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June 15, 2006

Are central banks even necessary?, Thurs., 6/15/2006 9:05 AM

When "Tifosi" sent this link to a Reuters article on a strategy by central banks to hold mortgage backed securities (MBS), my inclination was to stand opposed to the strategy. Rather, I stand opposed to the whole notion of central banks.

Central banks in many countries are not owned by the People, but by bankers. I think all central banks should be 100-pct owned and controlled as government agencies.

Why should the Gnomes and the Bankers have access to information that the People do not have. Why for example is GE/NBC/CNBC head Jeff Immelt a member of the Board of the Federal Reserve Bank of New York?

This is wrong, and almost every non-Gnome and non-Banker reader I have knows it. We The People need a private sector (where we vote with our capital savings and investment and spending decisions) and a separate public sector that all of us can vote out of office if, as and when these representatives are found to be incompetent or self-serving.

In other words we need checks and balances rather than systems where a chosen few of us have the opportunity to play both sides of transactions.

So if we truly live in a democracy and enjoy the transparency of markets, we will work together to put central banks back into the direct control of government, and we'll vote for a new Securities Act that eliminates the possibility of bankers from playing all sides (principal buyer or seller, financial advisor to both buyers and sellers, and regulators) of all financial transactions.

If this is truly a capitalist system and the private capital is ours (directly and institutionally held), then We should be in control.

Am I right or wrong?

And I won't accept the answer that ‘what is, is'.

We advance society by making changes, not by suffering under status quo.

Posted by Posted by Bill Cara on June 15, 2006 09:05:08 AM | Category: Community Chat

Discourse

"If this is truly a capitalist system and the private capital is ours..then we should be in control"

It is not, on both counts, and we are not in control, YET!

"Am I right or wrong?"

You are right.

You frequently talk about "we the people" and it's unfortunate for us that they control the information machine en mass. A central banking system, by its very nature and existence makes our capitalistic system a semi-free market system. It's tough enough as you know to outmanage all the other traders out there, but we also have to outguess the people pulling the levers.

For those of us who would like to see the abolition of the Fed, count me in that crowd, it starts with education of what it is they do day in and day out. Without trying to sound like a goldbug, everyone should start with the book by Murray Rothbard, "The Case Against the Fed."

In a truly free market economy, the market sets the rates, not a central planning committee.

Aloha.

Posted by: Uncle Jack [TypeKey Profile Page] at June 15, 2006 9:14 AM [link]

Uncle Jack,

You don't have to worry about being labelled a 'gold bug' or whatever. There are People who hate gold too who are fed up with the Fed.

"Fed up with the Fed" -- great slogan for the People.

I happen to respect the mission of the Fed, but it is a political mission. What's wrong with the Treasury head having the job to stabilize prices in order to grow public confidence, and enhance the free flow of international trade?

We need to do what's right, not what we are told we must do.

Posted by: Bill Cara [TypeKey Profile Page] at June 15, 2006 9:23 AM [link]