FACT: There's a shady group of banks that the Fed deals with directly to print massive amount of their so called 'money'. FACT; The Fed also BUYS from them exclusively when they do these so called 'open' market operations. FACT: Goldman Sachs is one of these banks. How can the Fed not be evil??
1. Define "private". 2. False. 3. False. 4. Irrelevant and meaningless. So if these are your "facts", I dread to think what your conjectures look like.
perception is reality and yet reality is not necessarily perception. The people of these United States are looking at the FED which might not be to your liking but too bad, the FED is doomed to failure, you have to accept it.
Is this FED (call capital) the same as the Fed (note the lower case 'e' and 'd') and the same as The Federal Reserve? I saw a youtube video the other day that made an interesting case that there are in fact THREE entities.
Keep it simple: - The Fed has been kiting checks since at least 1971. - Lack of "consideration" when the contract (bond) was created, makes that contract null and void. - Treasury owes nothing to the Fed. "swipe of a pen"
This is great! Does this mean I owe nothing on my mortgage either? Since banks are just doing check kiting when they advanced the money to the seller on my behalf?
You think that the FED has a future? I can't see how a glorified wholesale bank that has to ask for the government to step in to give bailouts when it is its job can continue to function. It can't control money supply anymore other than through QE. All it is now is a glorified printing press. Why not just shut it down and get some crooks to set up a press in their living room. It provides the same function.
If you try this, lemme know how it works. I'd be interested... There are some accusations which are true against the Fed, to wit: 1 - It is an engine of inflation, but then that's in the design. 2 - It never has been effective at stopping bank runs or at regulating the tendency of banks to go off the rails on speculative binges, a thing we relearned in 2008. The FDIC is a lot better at it, and in a sane world they'd have sole jurisdiction over that, for the same reason a life insurance company might be interested in whether you sky dive. 3 - They suck at setting interest rates. The false ones: 1 - Mostly, they don't blow bubbles. The dot-com thingie would've happened anyway, and US real estate was an accident waiting to happen for a looonnng time. Fannie, Freddie, and the infamous mortgage interest deduction had a lot more to do with it. Bubbles predate the Fed: from the South Sea one and Law's French bank, to the time in Italy in the 80's when the communist newspaper began printing stock quotes. As James Grant asked at the time, "Who's left to buy? The anarchists?" 2 - The private bank nonsense: if this were true, would Glass-Steagall have been able to specifically order that the Fed meet in committee from time to time to decide on monetary policy? Would they send their profits to the Treasury? Obviously, no.
If the Fed is a private operation then why does it give over 97% (over $79BN in 2010) of it's annual profit every year to the US Treasury? The Fed does not print money at interest. It earns interest, set by the Treasury, on the bonds it holds, about $1.7TN or 2/3 of it's total assets. The Fed does not lend money to the US government, only member banks. The government incurs debt by authorizing the Treasury to issue bonds. The Fed is one of the largest purchasers of those bonds. The depreciation of the dollar is not a linear function of time since the Fed was created. In fact, the dollar lost 25% of its value between the Spanish-American War and 1913, when the Fed was created. The dollar has also lost 92% of it's purchasing power since the end of Bretton Woods in 1971.