The easy way out

Posted Nov 6, 2012 22:35 UTC (Tue) by Cyberax (✭ supporter ✭, #52523)
In reply to: The easy way out by petrakis
Parent article: Let’s Limit the Effect of Software Patents, Since We Can’t Eliminate Them (Wired)

> Actually, Fiat currency was in full force by then thanks to National Banking Act
[citation needed]

The easy way out

Posted Nov 6, 2012 22:40 UTC (Tue) by petrakis (guest, #39672) [Link] (4 responses)

http://mises.org/books/caseforgold.pdf, p83

"The National Banking Acts destroyed the previously decentralized and fairly successful state banking system, and substituted a new,
centralized, and far more inflationary banking system under the aegis
of Washington and a handful of Wall Street banks. Whereas the effects
of the greenbacks were finally eliminated by the resumption of specie
payments in 1879, the effects of the National Banking System are still
with us. Not only was this system in place until 1913, but it paved the
way for the Federal Reserve System by instituting a quasi-central banking type of monetary system. The "inner contradictions" of the National
Banking System were such that the nation was driven either to go
onward to a frankly central bank or else to scrap centralized banking
altogether and go back to decentralized state banking."

e.g. the national banking act laid the foundation for the great depression.

The easy way out

Posted Nov 6, 2012 22:45 UTC (Tue) by Rudd-O (guest, #61155) [Link]

Citation provided! Excellent!

Now, in my experience, you must wait for Cyberax to insult you (he could call you "childish"), mock your arguments, change the subject, and tell you "IF YOU DON'T LIKE IT HERE, WHY DON'T YOU JUST LEEEEEEAAAAAAAVEEEEEEEEEEEE".

The easy way out

Posted Nov 6, 2012 22:48 UTC (Tue) by Cyberax (✭ supporter ✭, #52523) [Link] (2 responses)

>The National Banking Acts destroyed the previously decentralized and fairly successful state banking system
Easily refuted: http://en.wikipedia.org/wiki/List_of_recessions_in_the_Un...

The easy way out

Posted Nov 6, 2012 23:07 UTC (Tue) by petrakis (guest, #39672) [Link] (1 responses)

I didn't say depressions weren't possible under a metallic currency system. In fact, if you actually took the time to read the document I originally cited you'll find a dissection of many of these depressions and the following conclusion. The frequency and depth of these "depressions" were much lower under a metallic currency then that of a fiat currency. Depressions are "normal", like storms, they come and go, what makes them "economy killers" is the massive use of leverage which is only possible under the arbitrary fractional reserve system e.g. the great depression and the 2008 banking collapse.

The fallacy is that government can actually shield us from a depression actually occurring to begin with. Our currency is based as much on confidence these days as it is on GDP, probably more so.

In closing, I'm not here to win a flame war, I frankly don't care. My goal is to get just *one person* to think twice about business as usual wrt fiat currency and seek the truth for themselves.

The easy way out

Posted Nov 6, 2012 23:41 UTC (Tue) by Cyberax (✭ supporter ✭, #52523) [Link]

So there were depressions before the FRS. That's the fact, it's unarguable.

The pre-FRS banking system was on a verge of a catastrophic collapse, so that's why the NBA had been passed. Saying that NBA destroyed a "fairly successful" banking system is kinda sad.

>Depressions are "normal", like storms, they come and go, what makes them "economy killers" is the massive use of leverage which is only possible under the arbitrary fractional reserve system e.g. the great depression and the 2008 banking collapse.
You might notice again, that 2008 was so destructive exactly because it was caused by a "shadow" banking system. It was not dependent on FRS or fiat currency, it could just as well happen with "hard" money (as pre-FRS crises show us).

The only two things that made it big:
1) Sudden austerity and hard-currency belief among elites.
2) The scale of the modern economy.