by Thomas E. Woods, Jr.
by Thomas E. Woods, Jr.: HuffPo’s
11 Myths About the Fed, Refuted
As I noted
not long ago, I find myself in serious disagreement with a portion
of the end-the-Fed movement. This is the segment of the movement
whose complaints are that the Federal Reserve is privately
owned, that the Fed does not inflate enough, that interest
payments are unjust or inherently unpayable all at once, etc.
This is not
nit-picking. I am not interested in replacing the Fed with something
as bad or worse. The problem with the Fed is not that it isnt
socialistic enough. The problem with the Fed is that it is a creation
of Congress and operates with special privileges granted by the
government. If only the Fed were truly private, with no government-granted
privileges. Then it could do no damage whatever.
As I also noted,
I recently asked an antagonist on Facebook to write out his ten
propositions on money, so we could try to get to the bottom of our
posted them last week. Right now Ill reply to this one:
deflation benefits the private bankers who wish the People to
default in order to seize collateral with, or without govt force.
This is clearly
incorrect. In addition to not wanting the hassle of trying to unload
collateral in a potentially illiquid market, no bank would want
to seize collateral during a deflationary period at all! When
asset prices are falling, why would banks want to grab assets?
Who would want an asset thats in the middle of seeing its
Ah, but couldnt
the banks coordinate the deflation together, and then when it hits
bottom, grab all the assets at that moment, when their prices have
nowhere to go but up? Even assuming that bankers would adopt such
a far-fetched strategy, there is no way for them to know at what
point in the deflationary process the defaults are going to occur.
something we’re supposed to fear from banks, this sure ain’t it.
the rest of the article
with permission from TomWoods.com.
E. Woods, Jr. [send him
mail; visit his
website], a senior fellow of the Ludwig von Mises Institute,
is the creator of Tom
Woods’s Liberty Classroom, a libertarian educational
resource. He is the author of eleven books, including the New
York Times bestsellers Meltdown
(on the financial crisis; read Ron Paul’s foreword)
Politically Incorrect Guide to American History, and most
© 2012 Thomas
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