What happens if the central bank runs out of gold?
You're not spending gold, you're keeping the gold under lock and key. That's the entire point of representational currency. The total currency represents the total gold holdings. If a dollar represents 1/1000th of an ounce of gold, then new dollars can't represent more or less than that and you prevent inflation. The only way inflation occurs is through an official revaluation, which would quite literally cause a revolt. But since fiat currency just slowly devalues over time, people don't notice it because it's boiled frog syndrome.
A central bank tied to a gold standard with no control over the currency supply would simply be what the name states, a Federal Reserve. A place where the object of value representing the money supply is stored and where people can put their own currency/gold for safekeeping.
You have to separate the concepts of a bank, a mint, and a moneylender. There are three different things that really shouldn't have anything to do with each other because that's how all this shit turns into the mess it is today.
Do you really think we would have seen the 2008 crash if banks were only allowed to lend money from their own assets and not lend from assets you store with them? Banks lend your money to other people, then give you someone else's money when you tell them you want yours back. That's not the function of a bank, that's a shell game. A bank's business model should be limited to holding things securely and charging their customers for that security. Making a profit by lending that money out to other people is outright ridiculous and is frankly theft when you think about it, but we just think it's a perfectly normal business practice.
If a central bank existed to fulfill the need for secure holdings and only that function, it wouldn't be a problem at all. That's an ideal world that doesn't exist, unfortunately, but I'm not going to denigrate Hamilton for thinking it was a good idea. All of the founders were idealists. If they weren't, they would have never been able to even envision the concept of a free people.
You're not describing what Hamilton wanted, nor the reality of what central banks are. You're talking about something you'd like, I might agree, and it might work.
It's never been the reality though.
Neither have you touched upon the nature of the problem: how is money created under our system that's existed since 1913? This is VITALLY important, because it crashing down all around us is what this year has been, and is at least as important as the election fraud that correctly has our attention.
It most certainly is! People with real money only came to this continent to escape "the corrupt European banking system." This is what we've been ensnared by since 1913. It's all connected. Fighting against it now is similar to the debates on the topic then. Hamilton won for a bit, then Andrew Jackson. The next real change wasn't until 1913. Either Hamilton is irrelevant to us now, or the changes circa Jackson and 1913 are completely relevant; and in direct contrast to Hamilton.
This was an interesting read for me. Though I still think having more than one bank is a good idea. In what way would a central bank with these limited powers/function be better than an array of unrelated banks with the same powers/functions? Is the monopolistic aspect of a central bank not exactly what allows it to spin off into all these other behaviors? Wouldn’t a bank and currency abiding by a gold standard be more desirable than one that doesn’t?
In practice, it's not really notably better. In theory, you don't have to worry about regulating or monitoring a bunch of private for-profit enterprises, you just have a single entity that would, ostensibly, also be cheaper for its customers since they're the ones paying for it through taxes in the first place and there is no profit motive.
Do you really think we would have seen the 2008 crash if banks were only allowed to lend money from their own assets and not lend from assets you store with them?
Yes. because the moment moment banks went fractionally , there was no turning back. And not amount of LAWS will ever change that.
Proof stands exactly the 2008 crash. More precisely the BAILOUTS and all the reactions to it.
You can't have capitalism without crashes. Having no crashes is THE ANTI-Thesis of capitalism.
Think about it. You make dildos ... when everyone that wants your dildo has one THE MARKET WILL CRASH. You either adapt , OR YOU GO BUST. This was true for anything that ain't a consumable.
government bailouts and "too big to fail" was designed in 1913. It's designed to strip wealth away from us, and give it to the very few who don't need it. With the result that we're brought to our knees economically, and forfeit everything this Nation ever stood for in exchange for some gibs.
I think a central bank would be viable for a monarchy, where the king/emperor is meant to have a good degree of power. Since a monarchy is effectively privatized, it should be reasonably efficient.
Even then, it could be used to screw over the common man, at least it would be for the benefit of the state rather than just bankers.
For a republic, I don't trust the state to keep people's gold safe.
Actually trusting anyone else to keep your gold safe is a pretty bad idea. Keeping your gold in the bank during renaissance Italy could end very badly for you. Song China (gold stored in state depositories) was a bit better I guess. Unless of course, you get a Mongol invasion.
You're not spending gold, you're keeping the gold under lock and key. That's the entire point of representational currency. The total currency represents the total gold holdings. If a dollar represents 1/1000th of an ounce of gold, then new dollars can't represent more or less than that and you prevent inflation. The only way inflation occurs is through an official revaluation, which would quite literally cause a revolt. But since fiat currency just slowly devalues over time, people don't notice it because it's boiled frog syndrome.
A central bank tied to a gold standard with no control over the currency supply would simply be what the name states, a Federal Reserve. A place where the object of value representing the money supply is stored and where people can put their own currency/gold for safekeeping.
You have to separate the concepts of a bank, a mint, and a moneylender. There are three different things that really shouldn't have anything to do with each other because that's how all this shit turns into the mess it is today.
Do you really think we would have seen the 2008 crash if banks were only allowed to lend money from their own assets and not lend from assets you store with them? Banks lend your money to other people, then give you someone else's money when you tell them you want yours back. That's not the function of a bank, that's a shell game. A bank's business model should be limited to holding things securely and charging their customers for that security. Making a profit by lending that money out to other people is outright ridiculous and is frankly theft when you think about it, but we just think it's a perfectly normal business practice.
If a central bank existed to fulfill the need for secure holdings and only that function, it wouldn't be a problem at all. That's an ideal world that doesn't exist, unfortunately, but I'm not going to denigrate Hamilton for thinking it was a good idea. All of the founders were idealists. If they weren't, they would have never been able to even envision the concept of a free people.
You're not describing what Hamilton wanted, nor the reality of what central banks are. You're talking about something you'd like, I might agree, and it might work.
It's never been the reality though.
Neither have you touched upon the nature of the problem: how is money created under our system that's existed since 1913? This is VITALLY important, because it crashing down all around us is what this year has been, and is at least as important as the election fraud that correctly has our attention.
A system that didn't exist in 1913 is in fact not at all relevant to what Hamilton or myself envisioned, thanks.
It most certainly is! People with real money only came to this continent to escape "the corrupt European banking system." This is what we've been ensnared by since 1913. It's all connected. Fighting against it now is similar to the debates on the topic then. Hamilton won for a bit, then Andrew Jackson. The next real change wasn't until 1913. Either Hamilton is irrelevant to us now, or the changes circa Jackson and 1913 are completely relevant; and in direct contrast to Hamilton.
This was an interesting read for me. Though I still think having more than one bank is a good idea. In what way would a central bank with these limited powers/function be better than an array of unrelated banks with the same powers/functions? Is the monopolistic aspect of a central bank not exactly what allows it to spin off into all these other behaviors? Wouldn’t a bank and currency abiding by a gold standard be more desirable than one that doesn’t?
In practice, it's not really notably better. In theory, you don't have to worry about regulating or monitoring a bunch of private for-profit enterprises, you just have a single entity that would, ostensibly, also be cheaper for its customers since they're the ones paying for it through taxes in the first place and there is no profit motive.
Yes. because the moment moment banks went fractionally , there was no turning back. And not amount of LAWS will ever change that. Proof stands exactly the 2008 crash. More precisely the BAILOUTS and all the reactions to it.
Too big to fail waa designed in 1913, and has happened at least 7x since. It wasn't anything new in 2008.
no it wasn't designed 1913.
You can't have capitalism without crashes. Having no crashes is THE ANTI-Thesis of capitalism.
Think about it. You make dildos ... when everyone that wants your dildo has one THE MARKET WILL CRASH. You either adapt , OR YOU GO BUST. This was true for anything that ain't a consumable.
Your points aside -
government bailouts and "too big to fail" was designed in 1913. It's designed to strip wealth away from us, and give it to the very few who don't need it. With the result that we're brought to our knees economically, and forfeit everything this Nation ever stood for in exchange for some gibs.
Look how many people are there right now!
I think a central bank would be viable for a monarchy, where the king/emperor is meant to have a good degree of power. Since a monarchy is effectively privatized, it should be reasonably efficient.
Even then, it could be used to screw over the common man, at least it would be for the benefit of the state rather than just bankers.
For a republic, I don't trust the state to keep people's gold safe.
Actually trusting anyone else to keep your gold safe is a pretty bad idea. Keeping your gold in the bank during renaissance Italy could end very badly for you. Song China (gold stored in state depositories) was a bit better I guess. Unless of course, you get a Mongol invasion.