Would the US markets see a steep rise if the Fed were to be ended?

Would the US markets see a steep rise if the Fed were to be ended?

How would it affect "muh stocks"?

if anything they'd completely shit the bed as the us is forced back onto something retarded like the gold standard, liquidity dries up completely and despite having a willing & able workforce nobody is able to get anything done, build any businesses or hire any workers since credit becomes basically nonexistant.

The us dollar would become worth less than the paper it is printed on as US banks become severed from the outside banking world, foreign holders of US debt exit their positions as fast as possible since the only way to transfer value into or out of the US becomes basically shipping crates filled with gold, an unbelievably ineffective and expensive way to transfer value

US citizens experience a situation similar to china's mainlanders/GREXIT event, with capital controls to prevent domestic entities and residents sending their value overseas to avoid the impending crash

Exports cease as the world market quickly replaces the goods/services lost from the US with more accessible venues

The world thrives as the US becomes an oxcart society and probably converts to islam

Go on and shut it down though, Bernie

>Go on and shut it down though, Bernie

b-but why do libertarians advocate for it?

they dont like human fingers on buttons like QE or NIRP. They don't like being able to have value stolen from them despite physically securing it. They might not trust banks in general. Pretty much all of their concerns are valid, but trying to turn it off now would be like trying to unplug the internet. People don't immediately see the benefits to central banking like they do the internet, though.

Probably why they like Bitcoin, since it performs (some) central bank functions while being provably fair. Blockchain doesn't lend unfortunately.

US Banks don't even have a way to settle funds among each other without the fed

Interesting

Are libertarians fools in some aspects? I find myself agreeing with a lot of what they say but starting to wrap my head around the fed part doesn't seem to work.

>civilisation would fall without a central bank
Can't fool me goldfeldshekelsteinbergwitz

t. Goldstein

I'd not personally fault anyone for not knowing how the financial system works, it's complicated and boring as fuck.

civilization would be fine everywhere else after the initial shockwave, it would probably be fine here too after a country with access to credit uses it to employ military force that we'd be unable to match even a fraction of :^)

Consider that Zerohedge, the mouthpiece of the Austrian/libertarian "end le fed" movement, has predicted imminent hyperinflation every day of every year, for the past several years.

Basically they read about the gold standard on the Internet, think "hory shiet this is real money" and engage in the most ridiculous mental gymnastics and conspiracy-level reasoning to justify their hatred of current monetary policy.

>They don't like being able to have value stolen from them despite physically securing it.

Cognitive dissonence. Fools like you need to pull your heads from your butts.

Read the Creature from Jekyll Island if you truely want to understand.

>Would ending the Fed be good?

What are you, fucking stupid?

I don't think so. If the Fed ended, there would probably be pervasive instability throughout financial markets. And subsequently, investors would probably look toward commodities and other less risky investments, like real estate or minerals.

What if the IMF issues special drawing rights to central banks throughout the world when they eventually need to be bailed out? The IMF would effectively become the world central bank.

You could still extend credit without a central bank, the interest rate would be a more pure market interest rate and would form through the privatization of the industry ie someone business would step in and fill the roles that the fed was offering. But what do i know, I'm just being introduced to Austrian economics as a current undergrad in economics

>Cognitive dissonence. Fools like you need to pull your heads from your butts.

I don't get you? Nobody likes it when their assets (in this case, cash) lose value, including libertarians. Interest rates affect all USD equally, no matter how deep you bury it

How do you ensure that the individually owned and operated bank is and remains solvent, and isn't just making shit up on it's electronic balance sheets? Do you lend in cash only? Do es walmart have to rent a small army to transport the 4.8bn in cash to renovate it's stores nationwide? No, because the bank doesn't have that much cash, because fractional reserve lending can't exist anymore ;(


*walmart has it's own bank, so bad example

Probably not, but it depends on what the Fed would be replaced with.

Central banks have unlimited credit. They shouldn't ever need bailing out.

Having said that, there are still some countries that haven't floated their currencies, and countries that borrow in foreign currencies, so the IMF isn't completely obsolete yet.

From what I've seen so far, Austrian economics is based almost entirely on non sequiters and false assumptions. Let us know if you ever find any redeeming features.

Completely underrated Post

Also please read this

I thought fractional reserve was still alive and well.

It is, but only because there's a central bank ("trustworthy authority") overseeing individual banks & making sure they don't lend out more than they can handle.

Dollar surpluses would be exchanged for shares in American companies most likely and the profits of the multinationals would flow back into the countries of their owners. How do you like the idea of the Chinese government owning large chunks of the American economy? It would probably be good for the world as a whole but not necessarily for ordinary Americans.
Libertarians see it as a way of constraining the power of their governments.. someone like Bernie Sanders would advocate for public banking which libertarians would oppose obviously
Right, this is actually how Marx predicated capitalism was supposed to develop, finance was the last remnant of feudalism and there would be a conflict between those who administrated enterprises and those who invested capital to enterprises. The new industrial system would end up developing based mainly on equity financing rather than debt.. some form of industrial banking would emerge as a kind of mutual fund, so that claims for payment would rise and fall to reflect the economy's real earning power... however what really ended up happening is industrial firms got into the financial racket when they realized they could make more money that way.
The Austrian Business Cycle Theory was developed in the 1920s. The data Mises and Hayek worked on was of the business cycle that emerged with industrial capitalism at the beginning of the 19th century and continued with varying amplitudes throughout that century. The business cycle they tried to explain predated both central banking and the 20th century growth of the state. When the it was put forward it was actually a pretty big theoretical advance. The main competitors were the orthodox defenders of Says Law, who denied that a business cycle was possible and the Marxists who offered a catastrophic crisis driven by a declining rate of profit. Obviously a lot has changed since then and Austrian Business Cycle Theory doesn't take any of that into consideration.