What is Digg?161 Comments
- waxoff, on 10/12/2007, -14/+48Panama doesn't have it's own currency. They use dollars and are at the mercy of US interest rate changes no matter what the economic conditions. Not a position we should place ourselves in.
- dukeeeey, on 10/12/2007, -9/+42educate yourself on how banking works
http://video.google.com/videoplay?docid=-9050474362583451279
Most people simply don't know. If you watch the video you will see what i mean .. - dave11980, on 10/12/2007, -2/+31Did you actually read up on history before posting your article? The federal reserve was founded by the federal reserve act in 1913, a full 16 years before the beginning of the great depression. The lack of faith that you are referring to was caused by the national banking act of 1863 which was another attempt by the government to interfere with the existing market.
http://en.wikipedia.org/wiki/Federal_Reserve - LinearChaos, on 10/12/2007, -6/+35Or read up on Andrew Jackson...
"You are a nest of vipers and thieves, and by the grace of the almighty God, I will root you out."
Words to a delegation of bankers, 1832. - gmason08, on 10/12/2007, -5/+29This is obviously a critically important topic but how many of you commenting here honestly know even the basics on this issue. How many even know, without looking it up, how many times the US has had a Privately-Owned, Central Bank?
Read "The Creature From Jekyll Island" by G. Edward Griffin for a critical look at the Federal Reserve.
Whether come to a pro or con view on this issue does it not make sense to arrive at your conclusion after an examination of all sides of the argument? - inactive, on 10/12/2007, -11/+35Yeah, since panama's economy is doing so steller"
Panama: 40% below poverty line, $7000 GDP per capita, 8.6% unemployment rate, 1.19 million laborers, inflation 1.4%.
United States: 11% below poverty line (which for one person is $9,800 in income per year, higher than the GDP per capita of Panama), $43,000 GDP per capita, 4.4% unemployment rate, 151.8 million laborers, inflation 2.42%.
Seriously, I visited panama city for a day, it had the worst ghettos and poverty of ANY city or place i have ever seen, the entire city was grey. I talked with the locals and they basically said most of the country was like that. Keep in mind panama city is right near the panama canal, a major source of money, and it was still uber ghetto. It makes detroit seem like boston. I am sure there are many other countries without a central bank, why could not he have just cited one of those? - inactive, on 10/12/2007, -4/+25you are assuming inflation is a problem they would want to solve. it may be bad for taxpayers and savers - however, ask whether it is a problem for governments and perpetual borrowers. then ask whether they have the taxpayers' best interests in mind.
- fantasmacanino, on 10/12/2007, -6/+27I'm gonna take this chance to quote Bertolt Brecht: "What's breaking into a bank compared with founding a bank?".
- betterth, on 10/12/2007, -8/+26Because that's the only difference in our economies. And if we got rid of the federal reserve and any govnerment influence in money what so ever, we'd all be rich beyond our wildest dreams and enter a new golden age of prosperity!
- Junkyarddawg, on 10/12/2007, -8/+26Panama uses US dollars as currency.
The US has a central bank. - pianomahnn, on 10/12/2007, -3/+20These few people that wrote a really cool declaration and constitution a few years back...
- kuzotz, on 10/12/2007, -11/+28federal reserve is a private company.
- puto, on 11/12/2007, -4/+19http://www.themoneymasters.com/faqs.htm
It's all about control.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children 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". -Thomas Jefferson
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance." -James Madison
"If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations". -Andrew Jackson
"The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity". -Abraham Lincoln
"Despite these warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: 'I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.'" -Woodrow Wilson - theodicey, on 10/12/2007, -2/+16I thought their currency was the "kilo"?
- inactive, on 10/12/2007, -2/+16Panama: 40% below poverty line, $7000 GDP per capita, 8.6% unemployment rate, 1.19 million laborers, inflation 1.4%.
United States: 11% below poverty line (which for one person is $9,800 in income per year, higher than the GDP per capita of Panama), $43,000 GDP per capita, 4.4% unemployment rate, 151.8 million laborers, inflation 2.42%.
I think I'll take the +1% inflation hit. And we have no national or central bank, all banks are private. - kaelyiesta, on 10/12/2007, -4/+17I like woodrow wilsons quote better. Unfortunately I can't recall the exact words and I wouldn't want to butcher it by paraphrasing but the gist is that he felt that the worst mistake of his presidency was in relenting to the pressure of special interests by allowing for the creation of the central bank system. He stated that it would be the downfall of real government by the people and instead put power in the hands of certain special interests. He didn't leave any ambiguity in his speech. He regretted horribly what he had done. Damn, I really like that quote, where the hell did google hide it...
- sid0, on 10/12/2007, -1/+14The actual article doesn't mention Ron Paul once. It's just something the submitter added.
Interesting read though. - kaelyiesta, on 10/12/2007, -5/+18The critics claim about his idea causing chaos is true in that all the people enjoying the benefits of pulling money out of thin air via debt-as-money would most certainly be running around chaotically like chickens with their heads cut off. I suggest instead of accepting or rejecting Ron Pauls idea based on panama, spend a few hours reading how the central bank works. Google "debt-as-money" for some strong arguments against the central banks practices. That will paint a rough picture of what the whole fuss is about.
- admiralbrinks, on 10/12/2007, -14/+26Great article. Of course it makes sense to abolish the Fed...
but who ever told you the American government was supposed to make sense? - Pfhreak, on 10/12/2007, -1/+12Ron Paul is seeking the Republican nomination, not the Libertarian one.
- eitheehstsergei, on 10/12/2007, -8/+19Damn, everything about Ron Paul is perfect. This guy is amazing... I'm almost in denial that republicans are letting this guy run under their name. I decided I'm gona vote for this guy, switching from Obama. This guy really is a genuine candidate with revolutionary, common sensical, ideas that may just save this country and put it on top again.
- Angostura, on 10/12/2007, -6/+17Panama does have a central bank - it's called the "U.S Federal Reserve". They just don't have any control over it.
- trentasaurus, on 10/12/2007, -8/+18the fed was created to keep the dollar stable? well it has failed. Our dollar today is worth far less than it was in the early 1900's. It's about 1% i think.
Also America's great depression was in the 1930's, the federal reserve was created in 1913 or 14 i think, and many economists believe that the fed caused the great depression. - nickbender, on 10/12/2007, -26/+35Panama also has a history of stealing money from it's own people..i.e. liquidiating large bank accounts for it's own purposes.
Have any of you seen 'blow'?
/article lame.
Also, if any of you have ever read up on just WHY the us bank was established... it was to maintain currency and keep the value of the dollar stable. It also helped restore shattered faith in banks caused by the depression. If you abolish the Fed... bye bye insurance... and all of a sudden paranoia ensues. Ask anyone over the age of 60 what they think about banks in general and you'll see what I mean. - NewzClewz, on 11/12/2007, -2/+11I recommend Money Masters also. It is a two part series that will really blow your mind!
Promise
http://video.google.com/videoplay?docid=-8753934454816686947&q=Money+Masters
http://video.google.com/videoplay?docid=-7336845760512239683&q=Money+Masters - geronimo, on 10/12/2007, -1/+10"That failed because America went into so much debt that most of our gold found its way overseas. Look, the gold standard just doesn't work. "
There is another solution - not running deficits and being financially sound. You basically are making the point that we can print our way into prosperity. Also, a nice side effect with the gold standard: no inflation. Just hold onto your gold and it actually increases in value. Inflation is the side effect of a fiat currency, it's nothing more than a tax. The government spends X dollars more than tax revenues, so the government prints money to get that X dollars, increasing inflation. Wages have been going down for decades if you include inflation. Imagine having a stable job, getting your pot of gold, then sitting on it. No more rat race. That sounds like happiness to me. Note this graph, before the federal reserve(1913), consumer prices were stable, afterwards consumer prices shot up like a hockey stick:
http://mwhodges.home.att.net/inflation.htm
There were bank runs but they were not serious, those risky banks went away without affecting much of the economy, but after the federal reserve was established we had the great depression, and we will have another. This world is risky, by offering such protections you just delay the hurt until it gets really painful. I would rather have mild shocks every decade rather than one big depression every so often. - thechadstannard, on 10/12/2007, -2/+10The Federal Reserve Act of 1913 transfered the power to create money from the government to a small group of private bankers.
The Federal Reserve is now a Private Corporation - SickMonkey, on 10/12/2007, -18/+26Duh! Of course Panama has low inflation, a stable currency and a good economy. The Balboa (their currency) is tied to the US dollar. They don't need a reserve bank because they are already using ours!
Libertarians are so silly. The think unmitigated capitalism can do no harm. My buddy is a Libertarian and he believes that all the public parks should be sold off to the highest bidder. I asked him then who would be responsible for saving the last remaining giant sequoias (95% of which have already been chopped down)? He said that he and others Libertarians like him would buy the land and create private reserves. Then I informed him that a single giant sequoia was worth about $400,000 to the lumber industry and I asked him how many he planned to buy. He just smiled because he knew he lost the debate. - KuntaKinte, on 10/12/2007, -45/+53yes that's the ticket! let's take notes from 3rd world countries! we'll be rich beyond our dreams and kids will play and laugh with gumdrop smiles
- inactive, on 10/12/2007, -9/+17Of course, Panama is at best a third world country.
- argoff, on 10/12/2007, -1/+8First,
Panamas economy sucks primarily because they have high corruption, but most importantly don't have any contract law. Well, they do - but it's extremely difficult to enforce in the courts. Not to mention their 7% tariff and labor laws that make it extremely expensive to hire workers and extremely difficult to fire them. Their non central bank is the one force that counter balances this.
Second,
The fact that their currency is linked to the dollar shows that the dollar is the primary trade currency, not that the US is their central bank. You had better believe that when things go to hell with the US dollar, that Panama won't go to hell with us.
Third,
Of course killing the Fed will cause a depression (like the US bank). But this is not because it harms the economy, but because they saturated it with WAY WAY WAY too much debt. Sorry folks, when your economy has too much debt - there are only two ways out: massive bankruptcy or print up the money and cause inflation. The Fed can not solve that problem. If you think massive bankruptcy hurts, try killing the standard currency (the only other option).
Fourth,
It is better to have an occasional bankruptcy than to be set up for a massive systemic failure. At least with the former you can spread out risk, or you can take your money out and hold it. But with fiat money, you can't even do that. The former decentralized system rewards prudence, the latter rewards stupidity and hides it by spreading it among all the banks till the whole system collapses. - khyberkitsune, on 10/12/2007, -5/+12*****. Panama has it's own currency, it's called the Balboa. Been there, lived there, had a job there, you're wrong.
- Xevec, on 10/12/2007, -1/+7People who refer to the GDP, and other stastistics and then come to the conclusion that panama's central bank does not work is not looking at the entire picture. It is probably their other economic policies that makes their country not as "wealthy" as america. They probably overall, have more regulations on their economy than the US. But a favorable thing they do have is a stable currency(because it is based upon gold and silver...instead of fiat.
The gold standard FORCES the govenrment to be responsible in the creation of money. That is why austrians and friedman followers believe that we should return to the gold standard. Ever since the creation of the federal reserve, inflation has risen MUCH higher than it has when we had the gold standard.
Going back to the gold standard will slow down inflation. Inflation of course, is caused by an increase in the money supply..it has very little to do with companies in general. Oil companies, and other greedy businessmen CAN NOT raise prices in general. You could argue that "dervied demand" can cause it, but it assumes that higher production costs are always passed on to consumers. This isn't necessarily true. Prices are determined by supply and demand, not how much production went into the product.
My question for you people about the federal reserve is this. The federal reserve was created in 1913...over 10 years before the depression. WHY IN THE WORLD COULD THEY NOT PREVENT THE BIGGEST DEPRESSION IN AMERICA?!(this is assuming that the federal reserves purpose when it was created was to keep a stable economy)
We suggest the gold standard because gold is probably one of the most sought out valuable thing people want. I mean, many items have been used as "currency." For example, Cigarettes, salt, and cattle have been used as "currency."
From Milton friedman:
All told, in the united states, prices in 1990 were 15x their intial level in 1891; in britian, fifty times....The rate of inflation during the first half of the century(1891-1940) average under 1 percent a year in the United states, 1.6% in Britian. During the second half, it quadrupled in both countries, averaging 4% in the united states, 6.4% in britian.
source: Milton Friedman, Money Mischief: Episodes in Monetary History(New york: Harcourt Brace Jovanovich, 1992), 197-98.
People say that between 1837-1861, the feds left banking up to the states. This is generally viewed as a "chatoic wasteland" where individuals can open up banks freely and issue currency as easily. This led to frequent bank collapses and financial panics.
First off, most of this is a myth. It wasn't an era of "free banking." There were many regulations the states put into these banks, and these regulations may have encouraged these "issues." Second, it is by no means clear why the panics of the 1800's were worse than the great depression and rampant price inflation of the 1900's.
Also, another question one must ask is how bank runs are impossible? Under a 100% reserve system(like the gold standard), banks would NEVER fail in this way(note that back in 1837-1861, it was not a 100% reserve system). Investors wouldn't worry about getting their money back, just as customers of dry cleaners don't have widespread anxiety attacks and rush to retrieve their garments.
Also, these panics actually helped keep bankers honest. In a truly competitive market, if Joe Smith opens a bank, he can't force anybody to hold smith notes or force any merchants to accept them at their stores. The only way for joe to convince the public that his notes are worth something is to pledge to redeem them for a valued commodity(like gold). Assuming that he can get his operation off the ground...what is to prevent Smith from printing up more notes than he can actually redeem?
One way is to it like how it is run today. Trust government regulators to design an honest system and run it responsibly. The other way is to let banks go out of business when they default on promises to their consumers. If bankers know that they'll be held liable for their decisions, bankers will be more careful with their funds. If government bails them out when they make bad investments, then that is a bank who makes bad business decisions.
source: politically incorrect guide to capitalism. - d00ley, on 10/12/2007, -2/+8"My timeline was a bit mistaken..."
The timeline in the context of your statement was EVERYTHING. Your writing indicates a serious misunderstanding of history. - wongburger, on 10/12/2007, -4/+10they also set their currency equal to the US dollar...
- RedStateRetard, on 10/12/2007, -2/+8Hey that plan that worked out well for Argentina...er nevermind
- geronimo, on 10/12/2007, -4/+10We had nothing like the great depression before the federal reserve, banks were allowed to fail so the free market made it so only the most stable banks would prosper. We chose the path of one major great depression every so often vs relatively frequent economic recessions.
- merreborn, on 10/12/2007, -1/+7If digg added a tagging system, we wouldn't need categories, and in fact, the whole category system could be abolished entirely.
You could then just opt to ignore "ron paul"-tagged stories. As an added bonus, we'd never have to see another damn "Digg needs an category!" post. - deadgoon42, on 10/12/2007, -1/+6@garth
http://en.wikipedia.org/wiki/Vasco_N%C3%BA%C3%B1ez_de_Balboa
How did you pass 5th grade history class??? - gak001, on 10/12/2007, -7/+12Take a Macroeconomics course - inflation isn't always bad. The creation of wealth and a steadily growing economy are ideals. Low, well managed inflation can actually be a good thing.
- inactive, on 10/12/2007, -2/+7 The Federal Reserve is the de facto government of America, they tell our politicians what to do and not vice versa. they are like a monkey on our back.
Napolean said "The hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." And that is our situation, congress is the hand that takes and is forever below the real secret power in our country, the power of coin and credit.
If ya really want to do some learning read up on how the founders of the Fed, Schiff and Warburg used the profits to fund communism and kick off the Russian Revolution. - inactive, on 10/12/2007, -0/+5"Hey that plan that worked out well for Argentina...er nevermind"
Actually, Argentina's economy has been on a steady climb since not long after they got rid of the last military dictatorship. The Argentine finance minister spoke at my work a few weeks ago. It was *very* enlightening. - badgey, on 10/12/2007, -4/+8Oh, and don't forget the overwhelming success of the Panama Canal. I'm sure that increasing global trade and shipping has no effect on one of the world's busiest shipping lanes. Surely the ever-increasing prosperity of the Panama Canal has absolutely nothing to do with relative economic success in a teeny-tiny country.
Everything must be because there's no Federal Reserve.
I think I'll go eliminate my use of my town's bank. Then I'll grow three inches, get tons of pussy, and become a rockstar and live happily ever after. You know it'll happen because I stopped using a bank. And I'm sure that if I looked hard enough I could find a person who also stopped using a bank and did the same thing. That'll be proof enough. - RedStateRetard, on 10/12/2007, -4/+8There was inflation BEFORE there was fiat currency.
Spain flooding Europe with potosi silver causing inflation in the 16th century.
14th century: When the King of Mali: Mansa Musa stopped by Egypt on his way to Mecca. He spent so much gold that the inflation stayed for a decade.
Getting rid of fiat currency doesn't "solve" the inflation problem. - Mrhuh, on 10/12/2007, -0/+4"Yeah because one example of an economy without a federal reserve is the end all be all. Get serious, the fed provides a stable economy and keeps the U.S. on top."
Yeah, never mind that a regular house costs for you nearly six times what it did for your parents in the fifties and most families now have two parents who have to work instead of one. The fed keeps the economy afloat if by "the economy" you mean a bunch of rich white guys.
"This economy can only continue if the central bank is controlled by true intellectuals."
Pride is one of the seven deadly sins, hence the reason why the term "intellectual" is often one of the most undeserved titles.
"(never mind that it acts on the interest of public wellbeing). Don't people realize that by abolishing the Fed, we are just as much at the mercy of gold miners and owners of gold reserves like Fort Knox?"
Uh, actually it would allow us to start up our own banks if we wanted or not use banks at all and trade directly. And if you think that any government service is in the interests of the public wellbeing then you have a truly utopian view of power. - theodicey, on 10/12/2007, -0/+4All the National Bank of Panama does is issue coins. Presumably because the US Mint doesn't want all our pennies to end up in Panama.
http://panamafaq.com/faqs/000258.html - R3yDigg, on 10/12/2007, -4/+8Inflation is not a problem to be solved, the Fed does it's best to keep it under control. India, China, the European Union, etc all have Federal Banking systems and are doing much much better than Panama.
- Pottersquash, on 10/12/2007, -3/+7If you dont think small recessions are better than a great depression only solved by the entire world going to war, your insane
- spawnfree, on 10/12/2007, -2/+6just after the fed was established they restricted loans and reduced the money supply.
the great depression happened just AFTER the fed was set up.
they have the power to create depressions, but its OK, I'm sure we can trust them not to manipulate a system that is under their total control. - kaelyiesta, on 10/12/2007, -4/+7Study up on early US imperialism to find out why that is.
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