The American money capture
Date: Mon, 2 May 94 10:35:54 -0700 From: hughes@ah.com (Eric Hughes) The Great Depression was pretty clearly caused by deflation in the money supply. To quote Milton Friedman:
"All told, from July 1929 to March 1933, the money stock in the United States fell by one-third [...]" Capitalism and Freedom, p. 50
On this subject (really from the original post about money), I have several times tried to convince people that the Federal Reserve Bank is a private deal. I don't know where I got this impression, but no one will believe me. Are there some conspicuous facts that I could quote in support of this position? Or, perhaps, an easily obtained and authoritative document which explains just what the heck the Fed really is? I know the head is apppointed by the US gov, but my impression was that the rest of it was just a consortium of bankers to whom the national debt is owed. thanks, tw
None of this is a cypherpunk topic and I don't intend to post after this on the topic. werner@mc.ab.com says:
On this subject (really from the original post about money), I have several times tried to convince people that the Federal Reserve Bank is a private deal. I don't know where I got this impression, but no one will believe me.
Thats because it isn't true.
Are there some conspicuous facts that I could quote in support of this position?
No.
Or, perhaps, an easily obtained and authoritative document which explains just what the heck the Fed really is?
The Fed is pretty easy to understand. Although its set up to be quasi-independant, it more or less the government body that regulates the banking industry and controls the money supply. It does this by setting the discount rate (fairly small importance), by open-market purchases of treasury securities, by making deposits in member banks, and by altering the reserve requirements of U.S. banks. The Fed also is supposed to act as "lender of last resort" in order to stop banking panics by loaning money in extreme situtations to member banks. Technically, its not part of the government the way Amtrak, the Resolution Trust Company, and other quasi-independant bodies aren't part of the government. However, this is largely just an illusion. Its as much a part of the government as the post office. Its just a central bank, like every other central bank in most respects. Central banks are very bad things in my opinion, however, they aren't some evil conspiracy of the Illuminati, conspiring in the back room to take over the world. The Fed earns no "profits". It has no "shareholders". Its not a "bank" in the conventional sense.
I know the head is apppointed by the US gov, but my impression was that the rest of it was just a consortium of bankers to whom the national debt is owed.
The national debt isn't owed to "bankers". Its owed to the holders of U.S. government bonds. This includes everyone who's ever bought a savings bond, lots of individuals, pension plans, money market funds, insurance companies, corporations, banks, and lots of others. Besides, if the debt was owed to "bankers", that would just be shorthand for saying that the beneficial owner of the debt securities would be the depositors of the bank, meaning the public at large. Perry
Fed is not a bank but a conglomerate of privately owned banks. The system is a quasi-govt entity . On Mon, 2 May 1994, Perry E. Metzger wrote:
None of this is a cypherpunk topic and I don't intend to post after this on the topic.
werner@mc.ab.com says:
On this subject (really from the original post about money), I have several times tried to convince people that the Federal Reserve Bank is a private deal. I don't know where I got this impression, but no one will believe me.
Thats because it isn't true.
Are there some conspicuous facts that I could quote in support of this position?
No.
Or, perhaps, an easily obtained and authoritative document which explains just what the heck the Fed really is?
The Fed is pretty easy to understand. Although its set up to be quasi-independant, it more or less the government body that regulates the banking industry and controls the money supply. It does this by setting the discount rate (fairly small importance), by open-market purchases of treasury securities, by making deposits in member banks, and by altering the reserve requirements of U.S. banks. The Fed also is supposed to act as "lender of last resort" in order to stop banking panics by loaning money in extreme situtations to member banks.
Technically, its not part of the government the way Amtrak, the Resolution Trust Company, and other quasi-independant bodies aren't part of the government. However, this is largely just an illusion. Its as much a part of the government as the post office.
Its just a central bank, like every other central bank in most respects.
Central banks are very bad things in my opinion, however, they aren't some evil conspiracy of the Illuminati, conspiring in the back room to take over the world. The Fed earns no "profits". It has no "shareholders". Its not a "bank" in the conventional sense.
I know the head is apppointed by the US gov, but my impression was that the rest of it was just a consortium of bankers to whom the national debt is owed.
The national debt isn't owed to "bankers". Its owed to the holders of U.S. government bonds. This includes everyone who's ever bought a savings bond, lots of individuals, pension plans, money market funds, insurance companies, corporations, banks, and lots of others.
Besides, if the debt was owed to "bankers", that would just be shorthand for saying that the beneficial owner of the debt securities would be the depositors of the bank, meaning the public at large.
Perry
**************************************************************************** Qjones@infi.net She kissed me- I felt the hot blush * * Qjones@larry.wyvern.com Of raging passion incinerate my heart * ****************************************************************************
The Fed is pretty easy to understand. Although its set up to be quasi-independant, it more or less the government body that regulates the banking industry and controls the money supply.
I have the opportunity of a group meeting with some of the SF Fed operations staff a couple of weeks ago. Their words: "The Fed is in the government but not of the government" Other tidbits: -- The new Fed funds transfer system will continue to use DES, and will not be using Clipper. -- The Fed wants to get rid of paper checks. The check subsidy from the float is enormous. The purpose of the Expedited Funds Transfer Act (mandated two day clearing of checks over $2500, among other things) was to start squeezing the float out of the checking system. Eric
participants (4)
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hughes＠ah.com -
Perry E. Metzger -
Wayne Q Jones -
werner＠mc.ab.com