Federal Reserve Governmental Fuckery - Its hypothetical ramifications on the world at large

[Iwasamwillbe]

What would happen if the Federal Reserve Banking System suddenly declared that all US coins and dollar bills, of any given value (e.g. 1¢ or $100), are no longer legal tender and thus invalid for any real use, unless an elected official that they hate resigns or a candidate (or really anybody) that they prefer is installed into office?

 

[Gaylord Brachiosaurus]

If you apply that equally it wouldn't do anything. People would still use it until another system came about. The power lies in it's ubiquity. Its got the monopoly on the system.

 

[Robert James]

Well we'd make world wars a trilogy. If they try to strong arm the U.S. dollar to get rid of trump by making it worthless they'll tank the globo homo economy. Most other countries would be happy trump is gone but would go to war out of fear of the power of the federal reserve or just to spite them for nuking the economy to get rid of a figure head.

 

[NerdShamer]

Go back to bartering, keep using it, take up cryptoshekels, or invent something new after the rioting dies out.

 

[Kosher Dill]

Superpower India already tried this, though the political reason was ostensibly cracking down on the "shadow economy" rather than ousting an elected official.

2016 Indian banknote demonetisation - Wikipedia

en.wikipedia.org

In India they were allowed to exchange at least some of the old bills for new denominations. In your scenatio this wouldn't happen, so it would be even worse.

 

[Jewthulhu]

Good Lord, we'd have to return to the gold standard! How will the fed arbitrarily print money to fuck over the middle class then? Just the thought of reverting to a stable currency system gives me the shivers.

 

[Y2K Baby]

I blow it up.

 

[Unassuming Local Guy]

What would happen if some guy said "there's these new things called Funko Pops and they have exactly X monetary value, and today's your lucky day because you can have them for X+Y actual money"? Apparently, Funko Pops become valuable, at least to enough people to make that value real. Currency has value because people want it to. No other reason.

If somebody successfully tried to convince the world that the dollar was worthless in a world where the leverage of almost every powerful person on the planet exists in the form of the dollar, that person would be found perfectly preserved on the surface of Pluto when the rest of us get there in 2000 years.

 

[Kosher Dill]

If somebody successfully tried to convince the world that the dollar was worthless in a world where the leverage of almost every powerful person on the planet exists in the form of the dollar

The scenario is talking about physical cash though, not all dollars in existence. The rich would actually be least affected because they keep the smallest proportion of their net worth in cash - it's not like they have Scrooge McDuck-style money bins.

 

[Chad Nasty]

You may not like the fiat currency we got, the greenback is always safer than things like crypto. Hell, maybe safer than almost any other currency. Dunno man, we haven't had to print $100 trillion bills like Zimbabwe yet and it gets accepted a lot more countries than pesos. I'd rather be getting paid in dollars than many other currencies.

 

[Unassuming Local Guy]

The scenario is talking about physical cash though, not all dollars in existence. The rich would actually be least affected because they keep the smallest proportion of their net worth in cash - it's not like they have Scrooge McDuck-style money bins.

Yes, but just like Funko Pops, good luck convincing people of that. Nobody would have anything to gain by obeying such a command. "Set all of your cash on fire please" isn't liable to get a lot of takers.

Banks wouldn't listen because they of all institutions have the most cash. To declare it all worthless would be to bankrupt basically every bank in the country, from the multi-billion dollar franchises to the "Kyle's Money Barn" style banks you see out in the exurbs.

Even the government wouldn't listen, because suddenly a huge chunk of their income - taxes - would vanish. Half the country's population would become broke overnight and become eligible for every kind of welfare under the sun.

In the end, the only power the fed would have to enforce such a rule is to stop printing money for the fifteen minutes between declaring cash worthless and being set on fire by an angry mob of 200 million people.