The Evils Of The FED And The Federal Reserve

The Gold Standard was the framework by which the value of cash was characterized in terms of gold, for which the money could be traded. The Gold Standard ended up being deserted in the Depression of the 1930s. Friedman felt that,“The gold standard is not feasible because the mythology and beliefs required to make it effective do not exist. This conclusion is supported not only by the general historical evidence referred to but also by the specific experience of the United States” ( “The Gold Standard:Please Stop”).Economists who contradict the Gold Standard may perceive what must be accomplished with a specific end goal to make a centrally controlled paper standard better than a decentralized Gold Standard. Milton Friedman poses the key question: "How can we establish a monetary system that is stable, free from irresponsible tinkering, and

Gold-backed money, also known as hard currency, is money that can be converted to actual gold. It used to be this way. Your dollar was as good as gold. On August 15, 1971, the United States decreed that the US dollar would not be gold backed. President Richard Nixon said, “let it be done” and American dollars became a fiat currency.

For the last twenty eight years, China has been quickly growing into one of the largest economies in the world. China has accomplished this feat, in part, by radically changing their policies on trade and free market interactions with other countries. During this process, China has bought approximately one hundred trillion dollars of United States debt in the form of Treasury bills, notes, bonds, and Inflation Protected Securities (Amadeo). This debt has given China leverage against the United States which has enabled China to keep the value of the United States dollar high, while keeping the value of the Chinese yuan low. As the inflation of the dollar continues to negatively affect the

The US dollar is used in the majority of the international transactions and therefore that happens to the American economy, will influence the international financial resources. Dollars bring big consequences both for the USA and for other countries. The economy of many countries depends on currency dollar. The increase in its course reduces the volume of the income in dollars for the country. And change of US dollar more considerably, than change of an exchange rate of the country. On the

Today, the world economy, after witnessing the greatest hit in 70 years, is wondering what life will look like after the storm has settled. It is grappling with the fundamentals of unemployment, increasing inflation, current account deficits, negative growth, and zero interest rates along with it, depreciating the value of money. In the midst of all this the future of the U.S. dollar is uncertain. Will the dollar maintain its reserve currency status even after its depreciation and regain faith of the nations? Or will it be replaced by some other currency, shifting the power balances among the nations forever?

The U.S. has had the most universal currency for decades because of America’s great influence on the world, and because the american capitalist way. In an economic standing America is at the top because of the value of the U.S. dollar. All throughout history dating back to the turn of the nineteenth century the U.S. dollar has been used all over the world both during times of depression and in times of recession. The times the U.S. the U.S. dollar value the most is when there isn't much of it around, but right now America is a a steady climb to inflammation which means the dollar is losing strength. The less the dollar is valued the less power the U.S. has and the more countries will use other secondary currencies. Socialism can stop this from happening altogether and allow America to stay powerful. In a shared wealth economy the money taxed from the people is returned to the people by offering free education and zero medical expenses. This also helps to increase the amount of money in middle class pockets by taxing higher class people more according to their income. When money is held by the people it circulates through the country more before returning to the government, this allows the the vale of the dollar to

After World War II, the Bretton Woods Agreement established the gold standard and two support institutions called the International Monetary Fund (IMF) and the World Bank. This would lead to a shift, away from the gold standard, to more relaxed systems. The idea of currency purely backed by gold was slowly being shifted to a trust based currency. These institutions purpose was to regulate the economies by injecting or taking money in a process called sterilization. Sterilization is to protect certain countries from a going bankrupt. If a country goes bankrupt, it chain a chain reaction of bankruptcies. So, in order to maintain balance, currencies need to be stable enough, so that it can be in debt without having to declare bankruptcy. The idea is

“A weak currency is the sign of a weak economy, and a weak economy leads to a weak nation.” – Ross Perot. The words of the 1992 Presidential candidate still ring true today, and in fact they have since the abolition of the gold standard in 1971 by President Nixon. Ever since that warm August day the United States has been on a death plunge into immaculate amounts of debt. However, by the establishment of the silver standard in the way I will explain to you today, makes it clear that action on such a policy must be taken.

This made the policy fine until WW 1 when the gold standard was torn up in 1914 because countries needed to print money to fight World War I. When World War I was over and the world entered the early 1920s, countries wanted to go back to the gold standard but they didn’t quite know how to do it. Before World War I started with parity, meaning there was a certain amount of gold and a certain amount of paper money backed by gold. Then, the paper money supply was doubled. That left only two choices if countries wanted to go back to a gold standard. They could’ve doubled the price of gold — basically cut the value of their currency in half or they could’ve cut the money supply in half. They could’ve done either one but they had to get to the parity

Because countries on gold standard had a common backing of currency, it was easy to exchange currencies without worrying about expensive transaction costs. The common currency backing was convenient for traders, but it also limited governments ability to raise inflation rates. Niall Ferguson writes in the Ascent of Money, “the long run stability of prices acted as an anchor for inflation expectations” (Ferguson 59). Because governments could control prices based on the amount of gold stored in inventory, the risk of inflation was low because the amount of gold stored was stable. This means prices do not fluctuate as much on a gold standard compared to fiat money. This stability is why there may still be sound reasoning for implementing a gold-backed

The financial crisis of 2008 has been described as the worst financial crisis the world has seen since the great depression, but there are now murmurings of the potential for an even greater financial crisis, a currency crisis, caused by the demise of the US Dollar. The Dollar has been the reserve currency of the world since it took over from the Pound at the end of world war two, but we examine if it is about to crash spectacularly?

With the continuous decline of the United States economy, it leaves us to wonder if there is anything that can be done to stop this degradation. There are several economic policies that can have different effects towards the stability of our countries currency, but one that stands out is the issue of returning to a Gold Standard. Would this be the best course of action, or would it further the problems we currently have, or would it even be better to look at an alternative solution to moor our currency? Understanding these solutions will greatly benefit those of us who live in the United States and can even have a large effect on the world. Those who understand these issues have the knowledge needed to help us make a decision on what would be best for our country’s economy.

China, the largest growing market in the world, currently has a policy regarding monetary regulation that allows the Yuan to “float”. This has seen the Yuan appreciate by approximately 24% over the past few years. Today, the exchange rate between the Chinese Yuan and the American Dollar is approximately 6.3 Yuan to 1 Dollar. Some argue that China should revalue the Yuan again the dollar, establishing a more fixed exchange rate. Others believe that current should allow

China must understand there are many challenges when they try to replace the Dollar by Renminbi in international and reserve currency. But there are many benefits from using own currency if Renminbi become an international currency. For instance, China can expand its political effect; furthermore, it helps to reduce cost for domestic firms and households from foreign currency’s risk. It is also a factor helping China in rebalancing economics, reducing the dependence on the Dollar,

As far back as the World War II, the United States has been attempting to replace the Great Britain, establishing a world currency system centred in US dollar. After the war, the economic strength of the world’s countries changed significantly. Unlike Europe and Japan, the United States experienced very little destruction on its own land, thus it did not only maintain but moreover strengthened the economy with its exponential growth in production. From March,1941 to December,1945, through the Lend-Lease Program the United States provided over 48395.4 million dollars’ reinforcement goods to the Allies. As gold constantly flew into the United States, the country’s gold reserve value increased from 1938’s 14,500 million to 1945’s 20,080 million dollars. The interwar has made USA the largest holder of gold (59% of the world’s reserve in 1945 and 72% by 1948). This created favourable conditions for pushing US dollar to its hegemonic position. In 1944, 44 Allied nations gathered in Bretton woods, New Hampshire, United States, for the Bretton Woods conference. The 44 countries came to an