or here: http://landru.myhome.net/monques/moneyfacts.html#MONEY SUBCOMITTEE ON DOMESTIC FINANCE COMMITTEE ON BANKING AND CURRENCY HOUSE OF REPRESENTATIVES 88th Congress, 2nd Session SEPTEMBER 21, 1964 WHO DETERMINES THE MONEY SUPPLY? 93. Who appoints members of the Federal Open Market Committee? Seven of the nineteen members of the "discussion" Committee are appointed by the President of the United States and confirmed by the Senate of the United States. Their term is 14 years. The other 12 participants at Open Market Committee meetings are elected through votes of private commercial bankers; specifically, they are the presidents of the 12 Federal Reserve banks, elected to their posts indirectly by bankers from banks which are members of the Federal Reserve System. 94. What are the most important Open Market Committee powers? The Open Market Committee has the power to determine the Nation's supply of money and credit, and therefore, the general level of interest rates, among other things. 95. How does the Federal Reserve influence interest rates? By open market operations, and by setting the required reserves of member banks, the Federal Reserve determines the amount available for lending. This together with the demand for loanable funds is the heart of the market for money that sets interest rates. In addition, by open market operations, the Federal Reserve can effect the level of interest rates on Government bonds. And finally, the Federal Reserve influences expectations about interest rates. 96. Why is the Federal Open Market Committee one of the most powerful groups of men in our country? Because in many ways their power is equal to that of the President in deciding how the world's greatest economic mechanism will operate. By regulating the supply of money, the Committee can control the general level of interest rates. This in turn is one of the major determinants of the level of business activity in the country. The Committee, then, has the power to offset any action taken by anyone to stimulate or restrain the economy. This indeed is power. 97. Are current open market operations what the founders of the Federal Reserve System intended? No. It was expected that in monetizing "eligible" short term commercial paper, the Federal Reserve would provide sufficient liquidity to sound banks in periods of need (or restrain excessive credit expansion). While the Federal Reserve was expected to exert supervisory powers, it was expected that the money supply and interest rates, would be fully responsive to business conditions. Thus the discount rate, rather than open market operations was regarded as the Federal Reserve's most important tool. 98. Why was the discount rate regarded as an important regulatory tool? Because under the original Federal Reserve arrangement, no specific limits were placed on the amount of money the system could create. After all, if the banks had eligible paper to rediscount, then the regional bank would automatically create reserves. This raised the possibility of infinite money creation provided the banks' lending rates and the system's charges were in a fixed favorable relation. But if the system could control the discount rate, it could discourage rediscounting or borrowing from it simply by raising its discount rate high enough. At a high enough rate, the commercial banks would find no businessmen willing to borrow. Thus the supply of eligible paper available to the commercial banks would dry up and, in turn, the commercial banks would be unable to acquire more reserves by discounting. The automatic system then had a regulator; namely, the discount rate. 99. Is eligible paper discounted much today? Very rarely. 100. Why have open market operations replaced discounting as the most important means of regulating the money supply? Basically, because the Federal Reserve found open market operations a more sensitive tool to control the money supply. And through the years the Federal Reserve has decided that its responsibilities were not consistent with the authorization of an automatic money supply. 101. Precisely what does the Federal Open Market Committee do? It determines the amount of government securities the Federal Reserve will buy and sell, in order to influence the level of bank reserves. In essence, the Committee determines U. S. monetary policy. 102. What functions have been left to the regional banks? Now that discounting eligible paper is rarely used, the regional Federal Reserve banks clear checks and gather statistics and other economic data. 103. Have the intentions of the founders of the Federal Reserve System been altered by the turn to open market operations? Yes, when the System was originally founded a struggle was waged over who would control the Federal Reserveâpublic or private interest. The solution was a compromise. But what (in 1913) was the master switch governing the money supplyâthe discount rateâwas left in the hands of a totally public bodyâthe Federal Reserve Board in Washington. This was a deliberate act. President Wilson rejected the notion of diluting the public nature of the Board when he said, "Which one of you gentlemen would have me select the presidents of railroads to be on the Interstate Commerce Commission to fix passenger rates and freight rates?" But when Congress in 1933 and 1935 authorized the Open Market Committee, which in effect succeeded to the policymaking role of the Board, it gave private interest a firm foothold in determining monetary policyâthe money supply and the general level of interest rates. Five of the twelve voting members of the Open Market Committee are regional bank presidents. These men hold their offices through the votes of bank directors, two-thirds of whom are elected by private bankers. The other seven bank presidents, of course, participate in the discussions of the Open Market Committtee. The upshot is that men whose views must meet the test of the private bank-selected directors help determine the Government's monetary policy. A purely public group has given way to a mixed body with questionable qualifications to represent the public interest.
Until you understand the basics and the history you'll never be able to conclude if the other writers are knowledgeable or ignorant. Unfortunately, there are many ignorant people writing about the workings of the Federal Reserve System.
Are the SUBCOMITTEE ON DOMESTIC FINANCE COMMITTEE ON BANKING AND CURRENCY HOUSE OF REPRESENTATIVES composed of ignorant people about the FED ? No so there is no problem. http://landru.myhome.net/monques/moneyfacts.html#MONEY SUBCOMITTEE ON DOMESTIC FINANCE COMMITTEE ON BANKING AND CURRENCY HOUSE OF REPRESENTATIVES 88th Congress, 2nd Session SEPTEMBER 21, 1964 WHO DETERMINES THE MONEY SUPPLY? 93. Who appoints members of the Federal Open Market Committee? Seven of the nineteen members of the "discussion" Committee are appointed by the President of the United States and confirmed by the Senate of the United States. Their term is 14 years. The other 12 participants at Open Market Committee meetings are elected through votes of private commercial bankers; specifically, they are the presidents of the 12 Federal Reserve banks, elected to their posts indirectly by bankers from banks which are members of the Federal Reserve System. 94. What are the most important Open Market Committee powers? The Open Market Committee has the power to determine the Nation's supply of money and credit, and therefore, the general level of interest rates, among other things. 95. How does the Federal Reserve influence interest rates? By open market operations, and by setting the required reserves of member banks, the Federal Reserve determines the amount available for lending. This together with the demand for loanable funds is the heart of the market for money that sets interest rates. In addition, by open market operations, the Federal Reserve can effect the level of interest rates on Government bonds. And finally, the Federal Reserve influences expectations about interest rates. 96. Why is the Federal Open Market Committee one of the most powerful groups of men in our country? Because in many ways their power is equal to that of the President in deciding how the world's greatest economic mechanism will operate. By regulating the supply of money, the Committee can control the general level of interest rates. This in turn is one of the major determinants of the level of business activity in the country. The Committee, then, has the power to offset any action taken by anyone to stimulate or restrain the economy. This indeed is power. 97. Are current open market operations what the founders of the Federal Reserve System intended? No. It was expected that in monetizing "eligible" short term commercial paper, the Federal Reserve would provide sufficient liquidity to sound banks in periods of need (or restrain excessive credit expansion). While the Federal Reserve was expected to exert supervisory powers, it was expected that the money supply and interest rates, would be fully responsive to business conditions. Thus the discount rate, rather than open market operations was regarded as the Federal Reserve's most important tool. 98. Why was the discount rate regarded as an important regulatory tool? Because under the original Federal Reserve arrangement, no specific limits were placed on the amount of money the system could create. After all, if the banks had eligible paper to rediscount, then the regional bank would automatically create reserves. This raised the possibility of infinite money creation provided the banks' lending rates and the system's charges were in a fixed favorable relation. But if the system could control the discount rate, it could discourage rediscounting or borrowing from it simply by raising its discount rate high enough. At a high enough rate, the commercial banks would find no businessmen willing to borrow. Thus the supply of eligible paper available to the commercial banks would dry up and, in turn, the commercial banks would be unable to acquire more reserves by discounting. The automatic system then had a regulator; namely, the discount rate. 99. Is eligible paper discounted much today? Very rarely. 100. Why have open market operations replaced discounting as the most important means of regulating the money supply? Basically, because the Federal Reserve found open market operations a more sensitive tool to control the money supply. And through the years the Federal Reserve has decided that its responsibilities were not consistent with the authorization of an automatic money supply. 101. Precisely what does the Federal Open Market Committee do? It determines the amount of government securities the Federal Reserve will buy and sell, in order to influence the level of bank reserves. In essence, the Committee determines U. S. monetary policy. 102. What functions have been left to the regional banks? Now that discounting eligible paper is rarely used, the regional Federal Reserve banks clear checks and gather statistics and other economic data. 103. Have the intentions of the founders of the Federal Reserve System been altered by the turn to open market operations? Yes, when the System was originally founded a struggle was waged over who would control the Federal Reserveâpublic or private interest. The solution was a compromise. But what (in 1913) was the master switch governing the money supplyâthe discount rateâwas left in the hands of a totally public bodyâthe Federal Reserve Board in Washington. This was a deliberate act. President Wilson rejected the notion of diluting the public nature of the Board when he said, "Which one of you gentlemen would have me select the presidents of railroads to be on the Interstate Commerce Commission to fix passenger rates and freight rates?" But when Congress in 1933 and 1935 authorized the Open Market Committee, which in effect succeeded to the policymaking role of the Board, it gave private interest a firm foothold in determining monetary policyâthe money supply and the general level of interest rates. Five of the twelve voting members of the Open Market Committee are regional bank presidents. These men hold their offices through the votes of bank directors, two-thirds of whom are elected by private bankers. The other seven bank presidents, of course, participate in the discussions of the Open Market Committtee. The upshot is that men whose views must meet the test of the private bank-selected directors help determine the Government's monetary policy. A purely public group has given way to a mixed body with questionable qualifications to represent the public interest.
Right about history I never cease to say it. So for example do you know that the FED was supposedly created in 1913 after the preceding crisis so that they make people believe they could be the last lender if economics really falls apart ? That's still what people think today. And what happened after 1929 ? THEY REFUSED TO BE THE LAST LENDER. Does this historical information in the FED 101 ? No. You can find it only if you read outer sources like in the history of money by economist J.K. Galbraith.
As I said, study your FED history on the link I provided. It will enlighten you and set you free! Maybe you should also read about the Glass-Steagall Act of 1933. Might as well read the Securities Act of 1933 while you are at it. Now go study your FRENCH history and don't worry about our country. And why do you always think you have to have the last post - err the last 3 posts?
I let you have the last word since I went to bed . And also I remark that when you lack technical argument you have only one ressort left: use your racist feelings but I'm accustomed Since it is no more technical I let you continue to freak alone