jem said to someone else... let me reword it then... supportive of the stock market and big bank earnings. besides I have no idea how you would know the fed is not supporting the stock market. its not like they open the books on how they create money to lend or where it goes. Its a very private bank. -------------------------------- Martys snarky comment in response Yes, they're hiding a few annual GDPs worth of assets they've bought on the sly in a vault in Switzerland... And has anyone ever seen Britney Spears and Ben Bernanke in the same room at the same time? Just sayin'... Edit/Delete ⢠Quote ⢠Complain -------- jem why not address whether the fed is a private bank... cause that was one of the points. why not even address whether the fed buys futures or stocks to support the market? why would you feel the need to post such worthless drivel? Besides why would they hide a few annual GDPS when they can create unlimited amounts.... according to bloomberg they lent out 7.7 trillion during the financial crisis. Look I don't hate the Fed they probably do a better job than this congress would... but I sure wish the fed would let the market clean itself up instead of this perpetual bubble cycle. How does one plan for the future knowing the if the fed loses control of interest rates the bubble goes pop or boom.
you bring up point that the govt gets to appt some people to the board... that does not change a private bank into a hybrid bank. also... in terms of your hybrid argument most of the control and the profits from printing money happen at the member level. in short... you have a reality show song and dance in front of congress but control and profits from printing money is in private hands. http://www.monetary.org/is-the-fede...r-a-privately-controlled-organization/2008/02 Several legal proceedings further illuminate the private aspects of the Fed. This case refers to several of those cases. 1) JOHN L. LEWIS, Plaintiff/Appellant, vs. UNITED STATES OF AMERICA, Defendant/Appellee. (No. 80-5905, UNITED STATES COURT OF APPEALS, NINTH CIRCUIT 680 F.2d 1239; 1982 U.S. App. LEXIS 20002; March 2, 1982, Submitted; April 19, 1982, Decided) [Lewis had been injured by a car owned by the San Francisco Fed and sued the US Government for damages. Note that this ruling particularly applies to the regional Federal Reserve Banks, not necessarily the Federal Reserve Board. Thus even more ambiguity!] Excerpts from the ruling: The district court dismissed, holding that the Federal Reserve Bank is not a federal agency within the meaning of the Federal Reserve Act and that the court therefore lacked subject matter jurisdictionâ¦. âFederal agencyâ is defined as: the executive departments, the military departments, independent establishments of the United States, and corporations acting primarily as instrumentalities of the United States, but does not include any contractors with the United States. There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act (28 U.S.C. § 2671), but the critical factor is the existence of federal government control over the âdetailed physical performanceâ and âday to day operationâ of that entityâ¦. Other factors courts have considered include whether the entity is an independent corporationâ¦, whether the government is involved in the entityâs financesâ¦. and whether the mission of the entity furthers the policy of the United States⦠Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purposes of the FTCA, but are independent, privately owned and locally controlled corporations. Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two thirds of each Bankâs nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors. 12 U.S.C. § 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. § 341, and appoint officers to implement and supervise daily Bank activities. These activities include collecting and clearing checks, making advances to private and commercial entities, holding reserves for member banks, discounting the notes of member banks, and buying and selling securities on the open market. See 12 U.S.C. §§ 341 [**5] 361â¦. It is evident from the legislative history of the Federal Reserve Act that Congress did not intend to give the federal government direction over the daily operation of the Reserve Banks: It is proposed that the Government shall retain sufficient power over the reserve banks to enable it to exercise a direct authority when necessary to do soâ¦. In other words, the reserve-bank plan retains to the Government power over the exercise of the broader banking functions, while it leaves to individuals and privately owned institutions the actual direction of routineâ¦[Note: neither the Act, nor this court explained how that is done] the Federal Reserve Banks, though heavily regulated, are locally controlled by their member banks. Unlike typical federal agencies, each bank is empowered to hire and fire employees at will. Bank employees do not participate in the Civil Service Retirement System. They are covered by workerâs compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act. Employees traveling on Bank business are not subject to federal travel regulations and do not receive government [**7] employee discounts on lodging and services. The Banks are listed neither as âwholly ownedâ government corporations under 31 U.S.C. § 846 nor as âmixed ownershipâ corporations under 31 U.S.C. § 856, ⦠a factor considered in Pearl v. United States, 230 F.2d 243 (10th Cir. 1956), which held that the Civil Air Patrol is not a federal agency under the Act. ⦠Additionally, Reserve Banks, as privately owned entities, receive no appropriated funds from Congress. â¦The Reserve Banks have properly been held to be federal instrumentalities for some purposesâ¦.The Reserve Banks are deemed to [**10] be federal instrumentalities for purposes of immunity from state taxationâ¦. The Reserve Banks, which further the nationâs fiscal policy, clearly perform an important governmental functionâ¦.Performance of an important governmental function, however, [**11] is but a single factor and not determinative in tort claims actionsâ¦. Brinkâs Inc. v. Board of Governors of the Federal Reserve System, 466 F. Supp. 116 (D.D.C.1979), held that a Federal Reserve Bank is a federal [**12] instrumentality for purposes of the Service Contract Act, 41 U.S.C. § 351. ⦠For these reasons we hold that the Reserve Banks are not federal agencies for purposes of the Federal Tort Claims Act and we affirm the judgment of the district court. [end of excerpts]
your passive aggressive idiot nature is hereby preserved. If you don't think the FED is a private bank try making the argument.... instead of being an arrogant fool who substitutes leftist talking points for actually thought.
You're repeating as gospel truth actual leftist(as opposed to liberal, but you have no idea what the diff is either, do you?) talking points, and in your bottomless ignorance have no idea that you're doing so.
I would agree that liberals, I mean old school liberals would be for smaller govt and quite concerned about private central banks. As a libertarian I consider myself an old school liberal in many ways. On the contrary leftists are friends of big money big control big cronies and really big bankers. Who knows there may be a few who are so left they demand state control of all industries... but leftists and cronism have gone together since the beginning. Big central power vs freedom. note.. I have not even argued the FED should be disbanded. I prefer the FED to congress. My argument is that the FED should be going to Congress and telling them if they don't cap the spending they will destroy the economy. If the Fed wants to bail out its member banks that is what I would expect them to do. If the Fed got the privilege to make money off the creation of money and creating a bit of inflation fine. Let them continue to serve the public interest and they wont get much of argument from me. But don't try to tell me its not a private bank.
Finally with regard to the hybrid argument. What does 7 out of 12 Pres... appt members of the FOMC board really do... when they have to come to a consensus and all that consensus really is, is a direction to the New York Fund to conducts operations consistent with their goals. http://www.federalreserve.gov/pubs/frseries/frseri2.htm Finally, the Committee must reach a consensus regarding the appropriate course for policy, which is incorporated in a directive to the Federal Reserve Bank of New Yorkâthe Bank that executes transactions for the System Open Market Account. The directive is cast in terms designed to provide guidance to the Manager in the conduct of day-to-day open market operations. The directive sets forth the Committee's objectives for long-run growth of certain key monetary and credit aggregates. It also sets forth operating guidelines for the degree of ease or restraint to be sought in reserve conditions and expectations with regard to short-term rates of growth in the monetary aggregates. Policy is implemented with emphasis on supplying reserves in a manner consistent with these objectives and with the nation's broader economic objectives.
Not sure about this, tbh... As far as I know, the general principles behind the structure of the boards are the same for all the regional Reserve Banks. Obviously, the particular choices that have been made can be more or less controversial and the NY Fed has done its share of dubious things. And I don't have a problem with the Fed being changed in some way. Ultimately, US is supposed to be a democracy, so the democratic process that created the Fed can be used to change its nature. As long as there's a degree of independence from the executive and legislative branches (which was the whole point of the original public/private arrangement), I don't have a problem.
Erm, no. Could you be kind enough to a) not quote me inaccurately; b) not make statements that are patently untrue? Firstly, like I said the Board of Governors of the Federal Reserve System is a federal government agency in the clearest and most obvious sense. The power to appoint ALL of its members, the chairman, and the vice chairman is vested in the president of the United States, with the Senate having a veto power over any appointment. Secondly, no, control most definitely does NOT "happen" at the regional Reserve Bank level, as explicitly stated in the Federal Reserve Act. The decision to engage in any quantitative easing (which is what you might be referring to by "printing money") is made by the FOMC where, at all times, the majority of members (they are permanent) are the government appointees from the Board of Governors. As to profits, they certainly don't "happen" at the member level. Again I would refer you to the Federal Reserve Act, as well as to the fact that, after expenses, all of the net earnings of the Reserve Banks are paid into the US treasury. Thus, if you want to be specific and technical, the Fed, according to GAAP, is a Variable Interest Entity (VIE) of the federal government of the United States. And no, this isn't song and dance. It's accounting. The quote that you have provided from the link above isn't saying anything new. Indeed, like we all have agreed regional Reserve Banks are privately owned. If you want me to comment on the other claims made in the article, I could do that, but that would be properly boring. At any rate, let's cut to the chase. Seeing as how you're not happy with the private ownership of the Regional Banks, I presume that you want the Federal Reserve System to be fully part of the federal government. Is that correct? You want to remove the private ownership element from the equation completely?
Quite clearly, "consensus" is the wrong word here, given that, at pretty much every meeting, there are dissenters (e.g. George and Bullard at the Jun FOMC), who vote against the policy decisions made. And the whole point of FOMC is to represent, at least symbolically, a mix of public (the government-appointed Board members) and "private" (regional Reserve Bank presidents) interests.
+1 on what Nine_Ender said. As long as companies are growing and showing solid profits it makes no sense for a market correction of 90%. The market can fall to return P/E ratios to a bit more sane levels, but why would Microsoft all of a sudden be worth $3 a share when itâs still making a lot of money.