The Federal Reserve System - Purposes & Functions

Discussion in 'Economics' started by 2cents, Aug 17, 2006.

  1. not exactly a page turner but perhaps for people who have the curiosity to look & learn by themselves instead of from austrian school / libertarian etc tabloid economist 'sources'...

    http://federalreserve.gov/pf/pf.htm

    chap 2 & 3 notably provide a good overview of monetary policy-related matters and how the Fed goes about them

    of course we're still some way from a proper layman version but thats not a bad starting point...
     
  2. Pekelo

    Pekelo

    The Federal Reserve is NOT:

    - Federal (it is private)
    - a Reserve (it can create money)

    But it is:

    - unconstitutional (noone but Congress can/should print money)
    -a quasi-government institution


    What else would you like to know? Oh yes, it was conceived at a secret meeting of a banking cartel. The best part is how it was voted into existence, but you have to read the book:

    http://www.amazon.com/gp/product/09...820104/ref=sr_1_1/103-0385151-4208634?ie=UTF8

    OK, I tell you since it was posted here already:

    "The most powerful organization in America (the Federal Reserve - which is not Federal or a Reserve) was created when the Senate was on Christmas recess and three senators passed the law creating the Fed on a voice vote..."
     
  3. on the new york fed website you can observe fed temporary operations, and notice the relationship to bottoms and critical resistance levels in US equity.

    now, as a lay person, how am i to avoid the conclusion that the fed and money center banks who execute these transactions are working together to steer this market for their own private interest? the banks who execute the fed's operations also trade against retail

    http://www.newyorkfed.org/markets/openmarket.html

    (temporary operations link on the left panel)
     
  4. should open market operations should be conducted on an exchange vs otc?
     
  5. that falls into 2cents grouping of austrian, libertarian or tabloid.

    btw 2cents, that's an excellent idea. it's a fascinating question of conflict of interest and when I have my case fleshed out more, presenting feedback directly to the federal reserve system of corporations is a good idea.

    are there any omissions in my view on that conflict of interest? perhaps it's a testiment to the true illiquidity of these markets more than a deliberate cooperative process between fed corporation and bank shareholder. it makes sense to me though, the banks help the fed hold the market up, and in return they can aggregate retail shorts and squeeze them with gargantuan infusions of temporary liquidity. am i missing something there?
     
  6. u bet it does... unlike Hayek, for all practical matters Rothbart's definitely useless...

    re your point, fwiw i do think illiquidity and v.low transactional volumes (relatively speaking) wld be factors in the cost/benefit analysis but that shldn't be the only angle... not a bad idea to give democratic processes such as feedback a chance... and always best to make a case directly if you believe there are issues of fairness involved (i don't in this instance, but that's just one view)... there could always be... if i were you i would proceed via open questions as to how it works in practice, and ask for a working example etc, first... have fun ;-)

    here's a good read fyi if you want to get a glimpse into operational type details http://research.stlouisfed.org/aggreg/meeks.pdf#search="open market operations" shld still be v. representative of how things work today...
     
  7. Researching "what" something is, like how it's structured and set up isn't as fascinating as "why" and "how". Read up on the background of the formation of the Fed in "The Creature from Jekyll Island". :)
     
  8. LOL, now you are just antagonizing. But in a comedic way, it's cute.

    I've been so wrong, all this time I was getting my info from a range of sources when the whole time I should have been going to www.federalreserve.gov for 100% accurate and unbiased information. After all, it has a ".gov" so it has to be a government institution. :confused: :confused: :confused:
     
    #10     Aug 17, 2006