Federal Reserve Prints $1 trillion in an attempt to jump-start US Economy

[Infinite Knowledge]

I was home watching Fox News on Wednesday when the Glenn Beck show came on and to my surprise the topic was the Federal Reserve and their so-called "final effort" to jump-start the US Economy.

Turns out the Federal Reserve actually did print out the supposed $1 trillion in an attempt to avoid an inevitable Depression that would have "surely" taken place if they had not printed the money, and will take place if the money doesn't serve its purpose.

I did my research and found several articles to be consistent with the newscast. Now I have found part of it on Youtube and thought I would share in hopes of getting everyone's view on the situation.

YouTube - Federal Reserve Buys $1 Trillion Dollars of U.S. Bonds while we worry about $165 Million AIG Bonuses

I'm not too fond of how severe the situation has gotten. There were plenty of exit points where our elected politicians could have pulled out and ceased Government spending - especially on acting as life support for failing companies like AIG.

As well as allowing payout bonuses to CEO's and execs, and paying for company parties, jets, and remodeling of different properties all with tax payer money.

On the show they also, on a digital screen, display what $1 trillion would look like next to a person, in this case Glenn Beck.

Pretty interesting.

[Dan.Linehan]

Originally Posted by Infinite Knowledge

I'm not too fond of how severe the situation has gotten.

Then you should have been worried about it more when banks were leveraging their assets 30-1 over the whole last decade or so.

Originally Posted by Infinite Knowledge

There were plenty of exit points where our elected politicians could have pulled out and ceased Government spending - especially on acting as life support for failing companies like AIG.

The true exit point was for the Bush administration to require good accounting on the assets of hedge funds, but this was never done. Instead we were spending what, $9B / month in Iraq?

AIG going under would have resulted in a complete failure of all the banks period, as well as the destruction of the United States credit rating. They insure millions of people retirement accounts, homes, etc.

[Infinite Knowledge]

Originally Posted by Dan.Linehan

Then you should have been worried about it more when banks were leveraging their assets 30-1 over the whole last decade or so.

And I probably would have, if I would have been aware of the problem in my preteens.

Originally Posted by Dan.Linehan

The true exit point was for the Bush administration to require good accounting on the assets of hedge funds, but this was never done. Instead we were spending what, $9B / month in Iraq?

Agreed.

Originally Posted by Dan.Linehan

AIG going under would have resulted in a complete failure of all the banks period, as well as the destruction of the United States credit rating. They insure millions of people retirement accounts, homes, etc.

Absolutely.

I'm completely aware of why it must not fail. But it is, will continue to, and Americans will suffer because of it.

Money is only part of the problem, it's the leaders at AIG and how they choose to manage these funds that are the bigger threat.

Leave it up to them, and AIG is surely going to come to a halt permanently.

And gee, they are leaving it up to them.

What a treat the near future must hold for young adolescents like myself.

Besides, the Government owns 80% of AIG; it has already failed - it's hanging on for dear life and thanks only to the US Government.

When AIG fails completely, because I feel it will, and we go into a severe Depression---unless this $1 trillion shot in the dark works---we will all wonder how the incompetent persons in position got to be there in the first place . . .

Nah!

I'm wondering that now.

[runningbird]

Maybe local currency is the solution?
LET IT DIE: Rushkoff on the economy | ARTHUR MAGAZINE - WE FOUND THE OTHERS

[Brutha]

Money is only part of the problem, it's the leaders at AIG and how they choose to manage these funds that are the bigger threat.

They replaced the old CEO with Edward M Liddy.

But in the end the problem is deepen. It is cultural in Wall Street to run high leverage ratios.
But if you would tell all those banks to run much lower leverage ratios nobody would get credits anymore as the bank wouldn't be able to lend anything.

There are no easy ways out of the problem. Nobody has a concrete idea of how to get out of it and how the end of the road will look like.

Somehow all that cyberpunk with I thought to be unrealistic a few years ago gets more realistic as time goes by.
Dark Angel for example with plays in a scenario in which in 2009 the US financial system crashes because of an electromatic blast that removes all the zeros from the computers in which the money gets stored.
It only turns out that you don't need a electromagnetic blast for it but complex financial forces do that on their own...

Give it five more years and we might also get the thing down about engineering such gen manipulated humans or maybe they already started.
We are talking about resurrecting mammoth these days out of old genetic data.

We have a bit of a problem with imagining the future. It certainly won't look like 2007 when we get out of the crisis.

We are lacking models for the future. We really need to think about how the future in five years should look like.

Maybe local currency is the solution?
LET IT DIE: Rushkoff on the economy | ARTHUR MAGAZINE - WE FOUND THE OTHERS

Local currency is certainly a nice idea. On the other hand I don't think that the government will start to allow it in the US and local currency would increase the pressure on the financial system therefore the government might have an interest to actively fight it.
You also takes time to start a local currency that actually works. People will start local currency if hyperinflation forces them too but you can't pay for oil with local currency.

To feed people you need oil in the US to drive food from A to B if you don't have enough local farmers and most regions don't have enough local farmers.

[Lauxa]

Originally Posted by Dan.Linehan

Then you should have been worried about it more when banks were leveraging their assets 30-1 over the whole last decade or so.

Because being worried then would have solved the problem Dan? Just wondering...

[escapee]

Opening the valves on the Titanic

U.N. panel says world should ditch dollar | U.S. | Reuters

Maybe it's time to bite the bullets...

[jnms]

Here's an interesting chart about the current state of affairs - and yes it has been adjusted for inflation:

[Subscreet]

Where again does it say that they printed the money?

[Brutha]

I don't think that 597 billion is an accurate cost for the Iraq war.

Where again does it say that they printed the money?

Of course it's created in computers but that's not the point.

[Infinite Knowledge]

Yeah, it's all digital. The majority of money today is in computers. Literally printing out $1 trillion would be a waste of resources and is besides the point.

As far as local currency . . . it sounds good, but I'd doubt how efficient it would be and if Government would allow it period.

Some people are saying it's best to just go into a Depression and get it over with because it's inevitable, they say.

I have no economic background and have no position in determining a realistic outcome for the US' economic future, which is why I started this thread to get other people's views.

To date, the war in Iraq has cost $656.1 billion and that's not counting President Obama's request for $75.5 billion for Fiscal Year 2009 war funding.

Source: Cost of War | National Priorities Project

[Dan.Linehan]

Originally Posted by Lauxa

Because being worried then would have solved the problem Dan? Just wondering...

Good question. Sure, if enough regulators and government officials had been worried about it then, it might have mattered. Not so much normal people who don't work in the financial industry.

[Brutha]

To date, the war in Iraq has cost $656.1 billion and that's not counting President Obama's request for $75.5 billion for Fiscal Year 2009 war funding.

That number doesn't include general military expenses and doesn't include a variety of veteran benefits that you have to pay in the future for those people who fight in Iraq.

Some people are saying it's best to just go into a Depression and get it over with because it's inevitable, they say.

There isn't one scenario of depression. Nobody really knows what will be left if you just let everything fall together.
When things fall they accelerate and decelerate the fall takes energy. Events can take a dynamic on their own.

If depression at some point means that the US someone can't pay anymore for it's oil a lot of companies simply break down. People can't drive anymore to work and items can't be transported anymore.
In that event you are lucky if you have local farmers that hold farmers markets.

It also becomes more and more a possibility that the mob simply lynches those AIG employees.
Public order can break down.

You should also consider thatsocieties breaking down is something that happened often in history.
We like to think that our society is different from others that broke down like the Maya or the Roman empire. Maybe it isn't.

[Andrew Brunelle]

The Federal Reserve should not be in control of the coining of money. It's unconstitutional. They're partly to blame for the financial crisis. They shouldn't even exist. They're simply here to wield power over us. I say we should take back our rights and tell the Fed to shut down.

[Infinite Knowledge]

Originally Posted by Brutha

That number doesn't include general military expenses and doesn't include a variety of veteran benefits that you have to pay in the future for those people who fight in Iraq.

Well, general military expenses are basic needs for a Government and would be there whether or not there was a war.

With that said, I think general military expenses are irrelevant when the question in matter is how much the war in Iraq has cost the US, don't you?

Originally Posted by Brutha

It also becomes more and more a possibility that the mob simply lynches those AIG employees.
Public order can break down.

You should also consider thatsocieties breaking down is something that happened often in history.
We like to think that our society is different from others that broke down like the Maya or the Roman empire. Maybe it isn't.

Well, I don't know about the lynching of AIG employees, but what does make us different from the Mayas and Romans would be technology.

Technology today is far more advanced for any reigning "Empire", "Government", "Dynasty", or whatever you want to call it economy's, in today's world, to completely collapse in the same sense that the Mayas and Romans did.

In our sense, it would probably be far WORSE. And because our technology is so advanced, it's WHY it can work against us - but I would say this in the sense of war and us blowing each other to smithereens with nuclear weapons rather than an economical breakdown.

Technology, in an economical sense, is a positive not a negative and our advancement in technology today would be what separates us from a collapse similar to what the Mayas and Romans had.

Conclusion: It'd be bad, but not that bad.

[Infinite Knowledge]

Originally Posted by Andrew Brunelle

The Federal Reserve should not be in control of the coining of money. It's unconstitutional. They're partly to blame for the financial crisis. They shouldn't even exist. They're simply here to wield power over us. I say we should take back our rights and tell the Fed to shut down.

Contrary to popular belief, I actually feel the same way.

The Federal Reserve is a private bank — not a Government agency. They loan the US its currency at interest. Every dollar in circulation is owed to them — and some.

This is Unconstitutional.

There's a popular belief that the Revolutionary war in the late 1700’s happened because the King of England was forcing the colonies to borrow the country’s currency from the Central bank of England at interest.

Our forefathers were well aware of this, and it’s believed to be one of the main reasons the Revolutionary war happened. They knew that borrowing the country’s currency from a Central bank could only mean one thing — slavery.

They would always be in debt to the Central bank of England, therefore the colonies would not have their independence.

Before 1933 all “paper” money was redeemable in gold from your local bank. Now every dollar bill you look at says, “This note is Legal tender. For all debts public and private.”

In other words it has no value, it’s just paper.

Remember the great Gold seizure in the 1930’s, where everyone was forced to turn in all their gold or face imprisonment for up to 10 years?

They literally robbed US citizens of their wealth and threatened to throw them in jail if they didn’t comply. And all this was supposedly done to, “get us out of the great depression”.

Their logic was and is, "we need a Central bank because if the country produces its own currency it would cause inflation."

Well, isn’t that what’s going on now?

The dollar's value has been on a downward spiral since The Federal Reserve was established in 1913. I believe the dollar's value today is over 90% LESS of what it was then.

[Lauxa]

Originally Posted by Infinite Knowledge

Conclusion: It'd be bad, but not that bad.

Yah, I say, "hey, y'know, maybe it won't be that bad" and then they say "naw man, it's gonna be BAD..."

[rawxstasy]

Technology, in an economical sense, is a positive not a negative and our advancement in technology today would be what separates us from a collapse similar to what the Mayas and Romans had.

Technology isn't going to put food on the table when the dollar becomes worthless. Even during the Great Depression most people had means to grow their own food and be somwhat self sufficient. In our technological society of today, alot of people have no idea how to garden or can vegetables - and I"m included in that bunch, unfortunately. I am doing what I can to prepare for the worst.

[Inthon]

This is Mary Poppins economics.

[Infinite Knowledge]

Originally Posted by rawxstasy

Technology isn't going to put food on the table when the dollar becomes worthless. Even during the Great Depression most people had means to grow their own food and be somwhat self sufficient. In our technological society of today, alot of people have no idea how to garden or can vegetables - and I"m included in that bunch, unfortunately. I am doing what I can to prepare for the worst.

Money is just a medium in which goods and services can be tracked and given value to.

If "money" collapses and loses its worth, people will just have to go back to trading a chicken coupe full of chicken for a couple cows - and grow their own fruits and vegetables.

With all the advances in agriculture and the machinery already in place we would be able to produce much larger quantities of crop than before this technology was discovered, and since money collapsed and there isn't any to pay someone with, we would gain access to these machines by doing favors, trades, and/or other kinds of tasks.

You're right, people today have no idea how to do such things. We are trained and bought up to use money for simple, daily tasks.

They'll have to learn.

But the most important thing to remember is money's just an illusion.

When money disappears, the resources will still be there. Only difference is now you have to go pick the beans of coffee off the tree, grind them to a fine powder and brew yourself a nice cup of coffee.

Instead of going across the street every morning to Starbucks and paying $3.50 for an 8 ounce cup of the same substance.

[escapee]

This is Unconstitutional.

You could be profiled as a potential terrorist for posting that.

The elite bankers are our Saviors.
The elite bankers are our Gods.
The elite bankers are our Laws.

Someone needs to make bumper stickers about how we adore the elite bankers.


MISSOURI STATE POLICE LABEL HONEST AMERICANS TERRORISTS Including Ron Paul Supporters! | Facebook

A secret police report targets millions of Americans as potential “domestic terrorists” if they support the Constitution, oppose unlawful taxation, supported 2008 presidential candidates Republican Ron Paul, Libertarian Bob Barr or Constitution Party candidate Chuck Baldwin, if they are opposed to abortion, are against unconstitutional gun control, if they display pro- Constitution bumper stickers or own copies of certain books and documentaries.

[Lauxa]

Originally Posted by Infinite Knowledge

When money disappears, the resources will still be there. Only difference is now you have to go pick the beans of coffee off the tree, grind them to a fine powder and brew yourself a nice cup of coffee.

Only difference is now you have to sneak into the heavily-guarded coffee plantation with your 15 well-armed commando buddies and steal as many beans as you can without getting shot. Then you can trade them on the black market for some eggs and vegetables.

[ThoughtAddict]

Originally Posted by Andrew Brunelle

It's unconstitutional.

Which Article or Amendment of the US Constitution does it violate?

[Lauxa]

According to Article I Section 8, Congress has the power to coin money and regulate its value, but instead the power is vested in a private bank.

According to Article I Section 10, states are prohibited from paying debts in anything other than gold or silver, and yet they pay their debts in this privately printed currency.

The United States Constitution - The U.S. Constitution Online - USConstitution.net

[ThoughtAddict]

Originally Posted by Lauxa

According to Article I Section 8, Congress has the power to coin money and regulate its value, but instead the power is vested in a private bank.

Let's set aside for a moment that the Fed doesn't actually coin money, but mostly sets requirements of the country's banks regarding interest rates between banks and debt/liability ratios. That's another issue entirely.

Congress has the power to coin money and regulate its value. That power carries with it the power to establish such entities as are necessary and proper to actually carry out the coining of money (unless, of course, we expect our Senators to do the labor themselves). They can legitimately delegate their enumerated powers to lower entities in order to make sure they are carried out. They have done so in this case via the Federal Reserve Act.

If we argue that delegation of power is unconstitutional, then we must also do away with, well, just about every piece of government. No DMV, no IRS, no SEC, no HHS, no government agencies at all. No FBI to investigate crimes and all military decisions involving purchases, recruiting, etc. requiring an Act of Congress.

If we argue that delegation of banking only is unconstitutional... well, it isn't, per McCulloch v. Maryland.

According to Article I Section 10, states are prohibited from paying debts in anything other than gold or silver, and yet they pay their debts in this privately printed currency.

Not quite. The States are prohibited from "mak[ing] any Thing but gold and silver Coin a Tender in Payment of Debts". In this case, the States have not taken any action; the federal government did via Congress. The prohibitions of the States in Section 10 do not apply to the federal government, else our government would be unable to declare war, make treaties, tax imports, etc.

[escapee]

Coinage Act of 1792 - Wikipedia, the free encyclopedia

Coinage Act of 1792, consistent with the Constitution, invoked the death penalty for anyone found to be debasing money. So It's extremely obvious that the act was created at that time to outlaw the use of fiat or non-precious metal monetary unit by any party (ie Banks, Federal government and states).

I'm not sure if this act is still applicable for the current debt based fiat monetary system. But for one thing most of us very sure, is the previous and current administration of federal reserve will make John Law seems like a little toddler.

Most of us enjoy the massive liquidity and convenience provided by fiat/digital money, but the flip side of this is once it's severely abused (as it is now), it usually leads to severe economic collapse and suffering. And with confidence completely destroyed, we may be forced to go back to honest money backed by tangible items. Perhaps money has it's own cycle? ( commodity money -> Fiat money -> commodity money -> infinity ) Oh wait, there could be one way to stop or merely delay the cycle. A single world currency controlled by a single dictatorial global bank. This is a guess on my side based on link below.
The Raw Story | China's top banker proposes new world reserve currency -Moscow supports IMF super-currency

In May 1716 the Banque Générale Privée ("General Private Bank"), which developed the use of paper money, was set up by Law. It was a private bank, but three quarters of the capital consisted of government bills and government accepted notes. In August 1717, he bought the Mississippi Company, to help the French colony in Louisiana. In 1717 he also brokered the sale of Thomas Pitt's diamond to the regent, Philippe d'Orléans. In the same year Law floated the Mississippi Company as a joint stock trading company called the Compagnie d'Occident (of which Law was named as Chief Director) which was granted a trade monopoly of the West Indies and North America. The bank became the Banque Royale (Royal Bank) in 1718, meaning the notes were guaranteed by the king. The Company absorbed the Compagnie des Indes Orientales, Compagnie de Chine, and other rival trading companies and became the Compagnie Perpetuelle des Indes on 23 May 1719 with a monopoly of commerce on all the seas. The system however encouraged speculation in shares in 'The Company of the Indies' (the shares becoming a sort of paper currency) and inflation. The system was based on Law trading shares in the Mississippi Company in return for government debt. The Banque Royale was created by default as a result of Law attaining the majority of the government issued notes (debt). It effectively became the Central bank of France. In 1720 the bank and company were united and Law was appointed Controller General of Finances to attract capital. Law's pioneering note-issuing bank was extremely successful until it collapsed and caused an economic crisis in France and across Europe. The collapse was staved off by a constant trading off between national debt and shares of the Mississippi company. New shares were issued to dilute the value of each share, and the new capital was used to purchase more government notes. The speculation continued to build, and the company's two branches, the trading arm and the bank arm, collapsed simultaneously.

Law exaggerated the wealth of Louisiana with an effective marketing scheme, which led to wild speculation on the shares of the company in 1719. In February 1720 it was valued for a very high future cash flow at 10,000 livres. Shares rose from 500 livres in 1719 to as much as 18,000 livres in the first half of 1720, but by the summer of 1720, there was a sudden decline in confidence, leading to a 97 per cent decline in market capitalization by 1721. Predictably, the 'bubble' burst at the end of 1720, when opponents of the financier attempted en masse to convert their notes into specie. By the end of 1720 Orleans dismissed Law, who then fled from France.

Depression 2009 The Largest Train Wreck in Economic History :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website

John Law's disastrous experiment with paper money combined with his role in the Mississippi Land Company, a stock bubble on the scale of Tulip Mania, eventually transformed France and much of Europe into an economic wasteland leading eventually to the overthrow of the French nobility.

John Law's destructive influence on France has been exceeded, however, by today's extraordinary über- mixture of central bank credit-based paper money, excessive risk and leverage and the globalization of markets—a volatile mixture whose fragility, extreme size and combustibility are now about to destroy the 300 year old world built on debt and paper money.

[Infinite Knowledge]

Originally Posted by Lauxa

Only difference is now you have to sneak into the heavily-guarded coffee plantation with your 15 well-armed commando buddies and steal as many beans as you can without getting shot. Then you can trade them on the black market for some eggs and vegetables.

Sounds fun! Care to join?

Originally Posted by escapee

You could be profiled as a potential terrorist for posting that.

Sad thing is the Government has labeled thousands of innocent Americans "domestic terrorists" for very common, day-to-day things.

Originally Posted by Lauxa

According to Article I Section 8, Congress has the power to coin money and regulate its value, but instead the power is vested in a private bank.

According to Article I Section 10, states are prohibited from paying debts in anything other than gold or silver, and yet they pay their debts in this privately printed currency.

The United States Constitution - The U.S. Constitution Online - USConstitution.net

This is correct.

Originally Posted by ThoughtAddict

Congress has the power to coin money and regulate its value. That power carries with it the power to establish such entities as are necessary and proper to actually carry out the coining of money (unless, of course, we expect our Senators to do the labor themselves). They can legitimately delegate their enumerated powers to lower entities in order to make sure they are carried out. They have done so in this case via the Federal Reserve Act.

If we argue that delegation of power is unconstitutional, then we must also do away with, well, just about every piece of government. No DMV, no IRS, no SEC, no HHS, no government agencies at all. No FBI to investigate crimes and all military decisions involving purchases, recruiting, etc. requiring an Act of Congress.

I clearly see your reasoning. You're correct in a way as far as your delegation of power argument.

Here's where I beg to differ . . .

The article directly states for Congress to coin money and regulate its value. You're saying Congress also has the power to delegate power, and so they did coin money and regulate its value by delegating that power to the Federal Reserve for them to do so.

Congress must also regulate these agencies they give power to. The Federal Reserve is not regulated by anyone but themselves; they're independent. They're a bank, not an agency with Government officials. If the Federal Reserve did have to answer to Congress or any other Government authority for that matter, how come they refused to identify the recipients of $2 trillion in emergency loans?

Now they're being sued.

I just think our forefathers would have been a bit more specific in the article of Congress and their delegating of power, and would have included that of coining of money to 3rd party entities.

And in the article of Congress and them coining money, I think they would have been more specific and would have included the option to delegate coining of money to 3rd party entities, rather than be left to assumption.

Originally Posted by ThoughtAddict

If we argue that delegation of banking only is unconstitutional... well, it isn't, per McCulloch v. Maryland.

Well, if one case proves all then . . .

The Federal Reserve Act is unconstitutional and the National Banking Act is unconstitutional, per Daly vs Minnesota.

Jerome Daly, that is.

Here's some brain food.

Judgement and Decree

http://www.lawlibrary.state.mn.us/Cr...tanddecree.pdf

Minnesota State Law Library - Credit River

Other goodies

Minnesota Judge Holds Federal Reserve Act Unconstitutional

Federal Reserve Notes Unconstitutional

[ThoughtAddict]

Originally Posted by Infinite Knowledge

I clearly see your reasoning. You're correct in a way as far as your delegation of power argument.

Here's where I beg to differ . . .
. . .

Congress must also regulate these agencies they give power to. The Federal Reserve is not regulated by anyone but themselves; they're independent. They're a bank, not an agency with Government officials. If the Federal Reserve did have to answer to Congress or any other Government authority for that matter, how come they refused to identify the recipients of $2 trillion in emergency loans?

First, the Fed doesn't coin money. Treasury does that. We're dealing with regulation of its value, and I'll assume arguendo that the Fed does that as conceived by the Constitution.

Second, Congress does not have the obligation under the Constitution to provide oversight. To be clear, I'm not saying that any delegation is a good or bad idea. I'm merely dealing with the reality that these delegations are not unconstitutional. Congress is free to delegate the power and then never review a single decision...

Third, Congress does retain oversight power over the Fed. The Board of Governors is selected by the President, with advice and consent of Congress. Congress, through the GAO, regularly audits the Fed. On top of the audits, there is a requirement for regular reports and hearings. And, as the ultimate power, Congress can amend the Federal Reserve Act via legislative process (as it has done over 200 times) or rescind it altogether.

I just think our forefathers would have been a bit more specific in the article of Congress and their delegating of power, and would have included that of coining of money to 3rd party entities.

And in the article of Congress and them coining money, I think they would have been more specific and would have included the option to delegate coining of money to 3rd party entities, rather than be left to assumption.

The founders were smart. Writing in too many details makes the system unable to adapt. It falls apart trying to hold on to foolish consistencies. They were aware of agency action when they wrote the Constitution. Do you have any source to indicate that they opposed their function in the new government?

I'd quote to the Federalist Papers at this point, but I don't have my copy handy. Suffice it to say that delegation already existed during the founding.

Well, if one case proves all then . . .

The Federal Reserve Act is unconstitutional and the National Banking Act is unconstitutional, per Daly vs Minnesota.

Supreme Court of the United States > Justice of the Peace of a county in Minnesota.

And there are a wealth of cases permitting delegation. See, e.g., J.W. Hampton, Jr. & Co. v. United States, 276 U.S. 394 (1928), Yakus v. United States, 321 U.S. 414 (1944), United States v. Southwestern Cable Co., 392 U.S. 157 (1968), National Broadcasting Co. v. United States, 319 U.S. 190 (1944), FPC v. Hope Natural Gas Co., 320 U.S. 591 (1944). All of these cases are from the SCOTUS. For a recent discussion of delegation, check out Whitman v. American Trucking Assns., 531 U.S. 457 (2001).

[Infinite Knowledge]

Originally Posted by ThoughtAddict

First, the Fed doesn't coin money. Treasury does that. We're dealing with regulation of its value, and I'll assume arguendo that the Fed does that as conceived by the Constitution.

Correct.

Forgive me if I'm mistaken, but I guess you feel the urge to point that out from this statement:

The article directly states for Congress to coin money and regulate its value. You're saying Congress also has the power to delegate power, and so they did coin money and regulate its value by delegating that power to the Federal Reserve for them to do so.

But I'm only confirming what you said in this paragraph:

Originally Posted by ThoughtAddict

Congress has the power to coin money and regulate its value. That power carries with it the power to establish such entities as are necessary and proper to actually carry out the coining of money (unless, of course, we expect our Senators to do the labor themselves). They can legitimately delegate their enumerated powers to lower entities in order to make sure they are carried out. They have done so in this case via the Federal Reserve Act.

Which would lead anyone who didn't know, but could read, to believe you are saying the Federal Reserve are the ones who coin money by the manner in which you wrote it.

Originally Posted by ThoughtAddict

The founders were smart. Writing in too many details makes the system unable to adapt. It falls apart trying to hold on to foolish consistencies.

Of course.

I still think if our forefathers would have meant it the way you are presenting it, they would have been a bit more specific as far as the delegating of such power to others and only in the 2 articles of the Constitution mentioned above.

Congress has the right to, "Coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures" - I think adding the possibility of delegating this power to a 3rd party wouldn't have hurt at all and in fact would have made the article more adaptable to future change, don't you?

But it wasn't what they planned, so they didn't.

It was meant to be taken as is or so it is my belief.

In 1935 the Supreme Court ruled against the Congress delegating its power in 2 occasions.

Schechter Poultry Corp. v. United States 295 U.S. 495 (1935)

Field v. Clark 1892

Here's some info on the topic:

Delegation of Power

The Politics of Shared Power ... - Google Book Search

The legal foundations of public ... - Google Book Search

Here are some newscasts bashing the Federal Reserve

http://www.youtube.com/swf/l.swf?swf...l%20Reserve%3F

http://www.youtube.com/swf/l.swf?swf...eVyVXS6U&rel=1

Your argument is sound, but assumptions have to be made and it leaves one to wonder is it what the founding fathers really meant.

For a moment, let's put aside your plea of whether or not it's constitutional and allow me to offer you this:

Let's just say your way is the way it should be.

Then let's ask, What's a Central bank?

manages our nation's supply of money and credit and operates at the center of the nation's financial system; keeps the wheels of business rolling with currency, coin, and payments services, such as electronic funds transfer and check-clearing; serves as the banker for the federal government by providing financial services for the U.S. Department of the Treasury; supervises and regulates a large share of the nation's banking and financial system; and administers banking and finance-related consumer protection laws.

What's the fundamental need for a Central bank?

As our nation's money manager, the Fed implements monetary policy to manage the flow of money and credit in the economy. If money and credit expand too rapidly, businesses cannot produce enough goods and services to keep up with increased spending. Prices may rise, causing inflation. If the flow of money and credit contracts too greatly, spending and business activity may dwindle, workers may lose their jobs, and a recession may result.

Source: The Federal Reserve System in Brief: The Nation's Central Bank

Now, I ask you . . . have they been doing their job?

The Federal Reserve has done nothing but cause inflation and abolish the value of the dollar - literally since they came into existence.

Hopefully we can both agree on that.

[ThoughtAddict]

Originally Posted by Infinite Knowledge

I still think if our forefathers would have meant it the way you are presenting it, they would have been a bit more specific as far as the delegating of such power to others and only in the 2 articles of the Constitution mentioned above.

Congress has the right to, "Coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures" - I think adding the possibility of delegating this power to a 3rd party wouldn't have hurt at all and in fact would have made the article more adaptable to future change, don't you?

It absolutely wouldn't have hurt for the purpose of this discussion. But there are other concerns that weigh against trying to be more specific. There are limits on the delegation as you pointed out. These limits include an inability to usurp the authority of other branches, an inability to delegate legislative authority to another branch, and an inability to entirely delegate legislative authority to lower agencies. Presumably, those would need to be written in. Also, the limits and deference would have to be written in. Really, the Constitution would be several pages longer, at least.

But it wasn't what they planned, so they didn't.

It was meant to be taken as is or so it is my belief.

Would you agree that the founders intended some delegation of power? Or did they intend Congress to directly fulfill all of Section 8's duties?

Also, do you object to the existence of the IRS, the Department of the Air Force, the Department of Homeland Security, the Secret Service, the Postal Service, the PTO, or the federal courts? Each of these involves a delegation of Congressional power beyond what is explicitly written in.

In 1935 the Supreme Court ruled against the Congress delegating its power in 2 occasions.

Schechter Poultry Corp. v. United States 295 U.S. 495 (1935)

Fun fact: Schechter is known in Constitutional and Administrative law circles as "The Sick Chicken Case".
It has been all but overruled, starting with West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937) and continuing with many of the cases I cited earlier.

For a moment, let's put aside your plea of whether or not it's constitutional and allow me to offer you this:

See, that's not an issue I'm even dealing with here. I am not a close enough observer of the Federal Reserve System to analyze every action they've taken. It could be bad policy. It could be a blunder of our government. Yet, the practical evidence on a broad scale doesn't convince me that it is, nor have my casual readings on the topic. The US grew into a privileged, hyper-industrial super-power and financial model since the Federal Reserve Act. It could be because of or in spite of the Fed. Frankly, I don't know, and I make no assertion on that point.

The only thing I really took issue with is the statement that the Fed is unconstitutional. Often, opponents of an issue will attack it with whatever rhetoric sounds effective... and "unconstitutional" is pretty effective. The amount of work that goes into really questioning whether or not it is true usually isn't done. As a law student, I do that kind of work. And the rather serious charge of unconstitutionality is misplaced here.

The Federal Reserve has done nothing but cause inflation and abolish the value of the dollar - literally since they came into existence.

Hopefully we can both agree on that.

Frankly, inflation itself does not concern me so long as wages rise at a comparable rate.
EDIT: On second thought, I think inflation would concern me if it was disproportionate to the overall growth of the economy via created value...