Found this page: http://www.usagold.com/federalreserve.html Could someone here explain the discrepancy here between their view and the view of Austrian economists, i.e. why usagold.com is wrong? I would really appreciate it as I am a bit confused on this. Thank you very much! EDIT: I also found this: http://www.topsecretwriters.com/2011/05/removing-myths-about-who-owns-the-federal-reserve-bank/
"The Federal Reserve Act of 1913 was crafted by Wall Street bankers and a few senators in a secret meeting?"-Is this true or is this conspiracy?? Someone also told me, "The Federal Reserve Act never actually passed Congress. The Senate voted on the bill without a quorum, so the Act is null and void.?"
No, the Fed isn't private, saying that it is private is just repeating socialist propaganda.
Also, I've never heard an Austrian economist refer to the Fed as being private.
I don't know what FascistSoup is talking about. Socialist propaganda? I have never in my life heard any socialist try to convince anyone the Fed is a private entity. Are you just throwing out buzz words like shit against a wall to see what sticks?
From the horse's mouth:
"it is an independent entity within the government, having both public purposes and private aspects. [...] The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations—possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year."
- http://www.newyorkfed.org/aboutthefed/faq.html
And that's what they put on their website. For a look into what's between all those peachy lines, you can look here:
The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin
"There are actually 12 different Federal Reserve Banks around the country, and they are owned by big private banks."
-FactCheck.org
Who Owns the Fed? by Jake Towne
The Money Matrix series by Jake Towne
JohnJames:I have never in my life heard any socialist try to convince anyone the Fed is a private entity.
Bernie Sanders does.
My Blog: http://www.anarchico.net/
Production is 'anarchistic' - Ludwig von Mises
I think a lot of people mean 'private' the same way someone might call the CIA the President's 'private army' - it means it's "independent within government", i.e. unaccountable to constitutionally established federal government structures. The Fed's decisions are not subject to approval by the President, Congress or anyone else. I'm sure it's not the only government institution or agency that isn't accountable to Congress, I mean, that's not saying much... Most Congresscreatures don't exactly try very hard to make government accountable.
It is true that the plan was hatched on Jekyll Island by a small group of financial and political elites meeting 'in secret', i.e. the media didn't know that it was important at the time, but this is how all legislation is drafted. Government policy is shaped by conspiracy.
Under US Senate procedure, a quorum is always assumed to be present unless one of the members who is present suggests otherwise, and demands a quorum call. No one did that in 1913, so it doesn't invalidate the passage of the Act.
James:It is true that the plan was hatched on Jekyll Island by a small group of financial and political elites meeting 'in secret', i.e. the media didn't know that it was important at the time,
You make it sound like the media just "decided not to cover it" and everyone knew but just didn't care. Please, I realize the book is long, but at least watch one of those videos.
You make it sound like the media just "decided not to cover it" and everyone knew but just didn't care. Please, I realize the book is long, but at least watch one of those videos. I don't wish to imply that what the media tells people to think is correct, or what's important. But in fairness, it's very seldom that legislation isn't effectively drafted in secret. Congress is supposed to read it, of course, but ya know... Non bene pro toto libertas venditur auro | Post Points: 20
James:I don't wish to imply that what the media tells people to think is correct, or what's important. But in fairness, it's very seldom that legislation isn't effectively drafted in secret. Congress is supposed to read it, of course, but ya know...
Again you're missing the point. It doesn't even sound like you know who was even in the room.
@John James:
Many socialist claim the Fed is a private bank independent from the govt, most notably Dennis Kucinich & Bernie Sanders. Even a lot of Ron Paul supporters run around screaming the Fed is a private bank and that nationalizing it will fix all the problems it creates.
FascistSoup:Many socialist claim the Fed is a private bank independent from the govt, most notably Dennis Kucinich & Bernie Sanders. Even a lot of Ron Paul supporters run around screaming the Fed is a private bank and that nationalizing it will fix all the problems it creates.
Now Ron Paul supporters are socialists? I think it's safe to say I've heard everything.
It depends on what you mean by "private." If the Fed is private because it is not owned by the state, then any public company is also private.
Anyway:
The Fed is not owned by the state, but it was created by Congress. The Fed's shares are owned by private banks; however; some of the Fed's employees are appointed by the state. Furthermore, the state has given the Fed monopoly powers.
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
I never said all RP supporters were socialist, but many of them are preaching for socialism even if they don't realize it.
The Case Against the Fed
It's too simple - the Federal Reserve is "public losses, private profits". This is, really, the essence of all government just distilled into a single agency.
The passage of any statutory law is mere window-dressing... does it really matter if the FR Act "really" passed or not?
Clayton -
It's also important to note that the Fed remits all its profits back to the Treasury*. So how do the commercial banks that comprise the Fed benefit from its existence? Money multiplication.
Unlike the loans the Fed gives the government, the loans the Fed gives the commercial banks are repaid, not rolled over indefinitely. But the money they are loaned is used to expand credit through inter-bank loans. For every $1 the Fed loans the commercial banks, they can loan out up to $10. If they earn, say, 5% interest on that loaned money, then, in a year they will have profited to the tune of 50% of whatever the Fed loaned them, a truly remarkable mathematical achievement when you think about it.
*This should serve as a red-flag to the dullards who attempt to deny that the Fed "prints money." Bernanke, for example, has repeatedly denied that the Fed is printing money - even during QE! Of course, he could only be telling the truth in the most woodenly literal sense that the Bureau of Engraving and Printing prints the money, not the Fed.
http://mimiandeunice.com/2011/07/21/lets-make-more-regulations/
It was the serpents of Amschel Rothschild, so you're looking at names like Morgan, Rockefeller, Monty Burns, Satan... You know, the same things that pick the President, and control the interests that control Congress. The scaly lizards that really own the world. Are their names so important? There are always things like them lurking around.
They are going to control every possible manifestation of the state, so I don't see why it's so important that they control the Fed by way of this particular set of lies or that particular set of lies, if you see what I mean. I mean, it's laughable to think that you'd fix 'em by, hypothetically, making the US Federal Government the nominal 'shareholder' of America's central bank. They control that too. In fact, they'd find someway to benefit. They always do.
James:It was the serpents of Amschel Rothschild, so you're looking at names like Morgan, Rockefeller, Monty Burns, Satan... You know, the same people who pick the President, and control the interests that control Congress. The scaly lizards that really own the world. Are their names so important? There are always things like them lurking around.
Now you're not even making sense. The whole point was you were trying to downplay the nature of the Fed's creation as something "the media just didn't know was important at the time".
They are going to control every possible manifestation of the state, so I don't see why it's so important that they control the Fed by way of this particular set of lies or that particular set of lies, if you see what I mean.
The whole point of this thread was to ask about the ownership of the Fed, and the first reply suggested there are no private (i.e. outside of government) interests. You're really taking this outside the scope of discussion.
I mean, it's laughable to think that you'd fix 'em by, hypothetically, making the US Federal Government the nominal 'shareholder' of America's central bank.
That's why people like Paul Grignon and Bill Still are not only severely criticized, but are even called possible "plants" of the powers that be.
This was already brought up in these threads:
What do you mean the FED is private?
Money as Debt
"...but governments did not initiate the crisis"
http://mises.org/Community/forums/t/20666.aspx
"Raising Debt Promises By Legislating Excessive Currency With Diminished Bond Values"
** Miss Conception **
Firstly, the Federal Reserve does not print money!, rather the Federal Reserve manages the transactions which occur through the sale or purchase of federal bonds.
http://en.wikipedia.org/wiki/Federal_Reserve_System
"The U.S. Government receives all of the system's annual profits, after a statutory dividend of 6% on member banks' capital investment is paid, and an account surplus is maintained. In 2010, the Federal Reserve made a profit of $82 billion and transferred $79 billion to the U.S. Treasury.[16]"
** NOTES Not Evident **
The Federal Reserve is responsible for managing the total money supply by changing interest rates on bank to bank lending, or by purposely purchasing federal bonds.
By setting lower interest rates, higher bond prices are the result, which means that bond earned interest is lower and the purchase of government securities becomes less profitable.
By setting higher interest rates, lower bond prices are the result, which means the bond earned interest is higher an the purchase of government securities becomes more profitable.
One should emphasize a review of http://en.wikipedia.org/wiki/Quantitative_easing as necessary enrichment with the information above.
** Other Thoughts **
May the OP question be rephrased to be, "Which entities own US treasury securities and government debt?"
http://en.wikipedia.org/wiki/File:Estimated_ownership_of_treasury_securities_by_year.gif
http://en.wikipedia.org/wiki/File:Holders_of_the_National_Debt_of_the_United_States.gif
I see the propagandists are out in force ahead of the 2012 election circus.
"Raising Debt Promises By Legislating Excessive Currency With Diminished Bond Values" ** Miss Conception ** Firstly, the Federal Reserve does not print money!, rather the Federal Reserve manages the transactions which occur through the sale or purchase of federal bonds.
The Federal Reserve in fact prints money. To deny this is to either lie (Bernanke) or speak from ignorance (most people who comment on the subject).
http://en.wikipedia.org/wiki/Federal_Reserve_System "The U.S. Government receives all of the system's annual profits, after a statutory dividend of 6% on member banks' capital investment is paid, and an account surplus is maintained. In 2010, the Federal Reserve made a profit of $82 billion and transferred $79 billion to the U.S. Treasury.[16]"
The Federal Reserve also does not receive a dime in taxes. But how come the Federal Reserve does not need to keep its "profits"? It doesn't get revenues from taxes. It's not producing anything that anybody needs except as required for regulatory compliance. So, what makes the Fed so unique that it needs neither profits nor taxes? Hmmm, could it be that they own and operate a legal money-printing press*???
So, the fact that the Fed remits its "profits" back to the Treasury should be a hint that the Fed does, in fact, print money.
** NOTES Not Evident ** The Federal Reserve is responsible for managing the total money supply by changing interest rates on bank to bank lending, or by purposely purchasing federal bonds.
"Managing the total money supply" is crypto-bureaucrat speak for "printing money."
By setting lower interest rates, higher bond prices are the result, which means that bond earned interest is lower and the purchase of government securities becomes less profitable. By setting higher interest rates, lower bond prices are the result, which means the bond earned interest is higher an the purchase of government securities becomes more profitable. One should emphasize a review of http://en.wikipedia.org/wiki/Quantitative_easing as necessary enrichment with the information above.
OK, so the Fed price controls interest rates on US government bonds (which has a ripple effect on market-wide interest rates). So what? The point is that when the Fed loans to its member banks, those banks, in turn, engage in inter-bank loans to multiply the "high-powered money" they have received from the Fed. The member banks (which are what comprise the Federal Reserve cartel) then loan out the multiplied money to the general public or purchase even more government bonds (on which they will earn interest that they get to keep). The remittance of profits back to the Treasury is just a charade, a token gesture to distract the unwitting.
*Yes, I am speaking metaphorically (for the newbies)
** Lucrative Positions **
Clayton:”Managing the total money supply” is crypto-bureaucratic speak for “printing money.”
Treasuries are now, although not always, publicly auctioned.
A government may print additional money if there is a purchaser for bonds it has made available, and the central bank is responsible for printing money that government treasuries (bonds) represent, and the central bank may actively purchase government bonds that does have an effect on the money supply.
However, both references to the central bank's "printing of money" are metaphorical, indirect, and distant allusions to legislation that directs the printing of money.
Clayton:OK, so the Fed price controls interest rates on US government bonds (which has a ripple effect on market-wide interest rates). So what? The point is that when the Fed loans to its member banks, those banks, in turn, engage in inter-bank loans to multiply the "high-powered money" they have received from the Fed. The member banks (which are what comprise the Federal Reserve cartel) then loan out the multiplied money to the general public or purchase even more government bonds (on which they will earn interest that they get to keep). The remittance of profits back to the Treasury is just a charade, a token gesture to distract the unwitting.
In the sense that the government gets money to fund its growning debt at bond interest price, after which secondary rates are passed to the public through the central bank, it is dissapointing that it is akin to asserting that government credit ratings are always better than private credit ratings.
It would be a unique track if there were a method to make bonds more expensive, thereby figuratively raising interest rates on government borrowing as a consequence to a lowered credit rating because of its growing debt, while respectively providing a private lender with lower interest rates due to its better credit rating.
I agree that interbank lending does cause an immediate increase in interest rate on the private sector intrinsically adding a prohibitive element to an efficient use of money for free enterprise.
A 6% reward to the central bank seems to be a special endowment with high reward for usery and for diminishing optimal efficiency of money.
To balance special endowment against egalitarianism, while avoiding bureaucratic collectivism, implement the public private trust.
It is popularly known as "quasi private, quasi public." However, regardless of its status as a private or public institution, it is a government granted monopoly on money and banking.
@Monk-eye:
"... one way or another…sooner or later, a new money system is bound to emerge [in place of dollar hegemony]. Most likely, it will have gold at its base. Why? Because in thousands of years of human experience, nothing better has ever been found. Not that we completely discount the possibility of a better system; humans can be clever. But money is the sort of activity where you don’t want cleverness. You want dumb, honest solidity…you want something that cleverness can’t undermine or circumvent. You want money that smart people can’t fiddle…and that is gold."
- Bill Bonner
You can keep your "public-private trusts" and all other money schemes. No more schemes. Money is what the market deems it to be and nothing else. This is not even a normative or policy statement, it is simply a description of the case-in-fact. Distortions of the market in money production created by central banks and other schemes are indescribably detrimental to human prosperity (cf Austrian Business Cycle Theory).
"references to the central bank's "printing of money" are metaphorical, indirect, and distant allusions to legislation that directs the printing of money."
Please read this and this for accurate information about the Federal Reserve, money and banking. Your disinfo isn't going to fly on this forum, Monk-eye. However, I'm glad you're expending your time and energy here where your disinfo will not go uncorrected.