reply to post by Sundancer
How did this ever get to the point the Fed Reserve would feel able to make disclosure demands of their own to our government. Who do they think they
This excerpt answers that question. For anyone who wants to know something about the Federal Reserve Banking system, I highly recommend
A PRIMER ON MONEY
It is well written, easily understood,
interesting and informative.
A PRIMER ON MONEY
COMMITTEE ON BANKING AND CURRENCY HOUSE OF REPRESENTATIVES
WRIGHT PATMAN Chairman 1964
......In mid-August of 1950, however, the Federal Reserve raised the discount rate and short-term Treasury bills jumped toward 11/2 percent, although
there were requests from the Secretary of the Treasury and the President for the System to continue a low-rate policy. It was later revealed by
testimony of some of the Federal Reserve officials to committees of Congress that the Open Market Committee had held a meeting on August 18 and
decided not only t o raise the discount rate, but to "go their own way" on the Government longer term bond rate as well, despite what the President,
the Secretary of the Treasury, and the head of the Office of Defense Mobilization might do....
Since the signing of the so-called accord, in March of 1951, this event has been widely interpreted as an understanding, reached between the Treasury
and the Federal Reserve, that the Federal Reserve would henceforth be "independent." It would no longer " peg Government bond prices. It would
raise or lower interest rates as it might see fit, as a means of trying to prevent inflation or deflation. These are understandings which have been
grafted onto the accord over the years. Certainly, no such understandings were universal at the time the accord was signed. ....
At the end of 1951, then, the Federal Reserve had both self-proclaimed independence, as a result of the accord, and an operational policy which aimed
at maximum credit effects through minimum changes in interest rates..... the Federal Reserve people were quite sure that they could do a better job of
running the country than the President, and with only slight increases in interest rates. ...
It then added another string to its bow- the “bills only" policy. ... Henceforth when the Treasury issued bonds or medium-term securities, it was
to dump these issues on the market and watch the natural consequences-first a drop in bond prices, then a gradual recovery as the market absorbed the
bonds. Any private rigging or manipulations of the market were to go without interference from the Federal Reserve, as were any speculative booms or
panics short of a "disorderly" market. The “bil1s-only” policy had only one reservation: The Federal Reserve would buy long-term bonds in the
event that the Open Market Committee made a findings that the market was disorderly. [ full details starting on pg 103]
The [Eisenhower ] administration announced at the outset that it would re1y on monetary policy exclusive1y for its economic regulation and would
respect the complete independence of the Federal Reserve to carry out these policies as it saw fit .....
Thirteen years have now passed since the accord and the liberation of the Federal Reserve. What have been the results? The major result is
shockingly obvious. Interest rates have climbed steadily, with slight interruptions, during the entire post accord period. (See table 3.) The period
has been marked, then, by a continual shift of income to the banks, other major financial institutions, and individuals with significant interest
income. The rest of the country provided this income........
Another result of post accord monetary policy is that the U.S. economy has unwittingly become a low investment economy... The Federal Reserve has
chosen the high interest, slower growth option for this country.