Well the Fed is technically a private institution with several quirks like the Chairman is appointed by the President. The reason for the Fed being private has nothing to do with function and everything to do with the fact that in 1913 the populace was much more concerned with the Constitution than it is today. The Constitution does not explicitly give the Federal Government the power to create money other than gold and sliver coins and certainly does not give the Federal Government the power to run a commercial bank. So the geniuses created this quasi governmental institution that creates money and works kind of like a super bank.
The Fed in reality is a political organization whose only job is to really fund government with loans created by reducing the value of the a fiat currency. In fact this is the purpose of every central bank.
If the FED is private, then how can it create legal tender, and the only legal tender?
When the government creates a monopoly, that monopoly is then an arm of the government.
If the FED is private, then why can't I create my own money factory?
It's a semantic game really. If it were private you wouldn't need the Federal Reserve Act now would you?
Bogart:The Constitution does not explicitly give the Federal Government the power to create money other than gold and sliver coins and certainly does not give the Federal Government the power to run a commercial bank.
U.S. Constitution, Article I, Section 8:The Congress shall have Power....
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures
Article I, Section 10:No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts...
faber est suae quisque fortunae
government monopoly = private profits, public losses
doesn't matter whether it's private stock or private salary. the model is the same across the board with all government monopolies or quasi government entities.
lol ""government monopoly = private profits, public losses" The Fed's "profit" is sent to the treasury."
The Fed's "profit" is sent to the treasury.
Is that alleged profit tallied before or after the "Enter" button is pressed to create legal tender checkbook money out of thin air to buy Treasury Bonds?
In simpler terms...
Whoever received legal tender for selling a T-Bond earned taxable income.
Does the FED report taxable income when it presses the enter button to create and simultaneously receive legal tender?
Or is the FED only reporting the interest earned on the unreported income it received by it's own hand?
Maurizio Colucci:What would you reply to someone who claims that the problem with the FED is that it is a private institution, and if it were public, like Denmark's central bank, the problem would disappear?
This is the same idea propogated by Paul Grignon in his Money as Debt series, as well as Bill Still in his movies. See the post here for reviews of those.
I don't know what he perceives to be the "problem" with the FED. Presumably not that it creates bubbles, as I don't see why being public should solve it. (This guy is an "Inside Job"'s fan. ) And what does it mean that the FED is private anyway? Thanks
Yeah if you want to help him understand something you kind of have to have an idea of how he thinks things work. Try to find out what the real problem he sees with the Fed is and why a simple change of ownership would change everything that's wrong with it.
As for Inside Job, check out the thread on it, especially here, here, and here.
Maurizio Colucci:So no one of you can guess what the guy's reasoning could be?
Well, if you watch Money as Debt or The Money Masters (or even just read those reviews) you'll see that they advocate basically the same thing. But no, they don't really explain why. The Money Masters is literally 3.5 hours of history of central banking, detailing all the terrible things that come from it, and yet, still, in the end the filmmakers just say "if only the government were in charge of all this, then it would be different." If you read G. Edward Griffin's review (included in one of the links above) you'll see a great rundown as well as a hint...he comes right out and says that he's met Bill Still multiple times and thinks he's genuine and sincere. But earlier in the review he hints at the potential that such non-solutions are great propaganda for the status quo and those who benefit from it. And of course I've heard others come right out and say that things like that are straight up purposeful misdirection.
I doubt that's the case with your friend of course. Honestly I have to just chalk it up to him not knowing any better or not even thinking it all the way through. There's no other "reasoning" I can think of beyond that. The notion that somehow politicians are more trustworthy than some other human being, and that they're better able to command such power (not only in a responsible, honorable and ethical way, but also in a competent, efficient way) is truly beyond me. I just have to guess it's the simple result of years of indoctrination of "government solves all problems", "government protects us", and all the jingoistic nonsense that comes with it.
I remember hearing somewhere: "When the government either runs or has a say in the curriculum of nearly every institution of learning, don't be surprised when people come out thinking government is the solution to everything."
Oh yea I've seen Money Masters a couple of times and I cannot believe their conclusion is to centralize it even more.