Topic: Is it true that the Fed is privately owned (Read 9428 times)

People are ignorant, as long as they get money, they don't care. If you have the right to print money, you could eventually bribe anyone (with printed money)

The problem is the monopoly authority given to them to create money .... without competition, and backing of legal thuggery to coerce and compel sole use of their shit monetary product, the opportunities for racketeering are boundless, as witnessed.

It doesn't matter if FED is privately owned or publicly owned, it's the way they create money problematic

In principle, anyone who is trustworthy and own some valuable things can create money. If you have lots of gold, you can issue money (backed by gold), if you have several house, you can also issue money (backed by assets). People can use those money to exchange things, because it has value, anyone can come to you to redeem gold or house, it is perfectly working

In such case, you can spend the money created by you but you must keep corresponding assets as mortgage. If you spend the underlying assets (gold or house), your money might worth nothing if someone come to you to redeem those assets

But the problem with central banks' money creation is: They don't have any asset back the money they created

For example, FED is creating 80 billion dollar a month to buy government bond and MBS, when they create those 80 billion dollar, these money are backed by nothing. But after they purchased government bond and MBS with these money, they have some corresponding items in the FED's balance sheet: The government bonds and MBS are FED's asset and those newly created money are FED's liability

This is quite absurd. Imagine that anyone doing this: He created money by copying and use those money to buy several hundred houses. And his balance sheet record those money as his liability and record those houses as his asset. Although he has good accounting discipline, but that still counterfeiting, in any kind of law in any country, this is illegal. Why it becomes legal when central banks are doing this?

Ok, even central banks get the permission to do this through some complicated political work, it still created some problem: Now everyone in society will become very dependant on their relationship with central banks. The closer you get to those big money printed out from central banks, the better you are. This will create a twisted structure of the society that most of the rich people are banking/financial related workers who actually contribute very little to the production of real goods/services

Here is an interesting read:
http://www.minds.com/blog/view/46206/who-owns-the-federal-reserve

You can. In the case that the landlord is willing to sell. If he can keep you subdued and funding his lavish lifestyle by not selling and requiring tribute from you for working "his" land, even, perhaps to the degree that it is hard to save to move elsewhere or if that is not an option for other reasons, then there is an issue. This was more of an actual problem in feudal times but there are aspects in the  current situation.

It comes down to a liberty thing really. If I come across land lying fallow and I could farm it to feed myself, by what logic is this disallowed? Because it is some corner of your 10,000 acre estate, portioned out by a king a millenia ago?

Part of the issue is that the population is not a static thing, people are born and die. It complicates allocation of limited natural resources. Particularly when those resources are not being limited by nature.


That wouldn't fly for more than a couple of days. Nomads can range for hundreds of miles and might not return to a place for years. (titular) Wars were fought in the US over such things. I'm not saying I have an answer though, I think there's just more subtlety needed than the "winner takes all" model and this is reflected in current laws to some degree (right of way etc)

yes it is

You're right, that is a problem.
Certainly none of the currently government-controlled lands were gained justly.
But is it a problem we can do anything about? In some cases, yes, in most cases, no. So the fairest thing we can do is to, in those cases where we cannot determine a rightful owner, simply call it a blank slate. Government lands go "up for grabs," and everything else is given to the current owner. By and large, everything in the private sector was acquired by voluntary trade, even if the original owner wasn't actually the original owner. What's done is done, and we can't change the past. All we can really do is move forward, and hope to build a fairer future.

I'm not sure what you mean by this. If you mean the oft-repeated criticism of the absent landlord, that's not really the problem you make it out to be. You can buy land from a landlord.

That's less of a problem in modern society, but there's no reason that a nomadic tribe couldn't claim their entire range, and a first-occupier rule would cover that. Just because you're not in all the rooms of your house all the time doesn't mean the rooms you're not in are not part of your house.

Two problems though. First, most of the land available was not acquired on a "first occupier" basis. Secondly, and this is a problem (arguably) with both systems is that land can be over-claimed causing those who must make use of the land bound into serfdom to those who "own" the land. A third potential conflict is with those who have no need or want to "own" land but only to make use of it on an occasional basis (nomads, cattle drivers etc).

As a libertarian, I have difficulty reconciling this. Personal property, no problem. But real property and "intellectual property" are much more thorny issues and it harms the discussion that people tend to knee-jerk their responses (even those whose arguments I usually otherwise admire). I think the system we have at the moment is probably "good enough" but in a purely intellectual consideration, I assert that it's "not easy" to answer.

OK, here's how it works: You start with physical reality:

Two objects cannot occupy the same space at the same time, and space (at least, usable space) is finite. Likewise, two people cannot make use of the same space (land) at the same time, and there's only so much land on any one planet.

Then, you move on to the logical conclusion from that physical reality:

Therefore, space, being scarce (finite), must be allocated.

Now, we move on to a statement of preference, based on that logical conclusion:

The fairest means of allocating space is that the first occupier has a better claim than all subsequent claimants, and this claim can only be transferred voluntarily.

As Stephan Kinsella points out in "Against Intellectual Property":

Now, I'm open to alternatives, if you can present a resource allocation strategy that is demonstrably fair, non-arbitrary, and prevents conflict over scarce resources such as land.

I agree Adam Smith's Capitalism has never evolved linearly, but I think the path of colective evolution inevitably leads to the same place.

I see America as slightly different, in that it was a reaction from the collectivism (existing State structures) and in its self, a new structure founded on Individualism. It proved to be more resilient and efficient and effective than the existing colonial State structures at the time. (Ultimately evolving into the exact structure early pioneers originally sort to escape)

I think there are memes that drive the natural evolution of Collectivism and ultimately the State. I suppose that if we change the meme at the core we can evolve to a state of cooperative Individualism.

My referents was to mammals, insects, lizards, etc. of the same species, interacting not how they interact across species in the ecosystem. Eg. Young male lions will leave the pride before they are injured by the dominant male.  And a challenger to the dominant male primate, will back down before being injured.       

I am not sure how to do it effectively, but I believe there is a problem in your proposed solution and I believe a new and alternate and better solution is possible. 

I'd like to test your assumption (A) on which voluntary trade is founded, I believe we were trading stone tools well before we had developed the property meme. In fact access to the rocks weren't restricted i.e. the quarry was free for all, no individual lay clame to the property; the value came from doing the work, and the resulting benefits of the division of labour that perpetuated the practice of specialisation and trade.

(B) is a fact not a choice.
(C) your proposed solution is an existing meme and it has opposition in some schools of thought. On first glance it looks fair if space is not a finite resource, and individuals need X space.

How would you propose solving the problem if space was finite, and the occupiers of the space increased exponentially?

I dont have a good one, - culling is one, innovating to multiply the space is another. The optimal solution is probably a market driven solution, however, it creates a monopolistic relationship where the growing number of occupants are subject to supply and demand, there innovation finds a solution, but the first occupier, doesn't need to innovate as he has self proclaimed monopoly.  i.e. the first occupier took something that belonged to everyone and by taking it away from everyone made it his.

Um. That wasn't pure capitalism. That was (at best) State capitalism. But I feel we might be falling down the definition hole here. Pure capitalism is simply this: Private ownership of the means of production (land, money, machinery, etc), and competition of producers in a free market for profit. For a society to be called "pure capitalism" that principle must be applied to all industries, including defense and justice, two industries which the State traditionally monopolizes in the name of the public. Thus, in order for "pure capitalism" to exist, there must not be a State. And it is precisely this monopoly which caused the failure of the markets built around it.

Almost 70 years before WWI, Gustave de Molinari outlined the conditions which inevitably caused it:

So... you're saying that the State is the "natural predator" of the businessman?

I would argue you we don't need Capitalism, we need something new something better, we need a hybrid of individualism, Laissez-faire markets, and to address Marx's (and Alpaca John's and my) concerns with Property. IE: effectively he who has a monopoly on the land rights controls the labour.

Pure Capitalism has failed with the pre WWI power States dividing up all the Land in the world.

The resulting "Victors" of WWI failed to create a Global economy with symmetrical trade benefits based on productivity, John Maynard Keynes saw the global inequality and resulting conflicts and predicted WWII would be a result. Keynes economic insight saw him alienated after WWI, he worked on a solution independently, and by chance WWII was largely driven by his economic predictions, he was the Man with the solution to the problem after WWII.  

The resulting compromise of the 2 World Wars was more diversity and individual State interests (& the UN), in effect free market among states, and socialism to manage the markets within the State.

WWI was a power struggle to control recourses, WWII was a power struggle to control trade, It looks like we are in a currency war now, and the net result looks like the players in the game are new with the goal to collapse nations and implement a new centrally controlled Fiat Currency as a global reserve and have control over trade and recourses, only this time the forses are not just States but the Multinationals Alpaca John is concerned about, the market brand monopolies who control recourses, and WTO trade policies. They know no Boarders; they get there power from their proximity to the big central banks and new money pre inflation or trade imbalances and in imbalances in legislation in different regions.  


I think you are confusing the cause, I don't see free market as the problem, I see the " biggest corporations on planet", as having leveraged the economic system to their advantage, using existing Monetarist policy and resulting fanatical instruments.

This is a result of a prevention of Laissez-faire Markets controlled by a Central Bank.
In effect we are seeing the best feature of capitalism hybridised with the worst feature of Marxism A controlled Central Bank.  

In short people who have new ideas often just stop having old ideas.
 
In effect we need to mimic the systems we see come from out of Nature, taking the most effective free market ideals and hybridise them with insights and understanding of Marx's concern with how property is owned.
  

Having lived in third world country and seen what corruption looks like, this discussion while enlightening, misses a very visceral component.  The poor people involved in these situations have very little in the way of improving their station.  Even with this blatant inequality government is still a necessity.

Also, it was stated that lower mammals, insects, lizards, etc. know how to establish a balance naturally.  That isn't exactly true.  There is natural order to things including a food chain.  These animals are kept in check by natural predators.  If left unchecked they will cause an imbalance in the ecosystem and the correction will be severe. 

The state has had to bust up monopolies before.  ATT owned all of the infrastructure that our telecommunications traffic traversed in the United States.  If the government had not stepped in and broken them up there would have been no incentive for them to do so and how could anyone enter the market after that?  Of course they had a "government contract" after WWII to provide POTS to everyone in the country but that's only because they were already covering 95% of it.

This is interesting. Now, which meme would you prefer replaces "Two objects cannot occupy the same space at the same time, therefore, space, being scarce, must be allocated, and the fairest means of allocating space is that the first occupier has a better claim than all subsequent claimants, and this claim can only be transferred voluntarily," ie, private property, homestead principle, and voluntary sale?

And, given that the current understanding of voluntary trade is founded on that meme, how would you structure an economy based on your meme?

I agree that monopolies are not good, and I agree that when you have one you can institute price controls and understand that is the source of your concern. 

I would like to challenge your assumption that the free market is the cause of monopoly. I would like you to consider the definition of monopoly, in relation to the state, any state not just the US, Germany or otherwise. 
By lobbying government and affecting the law, you can create a monopoly, Fiat, being the most obvious and bank's who own the institution that controls it being somewhat central to this discussion.  But other monopolies exist that are granted by the state; Intellectual Property by its definition takes an ethereal idea and through law creates a physical monopoly. Many believe this monopoly is necessary and is the sole drive behind innovation (just a meme not fact). 

Another monopoly is Land. The state by granting property rights of land to one farmer, is denying another labour the right to farm the land (state sanctioned unemployment). Almost everyone argues this monopoly is the sole driving force behind the fee market (just a meme not fact).

I would also like to challenge you objection to the use of violence, it is and should always be a measure of last resort, it shouldn't be illegal, just avoided at almost any cost. When you attempt to eradicate Direct Violence through Law it materialises as Structural Violence in society. Almost everyone believes violence is wrong, but we give power to a state to uses force (resulting in violence) to prevent violence. (just a meme not fact) yet People overlook the irony, as they believe it is a means to an end.
as Richy_T couldn't put it more bluntly, I would add you don't need to be sensible to want to avoid it. All lesser competing mammals, reptiles, and insects know the limit when mounting a challenge of finite recourses, be it a mate, or territory in the wild. They know how far to push and when to stop before you need to prevent a compromising injury (a war).

To the point of Drug violence, and the profitable street corner, innovation has created a better system, a virtual street corner (Silk Road) where everyone competes on equal footing, the result is the consumer gets better service and more competitive pricing. The trend is free market solves problems most effectively.   




Corporation and healthy competition is what happens in a free market.

I question you resulting prediction. While I agree business may have the objective to achieve a monopoly, and reduce the farmers to slaves, the free market does not give them a mechanism to achieve that goal, as illustrated with the Silk Road example or consumers changing their eating habits Corn - Wheat. 

I share your concern though. As prises are sticky, corporations who have influence with the central banks can manipulate the money supply and force a boom bust business cycle, and the corporations can snap up the valuable properly during the peak insolvencies, as has been happening since the early 1900. 

I would say "scarcity" is a function of demand, not supply the value is created by what the demand side is willing to do to obtain what is scarce. If the Demand is grossly asymmetric and incurable then you need to address how the monopoly is allowed to exist.

I agree with everything myrkul has to say as to why monopolies are not practical to maintain, and would disappear when one eradicate government . where I agree with Alpaca John is, if you can get a monopoly, you can affect controlee and price manipulation, and where I disagree with Alpaca John is I don't believe it is possible to ever regulate or prevent monopolies through State control, ultimately someone convinces someone that a monopoly would be good for the people, and when it becomes law the working class suffer.   

As I see it:
Alpaca John: is using the scientific method to prove that a monopoly is likely attainable through the use of capital, (proposed a solution - regulation is needed).   
Myrkul: is proving a monopoly is highly unlikely due to Human Preference, ( solution - markets self regulate)

Adrian-X:  both are correct - Alpaca John solution is wrong; Myrkul: solution is correct but insufficient.   (Solution the property, given by God or the gods, or the big bang, [land air and water] is redefined in a new meme as something other than a commodity)

source: http://mises.org/econcalc.asp

its intended to critique socialism but its actually literally the exact same phenomena at work that prevents companies from growing too large.

(just a meme not fact).
This is the Dogma that gave Keynes advantage over Hayek, they were debating apples and oranges. Mises, so elegantly discounted every economic mathematical model proposed for the same reason.

Human Preference is a social science, and Human Preference is key to understanding at what point, to use previous examples, people stop buying corn and start buying grain, and at what point they substitute grain with sorghum, and when do consumers give that up and consume seaweed, - this is why  monopolies are hard to maintain.

How individuals determine value is irrational, (this is as true of 2 year olds as it is of stamp collectors or a gold bug), it is largely circumstantial time and need dependant)  given this as a fact any economic calculation that involved a fixed value (defined by consumer demand) should be considered a stoical science.   (Scientific models are rejected wrongly because opponents add Human Preference to make their argument.)  

Mathematic principles derived from the laws of nature can be defined and are therefore considered science.  Take meteorology for eg.  The principle of air moving from a high pressure to a low pressure is science. There are so many factors like the surface area on all the leaves on the trees the wind moves past, and given that will affect the speed at which the air will travel are not understood this  does not negate the scientific principal. (Given just this one unknown an accurate predictions will always be wrong); and depending on the time, place and circumstances the measurements are taken one may even get the direction of the wind wrong - but the scientific facts the direction of air flow will move from a high to low pressure will always be correct. Likewise It is in this scientific fundamental market principle that supply and demand determine the direction of price, it's just we can't measure it accurately because of human preference, but like meteorology, we know the science behind high and low pressures is sound, we can know the principals behind supply and demand are equally sound.