myths about the federal reserve

[dujac]

i'd like to address the myths, one at a time


myth number one

the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders

anyone that disagrees with this being a myth is welcome to disclose evidence against the assertion

 

[Travlyr]

i'd like to address the myths, one at a time


myth number one

the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders

anyone that disagrees with this being a myth is welcome to disclose evidence against the assertion

That is unknown since its books are closed to audits. Do you have access to inside information?

 

[dujac]

That is unknown since its books are closed to audits. Do you have access to inside information?

that's a different myth, it's just the monetary policy that isn't audited

Each member of the Federal Reserve is audited by independent private accounting firms, by the GAO and by internal means; on a yearly basis.

here's a link to see the audits and reports:

http://www.federalreserve.gov/boarddocs/rptcongress/default.htm

 

[Cowlesy]

We are well aware that the Federal Reserve's GAAP accounting profits, post member bank dividends, are returned to the U.S. Treasury.

Member banks most certainly profit from the easy-money climate that the Federal Reserve creates, not to mention reaping MASSIVE profits by being able to unload garbage paper on the Fed at or with a slight haircut to face value that may ultimately prove worthless.

 

[Travlyr]

The monetary policy not being audited is problematic in itself.

Do you have access to the governing documents which established the Federal Reserve System in 1913 showing who are the stockholders?

 

[Chester Copperpot]

Oh no... not a new pro-fed person trying to rally the cause of the federal reserve..

you must be out of your mind oP

 

[hazek]

Whoever still has questions about the FED should just spend those measly 2hours and watch The Creature From Jekyll Island (by G. Edward Griffin):

 

[dujac]

The monetary policy not being audited is problematic in itself.

Do you have access to the governing documents which established the Federal Reserve System in 1913 showing who are the stockholders?

yes and anybody can read the federal reserve act

there are no individual owners of federal reserve bank stock, it's owned by member banks

here's a link to the federal reserve act

http://www.federalreserve.gov/aboutthefed/fract.htm

 

[Mini-Me]

We are well aware that the Federal Reserve's GAAP accounting profits, post member bank dividends, are returned to the U.S. Treasury.

Member banks most certainly profit from the easy-money climate that the Federal Reserve creates, not to mention reaping MASSIVE profits by being able to unload garbage paper on the Fed at or with a slight haircut to face value that may ultimately prove worthless.

Plus, "member bank dividends" are hardly insignificant. When you consider that the Fed and banking industry is coercively placed at the heart of the economy, the amount of money flying through there is so high that the member banks and their fat cats are making a killing on the 6% (I think) they get to keep of the profits. All that said, it's still not the main reason to oppose the Fed (even if it's one of the main reasons for its existence)...just kind of an outrageous/obscene side show.

 

[dujac]

Whoever still has questions about the FED should just spend those measly 2hours and watch The Creature From Jekyll Island (by G. Edward Griffin)

here's another one of g edward griffin's videos

in this one he says that noah's ark is over on mount judi

 

[dujac]

Plus, "member bank dividends" are hardly insignificant. When you consider that the Fed and banking industry is coercively placed at the heart of the economy, the amount of money flying through there is so high that the member banks and their fat cats are making a killing on the 6% (I think) they get to keep of the profits. All that said, it's still not the main reason to oppose the Fed (even if it's one of the main reasons for its existence)...just kind of an outrageous/obscene side show.

member banks get 6% of their investment in the stock, not 6% of loan profits

 

[Cowlesy]

member banks get 6% of their investment in the stock, not 6% of loan profits

Can I invest in the Fed and get a guaranteed 6% yearly dividend? I'll take it!

 

[dujac]

Can I invest in the Fed and get a guaranteed 6% yearly dividend? I'll take it!

no, it doesn't work like that

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

 

[Cowlesy]

i'd like to address the myths, one at a time


myth number one

the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders

anyone that disagrees with this being a myth is welcome to disclose evidence against the assertion

So you sign-up on this messageboard and want to address the Federal Reserve. Are you an employee or consultant of the Federal Reserve or an affiliated entity trying to combat 'misconceptions' about the Federal Reserve System?

 

[Cowlesy]

no, it doesn't work like that

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

Yes, we get that. A 6% return on member bank capital is still great if you can get it.

 

[hazek]

here's another one of g edward griffin's videos

in this one he says that noah's ark is over on mount judi

You know what's funny though. He agrees with you. He also says that: "myth number one

the federal reserve system is a 'for profit' institution that retains its profits and divides them among its share holders" is merely a myth.


Btw I've never seen that video you posted before so I watched a few seconds of it and as soon as I got to the mark 2:15 where he says: "but the purpose of this presentation is to examine the historical and archeological records, nothing more" which I really don't understand how anything after that could hurt his credibility.

And btw I'm a very vocal atheist. Others on this forum will confirm!

 

[Cowlesy]

no, it doesn't work like that

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

Why don't you address my pointing out that the Federal Reserve by purchasing garbage assets from their member banks at par or with a slight haircut during the banking crisis saved those banks from massive losses (given the fact there were no bids for those toxic assets so they were bailed out by the Fed), thereby saving those banks from insolvency caused by massive losses.

 

[dannno]

there are no individual owners of federal reserve bank stock, it's owned by member banks

Oh, I wasn't aware that individuals don't own banks, thanks for letting me know

 

[Mini-Me]

member banks get 6% of their investment in the stock, not 6% of loan profits

Perhaps there's a bit of a semantic difference, but it's not that substantive of one. (Where does the stock gets its value, and where does the money come from to pay dividends?) It's still called "making a killing," not that that's the primary reason to oppose the Fed.* I'm guessing you're probably here to troll, but if you educate a few Money Masters viewers about Fed myths, I can't really complain. It's too easy to get confused about the Fed and hate them for the wrong reason.

*The primary reason is the destructiveness of manipulated interest rates and an inflationary currency, especially an inflationary currency declared "legal tender" and shielded from competition (no, foreign currencies don't count).

 

[dujac]

So you sign-up on this messageboard and want to address the Federal Reserve. Are you an employee or consultant of the Federal Reserve or an affiliated entity trying to combat 'misconceptions' about the Federal Reserve System?

no, i'm a private business owner with no connection to any government institution