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Comment by jstalin | Hacker News Reader

Central banking is essentially a price-fixing scheme and doesn't really have much to do with capitalism.

With all due respect, just ask any fat cat on Wall St. about the Fed or the role of central banks in the economy and he would assert that those institutions are essential for the global economy to function correctly and they are really upapologitically capitalists and they wear the label as a badge of honor.

They're "capitalists" as long as they have a thumb on the scale, but they're not really capitalists who would cheer a true free market in currency.

The USD is about as free market as a currency can be reasonably obtain. The Fed allows the market to drive the money supply through lending. Institutional banks can effectively create an unlimited supply of money on demand through lending; they just ask the Fed for money and pay the discount rate.

So it's largely the market that drives short and medium term inflation through borrowing. The Fed uses treasury bonds to balance the money supply.

It's not a perfect system, but it's the best system we know of.

> The USD is about as free market as a currency can be reasonably obtain.

Nothing about the USD is free market.

The USD is shored up by the petro dollar standard and its status as a reserve currency esp. in the commodities market and its supply and management is governed by a quasi-private institution that is in bed with Wall St.

You ignored everything he said, because it disproves your point.

Not only did you ignore what the guy said, but you don't even seem to understand the points you are trying to make. The reason why the dollar is a reserve currency, and why so many oil contracts are made out in USD is because both parties have a reasonable expectation that it will retain its relative value over a reasonable time period. This means that it is a reserve currency because no one group can manipulate its value. If it was subject to as much political machination as you seem to imply, then no one would want to use it.

Apparently you ignored conveniently the petrodollar part and the Fed being non federal or public institution and just focused on its status of reserve currency to discredit me. Maybe you need to get acquainted more with these points before writing your counterargument.

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