Forum Post: The Federal Reserve Bank: A Regulatory Body
Posted 12 years ago on Oct. 12, 2011, 12:21 a.m. EST by OccupyThis
(22)
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Why do you want to end the Federal Reserve Bank? (http://en.wikipedia.org/wiki/Federal_Reserve_Bank)
Do you think the Board of Governors of the Federal Reserve Bank are heads of a massive global conspiracy or part of one? (http://www.publiceye.org/conspire/flaherty/flaherty1.html)
Do you think the Chairman of The Board just creates money out of thin air and sticks it in his bank account? (http://weakonomics.com/2010/08/03/11-things-you-didn%E2%80%99t-know-about-ben-bernanke/)
Do you want to ‘end the fed’ because you hate regulation? (http://www.ronpaul2012.com/)
Are you suspicious that the Federal Reserve Bank has never been audited? (http://www.federalreserve.gov/publications/budget-review/default.htm)
Are you upset because the Federal Reserve Bank sucked you into a crappy loan with a teaser rate, then jacked up the interest rate and when you couldn’t pay the mortgage and they came to foreclose on you and they couldn’t even produce the deed to the house because of ‘robo-signing’ or was that some other bank? (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8VdF24EZqFQ&refer=us)
Are you upset because the Federal Reserve Bank is ending free checking service and imposing fees to their debit card holders or do they not do personal checking accounts?
Are you upset because the Federal Reserve Bank invented exotic finical products like credit default swaps or because they invented high frequency day trading?
Are you upset that the Fed turned you down for an auto loan or credit card, because I don’t think they have anything to do with credit ratings or offering consumer credit products?
Are you upset because you are concerned that 4% target inflation will deprecate the value of your massive bond holdings?
Are you really posting right leaning, libertarian, conspiracy propaganda on a site for a left leaning, progressive movement?
The problem isn’t the Fed, the problem is there aren’t more regulatory institutions in this country that have as much power and strength like the Federal Reserve System.
http://webskeptic.wikidot.com/federal-reserve-system
Damn straight they want to control the world. They already mostly do. Look at quotes from the families of those involved with the Act.
John D. Rockefeller:
In 2002 Rockefeller authored his autobiography “Memoirs” wherein, on page 405, Mr. Rockefeller writes:
“For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as "internationalists" and of conspiring with others around the world to build a more integrated global political and economic structure - one world, if you will. If that's the charge, I stand guilty, and I am proud of it."
The Federal Reserve didn't give you a shitty loan, or invent credit default swaps, or any of that stuff, it is true.
But it primed the pump (har har) for these things to happen.
When you force interest rates below the rate that the market would set it at based on the amount of real capital (not electronic numbers) in the economy (basically, the more people save, the more money there is to lend), then several things happen. The most relevant thing to what happened in 2008 is that you have more money than you have credit-worthy borrowers. So what you do is make shitty loans with teaser rates to poor people, package them in ultra-complex financial instruments, then sell them to some poor sucker in India or Switzerland. Why do you do this? Because you're swimming in cash, you know the Fed is gonna bail you out if things DO go wrong - what could possibly go wrong?
Of course, we have lots of regulation, Sure, some of it was stripped away, but most of it was still there. That's why you create a shadow banking sector, where you can work your CDS casino shenanigans all you want without those annoying feds looking the other way.
The point is that the Fed, aside from making you poorer by eroding the value of your currency (I'm sure you notice how much harder it is to do grocery shopping or fill up your car), actively feeds the financial complex by giving it free money, then when the shit hits the fan, giving it MORE free money because of TBTF.
The Federal Reserve didn't give you a shitty loan, or invent credit default swaps, or any of that stuff, it is true.
But it primed the pump (har har) for these things to happen.
When you force interest rates below the rate that the market would set it at based on the amount of real capital (not electronic numbers) in the economy (basically, the more people save, the more money there is to lend), then several things happen. The most relevant thing to what happened in 2008 is that you have more money than you have credit-worthy borrowers. So what you do is make shitty loans with teaser rates to poor people, package them in ultra-complex financial instruments, then sell them to some poor sucker in India or Switzerland. Why do you do this? Because you're swimming in cash, you know the Fed is gonna bail you out if things DO go wrong - what could possibly go wrong?
Of course, we have lots of regulation, Sure, some of it was stripped away, but most of it was still there. That's why you create a shadow banking sector, where you can work your CDS casino shenanigans all you want without those annoying feds looking the other way.
The point is that the Fed, aside from making you poorer by eroding the value of your currency (I'm sure you notice how much harder it is to do grocery shopping or fill up your car), actively feeds the financial complex by giving it free money, then when the shit hits the fan, giving it MORE free money because of TBTF.
I would like to comment on your last comment because it's about the age old concerned of the right about inflation. 2 points:
inflation is reatively low right now, at about 2% and interest rates have been at zero for a few years now. Maybe quantitative easing or borrowing will pick up and drive inflation, but inflation also helps to offset the expense of debt that people owe on their homes.
While over the course of ones life one will notice the cost of goods going up due to monetary inflation. However, recent increases in energy prices are due to other market forces, like speculators, political unrest in oil producing regions and fears of future production short falls, but no so much monetary policy.
I think it's up to other regulatory agencies like the FDIC, SEC, CFTC, and the newly formed CFPB to regulate our markets and finical institutions. It's also a matter of making sure that a cozy environment doesn't exist between regulators and those we are meant to regulate.
I agree that the unrest in the middle east is affecting oil prices.
Now, while inflation has been low to this point, it's because the banks are not lending out those huge piles of money they're sitting on. So you say, "they should lend it out, right"? Well, you get the basic principle of "more money in economy = higher prices" right? But this only helps if everyone got the same proportion of money. But the banks aren't going to do that. They're going to lend to who they think is "worthy" of the credit they lend out.
Guess who the banks are more likely to consider "worthy".
The 1%.
Guess who pays more for EVERYTHING because their money is worth less?
The 99%.
I do acknolwedge that inflation can help with debt, but the people underwater on their houses don't stop paying for other stuff because they're underwater.
This isn't an attack on the rich. There is nothing wrong with being rich. There is a problem with being rich and stealing from the poor. There is a problem with few people controlling the wealth, and to that end there is a problem when those who control the wealth are not helping their country and society progress.
David Walker, former US Comptroller General and chief of the GAO, warned before the 2004 election that if large economic changes were not made, by 2009 the United States and its taxpayers would not be able to afford the interest payments on the national debt. A study authorized by the US Treasury in 2001 found that in order to keep servicing the debt at its current rate of growth, by 2013 income taxes would need to be raised to 65%.
If the United States cannot afford to pay the interest on its debts, that would be the final stage of economic collapse and hence result in a total textbook bankruptcy. The systematic crisis would in turn spread to the rest of the world.
How did this happen? Why is the US national debt $14,819,350,000+? Of the 203 countries in the world today, only four (!) do not owe others money. The collective external debt of all the governments in the world is now above 40 trillion dollars and this number doesn’t include the massive about of household debt in each country.
The whole world is basically bankrupt. But how? How can the world as a whole owe money to itself? Obviously, it’s all nonsense. There is no such thing as ‘money’. There are only planetary resources, human labor and human ingenuity. The monetary system regulated by Federal Reserve is nothing more than a game… and an outdated and dysfunctional one at that. Those in positions of social power alter the rules of the game, at will. The nature of those rules is guided by the same competitive, distorted mentalities that are used in everyday “monetary” life, only this time the game is rigged at its root to favor those who run the show. For example, if you have 1 million dollars and put it into a CD at 5% interest, you are going to generate $50,000 a year simply for that deposit. You are making money off of money itself… paper being made from other paper … nothing more - no invention - no contribution to society – no nothing.
That being denoted, if you are a lower to middle class person, who is limited in funds, and must get interest based loans to buy your home or use credit cards, then you are paying interest to the bank, which the bank is then using, in theory, to pay the person’s return with the 5% CD! Not only is this equation outrageously offensive due to the use of usury (interest) to ‘steal from the poor and give to the rich’, but it also perpetuates class stratification by its very design, keeping the lower classes poor, under the constant burden of debt, while keeping the upper classes rich, with the means to turn excess money into more money, with no labor.
That reality aside, there are other games in the system which have worked for decades, but are just now starting to bloom into the inevitable mathematic disasters that should have been anticipated 100 years ago. The point is, our system is broken. Simple policy change will not solve our debt problem. We need to alter the governmental paradigm if we wish to repay our debt. First step: our government must fire the Federal Reserve Board.
Very Good and Well Put!
Money may be meaningless in "value" but imagine trying to conduct exchange without it.
Of course, this is the inherent absurdity of fiat currency - there is now more debt on the planet than wealth. Obviously it can't be because of the internationalization of fiat currency that occured after WWII, riiiiiiiiiiiiiight?
We are not debating getting rid of money. We want to get rid of money that is backed by debt. What is debt? Bullshit. Bullshit is actually more substantial than debt.
The members of the Federal Reserve Board are all federal employees, so your closing argument should read, "our government must fire the government" US Congress has appropriated funds and set tax rates and collecting public debt along the way, since pretty much the time the country formed. The Federal Reserve Board sets interest rates, reserve requirements, acts as a clearing house for checks for the federal government and loans money to charter member banks. It's really not that exciting.
The federal reserve is not a federal institution. Its a private for profit corporation whos shareholders are other private institutions. GET THAT STRAIGHT.
and
Claim: Woodrow Wilsonwas quoted expressing strong regrets about the signing the Federal Reserve into law
False This alleged quote was derived from portions of the book The New Freedom published in 1913. This book was a compilation of speeches from 1911 and did not refer to the Federal Reserve.
www.salon.com article
New Freedom Claim: The Federal Reserve has never been audited
False The Federal Reserve, including all its branches are audited at least once a year.
You can find some the examples here: [http://www.federalreserve.gov/boarddocs/rptcongress/] [http://www.federalreserve.gov/boarddocs/rptcongress/annual06/default.htm] [http://www.federalreserve.gov/boarddocs/rptcongress/annual06/sec6/c1.htm]
… and the law that authorizes the GAO to audit the Federal Reserve [http://www4.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00000714----000-.html]
Other research on this topic: [http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#9] [http://www.geocities.com/CapitolHill/Senate/3616/flaherty6.html] [http://www.gao.gov/docdblite/info.php?accno=112364]
http://www.publiceye.org/conspire/flaherty/flaherty1.html
and
Conspiracy claims Claim: The Federal Reserve System is a private bank
False As a system, it is a supervised by the Board of Governors (a government agency) and overseen by Congress. However, the branches share control and ownership with member banks. Claim: "It is owned by the Bank of England (or the Rothschilds or Rockefellers)"
False There is no structure anything resembling ownership except for the participation shares owned by member banks. Claim: "All profit goes to private entities (such as banks, families, or individuals)"
False Beyond a standard 6% dividend paid to member banks, all other profit is turned over to the U.S Treasury at the end of the year. Claim: The Federal Reserve owns all U.S. Debt
False The Federal Reserve owns about 17% of the U.S. Debt. This is used as collateral for U.S. dollars. Since the money supply continually grows, this debt never really has to be paid back. When the bonds do mature, the Fed replaces them with new bond purchases. Claim: All Income Tax goes to the Federal Reserve
False This is based on three false assumptions:
All the above are false Claim: The Federal Reserve has never been audited
False By law, the Federal Reserve and all it's banks are audited at least once a year.
Congress has the power of the purse, this means that they are meant to regulate the US currency. In 1913 they handed the power of the purse over to a private bank - the Federal Reserve, to print money based on nothing. Historically, money was backed by commodities such as gold and silver, although now it has zero material backing. It's a bunch of numbers in a computer.
Congress does not have the constitutional authority to hire a private bank to manipulate global currencies. It's a scam. Perhaps the most intricate, and well governed Ponzi scheme.
It is time that we realized the Federal Reserve is destroying this country’s wealth and future prospects. It is not the cure for the economy; it’s the cancer destroying it. It is responsible for the Great Recession, unemployment, the government’s ballooning debt, and the cartelization of the banking industry. Check out my blog “The Compassionate Capitalist” to read the argument. http://ccapitalist.blogspot.com/2011/09/why-you-really-shouldnt-like-fed.html
There are a lot of causes that can be cited in regards to the Great Recession and current unemployment levels, but our only regulatory body that wasn't completely asleep at the wheel is not a place to fairly point your finger. Commodity Futures Trading Commission [CFTC] headed by Brooksly Born aggressively tried to regulate the growing derivative market in the late 1990's. She was blocked buy members of the treasury department and the business community, not the Federal Reserve Bank. Derivatives known as credit default swaps were used by banks to hedge against losses on risky investment vehicles. When the Lehman Brothers failed in 2008, AIG needed to be bailed out by congress, who manages the 'ballooing debt', in order to prevent a private banking crisis from spiraling even more out of control. The 'cartelization' of the banking industry has been going on since the Renaissance.
I think the calls to make it a purely public institution with total transparency are valid from a progressive standpoint.
PS if you like transparency in central banking you'd love Ben Bernanke as it has been the focus of much of his scholarly work.
That's completely different then abolishing the Federal Reserve System or lashing out against fractional reserve banking or freaking out over inflation. This country is suffering from an extreme lack of demand fueled by rampant unemployment and the situation was not created by monetary policy. The problem is that regulation wasn't strong enough and the other regulatory agencies didn't have teeth or were too cozy with the institutions they are supposed to regulate.
'End the Fed' enthusiasts typically get all their information from tainted sources (Alex Jones, Zietgiest or Money Masters).
The problem isn't the money that the Fed loans out, it's what the private commercial banks do with that money after they borrowed it. People wasting their breath yelling at Bernanke or Greenspan end up looking the other way while the real crooks sneak out of the room.
Agreed on all points (I think it goes a little beyond regulation - i.e. corporate personhood - but I'm with you). My point is this: One of the "enthusiasts" posted, a couple of days ago: "even Alex Jones is for nationalizing the Fed instead of abolishing it now." Is that a possible area for compromise? We'll help you nationalize and make the Fed 100% transparent, and you help us on X...? Just a thought.
What does nationalizing the Fed even mean? I think people really get confused because it's called the 'Federal Reserve Bank'? It's not an investment bank like Morgan Stanley or a commercial bank like Bank of America? In absence of the Fed there still needs to be a mechanism to create money. There would still need to be a body that set reserve requirements, because people will always have the need the borrow money and institutions will always form to loan money they don't have.
I would think he's implying that congress should form a committee that will control the money supply, set interest rates and reserve requirements. If you trust congress to do as good a job with monetary policy as they have with fiscal policy, then maybe you want to listen to Alex Jones.
The system was designed out of a compromise between the competing philosophies of privatization and government regulation. In 2006 Donald L. Kohn, vice chairman of the Board of Governors, summarized the history of this compromise:[45]
"Agrarian and progressive interests, led by William Jennings Bryan, favored a central bank under public, rather than banker, control. But the vast majority of the nation's bankers, concerned about government intervention in the banking business, opposed a central bank structure directed by political appointees. The legislation that Congress ultimately adopted in 1913 reflected a hard-fought battle to balance these two competing views and created the hybrid public-private, centralized-decentralized structure that we have today."
So I imagine it would be the Bryan model.
GET RID OF THE FED, thats what the treasury is there for, to be the peoples transparent money supplier, regulated by the people via Congress
Fly the Black Flag high and fear the Red Shield! The FEDS print money and loan it to the government at cost making a huge profit. So what happens is they print a $100 bill and it costs them less than $100 to make it. They then loan it to a government for $100. So they take money from the US Mint then loan it to us at an inflated price. The only reason they do not do this is because the Red Shield is EVERYWHERE. Our only chance is a Global Occupation.
red shields, black flags, almost feels like a national socialist movement. Who takes money from the 'US Mint', again?
Federal reserve bank takes the money and loans it to the government at cost. Not just in the US but in almost every country.
David Rockefeller’s own words he spoke before the secretive Trilateral Commission in June, 1991, when he said:
“We are grateful to The Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But, the work is now much more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto determination practiced in past centuries.”