Bitcoins and gold standard dollars -- was Re: Anyone want to make a housecall?

Joshua Marsh joshua at
Mon Jun 3 22:16:15 MDT 2013

On Sun, Jun 2, 2013 at 3:18 PM, Levi Pearson <levipearson at> wrote:

> No, the law does not allow shares to be sold to the public.  There was
> a provision that allowed it *at the time the Fed was created*, but
> only *if* the regional banks did not meet their funding goals through
> sale of shares to the banks as I described.  They did meet their
> funding goals, so no public shares.

Do you have somewhere I could read more about this? My google-foo wasn't
sufficient. The only thing I've read about it was from the original law.

> By 'these people' I assume you mean the FOMC, because they're the ones
> that control the open market operations of the Fed.  When have you
> ever seen 12 elected or appointed people work together that closely on
> something that requires that kind of subtle manipulation?

It's happened enough that sociologists have studied it and coined a term
for it: oligarchy. These people weren't 7-11 cashiers in their previous
position. Powerful and rich people like to keep their power and money. In a
political system where you have to solicit $1 billion dollars to become the
president, it's can't be too far fetched to assume some of that money comes
with strings attached. It doesn't seem like a stretch to me to have
financial savvy people conspire to make money.

>  And where are you getting the 'government gets a large kickback on those
> profits' thing?  Are you referring to the Fed returning the majority
> of the interest it collects on Treasury securities to the Treasury?
> This means that somewhere around 7% of the national debt is actually
> interest-free.  Not really a kick-back.

Congress passed a law that gives power to an organization that gave the
government $90 billion dollars last year. Is it financially smart? Sure. Is
it a kick-back? I think so.

> So, what this comes down to-- do you trust the idea of having elected
> officials appointing people to make decisions for the governance of
> the Federal Reserve?  Or do you think the people should have a more
> direct say in what's happening via a more democratic process?

I'm actually OK in general with the system. My biggest complaint is
transparency. I may not be able to wade through the details if they were
released, but there are professors of economics who would. Much like
open-source software, it could lead to more eyes squashing bugs and
preventing tampering.

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