WHY would we do that?
What if I told you, there is a world where $2 could fill your tank of gas? That era could’ve existed before the Federal Reserve’s centralization of currency in 1913, fundamentally altering our economy. As the U.S. central bank, the Federal Reserve shapes monetary policy, oversees banks, and provides financial services. Although it operates independently, it remains answerable to Congress, with its Board of Governors appointed by the President and confirmed by the Senate. By shifting to a commodity-backed free banking system without the Federal Reserve, we could preserve economic stability, curtail government overreach, and reclaim financial freedom for individuals and businesses.
Preserve economic stability
The Federal Reserve has fundamentally failed to fulfill its primary mandate of price stability, and, in fact, it has not succeeded in achieving any of its three core objectives. According to the Federal Reserve Act, the central bank is tasked with conducting monetary policy “so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates”(1). However, even when considering periods of wars and recession, unemployment rates have stagnated (2), the dollar has lost an astounding 96.4% of its purchasing power (3), and interest rates have exhibited greater volatility over the past century than in the preceding one (without the feds) (4). Over the last couple hundred years, we’ve experienced two distinct banking systems: central banking and free banking. Ultimately, commodity-backed free banking has outperformed the central banking system in achieving these mandates without wasting 9-billion taxpayer dollars per year supporting an unelected bureaucracy (5).
Curtail government overreach
Abolishing the Federal Reserve would significantly reduce government influence over the economy by eliminating its role in manipulating interest rates, controlling the money supply, and serving as a lender of last resort, all of which can undermine market discipline. The 2008 financial crisis serves as a poignant example of this issue. Following the 2001 recession, the Fed kept interest rates artificially low for an extended period, which fostered excessive borrowing and risk-taking in the housing market (6).
Leading up to the crisis, we saw unmistakable warning signs of an asset bubble—soaring home prices and escalating household debt—but the Fed did not adequately regulate financial institutions or enforce strict enough regulations on subprime mortgages and derivatives (7). Instead, it intervened to bail out banks that had engaged in reckless lending practices, costing taxpayers over $700 billion and failing to avert the ensuing economic collapse (8). Such interventions create a moral hazard, making financial institutions feel insulated from the repercussions of their actions. By eliminating the Fed and returning to commodity-backed free banking we could reinstate the principle of market discipline, prompting banks to assess risks more responsibly, ultimately fostering a healthier economy.
Reclaim financial freedom
Restoring financial autonomy for both individuals and businesses begins with dismantling the centralized control of currency issuance and embracing decentralized banking systems. In a commodity-backed free banking model, banks would regain the ability to issue their own notes, supported by tangible assets such as gold or cryptocurrency. This competitive environment would reduce the boom-and-bust cycles commonly seen in centralized fiat systems and fractional reserve banking (9). Decentralization would also empower individuals to select financial institutions that reflect their values, fostering greater fiscal independence and reducing reliance on government-regulated financial structures. For businesses, it would mean more accessible capital through commodity-backed lending (10) and lower interest rates due to favorable credit terms tied to real assets (11). Overall, Abolishing the Federal Reserve would create a more stable economic environment, allowing individuals and businesses to accumulate wealth without the threat of volatile currency devaluation.
How DO we abolish the Fed?
In summary, shifting away from the Federal Reserve’s centralized control is crucial for maintaining economic stability, limiting government overreach, and reclaiming financial freedom. The Fed has failed in monetary policy, leading to market inefficiencies. A transition to a commodity-backed free banking system would restore market discipline and empower individuals and businesses to thrive independently. This process starts by engaging Congress to draft and co-sponsor legislation, which, if approved by both the House and Senate and signed by the president, would allow us to dissolve the Fed and redistribute its functions. Advocates like us must be proactive and reach out to our representatives to restore economic stability, decentralize financial power and enable financial independence.
Source URL’s:
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https://www.officialdata.org/us/inflation/1800?amount=1
- https://www.federalreserve.gov/monetarypolicy/monetary-policy-what-are-its-goals-how-does-it-work.htm
- https://www.statista.com/statistics/1315397/united-states-unemployment-number-rate-historical/
- https://www.officialdata.org/us/inflation/1801
- https://www.visualcapitalist.com/the-history-of-interest-rates-over-670-years/
- https://www.statista.com/statistics/1386656/federal-reserve-total-operating-expenses/#:~:text=The%20total%20operating%20expenses%20of%20the%20Federal%20Reserve,up%20from%208.74%20billion%20U.S.%20dollars%20in%202021.
- https://www.federalreservehistory.org/essays/great-recession-and-its-aftermath
- https://www.thebalancemoney.com/2007-financial-crisis-overview-3306138
- https://www.investopedia.com/articles/economics/09/subprime-market-2008.asp
- https://www.aier.org/article/fractional-reserves-and-economic-instability/
- https://www.investopedia.com/terms/c/commodity-backed-bond.asp
- https://www.lme.com/Education/Online-resources/LME-insight/Commodity-financing-how-hedging-benefits-both-borrowers-and-lenders
