Filed under: Caveman Radio, Economics, Politics | Tags: banking, end the fed, federal reserve, gold standard, monetary policy, ron paul
Another show in the can. This one was especially fun because I had David Hillary joining me from New Zealand. David is a banking and monetary policy expert. He is the author of the blog, Lost Soul. Very smart guy.
(Gotta love the Internet – making it possible to do a live call-in radio show with hosts on opposite ends of the planet. Truly amazing.)
You can download the mp3 here.
I think the show went well. We tried to use Ron Paul’s book as a hub for a broad discussion on banking and monetary policy. David has been educating me over the last couple of weeks on the three major points of view relative to these topics.
- Keynesians – people who believe we need a Central Bank and a strong Federal government to manage our economy
- Rothbardians – people who believe we should abolish central banks and other prevailing aspects of banking (including the fractional reserve system) and return to a gold coin monetary standard
- Free bankers – people who believe we do not need a central bank, but we do need a gold standard, and we need to maintain the Fractional Reserve system
Ron Paul is in the Rothbardian camp. His book, therefore, focuses on all of the terrible things that are the result of the Fed, fiat currency (currency not tied to anything concrete), and the fractional reserve system. David and I fall into the Free Banker camp. (This is a position I’ve adopted as a result of my investigations and talks with David.) So we took the main points of a few Paul’s chapters to discuss the flaws in the Rothbardian approach and to illuminate the value of Free Banking.
Lots of good stuff there. We covered everything from how banks are supposed to work (it probably isn’t what you think) to what the gold standard is, how interest rates work, and the role of the Fed in our society. In the end, we conclude as Ron Paul does – we should end the Fed. However, our reasoning is completely different. Ron Paul’s big hangup is mostly with the Fractional Reserve system, though he attributes most of the so-called problems from it to the Fed. Of course, he also is very upset with our fiat currency, so he wants us to return to a gold standard. That, in itself, is also a good idea. But doing that without a Fractional Reserve system is frankly impossible.
In the end, David put forward a completely workable way to move from where we are today to a free banking model. We can get there, folks. We just need some folks in Washington who are in favor of real change (as opposed to the fake change that was sold to America in 2008).
So have a listen and form your own conclusions.
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