reply to post by Cassius666
The way I understand it, the Federal reserve bank in a country makes more money avaiable to banks, which in turn loan it out to people and
Technically it has two functions (the US, UK, and EU versions)
1. Bank regulation .. the Reserve Bank(s) are not actual institutions but instead "boards", ie, nothing more than a boardroom.. it is not a
"real" bank, and technically cannot own assets. It regulates other banks, which banks of members of. This is the primary reason for conspiracies
(and rightly so) .. the Bank, who's board members are Member Banks and represented by heads of private banks to regulate... private banks.
Granted, the idea being that no one bank can become all powerful because other members of the board will be from it's competitors. However, when an
entire industry gets together to manipulate pricing, availability, regulation and controls we call it price manipulation. For banks it's called a
2. To establish the countries financial, economical and geoeconomical policies OUTSIDE of politics. Technically a Reserve member should not comment
on politics or offer political guidance or remarks to Congress, they deal with money and money only. Whether the administration is Red or Blue, the
bank is always Green. Theoretically this is the most important aspect of The Bank, because personally, I'd trust greedy bankers over inept
politicians. Imagine Congress setting interest rates..
the nation makes debt on every new piece of currency that gets into the system, which has to be repayed to the fed.
No not at all. There are different types of "debt" for starters. A Currency has value based on whether or not other people accept it as payment
for goods and services. To say a Dollar is a Debt, then turn around and buy something, theoretically you just purchased a tangible asset and or
liability with negative value. Oxymoron.
Not all currency has to be "backed" by something, by which we mean you place a physical aspect behind a given currency, then the currency is either
limited to supply of said resource (ie gold) or the systematic manipulation of said material (ie, gold) .. so if $1 bought you an oz of gold, the
Government could manipulate the currency to that $.1 bought an oz, or .01, or 10, or 100 .. there's no limit.
Our currency is based on the belief that our government cannot fail, and that throughout the world it's always accepted (primarily because of oil)
Because of this our currency has value, regardless of what the uneducated would say. If everyone accepted sea shells as currency for goods and
services, sea shells would have value. Simple as that.
Also, the Federal Reserve does not print money, Congress does, and Congress alone sets the annual increase. The Reserve sets interest rates that
through Reserve Banking the currency is inflated mostly through equity and debt. This is the deepest flaw in our system.. not what our currency is
based on, but how Banking uses money to create money form nothing, then gain interest.
Also, the Federal Reserve actually pays Congress every year (which is usually destroyed) the interest on the debts.. it's called Monetization, or the
new word "Quanitive Easing" .. the Government instead of printing dollars, buys dollars from it's self, boosting bonds and creating an illusion of
stability.. it's a fraud of course, but it's a good trick, and as long as the dollar doesn't fall to far to fast, few care.
I do not see the benefit of this system
Politicians don't set monetary policy (good thing)
Our economic expansion is not limited to a finite resource (our economy would not have expanded at the rate it did and has under past currency forms)
And it provides economic stablity. Before the reserve depressions were common every 10 years, and our economy was a series of sharp ups and downs.
I am not a defender of the Fed though, I'd rather see it gone with a new experiment in place.
And what does the fed do with the money they make, which is interest on every single Dollar they issue.
The debt they make (they only make loans to other banks and the government) is usually destroyed or funneled into the Treasury, but the vast majority
is rolled into new Tbills (gov debt) to keep the government functioning.
Congress and the Mints are the only ones "creating" actual money, and Congress holds The Bank's Charter.
The vast majority of money creation is through Member Banks, through Reserve Banking, which only make up the Fed.