That is: on discarding and replacing the Federal Reserve System

This was not on my “to do list.” But timing is everything. It took the wild excess of Obama’s deficit spending, government expansionism to cause us to say stop. To say hell no! Therefore is not the present destruction of America’s wealth, stored in the monetary system, by the inflation producing “quantitative easing” (QE and QE2) is the perfect timing to call for replacing the Fed?

Mark W. Hendrickson at American Thinker thinks so and has laid out a persuasive case.

FED UP WITH THE FED

It is time (as it has been for decades now) to rethink the role of the Federal Reserve Bank.  An article of this length is insufficient to examine all the problems associated with the Fed, so I will concentrate on three problematical areas:         

1) Its record is abominable.

2) Its current policies are misguided and counterproductive.

3) It has become dangerously powerful.        

First, its record: When Congress created the Fed nearly 100 years ago (1913) its stated mission was to smooth out the disruptive ups and downs of the business cycle, to stabilize banking system, and to protect the viability of the U.S. dollar. 

Since the Fed opened for business in 1914, there have been numerous boom-bust cycles, with the Great Depression, the stagflationary 1974-82 period, and the current “Great Recession” being particularly severe. 

Under the Fed’s policies, bank failures have occurred in alarmingly high numbers.

In the century before the Fed’s creation, the purchasing power of the dollar, while subject to the inevitable fluctuations of a market economy, had approximately the same purchasing power in 1914 that it had had in 1814.  Since 1914, more than 95% of the dollar’s purchasing power has eroded.  Money is supposed to function as a store of value.  By that standard, the Fed’s ward, the Federal Reserve Note, has been a miserable failure.

Second, its current policies:  The Fed’s second round of “quantitative easing” (QE2) continues its long tradition of bubble-creating inflationary policies.  In support of QE2, the Federal Open Market Committee’s Sept. 21 statement asserted that price inflation was too low, citing the official Consumer Price Index. 

People living in the real world may disagree.  The Commodity Research Bureau’s food index has risen 27% in the last year; cotton is at a 145-year high; oil and gasoline prices have made double-digit gains.  Don’t look now, but the costs of eating, driving, and wearing clothes are trending higher at the very time the Fed plans to inject hundreds of billions of dollars (or trillions, if needed) to prop up Washington and Wall Street. Read the rest here.