What is the Objectivist alternative to the Federal Reserve?


Derek McGowan

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Every one here is utterly powerless to control the Federal Reserve and the international banking system. So to talk about it as if they could is just a fantasy that powerless people indulge in to ~feel~ like they are powerful.

A man is powerless right on up to the moment when he stops being powerless. For example, early Christians had no control over Roman authorities or the pagan masses. Yet by the end of the fourth century, Christianity was the dominant cultural influence in the empire.

There is no basis for the suggestion that the Federal Reserve is forever invulnerable to political, cultural and economic forces.

When you exercise power over your own finances there's no need to wait for the tide of history to change. My approach is to learn how to live so that it doesn't matter what the Federal Reserve does. The economic quality of my own life is completely unaffected by the Federal Reserve or the Banks...

...because I have no participation, investments, or financial entanglements in the debt/credit system.

Greg

Red herring. Finding ways to circumvent the Fed is an entirely separate issue from the claim that no one can control the Fed. The central bank was created by humans and can be ended by humans.

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Derek,

If the Feds didn't enforce a monopoly on Federal Reserve Notes (FRNs), new banks would open that would offer gold as money. Then consumers would chose to hold gold money rather than FRNs in their bank accounts, hence they'd switch to the new gold banks. So basically the system would change due to consumer demand and competition. Right now there isn't competition: the FRN is fiat, a government enforced monopoly.

=================

BNotes: BNotes are a dollar backed. There is no banking infrastructure around BNotes: you can't deposit them in a bank, write checks, take out a loan, deposit in a money market account etc.

Disney Dollars, berkshares, bay area bucks: Just like BNotes: dollar backed, with no banking deposit & loan infrastructure.

Sand dollars: You mean like the sea creatures?

Time dollars: looks like some marxist non-existant currency that beleives that hours worked digging and refilling holes is equivalent to hours worked manufacturing consumer goods... as if effort = market value.

Bitcoin: New distributed digital ledger. Banks not needed for transactions. Currency is still to young/unstable for there to be a loan market. Since no banks are required, and its distributed, the Feds can't really shut it down or use the excuse of "protecting depositors" in order to shut down the non-extant banks. The big banks with close ties to the Feds (essentially controlling the Federal Reserve infact, revolving door) refuse to do business with bitcoin related business. No bitcoin exchange (where you can post buy and sell orders at your own chosen price) have been allowed to come into existence in the US. Bitcoin is different... its not gold backed... its just a distributed ledger.

Dean,

You used a comment of mine where I told Brant that he could start his own currency. You then said that if someone attempted to create their own currency that they would be prosecuted by the government. I then gave multiple local currencies that exist now.

You quote above tries to downplay those local currencies by somehow tying currencies to banking. What definition of currency that you are using that says it is only a currency if a bank issues it? Or what definition says that it has to be gold backed? Actually even gold backed would essentially boil down to labor-backed so its strange that you would have a problem with the time dollars

Appears you are trying to move the goal post which is kind of intellectually dishonest especially when the position of the goal line was first established by what I said.

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...because I have no participation, investments, or financial entanglements in the debt/credit system.

the Fed is a debt/credit system? That's it or is that just one part of economies in general therefore they have a hand in it as well?

ps thats a real question

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the Fed is a debt/credit system?  That's it or is that just one part of economies in general therefore they have a hand in it as well?

 

ps thats a real question

 

 

Job One for the Federal Reserve is to make sure that the U.S. Treasury can float its debt, even if the Fed has to be the "buyer of last resort". It also has regulatory power to compel commercial banks to maintain adequate AAA Tier 1 reserves (U.S. Treasury bonds again). As window dressing and political smiley face :) cover, the Fed supposedly has a "dual mandate" to promote full employment and low inflation. It does neither. At the moment, they're pumping as much liquidity (bond leverage) as possible, because banks aren't lending and businesses have cut spending, a situation that the Fed created with ultra low interest rates and from which there is no escape. "Excess reserves" have bid the stock market sky high, but money in circulation (velocity) has collapsed.

 

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For several years, the Fed has been saying that they've done all they can, and government "fiscal policy" (deficit spending) is the only way out. Ebola is the health of the state? But finally it's a ticking demographic time bomb, with massive Social Security and Medicare/Medicaid unfunded liabilities, that will "save" the financial system. Got gold?

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Derek,

Gold is not "labor backed". The price of gold is set by the market value demand of people who want to increase thier marginal savings intersecting with the supply of people who want to reduce their marginal savings.

Miners, smelters, mints adjust their output quantity based on whether they can make profit by doing so. If the price of gold goes down, some producers who were previously only slightly profitable now would have losses if they produced, so they cease production.

If the gold price was based on labor, then I could purify gold out of seawater (an extremely expensive process) and sell my gold at a much higher price than say a traditional geological gold digging mine. But thats nonsense... why would people buy gold at a high price from me when they could buy gold at a lower price from a traditional miner?

Its one of the fundamental truths discovered in Austrian economics that previous labor put into a resource has nothing to do with its market value.

======

Except for bitcoin (which has the potential to complete and overthrow the FRN money monopoly), those local currencies are just extended forms of dollars. They are all dollar backed 1:1, or at least claimed to be. Hence they are not competing with FRN, they are FRN.

Bitcoin is a new money technology that I have high hopes for. I think it has a good potential to end the system of fiat monopoly money.

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gold is labor backed. when you save gold, or want gold, its because when you trade it to someone else, they will do something for you. That is labor. Or they give you something that they or someone else made- labor. All currencies are symbols and transfers of labor. When the group is no longer willing to perform work in trade for a currency (which when gained is simply traded down the line for someone else's labor) it no longer is a currency, its a collectible. Gold does indeed have a separate life as a collectible but if and when it is ever traded, it is traded for the labor that comes with it.

Currencies are like physics (energy) You can change energy from potential to kinetic but the form it currently takes is not what defines it. What defines it is what comes out in the end- work.

Your statements about savings and profit margins and all that is really just another expression of labor. Labor stored, labor used. Labor multipliers (like pulleys) It is all about what someone else will physically or mentally do for you (or did do)

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Every one here is utterly powerless to control the Federal Reserve and the international banking system. So to talk about it as if they could is just a fantasy that powerless people indulge in to ~feel~ like they are powerful.

A man is powerless right on up to the moment when he stops being powerless. For example, early Christians had no control over Roman authorities or the pagan masses. Yet by the end of the fourth century, Christianity was the dominant cultural influence in the empire.

There is no basis for the suggestion that the Federal Reserve is forever invulnerable to political, cultural and economic forces.

When you exercise power over your own finances there's no need to wait for the tide of history to change. My approach is to learn how to live so that it doesn't matter what the Federal Reserve does. The economic quality of my own life is completely unaffected by the Federal Reserve or the Banks...

...because I have no participation, investments, or financial entanglements in the debt/credit system.

Greg

Red herring. Finding ways to circumvent the Fed is an entirely separate issue from the claim that no one can control the Fed. The central bank was created by humans and can be ended by humans.

Well, it's the only issue that matters to me. I pick battles I can actually win, instead of impotently flailing away at sure losers. Everyone else is on their own to try to figure things out for themselves because I can't live their lives for them... only my own.

I take the Galt's Gulch approach by simply refusing to participate in a corrupted economic system. That's also a two way street. Conversely, because I don't participate, that corrupted system has no control over my financial wellbeing.

Problem solved! :smile:

Greg

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Wolf DeVoon, SPG is reference to a cult classic censorship police force? Thanks for catching my "Australian" typo... was using my cell phone and pressed the autocomplete without looking close enough.

Derek, People don't value labor in itself. They potentially value the outcome of labor, if it is predicted to result in the attainment of a desired consumer good. Hence it is the outcome of particular kinds of labor that are valued, not the labor itself. That people are paid hourly wages is just a simplification to reduce the costs of monitoring/tracking overhead.

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...because I have no participation, investments, or financial entanglements in the debt/credit system.

the Fed is a debt/credit system? That's it or is that just one part of economies in general therefore they have a hand in it as well?

ps thats a real question

...and it deserves a real answer, Derek. :smile:

The Federal Reserve has complete control over interest rates which totally control the cost of borrowed money. So my approach to financial freedom is never to borrow money and to operate solely from a position of 100% solvency. By doing this, I'm able to operate freely, entirely outside of the corrupt credit/debt system.

The credit crash of 2008 and its aftermath had zero effect on my fiscal situation because I had no entanglements in that system. And by the way, the next even bigger crash will be in 2015... so you had better build your financial ark now while you still can. :wink:

Greg

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...because I have no participation, investments, or financial entanglements in the debt/credit system.

the Fed is a debt/credit system? That's it or is that just one part of economies in general therefore they have a hand in it as well?

ps thats a real question

...and it deserves a real answer, Derek. :smile:

The Federal Reserve has complete control over interest rates which totally control the cost of borrowed money. So my approach to financial freedom is never to borrow money and to operate solely from a position of 100% solvency. By doing this, I'm able to operate freely, entirely outside of the corrupt credit/debt system.

The credit crash of 2008 and its aftermath had zero effect on my fiscal situation because I had no entanglements in that system. And by the way, the next even bigger crash will be in 2015... so you had better build your financial ark now while you still can. :wink:

Greg

It has control until it does not--then the shit hits the fan.

--Brant

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Every one here is utterly powerless to control the Federal Reserve and the international banking system. So to talk about it as if they could is just a fantasy that powerless people indulge in to ~feel~ like they are powerful.

A man is powerless right on up to the moment when he stops being powerless. For example, early Christians had no control over Roman authorities or the pagan masses. Yet by the end of the fourth century, Christianity was the dominant cultural influence in the empire.

There is no basis for the suggestion that the Federal Reserve is forever invulnerable to political, cultural and economic forces.

When you exercise power over your own finances there's no need to wait for the tide of history to change. My approach is to learn how to live so that it doesn't matter what the Federal Reserve does. The economic quality of my own life is completely unaffected by the Federal Reserve or the Banks...

...because I have no participation, investments, or financial entanglements in the debt/credit system.

Greg

Red herring. Finding ways to circumvent the Fed is an entirely separate issue from the claim that no one can control the Fed. The central bank was created by humans and can be ended by humans.

Well, it's the only issue that matters to me. I pick battles I can actually win, instead of impotently flailing away at sure losers. Everyone else is on their own to try to figure things out for themselves because I can't live their lives for them... only my own.

I take the Galt's Gulch approach by simply refusing to participate in a corrupted economic system. That's also a two way street. Conversely, because I don't participate, that corrupted system has no control over my financial wellbeing.

Problem solved! :smile:

Greg

Glad to hear you've stopped paying taxes.

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Every one here is utterly powerless to control the Federal Reserve and the international banking system. So to talk about it as if they could is just a fantasy that powerless people indulge in to ~feel~ like they are powerful.

A man is powerless right on up to the moment when he stops being powerless. For example, early Christians had no control over Roman authorities or the pagan masses. Yet by the end of the fourth century, Christianity was the dominant cultural influence in the empire.

There is no basis for the suggestion that the Federal Reserve is forever invulnerable to political, cultural and economic forces.

When you exercise power over your own finances there's no need to wait for the tide of history to change. My approach is to learn how to live so that it doesn't matter what the Federal Reserve does. The economic quality of my own life is completely unaffected by the Federal Reserve or the Banks...

...because I have no participation, investments, or financial entanglements in the debt/credit system.

Greg

Red herring. Finding ways to circumvent the Fed is an entirely separate issue from the claim that no one can control the Fed. The central bank was created by humans and can be ended by humans.

Well, it's the only issue that matters to me. I pick battles I can actually win, instead of impotently flailing away at sure losers. Everyone else is on their own to try to figure things out for themselves because I can't live their lives for them... only my own.

I take the Galt's Gulch approach by simply refusing to participate in a corrupted economic system. That's also a two way street. Conversely, because I don't participate, that corrupted system has no control over my financial wellbeing.

Problem solved! :smile:

Greg

Glad to hear you've stopped paying taxes.

I don't pay taxes. My clients do. This is Business 101, so I'm surprised you don't know this.

Taxes are just another cost of doing business which is already built into the selling price of goods and services. And operating without a debt load makes it easy to be highly competitive. I believe we've been down this road before, Frank. Do you really need to do it all over again? :wink:

Greg

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But still Greg...the government gets their cut from every job you do. I could say, "I don't pay taxes, the company I work for pays them". Which is actually true through withholding. I could call it an accounting trick and just say my net was my income. You do fill out a return every year?

Sorry to be a wet blanket, I really admire your equanimity. I'm a total raging asshole at tax time (well, among other time). My wife does our taxes while I go out in the back work out on my punching bag.

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But still Greg...the government gets their cut from every job you do. I could say, "I don't pay taxes, the company I work for pays them". Which is actually true through withholding. I could call it an accounting trick and just say my net was my income.

Every product or a service you buy contains all of the taxes paid to the government to produce them. So the solution is to become a producer. That's how businesses create wealth... by charging a price which is greater than the total business expenses and taxes. I simply calculate all my expenses and taxes and add my profit. The more efficiently I run the business, the more I produce. The more I produce, the more profit I make. Capitalism is the greatest wealth producing engine on Earth. You can literally buy your freedom.

You do fill out a return every year?

There's no witholding. I pay quarterly business taxes along with filing an annual tax return. And being self employed, I pay both the employer's and employee's shares of Social security.

Sorry to be a wet blanket, I really admire your equanimity. I'm a total raging asshole at tax time (well, among other time). My wife does our taxes while I go out in the back work out on my punching bag.

Being a business owner is totally different than being an employee. I know because I've been both... and I'd never go back.

Greg

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Every one here is utterly powerless to control the Federal Reserve and the international banking system. So to talk about it as if they could is just a fantasy that powerless people indulge in to ~feel~ like they are powerful.

A man is powerless right on up to the moment when he stops being powerless. For example, early Christians had no control over Roman authorities or the pagan masses. Yet by the end of the fourth century, Christianity was the dominant cultural influence in the empire.

There is no basis for the suggestion that the Federal Reserve is forever invulnerable to political, cultural and economic forces.

When you exercise power over your own finances there's no need to wait for the tide of history to change. My approach is to learn how to live so that it doesn't matter what the Federal Reserve does. The economic quality of my own life is completely unaffected by the Federal Reserve or the Banks...

...because I have no participation, investments, or financial entanglements in the debt/credit system.

Greg

Red herring. Finding ways to circumvent the Fed is an entirely separate issue from the claim that no one can control the Fed. The central bank was created by humans and can be ended by humans.

Well, it's the only issue that matters to me. I pick battles I can actually win, instead of impotently flailing away at sure losers. Everyone else is on their own to try to figure things out for themselves because I can't live their lives for them... only my own.

I take the Galt's Gulch approach by simply refusing to participate in a corrupted economic system. That's also a two way street. Conversely, because I don't participate, that corrupted system has no control over my financial wellbeing.

Problem solved! :smile:

Greg

Glad to hear you've stopped paying taxes.

I don't pay taxes. My clients do. This is Business 101, so I'm surprised you don't know this.

Taxes are just another cost of doing business which is already built into the selling price of goods and services. And operating without a debt load makes it easy to be highly competitive. I believe we've been down this road before, Frank. Do you really need to do it all over again? :wink:

Greg

I see. You don't pay taxes; your clients do. So apparently you are nobody's client. You buy no products or services from those who do pay taxes. That means you made your own car, computer, television, cell phone, refrigerator, light bulbs, pencils and toilet paper from the raw materials on your own land in Galt's Gulch and are thereby able not to "to participate in a corrupted economic system."

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Being a business owner is totally different than being an employee. I know because I've been both... and I'd never go back.

Greg

Here is where we differ Greg. I sell my specialized technical skills to the highest bidder. My business is selling my knowledge and skill in a technical field. There are many advantages to working for a larger business. I can focus my efforts solely on the technical details that interest me. There are a couple dozen talented engineers here who I collaborate with which I find very rewarding. I learn new things all the time. I have the opportunity to mentor less experienced engineers and technicians which I also enjoy. I get to work on things that are interesting, that are complicated enough to be interesting. The easy stuff is screened out before it gets to me. When I worked for myself it seemed 90% of my time was on overhead and drudgery, stuff that didn't require my specialized skills but other skills I wasn't particularly interested in acquiring. And I made about half as much money. I was unable to figure out how to bill my time properly I guess because I figured people were paying me for my specialty, not for all the administrative overhead. There is also a whole new raft of tax considerations for the technical self employed worker. I think they targeted this group for some reason and try to drive them back into working for a company. It worked in my case. At any rate, there are advantages to working for a larger company and I still feel like I'm my own boss. If there is anything I don't like in the workplace I walk. I did this once before at this company. A couple of years later they recruited me back into another position with a different manager and more money and its been good. The only thing I don't like is the commute. Damned insane California drivers, I have to pay attention continuously to keep from running into the maniacs. Can't wait for cars that drive themselves.

My main point is everyone is selling their time. My customer is my 'employer'. I can walk away any time. Everyone, no matter what they're selling, labor or specialized skill is their own boss. If people were in the habit of saving and not living from paycheck they wouldn't feel like slaves. That, in my opinion, is your secret for success, not that you work for yourself, everyone does, but that you save. You are a good money manager. BTW, that's my definition of a capitalist. Someone who saves (accumulates capital). An 'anti-capitalist' is a god damned fool.

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But still Greg...the government gets their cut from every job you do. I could say, "I don't pay taxes, the company I work for pays them". Which is actually true through withholding. I could call it an accounting trick and just say my net was my income. You do fill out a return every year?

Sorry to be a wet blanket, I really admire your equanimity. I'm a total raging asshole at tax time (well, among other time). My wife does our taxes while I go out in the back work out on my punching bag.

Your wife likely needs a punching bag of sorts too.

--Brant

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The most admirable thing about Greg is his total refusal to be a victim or think of himself as one even though a case is to be made that he is to some extent. Why are some of us so eager to explain just how he really is one?

--Brant

I want to too: "Greg!--. . . "

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But still Greg...the government gets their cut from every job you do. I could say, "I don't pay taxes, the company I work for pays them". Which is actually true through withholding. I could call it an accounting trick and just say my net was my income. You do fill out a return every year?

Sorry to be a wet blanket, I really admire your equanimity. I'm a total raging asshole at tax time (well, among other time). My wife does our taxes while I go out in the back work out on my punching bag.

Your wife likely needs a punching bag of sorts too.

--Brant

She spends long hours in the garden, occasionally yells at and throws rocks at the squirrels. I am forbidden to feed or say nice things about squirrels, like "Hey, there's a handsome fellow, nice tail little guy! Care for a nut?" --Grounds for divorce. I adore that woman more than life itself. So the squirrels get no nuts.

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The most admirable thing about Greg is his total refusal to be a victim or think of himself as one even though a case is to be made that he is to some extent. Why are some of us so eager to explain just how he really is one?

--Brant

I want to too: "Greg!--. . . "

Hey, just defending my choices. Greg doesn't mind. I'm sure his response will be interesting if not enlightening.

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But still Greg...the government gets their cut from every job you do. I could say, "I don't pay taxes, the company I work for pays them". Which is actually true through withholding. I could call it an accounting trick and just say my net was my income. You do fill out a return every year?

Sorry to be a wet blanket, I really admire your equanimity. I'm a total raging asshole at tax time (well, among other time). My wife does our taxes while I go out in the back work out on my punching bag.

Your wife likely needs a punching bag of sorts too.

--Brant

She spends long hours in the garden, occasionally yells at and throws rocks at the squirrels. I am forbidden to feed or say nice things about squirrels, like "Hey, there's a handsome fellow, nice tail little guy! Care for a nut?" --Grounds for divorce. I adore that woman more than life itself. So the squirrels get no nuts.

We once killed, skinned and ate two or three squirrels from our NJ backyard. Just once, in the very early 1960s.

--Brant

getting back to my hunter-gatherer roots, but it ain't nostalgia

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Being a business owner is totally different than being an employee. I know because I've been both... and I'd never go back.

Greg

Here is where we differ Greg. I sell my specialized technical skills to the highest bidder. My business is selling my knowledge and skill in a technical field. There are many advantages to working for a larger business. I can focus my efforts solely on the technical details that interest me. There are a couple dozen talented engineers here who I collaborate with which I find very rewarding. I learn new things all the time. I have the opportunity to mentor less experienced engineers and technicians which I also enjoy. I get to work on things that are interesting, that are complicated enough to be interesting. The easy stuff is screened out before it gets to me. When I worked for myself it seemed 90% of my time was on overhead and drudgery, stuff that didn't require my specialized skills but other skills I wasn't particularly interested in acquiring. And I made about half as much money. I was unable to figure out how to bill my time properly I guess because I figured people were paying me for my specialty, not for all the administrative overhead. There is also a whole new raft of tax considerations for the technical self employed worker. I think they targeted this group for some reason and try to drive them back into working for a company. It worked in my case. At any rate, there are advantages to working for a larger company and I still feel like I'm my own boss. If there is anything I don't like in the workplace I walk. I did this once before at this company. A couple of years later they recruited me back into another position with a different manager and more money and its been good. The only thing I don't like is the commute. Damned insane California drivers, I have to pay attention continuously to keep from running into the maniacs. Can't wait for cars that drive themselves.

My main point is everyone is selling their time. My customer is my 'employer'. I can walk away any time. Everyone, no matter what they're selling, labor or specialized skill is their own boss. If people were in the habit of saving and not living from paycheck they wouldn't feel like slaves. That, in my opinion, is your secret for success, not that you work for yourself, everyone does, but that you save. You are a good money manager. BTW, that's my definition of a capitalist. Someone who saves (accumulates capital). An 'anti-capitalist' is a god damned fool.

Hey Mike, :smile:

I think that you would admit that you don't possess the attitude of a typical employee... because you have exactly the same attitude of a business owner with which I totally agree. I was alluding more to the different tax situations of employees and business owners.

Greg

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