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Ctrl + F "federal reserve" - phrase not found. The Federal Reserve (which, despite its name, is not a part of the US Government) is the de facto institution th

by auspiv 3y ago

Ctrl + F "federal reserve" - phrase not found. The Federal Reserve (which, despite its name, is not a part of the US Government) is the de facto institution that controls money in the United States. All US Dollars are created by the Federal Reserve. It was created "for central control of the monetary system in order to alleviate financial crises". It is owned by member banks - "A member bank is a private institution and owns stock in its regional Federal Reserve Bank. All nationally chartered banks hold stock in one of the Federal Reserve Banks... The amount of stock a member bank must own is equal to 3% of its combined capital and surplus" https://www.institutionalinvestor.com/article/2bsx0wq4jdzo82fk8nhfk/culture/conspiracy-theorists-ask-who-owns-the-new-york-fed-heres-the-answer https://www.institutionalinvestor.com/article/2bsx0wq4jdzo82... - "Now, thanks to a Freedom of Information Act request filed late last year by Institutional Investor, we know the truth. II asked the New York Fed for the capital stock holdings of its members as of year-end 2018, as well as for each year going back to 2007. The bank responded with copies of what it calls its Capital Stock Master Report, a compendium of shareholdings of member banks, for each of those years. The big reveal for year-end 2018: Citibank, the No. 1 institution on the roster, held 87.9 million New York Federal Reserve Bank shares – or 42.8 percent of the total. The No. 2 holder stockholder was JPMorgan Chase Bank, with 60.6 million shares, equal to 29.5 percent of the total. In other words, the two banks together control nearly three-quarters of the regional bank’s capital shares." The Federal Reserve banks pay 6% dividend to member banks holding shares. The big banks effectively own the Federal Reserve.

corethree 3y ago
Federal reserve makes things equivalent to money and they use it to control the value of money. They do not own money. Owners of money are those that actually own it in the bank. Then there are those who own it in the form of assets which also helps divert control of value away from the Fed. In fact almost all rich people don't own money, they own some form of asset which has intrinsic value. Therefore in a non-technical sense, rich people are the owners of "money" or "value" which is what we're really getting at here. But there's another viewpoint of this. Corporations. Corporations own a lot of "value". But who owns the corporations? Rich people and also all of us. Generally upper middle class people and Rich people own most of the value and money.
WalterBright 3y ago
The Fed not being part of the government is a sham designed as a workaround to the Constitution not empowering the government to print money. The Fed chair and board is appointed by the President and approved by Congress. It hasn't been tested in court whether the President can fire them.
doublerabbit 3y ago
This aged animal explains a lot. [30mins] https://m.youtube.com/watch?v=8NBSwDEf8a8 https://m.youtube.com/watch?v=8NBSwDEf8a8 But essentially, the red shield aka rothschilds
deleted 3y ago
[deleted]
jjtheblunt 3y ago
> All US Dollars are created by the Federal Reserve. What? the US Mint in the US Department of Treasury creates money (which it then banks in its account at the federal reserve), though perhaps the ebb and tide of money into and out of the economy is more like what you describe?
- celtoid 3y ago
  According to the Federal Reserve Bank of Chicago, money creation happens in banks, not in government. "The actual process of money creation takes place primarily in banks." [0] [0] https://en.wikisource.org/wiki/Modern_Money_Mechanics/Introduction https://en.wikisource.org/wiki/Modern_Money_Mechanics/Introd...
  - jjtheblunt 3y ago
    That's a nice article, and thanks for linking to it, definite upvote, though it is sloppy with words, as "creation" above refers to issuing currency, not creating it. Here's where money is physically created, somewhat of a curious point since so much of transacted 'money' is digital, and perhaps why the article above misleadingly says "creates". https://en.wikipedia.org/wiki/United_States_Mint https://en.wikipedia.org/wiki/United_States_Mint
- somenameforme 3y ago
  Physical currency in existence is a very negligible sum of all money. This is thanks to what the article hits on - endless interest, and endless debt. If you took every single dollar in existence, you wouldn't be able to make whole even a small fraction of all debts. Interestingly enough, even if you took every dollar, digital or physical, in existence that would still be true. Isn't interest interesting? The primary way money is made is through loans, though the Fed buying treasuries also creates large amounts of money. When you deposit at a bank, they're only required to create a fraction of that deposit available. Hence - fractional reserve banking. [1] You deposit at a bank, they take that deposit and lend it out to somebody who now spends that money which eventually ends up getting deposited at a bank again, and the process iterates. If at some point everybody demands their money, a run on the bank, which the bank could not afford as they've lent out deposits to other people, then the Fed bails them out. The exact process is slightly more subtle, but not fundamentally different. There's a lot of great videos on a search for 'how money is created' at any video site. Because it's a question few know the answer to, everybody wants to know the answer to, and the answer itself is somewhat unsettling. [1] - https://en.wikipedia.org/wiki/Fractional-reserve_banking https://en.wikipedia.org/wiki/Fractional-reserve_banking
napsec 3y ago
Ordinary banks create money everyday when they issue loans.
- kylebenzle 3y ago
  Small banks can create money but only the Federal Reserve "sets the price" of money. The latter is arguably much more important.
  - napsec 3y ago
    The fed has tools they use to influence the value of money, that's true and part of their core mandate. But it's a massive oversimplification to say that they set the price of money.
peanut-walrus 3y ago
No, all US dollars are not created by the Fed. In fact, most US dollars in circulation have not been created by the Fed, but rather by private institutions. You get a mortgage from your bank? That's brand new dollars, never seen before.
alexb_ 3y ago
The federal reserve being completely divorced from the government is intentional and a good thing. When you give the government the power of controlling the money, you get populist decisions that work in the short term while crippling the value of the dollar in the long term. When you have banks that are incentivized to raise interest rates enough to make a ton of money but not enough to crash the economy, you keep the dollar as the strongest currency in the world. That's a good thing - the last thing I would want is for less free countries to expand their influence.
- boppo1 3y ago
  > populist decisions that work in the short term while crippling the value of the dollar in the long term. Got these anyway. ZIRP priced the middle class out of equity ownership. That historic bull run is from goosing the numbers, not record productivity. The S&P was ~750 in 1990. Things are not 6x better. We should let treasury auctions decide the yield curve, not a committee of 12 people.

by auspiv 3y ago

corethree 3y ago

Federal reserve makes things equivalent to money and they use it to control the value of money. They do not own money. Owners of money are those that actually own it in the bank. Then there are those who own it in the form of assets which also helps divert control of value away from the Fed. In fact almost all rich people don't own money, they own some form of asset which has intrinsic value. Therefore in a non-technical sense, rich people are the owners of "money" or "value" which is what we're really getting at here. But there's another viewpoint of this. Corporations. Corporations own a lot of "value". But who owns the corporations? Rich people and also all of us. Generally upper middle class people and Rich people own most of the value and money.

WalterBright 3y ago

The Fed not being part of the government is a sham designed as a workaround to the Constitution not empowering the government to print money. The Fed chair and board is appointed by the President and approved by Congress. It hasn't been tested in court whether the President can fire them.

doublerabbit 3y ago

This aged animal explains a lot. [30mins] https://m.youtube.com/watch?v=8NBSwDEf8a8 https://m.youtube.com/watch?v=8NBSwDEf8a8 But essentially, the red shield aka rothschilds

deleted 3y ago

[deleted]

jjtheblunt 3y ago

> All US Dollars are created by the Federal Reserve. What? the US Mint in the US Department of Treasury creates money (which it then banks in its account at the federal reserve), though perhaps the ebb and tide of money into and out of the economy is more like what you describe?

celtoid 3y ago
According to the Federal Reserve Bank of Chicago, money creation happens in banks, not in government. "The actual process of money creation takes place primarily in banks." [0] [0] https://en.wikisource.org/wiki/Modern_Money_Mechanics/Introduction https://en.wikisource.org/wiki/Modern_Money_Mechanics/Introd...
- jjtheblunt 3y ago
  That's a nice article, and thanks for linking to it, definite upvote, though it is sloppy with words, as "creation" above refers to issuing currency, not creating it. Here's where money is physically created, somewhat of a curious point since so much of transacted 'money' is digital, and perhaps why the article above misleadingly says "creates". https://en.wikipedia.org/wiki/United_States_Mint https://en.wikipedia.org/wiki/United_States_Mint
somenameforme 3y ago
Physical currency in existence is a very negligible sum of all money. This is thanks to what the article hits on - endless interest, and endless debt. If you took every single dollar in existence, you wouldn't be able to make whole even a small fraction of all debts. Interestingly enough, even if you took every dollar, digital or physical, in existence that would still be true. Isn't interest interesting? The primary way money is made is through loans, though the Fed buying treasuries also creates large amounts of money. When you deposit at a bank, they're only required to create a fraction of that deposit available. Hence - fractional reserve banking. [1] You deposit at a bank, they take that deposit and lend it out to somebody who now spends that money which eventually ends up getting deposited at a bank again, and the process iterates. If at some point everybody demands their money, a run on the bank, which the bank could not afford as they've lent out deposits to other people, then the Fed bails them out. The exact process is slightly more subtle, but not fundamentally different. There's a lot of great videos on a search for 'how money is created' at any video site. Because it's a question few know the answer to, everybody wants to know the answer to, and the answer itself is somewhat unsettling. [1] - https://en.wikipedia.org/wiki/Fractional-reserve_banking https://en.wikipedia.org/wiki/Fractional-reserve_banking

napsec 3y ago

Ordinary banks create money everyday when they issue loans.

kylebenzle 3y ago
Small banks can create money but only the Federal Reserve "sets the price" of money. The latter is arguably much more important.
- napsec 3y ago
  The fed has tools they use to influence the value of money, that's true and part of their core mandate. But it's a massive oversimplification to say that they set the price of money.

peanut-walrus 3y ago

No, all US dollars are not created by the Fed. In fact, most US dollars in circulation have not been created by the Fed, but rather by private institutions. You get a mortgage from your bank? That's brand new dollars, never seen before.

alexb_ 3y ago

The federal reserve being completely divorced from the government is intentional and a good thing. When you give the government the power of controlling the money, you get populist decisions that work in the short term while crippling the value of the dollar in the long term. When you have banks that are incentivized to raise interest rates enough to make a ton of money but not enough to crash the economy, you keep the dollar as the strongest currency in the world. That's a good thing - the last thing I would want is for less free countries to expand their influence.

boppo1 3y ago
> populist decisions that work in the short term while crippling the value of the dollar in the long term. Got these anyway. ZIRP priced the middle class out of equity ownership. That historic bull run is from goosing the numbers, not record productivity. The S&P was ~750 in 1990. Things are not 6x better. We should let treasury auctions decide the yield curve, not a committee of 12 people.