Does certified financial planner Wes Moss actually ask that question with a straight face?
Rep. Ron Paul (R-TX) wants to get rid of the U.S. Federal Reserve System – an issue that he has made the centerpiece of his campaign for the Republican presidential nomination. Paul, and like-minded libertarians, think the Fed’s constant intervention in our economy leads to disasters like the housing collapse, banks taking on too much risk, and the debasement of the dollar.
No, Ron Paul is not crazy but Wes Moss certainly is an idiot. Anyone who provides professional financial advice for others should know better.
First, a quick explanation of the Fed’s role:The Fed’s over-arching mission is to maintain full employment and keep inflation at a gradual or moderate pace. Its open market committee controls the money supply and uses that power to manipulate short-term interest rates. If the economy needs a boost, the Fed will lower rates, making cheap money available for investment. If the economy is facing threat of inflation, the Fed can raise rates, putting a brake on economic activity.
First, a quick explanation of the Fed's explanation of the Fed's role:
The Fed's overarching mission is to print money out of thin air. While most of us work for our money the bankers at the Federal Reserve want the power to print theirs for free. Obviously this would not do well in public debate. So the usurers, went off in search of a fig leaf and settled, with a laugh on you, with the full employment and low inflation line. It may convince Wes Moss, but it's just Fed speak to an out of work working stiff.
In case you haven't noticed Wes we are nowhere near full employment, and it is incontrovertible that the Feds money printing scheme can only result in inflation. In 1913 one US dollar was by definition 1/20th an ounce of gold. Today that same ounce sells for $1674.80. Great going boys on both fronts!
You would think anyone with common sense would quit hurting themselves, but Mr. Moss just won't quit.
So maybe the Fed isn’t perfect.
The Federal Reserve and Ben Bernake have publicly and privately stated that there was no housing bubble while Ron Paul has been warning of the housing bubble since 2002. In fact The Federal Reserve missed the signs of a housing bubble right up until it burst.
Running his first meeting as chairman of the central bank, Ben S. Bernanke, in his collegial style, solicited observations about the economy from colleagues. Some of the Fed's staff earlier had talked about the potential risks, but in that meeting and in subsequent ones that year, there was a glaring absence of alarm about the dangers of the housing bubble and what might lie ahead for the broader economy.Instead, concerns about a housing bust were largely dismissed by most officials, according to meeting transcripts released Thursday."We believe that, absent some large, negative shock to perceptions about employment and earned income, the effects of the expected cooling in housing prices are going to be modest," said Timothy F. Geithner, the current Treasury secretary, who then was president of the Federal Reserve Bank of New York.When Geithner was finished, Bernanke asked, to a round of laughter, "Anything to report on co-op prices in Manhattan?"
Imperfect! It's impossible to imagine it being any worse.
But this guy just won't quit.
Should we eliminate it? Not before considering the possible downsides. Without the Federal Reserve we could see:1. Haywire interest rates: Who would control interest rates in a Fed-less world? An unfettered free market? A cabal of Wall Street bankers? Congress? You can see the problems with these scenarios.2. More bank failures: The Fed serves as a last-resort lender for struggling financial institutions. Without it, we’d almost certainly see more bank failures, from Main Street to Wall Street.3. Less lending: Without the support of the Fed and other safeguards, banks would be far more conservative in their lending. Fewer people would qualify for mortgages, fewer businesses would be funded, and the economy would look very different.
Mr. Moss should really feel embarrassed.
There are no downsides. Without the federal reserve we would see:
1.Stable interest rates: The free market would take care of the interest rates perfectly and for free. How? Glad you asked. When banks are flush with money from any source such as deposits they will then compete to lend the money to return a profit. It is that constant competition that will bring the lowest stable interest rates. Those banks who are able to profit by bringing their interest rates down to the market will prosper, the ones who can't will disappear for the good of us all. Do you see the difference yet Wes? Then when the banks get low on reserves they will be forced to raise interest rates decreasing demand. Follow along Wes. The Fed wants to abolish free market and have monopolistic control over interest rates for the entire nation.
2. More bank failures: There should be more bank failures. It is absolutely essential that there be more bank failures. The likes of Goldman Sachs J.P. Morgan, Citigroup, Bank of America, and others should have been allowed to fail, when they upchucked on their subprime garbage in 2007.
One could properly ask if Mr. Moss is crazy. If he is not would someone please try to explain to him that, the free market punishes the bad banks by allowing them to fail. Thus the good banks are rewarded with market share. Mr. Moss suggests we prop up the bad banks instead and deny that market share to the banks that are well run as well is punishing innocent taxpayer for what is now over $7.7 trillion.
3. Less lending: The credit crisis is a direct result of too much lending Mr. Moss. If fewer people would have qualified for mortgages there would be fewer foreclosures now. Fewer unworthy consumers and businesses would have been funded and things would look very different now indeed.
Are Americans willing to work without the safety net the Fed provides…
He still doesn't get it the Fed doesn't provide a safety net. The Fed is the only danger. The safety net is to remove the issuance power of money from the usurers and return it to the people to whom it properly belongs.
Currently there are two classes of people. Those who work for money and those who print it from thin air. The latter group is always a slave to the former. Ron Paul wants to do away with the former. So, Is Ron Paul Crazy… or the only sensible one at the table? Gee Wes that's a hard one, let me think about it.