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Originally Posted by Broadsword2004
What about the Fed's role in managing inflation properly, allowing the economy to grow over so many years?
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You only have to manage inflation if you rely on paper currency. You're using a circular argument.
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Aren't those kind of the same thing though? Too much power in too few hands, results in corruption?
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Not necessarilly. And certainly not the reason that Jackson made sure that the charter for the Bank of the United States wasn't renewed.
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True, but the 1990s was considered the greatest economic growth period in U.S. history I believe, and that was without the gold standard.
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By who? Certainly not economic historians.
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I'm not too familiar with how the Swiss economy works, but from my understanding, before the Federal Reserve was created, American banks had a problem with runs on them during times when the Stock Market would go down. The Federal Reserve was created specifically to stop the banks from getting runs on them.
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There was exactly one period, and one only, in which US banks suffered runs. The Federal Reserve system wasn't created to stop them, but for a variety of reasons.
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I may have this wrong as I don't fully understand this issue (though I find it all very fascinating!), but if everyone is actually carrying around gold, the money supply remains constant, and increases or decreases based on the amount of money, but since people carry representative forms of money, which are backed by that gold, government oversight is still needed to manage this properly.
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That's called a Treasury.
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If the specie reserves increase or decrease, I believe the money supply has to be changed accordingly. The problems can come though when this is mis-managed, as I believe happened in 1929 with the Stock Market crash.
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The Stock Market Crash of 1929 had to do with rampant speculation, not with specie management.
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Thing is though, since the money supply still must be managed even with a gold standard, I don't see how we could do without the Federal Reserve.
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Did it from 1848 - 1913 without the Federal Reserve.
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I do not see how the Euro could ever replace the dollar.
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Well, it's doing it. Might also consider that for a number of years, the Swiss Franc was the "international currency". Stability has value.
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Also, from some things I've been reading, a weak dollar can be good for the U.S. economy because we are no longer the world's manufacturing king. As such, for our manufacturers to compete, a weak dollar helps them because it allows us to sell our exports where they are cheap to the rest of the world. It also stimulates U.S. tourism I believe, and it helps the economy because we can increase prices for products, which may seem bad for the consumer (increases cost of imports), but it helps the economy, and assuming most consumers are workers, this should help them.
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Republican Administrations have consistently used this argument and supported a weak dollar. The dollar isn't weak now, it's looking close to freefall. In addition, the US doesn't manufacture the amount that it used to that competes internationally on the issue of price. More and more US exports are in areas where the customers pay the price regardless (such as technology) if they want the product. The USA gets far more internal tourism (US tourists) than external tourists (tourists from overseas).
You can have a weak dollar with specie based currency. Just set more dollars per ounce.