The Federal Reserve
- Thread starter Salamando
- Start date
cjhowe
Member
- Joined
- Jun 30, 2007
- Messages
- 1,407
Their purpose is to eat children...
For real though, their mission on their website is pretty clear about what their role is: http://www.federalreserve.gov/generalinfo/mission/default.htm
* conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
* supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers
* maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
* providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system
essentially to be the bank of last resort and the credit card company of Congress.
For real though, their mission on their website is pretty clear about what their role is: http://www.federalreserve.gov/generalinfo/mission/default.htm
* conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
* supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers
* maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
* providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system
essentially to be the bank of last resort and the credit card company of Congress.
Broadlighter
Member
- Joined
- Jun 6, 2007
- Messages
- 772
My principal gripe with the Federal Reserve is that it is a private corporation that does all the things that CJHowe said in his post - for profit.
C
Chester Copperpot
Guest
The federal reserve sells America money... currency.. All the paper dollars you see as well as all the electronic credits you dont see.
This is how it works
Federal Reserve acquires $100 Bill for 4 cents. They then turn around and sell that $100 Bill to the Govt for $100 Face amount.. The country pays in Treasury bonds, spends its money, but then still has an outstanding debt for the $100.
Thats pretty much it in a nutshell. Thats why under the current banking system its almost impossible to pay off the debt.
Here is a very good video you can watch that explains our monetary system and who runs it...
http://video.google.com/videoplay?docid=-9050474362583451279
cjhowe
Member
- Joined
- Jun 30, 2007
- Messages
- 1,407
Absent the Federal Reserve Act, the free market would allow such an institution to exist, it is essentially what J.P. Morgan already was in 1907. The only thing the Fed does that the free market would not allow for is to be a credit card company to Congress.
cjhowe
Member
- Joined
- Jun 30, 2007
- Messages
- 1,407
No, it's not. I can't even tell you where you got off on the wrong track, because your train ever got on the right track.
Johnnybags
Member
- Joined
- Jul 13, 2007
- Messages
- 4,126
Federal Reserve
is a congressional debit card, ushering in an inflation tax vs increasing income tax, its also a counterfeiter of last resort to the elite, in case their investments go sour, and finally, it is a manipulator of markets and statistics to spoonfeed the masses by directing investment. The best way to look at it is its a maintainer and insurer of the status quo for the elite and politicians on your back. The only real power they have is legalized theft of your buying power.
is a congressional debit card, ushering in an inflation tax vs increasing income tax, its also a counterfeiter of last resort to the elite, in case their investments go sour, and finally, it is a manipulator of markets and statistics to spoonfeed the masses by directing investment. The best way to look at it is its a maintainer and insurer of the status quo for the elite and politicians on your back. The only real power they have is legalized theft of your buying power.
sickmint79
Member
- Joined
- Jul 3, 2007
- Messages
- 534
i have looked into this too, there is a lot of misinformation and misperceptions on how it works. personally i don't think it is flawed because parts are privately owned, i think it's flawed because of the keyensian economics behind it; instead of the free market determining the value of money, the government is trying to manipulate and control it through fiscal and monetary policy.
"money as debt" on google video is a great video and free from conspiracy.
"Money, Banking and the Federal Reserve" put out by the mises institute is also a great video.
fiat empire i don't recall, think it was ok.
money masters is older, longer, and has some conspiracy stuff mixed in. goes over a lot more history too, which i liked a lot. the conspiratorial stuff is interesting too. certainly no belief is required in conspiracy to believe the current system is mismanaged at best, or a gauranteed failure at worst.
"money as debt" on google video is a great video and free from conspiracy.
"Money, Banking and the Federal Reserve" put out by the mises institute is also a great video.
fiat empire i don't recall, think it was ok.
money masters is older, longer, and has some conspiracy stuff mixed in. goes over a lot more history too, which i liked a lot. the conspiratorial stuff is interesting too. certainly no belief is required in conspiracy to believe the current system is mismanaged at best, or a gauranteed failure at worst.
SeanEdwards
Member
- Joined
- May 21, 2007
- Messages
- 4,407
The main raison d'etre is to be the lender of last resort. The idea is that by integrating the banking system they can prevent bank runs and panics by standing ready to infuse cash into the banking system.
Of course, the unintended consequence is to facilitate bad speculation and unscrupulous banking practices, since bankers know that no matter how flagrantly irresponsible they behave, the fed is on tap to distribute the cost of their errors onto the American taxpayer.
cjhowe
Member
- Joined
- Jun 30, 2007
- Messages
- 1,407
The part that goes against the free market is the part that benefits those conspiracy theorists in their everyday lives. If it were free market, there would be no goal of maximum employment, only maximum profits. At the same time, given a long enough outlook, maximum employment should lead to maximum profits. However, the free market generally prioritizes shorter time period outlooks.
micahnelson
Member
- Joined
- Jun 18, 2007
- Messages
- 3,077
http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212
This is a great book on the matter. Ron Paul is quoted on the back of it supporting the book. Some of the conclusions as to the "Why's" get into the idea of a New World Order, but the facts about banking, central banks, and currency are all there. The book will be a big eye opener.
This is a great book on the matter. Ron Paul is quoted on the back of it supporting the book. Some of the conclusions as to the "Why's" get into the idea of a New World Order, but the facts about banking, central banks, and currency are all there. The book will be a big eye opener.
C
Chester Copperpot
Guest
You can go check out the term "monetizing the debt" because that is how it works.
Granted, I may have simplified the process so people can understand it, but that is esentially how it work.
The govt pays $100 for a $100 Bill that only costs the Federal Reserve 4 cents.
and the process is what Ive already said.
ARealConservative
Member
- Joined
- May 16, 2007
- Messages
- 4,771
It was to solve a legitimate problem with the gold standard, namely that the lack of new discovery of gold was preventing the economy from growing.
Furthermore, prices in a gold standard are deflationary in nature, which also stifles economic growth. Real infaltion of 3-4% is very beneficial for the economy (but like we all know - we aren't at 3-4% inflation - that is government fudged numbers).
If you take out the human element of corruption - a fiat economy will always outperform a commodity based currency. Keep that in mind when debating people - the issue is corruptability of the fiat currency - not fiat currency itself.
cjhowe
Member
- Joined
- Jun 30, 2007
- Messages
- 1,407
No, you are confusing issues of printing and engraving with issues of debt.
C
Chester Copperpot
Guest
Im not sure what you mean by that but. The Federal Reserve buy dollar bills from the Bureau of Engraving and Printing for 4 cents per bill. They then sell those bills to the govt for face amount in exchange for govt securitites.
Technically the 'printing' of the money doesnt cause debt to go up. However the 'issuance' of the money does. Before that money goes into circulation there must be an equivalent amount of debt created. the owner of th new debt is the federal reserve.
Therefore a $100 Bill that the federal reserve gets to acquire for 4 cents, it then turns around and sells for $100. It is quite a racket.
cjhowe
Member
- Joined
- Jun 30, 2007
- Messages
- 1,407
Everyone likes to try to mix three very separate issues when they attack the Fed to mislead people as to the extent of the problem. It's a problem that should be dealt with, but it's not a 50 foot monster. The three issues that people mix are.
1. Cost of printing/engraving
2. Fractional Reserve Lending
3. Purchase and sale of Treasury Notes (U.S. debt)
1. This is such a nonsensical thing to focus on, almost like complaining to IBM that they purchase pens and pencils. This has absolutely nothing to do with debt or inflation.
2. Fractional Reserve Lending will occur in any commodity market where the commodity is perfectly fungible. Just look at the futures market. The Fed sets a reserve requirement that should be adequate provided JAMA doesn't release a study saying that bathing in Federal Reserve notes cure cancer. At the same the same time, this can produce inflation because it allows for too many dollars to chase too few goods.
3. This is a simple exchange of the u.s. government promising future tax receipts for federal reserve notes to spend on programs.
Lord Xar
Member
- Joined
- Jun 24, 2007
- Messages
- 7,803
? Call me crazy but aren't the latter posters views completely relevant and it is you who is mixing things up?
In regards to point #1, my feeling was that the "cost to print/engrave" is $4, YET they are selling at $100. Its not like the example you gave because IBM does not function in the realm of pens and pencils to set precedence for its program. The value of the printed money is brought up, in my eyes, to lend example that a 'business' is set up to print money with NO value other than the paper it is printed on and sells it to the government. I concede I might be off base here but that is what i got out of it.
Similar threads
