{"id":35194,"date":"2018-06-18T05:39:54","date_gmt":"2018-06-18T10:39:54","guid":{"rendered":"http:\/\/olduvai.ca\/?p=35194"},"modified":"2018-06-18T05:39:54","modified_gmt":"2018-06-18T10:39:54","slug":"the-federal-reserve-public-enemy-number-one","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=35194","title":{"rendered":"The Federal Reserve: Public Enemy Number One"},"content":{"rendered":"

The Federal Reserve: Public Enemy Number One<\/a><\/h3>\n
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When currency was backed by gold, a central bank\u2019s main function was to maintain the value of the issued currency in terms of gold.\u00a0 For example, if a central bank created too much money against the gold reserves in the banking system, an increasing number of people would begin to exchange their currency for gold.\u00a0 To combat this, a central bank would be forced to raise interest rates and decrease the money supply.\u00a0 The higher interest rates would incentivize people to exchange gold for larger savings on deposit that earn interest.\u00a0 Banking reserves \u2013 gold \u2013 would return to the banking system and the economy would return to balance.\u00a0 The prime reason for insisting on defining currency in terms of a precious metal was to provide a self-correcting braking mechanism to the creation of money.\u00a0 As expressed by the great Wilhelm R\u00f6pke:<\/span><\/p>\n

If in the production of goods the most important pedal is the accelerator, in the production of money it is the brake.\u00a0 To insure that this brake works automatically and independently of the whims of government and the pressure of parties and groups seeking \u201ceasy money\u201d has been one of the main functions of the gold standard.\u00a0 That the liberal should prefer the automatic brake of gold to the whims of government in its role of trustee of a managed currency is understandable.\u201d[1]<\/sup><\/p><\/blockquote>\n

The US dollar was backed by gold as recently as 1971.\u00a0 Any central bank in the world could present the Federal Reserve $35 and receive 1-ounce of gold in exchange.\u00a0 However, on August 15, 1971 \u2013 blaming it on the \u201cgnomes of Zurich\u201d \u2013 President Nixon \u201ctemporarily\u201d broke the dollar\u2019s last link with gold.\u00a0 Nixon closed the \u201cgold window\u201d and reneged on the promise<\/a> to exchange an ounce of gold for $35.\u00a0 Since then, the system of credit in the US has been under the Fed\u2019s complete control.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve: Public Enemy Number One When currency was backed by gold, a central bank\u2019s main function was to maintain the value of the issued currency in terms of gold.\u00a0 For example, if a central bank created too much money against the gold reserves in the banking system, an increasing number of people would […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,303,374,536,20555,18779,827,839,3650,12758],"class_list":["post-35194","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-fed","tag-gold","tag-money","tag-peter-schmidt","tag-schiffgold","tag-united-states","tag-us-dollar","tag-us-federal-reserve","tag-wilhelm-ropke"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35194","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=35194"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35194\/revisions"}],"predecessor-version":[{"id":35195,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35194\/revisions\/35195"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=35194"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=35194"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=35194"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}