The Federal Reserve Bank (Fed) has been a hotly debated topic with more Americans growing consistently against its existence, so I decided to tell my readers why the Libertarian society of North Columbia, featured in my urban fantasy Lord of Columbia Series, would never stand for the creation of such a large and disastrous central bank.
Read on for more.
One of my favorite sources to turn to is a tiny book from Murray N. Rothbard entitled The Case Against the Fed. It’s an easy, fast read and a great resource to outline in these following articles. I’m covering one chapter per post, allowing for shorter articles for my readers so they can gain a greater understanding of the overall themes in Lord of Columbia.
Today we’re talking about the intro, Money and Politics.
The Fed and Foreign Policy
Rothbard is very clear when he states America’s foreign policy (aka the Southpoint Empire) cannot exist the way it is today (the year he published the work), and literally today, where the military spending budget is threatening $700 billion. Per RT’s Rick Sanchez’s recent speech at the Ron Paul Institute, the US now has bases in over 80 countries.
It’s clear that without the Fed, created in 1913 a few years before America entered World War I, America’s quest for empire would falter tomorrow.
The Fed’s ability to endlessly print money out of thin air has not only overly inflated military spending but has devalued the reserve currency of the world both at home and abroad, lowering the standard of living here in America.
America’s brutal and perpetual quest for empire and even the creation of enemies out of thin air cannot exist without the Federal Reserve.
Who is the Fed Accountable To?
Even the CIA holds more accountability than the Fed.
The Fed has no budget, is subject to no audit, has no Congressional committee overseeing it, and has been in full control of the monetary system since its creation.
There have been attempts to reel in the Fed over the last three decades, one of which was a bill written by Henry B. Gonzalez which became known as the Gonzalez Bill.
The Gonzalez Bill would’ve required full, independent audits of the Fed’s meetings via videotaping and full details rather than simply summaries, as is the case today.
Commercial banks no longer would’ve had the power to appoint presidents of the twelve regional Feds. Instead, POTUS would’ve held such power. However, both President-Elect Bill Clinton and Fed Chairman Alan Greenspan rejected the bill, with the excuse being it would run the risk of undermining market confidence in the Fed.
Fed’s Standard Reply
The Fed stated the Gonzalez Bill would’ve encroached its “independence from politics,” claiming the monetary system is highly important and the Fed must enjoy absolute independence. However, being that the Fed was signed into law by government to be given full control of America’s monetary system, he compares this to government in any capacity.
For this, if government in any capacity can become independent from politics, it can only mean the sphere of government becomes an absolute, self-perpetuating oligarchy and will be accountable to no one, not even the public’s ability to challenge and change its personnel – or drain the swamp – as has become a popular term.
Further, Rothbard states if no person or group, whether stockholders or voters, can displace a ruling elite, then such an elite becomes more suitable for a dictatorship rather than for an allegedly democratic country. The Fed violates the reforming and opening of government than any of the three branches of government.
The Big Question
Rothbard questions why Americans are so suspicious when private industry tries to opt for deregulation from its regulatory agencies yet seems to always pose zero suspicion between the “oddly cozy relationship between private banks and the Fed.” It’s either hypocrisy or ignorance for most Americans to either oversee or refuse to consider what should be a blatant kind of issue.
Or for that reason, even question why there’s a monopoly on the monetary system in favor of competing currencies.
The Fed’s answer?
It’s defenders use one single underlying argument: Any change would weaken the Fed’s allegedly inflexible commitment to wage a seemingly endless fight against inflation.
Given the current state of inflation today, it’s easy to note that the Fed has clearly not done its job in fighting the good fight.
Something today, on October 26th, 2019, would cost $1.88, 88% more than the cost during my birth year of 1991.
As Rothbard rightly points out, given my example above, that the more of any commodity on the market will devalue that commodity’s value and the same goes for money.
The more there is, the less valuable it is.
And as Ron Paul has consistently stated, “wages can’t keep up.”
Therefore, when wages can’t keep up, both income inequality increases and the standard of living decreases. This makes it far tougher for families to live within their means.
And yet, as Rothbard states the public clamors for inflation.
Yet how does the public go about creating more money when only one institution is allowed to do so?
They can’t, which results in a crime called counterfeiting, even if such counterfeiting in this instance would be market competition to Libertarians.
But the government takes counterfeiters very seriously, subjecting them to the highest possible crimes in the land for one reason and one reason only, as Rothbard states: Because they are interfering with the government’s revenue, specifically the monopoly power to print money that the Fed enjoys.
Responsibility for Inflation
It’s clear that chronic inflation happens in America and every other country in the world for that matter.
However, if the sole source for the creation of money, then who is responsible for the blight of inflation?
The Fed and the central banks of every single nation that possesses one.
That said, it’s correct to state the Fed’s lies regarding their endless fight against inflation are just that; lies. It’s clear the Fed, even if their intentions were good, has failed miserably in their quest to curtail inflation.
How This Relates to the North Columbians?
North Columbia is a Libertarian society set in my Lord of Columbia Series. One huge point made in Northern Knights, which you can download for free at Amazon, Nook, iBooks, and soon Kobo, is the plight for sound money. In it, I have a Diamond Standard, where North Columbians use Diamond, Gold, Palladium, Silver, Bronze, and Copper as money, all of which is backed by stores of the metals, rather than the dollar-based inflation system used by the Southpoint Empire.
As such, North Columbia is a free, Constitutional Republic with limited governmental power. The North Columbians use markets in response to consumer demand to thrive, championing free-market competition where industries are regulated by the people and through the courts if a dispute arises.
Further, there is no true monopoly in any capacity in North Columbia in regard to industry. The North Columbians seek out free trade among their allies, which is virtually anyone at odds with the world’s global power, Southpoint.
But the overarching plot theme in the entire First Trilogy states the importance of a society’s lacking of a central bank.
Next, I’ll discuss the Genesis of Money and talk about the Optimum Quantity of Money and how these two issues relate to Lord of Columbia.
Be on the lookout for my upcoming YouTube Channel ‘Liberty Rising’ where you’ll see vocal summaries of my own articles as well as current events that relate to Lord of Columbia.
Thanks for reading.