The evidence against this is, however, overwhelming. It is just not acknowledged by conventional economists like him. This is that the process runs in the reverse direction to that claimed. The financial sector generates new debt (in order to maximise its own profit) which has to be backed by the creation of new money through the Federal Reserve.

    It is not true that the Fed has a monoply on creating money because in fact, it only prints money (notionally) in response to rising levels of debt generated through the financial sector. Indeed, when the Fed has tried to take the lead through Quantitative Easing, that has not flooded into the market but has instead silted up in the reserves of banks unwilling to lend.

    So your argument is tragically wrong and sadly lies at the heart of the reason why QE is failing to restore the economy. It fails to address the debt levels in the private (not public) sector which depresses demand and kills off investment. A policy to reduce private debt, by giving the money directly to the public, would quickly stimulate economic activity but sadly it would devastate the profits of the financial sector.

    Incidentally, all this Monetarist crap was tested to destruction by Thatcher in the early Eighties in Britain and, as Keen says in a recent book, if the Iron Lady could not manage it then nobody can.