Forum Post: Save the FED
Posted 13 years ago on Nov. 5, 2011, 9:45 p.m. EST by Socrates469bc
(608)
from New York, NY
This content is user submitted and not an official statement
How Populist Outrage Gave Birth to the Federal Reserve: Echoes By Gregory D.L. Morris Nov 4, 2011 10:29 AM ET 20 Comments Q
This week marked the 104th anniversary of the night that ultimately gave birth to the Federal Reserve.
On Nov. 2, 1907, John Pierpont Morgan assembled the presidents of several prominent trust companies in the library of his Fifth Avenue mansion. The illiquidity of their firms had caused what is known today as the Panic of 1907. ... Even with the terrible economic conditions we've seen in the past few years, it's difficult today to comprehend the precarious state of business and personal finance in those days. Not only was there no central bank to restrain economic swings, there was no deposit insurance and no social safety nets. Banks were chronically undercapitalized and went bust with alarming frequency. There was no recourse for depositors. Farms and shops were foreclosed, families put on the street.
In 1907, the economy had been showing multiple signs of distress. As with our recent troubles, the natural ebbs and flows of the economy were amplified and made dangerous by excessive speculation, irresponsible lending and financial engineering run amok. By one account, half the bank loans in New York City were backed only by securities as collateral. ....
For More read: http://www.bloomberg.com/news/2011-11-04/how-populist-outrage-gave-birth-to-the-federal-reserve-echoes.html
Reading about the Federal Reserve on Bloomberg.com is like reading about human dignity on JerrySpringer.com.
Interestingly, the Morgans are still part owners of the Fed. Seems like being a banker is the only profession with long term job security these days, not to mention nepotism...while the rest of us struggle.
We need a financial safety net for the nation, no disagreement there. But the operations of the FED have become so opaque that there is no way to hold it accountable for that mission. It needs to be purged and redesigned so that its directives are accessible to everyone who cares to know.
the fed provides the fuel for the bubbles.