Can't wait to see what Secretary Weisshaupt does with the Fed!
There is only one thing that CAN be done with the fed. Its charter must be revoked. The Criminals on its board arrested and publicly executed for treason.
Replacing its function is a much harder task. Hamilton and Madison went round and round on if a Bank was "necessary" to the execution of the Federal Govt's powers or merely convenient. If we had not had a National Bank, I think the country would have had a much harder time growing into the economic powerhouse it did, plus our participation in the First and Second World wars would have been impossible. The Civil war and Reagan's cold war would have been impossible as well. ( and Korea, and Vietnam,and Afghanistan, and Iraq etc) Hamilton's bank was primarily to take on the debt acquired by the colonies via the Revolutionary War. Before the Welfare State, war expenditures were the only thing a country went into debt for. However, for that reason alone, it can be justified. As much as some "RON PAUL!" folks won't admit it, profits for the military- industrial complex and their banker allies aren't the only reason wars are fought or started. And even if we accept the dubious assertion that is the only way they ever start, there is no denying that at some point they can become existential threats to a Nation.
So a Central bank is probably a really good idea. 50 (or more) different banks in different States all charged with issuing money just makes it harder to spot one or more of them cheating and cooking the books. Transparency is needed. Accountability is needed. But most of all integrity is needed - and that is the hardest thing to come by. This System must also accomplish two things : 1) maintain a stable and predicable money supply 2) provide a source of funding for liquidity in the form of loans.
I very much like the
idea behind Bit-Coin. Bit Coin increases money supply based on a
well known and secure algorithm- so everyone can plan for it. Inflation itself isn't bad- its unpredictability in inflation that does the harm. If the source code and networks could be hardened enough it might be possible ( but we don't have a way of verifying Voting machines so everyone trusts them..) but Bit Coin requires a high number of servers- under many different parties to be compromised before any actual fraud can happen. Each charter would be allowed to "mine" for new bitcoin, and "keep" the proceeds... so in my view each STATE gets a charter ( if it wants one) to run the servers and "mine" revenue from them. This distributes both the implicit gain from printing (which has to happen because of population and growth - if the goal is to keep the value of money stable and predictable over time) to the State government. Inflation is a Tax. Why do we let a bunch of shadowy individuals on the board of the Fed collect and spend it vs. the government? Undoubtedly it would be better for the world and humanity if charters were issued to other nations and probably individuals as well, but no, that isn't going to happen for a number of social and logistical reasons.
Now, If a major government were to back such a currency - AND make 10% of its value redeemable - with a basket of real goods (gold, silver, Copper, Iron, Oil) which we really should have a national stockpile of anyway, you have a strong contender for something that might actually be accepted ( Bitcoin is under attack from the Feds right now for obvious reasons.. govt doesn't like competition) All granted Charters would require regular Audits and public disclosure of the systems for security and integrity, and verification that the required amount of hard assets to pay off a "run" are present. 10% of the bitcoins mined by such entities would be used to purchase the commodities required to "back" the newly mined coins, with the remaining 90% being available as revenue. to the Charter holder.
Before FDR almost all contracts had a "gold clause" - where a set amount of the metal would be set aside as collateral to be seized if either party reneged on its agreement. - The National-Bit Coin is merely a Money Supply Control system however, and cannot provide liquidity.
A new entity would be established at the Federal level to be our "central" bank. It would NOT be unlike the Federal reserve other than it would no longer be a Private Bank. The Charter would require yearly audits, and the officials running the establishment would be nominated by the President, confirmed by the senate, and subject to a vote to retain every 2 years held along with the National election,and salaries for such officials to be established by congress. Any "profit" the bank itself makes, is returned to the Treasury. This bank, however, does NOT issue bitcoin. It issues "speculative money" Call it a Blue Dollar.
This bank can produce "blue dollars" in the same way it produces the green ones now. It can set the prime rate, loan money to congress, and loan money to other private institutions. However, the Blue Dollar floats in value against the National Bit-Coin. This is fundamentally what the States are attempting to do when they make Gold and Silver a Currency- provide a stable money supply UNDER the one being destroyed by the Fed. But individual States can not easily or quickly mine Gold and Silver, because they must pay for it with the Damned green stuff. Bit Coin would give them the same power to "mint" money the Fed has.
The Federal Government can only borrow Blue Dollars. All Federal taxes are paid in Blue dollars, however the Federal Government MUST make payments only with Bitcoin except for expenditures on National defense. . Thus to get a road built, they can borrow Blue Dollars, and then must exchange them for Bitcoin in order to pay their workers. For Military expenditures they may pay their partners like Lockheed-Martin, Boeing, or Halliburton in Blue dollars ( if those parties will take them) - so sure, they will profit, but less so as the money inflates next to National Bitcoin ( or sound money)
This sets up an incentive for Washington to keep Blue dollars in relative parity to Bitcoins. Private individuals may make whatever deals they wish ( loan in blue dollars to be paid back in X amount of bit coin and Y amount of Blue Dollars at such an such an interest. Or they may just go back to having a bitcoin clause- where X amount of bitcoin is held in escrow- or simply chose to pay back bit coin in bitcoin and blue dollars in blue dollars. ) No one would be required to accept blue dollars ( or bitcoin) in exchange. The point is there is a speculative money supply available at need, and Sound Money to rely on when the speculative supply becomes unstable ( via bubbles, idiotic and irresponsible govt spending, wars and so on etc) The power of sound money is invested with the several states, the power to borrow with the Federal Government, and the two can keep each other in check..
If we had such a money supply now we would all be converting our Blue Dollars to National Bit Coin, and depositing them in a bitcoin account in some bank which would still be paying decent interest on them ( because they are not affected by the prime blue dollar rate - each bank deciding on its own what rate to loan bit coins at and what to accept in payment. ) or loaning them ourselves via investments that pay back in National bitcoin. Point is "smart money" would start flowing out of the Blue Dollar, reducing Washington's spending power considerably ( while still allowing them to prosecute a war if required)
Anyway, that is the View from the Economic Czars office. Anyone see anything critically wrong or stupid in it?