End The Fed?..And then what

[achilles28]

Quote from Random.Capital:

I got your point - unfortunately your point is simply wrong. You don't have to look any farther than the economic history of the US, where massive speculative bubbles formed during - or if you prefer, despite - very long stretches of gold or gold/silver standards.

The reason "fixed" money doesn't stop credit bubbles is because there will always be economic agents who are perceived as "no worries, they're good for it".

Asset bubbles aren't a function of the monetary system, they are a function of human nature, and that nature will find a way to express itself regardless of monetary structure.

Please cite examples. Reserve requirement, ratio-backing and other facility policies offer enormous monetary expansion even with a gold-standard. The roaring 20's, a perfect example.

Historically, avenues to "Get-around" hard-money, were allowed to exist. To keep bankers happy and the public fooled.

 

[achilles28]

Quote from Random.Capital:

This is a meaningless question, as credit IS money. The correct question is "do asset and/or credit bubbles routinely occur under gold or other fixed monetary systems?"

And the historical record is clear - they do.

Like I said, ways and means to 'get around' hard money are left available under fixed monetary systems.

Close the loopholes to aggressive monetary expansion under fixed money, and problem solved.

If the historical record is so "Clear" on hard money bubbles, post a few examples. 9 times out of 10, its an influx of derivatized credit from lower reserves/backing

Your entire argument is a straw-man.

 

[achilles28]

Quote from Daal:

I'm yet to hear how the resident autrians gold standard advocates would prevent free economic agents in a free market from initiating levered derivative transactions between each other to the tune of multiples of GDP(which they ocasionally use as 'evidence' that the financial system is phony). After all, they are just a piece of paper stating two parties are making a bet on an outcome

Let them fail. Period.

If the FED wern't here to bail them out, would Banks write naked puts (CDS) on the market? No, they wouldn't.

The FED is the Moral Hazard.

And the Free-market, when left alone, is self-policing.

Would you invest or patronize the services of a insurance company who sold policies with no insurable interest? 100 people each with full claim against 1 property?

No, you wouldn't.

 

[achilles28]

Quote from Daal:

I'm yet to hear how the resident autrians gold standard advocates would prevent free economic agents in a free market from initiating levered derivative transactions between each other to the tune of multiples of GDP(which they ocasionally use as 'evidence' that the financial system is phony). After all, they are just a piece of paper stating two parties are making a bet on an outcome

From the horses mouth. Ron Paul advocates Government legislation against fraud.

CDS is fraud. No insurable interest.

2:30 in.

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