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Federal Reserve is an Independant Agency?

Discussion in 'North American Politics' started by Aquitaine, Dec 11, 2009.

  1. Aquitaine

    Aquitaine Well-Known Member

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    Hi guys, I've just seen an interview with Alan Greespan the former Chariman of the Federal Reserve (1987-2006) claim that the Federal Reserve is an "Independent Agency" that "no other Government Agency can overule actions that we take".

    Does this mean that the Federal Reserve is a private company of some sort, and not a part of the US Government?

    I've honeslty always thought that the Federal Reserve was part of the US Government, am I wrong?

    Here's a video link to the section of the interview I'm on about:
    http://www.youtube.com/watch?v=pVmxQsvj6lo&feature=related


    The full interview can be found here:
    http://www.youtube.com/watch?v=8xrsO_hYmuY&feature=related

    Please tell me what you think.
     
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  2. Shadow Wolf

    Shadow Wolf Kissed by Fire

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    It is but it isn't. It's the central banking system for the United States, so it is practically interwoven with the government, but the Federal government doesn't actually own it. Kinda like a company within a company.
     
  3. Aquitaine

    Aquitaine Well-Known Member

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    So it's...... in effect a Company that loans/produces money for the US Government?

    :confused:
     
    #3 Aquitaine, Dec 12, 2009
    Last edited: Dec 12, 2009
  4. Shadow Wolf

    Shadow Wolf Kissed by Fire

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    Pretty much.
     
  5. Aquitaine

    Aquitaine Well-Known Member

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    Do Americans get to vote Democratically on the memebers of the Board of Directors/Governers or the Chairman of the Federal Reserve?
     
  6. gnomon

    gnomon Well-Known Member

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    Nope. They are appointed by the POTUS and confirmed by Congress. Once appointed they, for the most part, cannot be removed. The Chair and Vice-Chair have to be selected from the sitting board members.

    The Fed pretty much runs independently of the government.

    And if in your discoveries you find out exactly how it works then please let the rest of us know.:)
     
  7. Aquitaine

    Aquitaine Well-Known Member

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    I'm reading the Fed's website, on it's FAQ section, and part of it says:

    "Why did Congress want the Federal Reserve to be relatively independent?

    The intent of Congress in shaping the Federal Reserve Act was to keep politics out of monetary policy. The System is independent of other branches and agencies of government. It is self-financed and therefore is not subject to the congressional budgetary process."


    So it is self-financed, and under how it earns its money, the site claims:

    "How is the Federal Reserve funded?

    The Federal Reserve's income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. Other sources of income are the interest on foreign currency investments held by the System; fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations; and interest on loans to depository institutions (the rate on which is the so-called discount rate). After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury. "


    So, it appears to be true that the Federal Reserve does charge the US Government interest on it's money, although I am curious as to why it states at the bottom that the Federal Reserve then gives back all it's earnings after expenses to the US Treasury, because to my knowledge the U.S Treasury is part of the Executive branch of Federal Government........ so since the Fed make thier money off interest from loans to the U.S Government, they then...... give their after-expenses earnings back to the U.S Government(?).

    That doesn't make much sense, otherwise the U.S Government would then no longer require loans from the Fed right..... and then the Fed would loose all their income (presumably).

    It's a bit confusing for now, but I'll research more into because I've always wanted to know how stuff like this works.

    Anyways for anybody else interested, here is the Fed's website, FAQ section:

    http://www.federalreserve.gov/faqs.htm
     
  8. Aquitaine

    Aquitaine Well-Known Member

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    This is weird, take a look at this, again from their website:


    "Does the Federal Reserve produce bank notes and coins?

    No, the Federal Reserve does not produce bank notes or coins. The Bureau of Engraving and Printing (BEP) produces currency and stamps, and the U.S. Mint produces our nation's coins. The Federal Reserve issues Federal Reserve notes and places them in circulation."

    So they don't produce bank notes or coins, but they produce Federal Reserve notes and place them in circulation, I did not know that. So........ they produce not money, but....... money? :S

    Federal reserve notes, but not U.S notes, would any of you have noticed the difference?

    [​IMG]

    Also:

    "What are U.S. notes, and how do they differ from Federal Reserve notes?

    U.S. notes, the first national currency, began circulating during the civil war; they were authorized by the Legal Tender Act of 1862. The Department of the Treasury issued these notes directly. Issuance was subject to limitations; the Congress established a statutory limitation of $300 million on the amount of U.S. notes outstanding and in circulation. Although this amount was significant in Civil War days, it is a very small fraction of the total currency now in circulation in the United States.
    U.S. notes serve no function that is not already served by Federal Reserve notes. As a result, the Treasury Department stopped issuing U.S. notes, and none have been placed into circulation since January 21, 1971. Those that remain in circulation are obligations of the U.S. government.
    The Federal Reserve Act of 1913 authorized the production and circulation of Federal Reserve notes. Although printed by the Bureau of Engraving and Printing (BEP), these notes move into circulation through the Federal Reserve System. They are obligations of both the Federal Reserve System and the U.S. government.
    Both U.S. notes and Federal Reserve notes are part of our national currency and are legal tender. They circulate as money in the same way."

    How many of you, have United States Dollar notes in your wallets compared to Federal Reserve Notes?
     
  9. Aquitaine

    Aquitaine Well-Known Member

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    Hey, I've just looked at this on Wikipedia (I know, it's not exactly the most reliable source, but still) under "United States Note":


    "Comparison to Federal Reserve Notes

    Both United States Notes and Federal Reserve Notes are parts of the national currency of the United States, and both have been legal tender since the gold recall of 1933. Both have been used in circulation as money in the same way. However, the issuing authority for them came from different statutes.[19] United States Notes were created as fiat currency, in that the government has never categorically guaranteed to redeem them for precious metal - even though at times, such as after the specie resumption of 1879, federal officials were authorized to do so if requested. The difference between a United States Note and a Federal Reserve Note is that a United States Note represented a "bill of credit", where the currency was transferred into circulation free of interest. Federal Reserve Notes are based on debt purchased by the Federal Reserve, and thus generate seigniorage for the Federal Reserve System, which serves as a lending intermediary between the Treasury and the public."

    "Federal Reserve Notes are based on debt purchased by the Federal Reserve"

    What does that mean, based on purchased debt? How does one purchase debt? Debt from whom?

    Wow this is so confusing, but it's interesting nonetheless since I've always wanted to know the ins-and-outs of money ^_^
     
  10. blackout

    blackout Violet.

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    It means we are all endebted to,
    and paying interest to
    private elite banking families.

    How nice for them.
     
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  11. Just_me_Mike

    Just_me_Mike Well-Known Member

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    Paul, you are learning the PR part of the Federal Reserve. There is a whole different side to this agency.

    This link is hard to swallow, and many will call it a racist link, but there is certainly a lot of information to research on your own, to get the other side of centralized banking and its history.

    Good luck, and know that people have died trying to unravel this and make to much of it public. More often than not, those that actually start getting air time, and run for office etc... They just end up dead.

    Of course there are conspiracy theorist, that take it to far, and connect to many dots, that can not be connected which then becomes wishful thinking on their part. So read between the lines a bit.

    http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=FinalWarn02-2
     
  12. Aquitaine

    Aquitaine Well-Known Member

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    Thanks itwillend, I'll read into that in a while.

    At the moment, I'm gonna research more into Fiat currencies as opposed to Specie currencies (when I get the time).

    It's kinda.... scary, to think that my currency has no actual specie attached to it :(
     
  13. Just_me_Mike

    Just_me_Mike Well-Known Member

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  14. Aquitaine

    Aquitaine Well-Known Member

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  15. blackout

    blackout Violet.

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    I carry around worthless paper in my pocket.

    Yet everyone gives me stuff for passing it around to them.

    It's a strange world.
     
  16. Aquitaine

    Aquitaine Well-Known Member

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    To my knowledge both our currencies are Fiat, and not backed by any specie, which basically means our money isn't backed by gold, or any other precious metal, or any other precious commodity for that matter.

    Well that kinda sucks, 'cause if our money isn't backed by anything, then what value does it have?

    So then what're being kept in the bank vaults, toilet paper?
     
  17. Just_me_Mike

    Just_me_Mike Well-Known Member

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    I do not ever recall seeing a US Note in my wallet.
     
  18. Just_me_Mike

    Just_me_Mike Well-Known Member

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    Welcome to the era of Central Banks.
    Thomas Jefforson fought against them, Andrew Jackson fought against them, but in the end, we now have a system that can print and make money out of thin air. Your really heading down a road that is depressing Paul. Take your time, I have been there, and am still recovering...
     
  19. Aquitaine

    Aquitaine Well-Known Member

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    Shall I start a new thread with a Poll to see if other Americans are the same, whether or not they have Federal Reserve, or United States Notes in their wallets?

    Because that's weird...... since only US notes were printed by the US Treasury, and not Federal Reserve Notes - which are printed by the Federal Reserve.

    What the Hell is that paper in your wallet?!
     
  20. Just_me_Mike

    Just_me_Mike Well-Known Member

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    According to your own post earlier, in 1971 the US note stopped being made. Isn't that correct? Which means all power and position has been granted to the Fed. What don't you understand about that?
     
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