I admit I didn't watch beyond the first laugh. I like your Abbot and Costello skit better. I'll see if I can last until the end.
OK, I persevered to the end. I think I can answer the question as soon as I figure out how many years it will be before the girl is older than Costello.
You are now waffling, which means you are trying to come with an answer that fits your narrative of how inflation is "not benefiting the central bank". Dude, you are a silly man. Inflation is bad.
Because otherwise the Fed would offer arbitrage to clearing partners. Has nothing to do with whether it's private or public.
No. I'm not! I'm just refusing to answer a question based on an Abbott and Costello like comedy skit. You can't be serious. The Zeitgeist video has nothing to do with reality. It is totally off the wall and wrong in virtually everything it claims. The Fed does not buy bonds from the government, i.e., the Treasury, it "buys" them at the market price from the secondary market. [What it is really doing, in net effect, is exchanging Bank Reserves for Treasuries using money previously "printed" by the Fed when it covered a Treasury overdraft.] And that's just for starters. Virtually everything about that video is wrong. I just assumed you were joking, because no informed person would throw that Zeitgeist video up here and think it was describing the real world. It completely ignores the reincarnation of the Fed in its modern form after the Banking laws of the 1930s were passed. Zeitgeist means "time ghost" right? I guess it is fair game then for the video to describe events as though time stood still. I don't mean to jump all over you. But that video is ridiculous.
I offer the following Zakaria opinion piece that appeared on CNN this past Sunday as support for my view expressed in the lead post in this thread.
I'll have to disagree with you. The Fed nowadays is clearly a part of the government. The President appoints the board members and the Senate approves or rejects the appointments. any profits made by the Federal reserve system flow directly back to the U.S. Treasury. The Federal Reserve, as a Federal Agency, was given independence from the Treasury and isolated from direct political influences by statute. But that certainly does not mean the Fed is not government agency. You will be pleased to know that the 2nd Circuit Court ruled definitively on this very issue not long ago (2019). The Fed is a part of the U.S. Government. It is created by Congress. It is funded by direct appropriation from Congress, it's Board of Governors is appointed by the Administrative Branch of the Government and any net profits flow directly back to the U.S. Treasury. Understanding this is key to understanding the origin of the Dollar the Government spends, how money it gets into the economy, what role taxes play, what role Treasuries play, why the creation of additional new money -- other than credit, or inside money -- is necessarily linked to deficit spending, and why the U.S. government can not borrow in U.S. dollars to spend in U.S. dollars. It is impossible for the Government to borrow in U.S. dollars, of course, because the government would then be borrowing from itself. You wrote: "I never claimed the Fed to be a private or for profit entity. In fact I stated the opposite, that the Fed is a supposed independent entity that is given a mandate to manage monetary policy to balance the goal of moderate inflation with full employment. It's neither controlled by the administration nor congress or the senate, though it is held accountable and reports to oversight committees." I agree with this and it is not inconsistent with the fed being an independent Government entity. But then you wrote: Your statement "but then today's Fed is a part of the government" is plain and simply wrong." Which is inconsistent with the Fed being an independent part of Government! That leads me to believe you consider the Fed to be both independent and not a part of Government --- something I believe is wrong. So I ask you, if the Fed is not a part of the government, according to you, and it is not a "Private for Profit Entity", something I believe you accept, what, in your mind, is the Fed, and what kind of charter does it operate under? Here is the 2019 Opinion of the Second Circuit in Wells Fargo v. United States, 18-1746 regarding the issue of whether the Federal Reserve Banks should be regarded as a functionally federal or private institution, or something else. And here below, for convenience, the salient features of the Second Circuits Opinion are excerpted and compressed. The entire opinion is 43 pages long, but well worth reading in my opinion.. (underlining below is mine. Thanks to Nathan Tankus for taking time to collect these salient features of the Second Circuits opinion on the Question of "who owns the Fed" ) Congress has transferred functional ownership and control of the FRBs [Federal Reserve Banks] to the Treasury and to the [Federal Reserve] Board [...] Further, we are not moved, as the district court was, by the fact that private banks serve as the FRBs’ nominal shareholders [...] Today, the United States, not the nominal shareholders, are the economic owners of the FRBs. Among other things, Congress has provided that the net earnings of the FRBs be “recorded as revenue by the Department of the Treasury,” FRB Amici at 17, and the FRBs are required to remit all their excess earnings to the United States Treasury [...] Thus, the “capital” contributions made by member banks function as debt interests owned by the member banks, not equity interest [...] money created for the Term Auction Facility or the Discount Window is as much a product of the “public fisc” as money that is distributed by the Treasury Department. Everything I have studied leads me to believe that the Second Circuit was Correct in its finding. I noted in another post that I regularly use a simplified model which has the Treasury and the Central Bank lumped together with other parts of the U.S. Government, but without any people, on one side of a ledger, and the Private sector containing all the people, on the other side of the ledger. That this produces net results in agreement with what is actually observed, is yet another indication that today's U.S. Central bank is thoroughly Government. Were it not, the simplified model would produce net transfers of assets and liabilities inconsistent with what is observed. A person who does not accept that the Central Bank is a part of the Government will be unable to understand the logic underlying my posts.
I have to repeat myself that what you think is utterly irrelevant and meaningless. What matters are facts and laws and regulations. We can debate how institutions veered from their original mandate and regulatory environment. But that was not the point I made. You misstated the function and mandate of the Fed, plain and simple.