Re: The Federal Reserve, Who, What, Why
- From: "The Trucker" <mikcob@xxxxxxxxxxx>
- Date: Thu, 13 Jul 2006 11:04:07 -0700
"Lantern" <lantern@xxxxxxxxxxx> wrote in message
news:1152733292.260726.227520@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Did you ever use, "Who, what, why, where, when and how", to clarify
things? Sometimes it can be helpful. For example, my favorite subject,
The Federal Reserve System....Who are they? What do they do? How? Read
this over, see what you think. Maybe even try your own set of answers.
I'd be interested in your thoughts on the subject. I think it is
important to understand our money system. But, anyhow...here's my
answers for your fun and entertainment ...and discussion.
WHO is the Federal Reserve System? My answer: The Chairman, Mr.
Bernanke. The U.S. Congress may be a more accurate answer because they
created the FED and watch over it.
WHAT is the FED? It is the U.S. money system. We don't have the gold
standard anymore. U.S. money is created by the FED.
US money may well be created by the FED, but this is done in reaction to
government deficits. The Fed is the nail and the elected government is
the hammer.
WHY is the FED? The FED exsists as a solution to the problem of
creating money. There are other possible solutions such as not having
any money at all...a pure barter system. Another solution might be to
return to the gold standard. Or, how about letting private banks create
the money? There is no movement towards another system that I can
discern. The FED is well established and doing well.
That is actually more true than false.
WHERE is the FED? Easy question. The FED is located in Washington,
D.C. at Constitution and 20th Street.
WHEN? The FED was created by the Federal Reserve Act in 1913.
HOW? How does the FED work? The currency supply is fairly straight
forward. It is just an inventory control function, that is, to provide
an adequate supply of one's, fives, tens, twenties, and hundreds. The
FED influences the supply of credit via the Discount rate, the Federal
Funds rate and the Open Market Committee. The FED has a bunch of other
functions such as providing a huge check clearinghouse. This is the
FED's biggest function as far as number of employees is concerned.
Approximately 70% of FED employees work here.
Another nice job on your part here:)
The FED also burns worn out bills, acts as a bank for the U.S.
Government, charters and regulates banks and was just recently
designated to be the top, main regulator of financial institutions. The
FED redeems food stamps, administrates international exchange rates and
holds U.S. reserves. That's a lot of heavy, critical functions! That's
why we the citizens must watch the FED closely. You can't trust people
with money.
The FED has a web site at http://www,federalreserve.gov/
All in all the Fed does what it is designed to do. But the independence of
the Fed continues to be a myth. If the Fed had acted as it should as the
defender of the value of the dollar, the Republican tax cuts would have
directed the Fed to raise interest rates.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org
.
- References:
- The Federal Reserve, Who, What, Why
- From: Lantern
- The Federal Reserve, Who, What, Why
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