Federal Reserve explained in less than 8 minutes

[VeronicaDwight]

Below is a link to a quick simple overview of the Federal Reserve in less than 8 minutes. Might be worthwhile to send to your friends that are not familiar with the Fed.

http://youtu.be/rsbTmKkZ0fI

[pauljmccain]

This is completely inaccurate. That is not how the fed works.

NBRP

[VeronicaDwight]

What's inaccurate about it?

[pauljmccain]

The entire thing. That's not what the fed does, how it works, or why it works.

http://en.wikipedia.org/wiki/Federal_Reserve_System

I encourage you to read that, but to touch on a few of the more important points: The Fed does not lend money to the government at the interest rate. It engages in open market activities, buying and selling government securities to manipulate the federal funds rate, the rate that banks pay each other for overnight reserves as needed. This determines the effective demand for money, and changes the money supply. The Fed isn't charging people for money that it prints. The U.S. Treasury prints money.

We RPers don't like it because they are completely manipulating the markets. Additionally, there are other side effects, such as offering low-cost loans to foreign governments, undeserving private business, and engaging in quantitative easing, which is expansion of the supply of money, and how we get inflation.

It has nothing to do with the Fed being owned by private banks and the fed making tons of money for them. Aside by the required, and unchanging, dividend paid to private banks that initially funded the system, all profits the fed makes are returned to the U.S. Treasury.

[Carson]

If she was my daughter I'd be very proud of her.

If I had a college she would be a professor.

If I could find her I would give her one of my Super Dollars to read later.



No matter how much hard earned money people can put together to build their countries the way they want there are those that can print up whatever it takes to dictate their way.


Super Dollar Text;

Maybe this will help make the danger of fiat money clear.

Imagine you and me are setting across from each other. We create enough money to represent all of the world's wealth. Each one of us has one SUPER Dollar in front of him.

You own half of everything and so do I.

I'm the government though. I get bribed into creating a Central Bank.

You're not doing what I want you to be doing so I print up myself eight more SUPER Dollars to manipulate you with.

All of a sudden your SUPER Dollar only represents one tenth of the wealth of the world!

That isn't the only thing though. You need to get busy and get to work because YOU'VE BEEN STIFFED with the bill for the money I PRINTED UP to get YOU TO DO what I WANTED.

That to me represents what has been happening to the economy, and us, and why so many of our occupations just can't keep up with the fake money presses. They print up what ever it takes to push, and push, and push us wherever they want.

They have been beating us with our own stick.

Super Dollar
This
Way
VVV

[Paul Or Nothing II]

Below is a link to a quick simple overview of the Federal Reserve in less than 8 minutes. Might be worthwhile to send to your friends that are not familiar with the Fed.

http://youtu.be/rsbTmKkZ0fI

Probably the only correct thing you said was that about the devaluation of the currency, which reflects as inflation & thereby we're able to buy less stuff than we otherwise would have been able to

Pauljmccain has already addressed some of the issues already including the fact that government does NOT actually "pay" anything to Fed as such but rather all the Fed's "profits" come straight back to Treasury; so don't buy into some of the conspiracy theories out there

Firstly, Fed is NOT "private" as such but more like "hybrid" of public & private sector because it IS a part of the government & it was formed by an act of Congress/government

The thing is that Fed doesn't directly dictate interest-rates but rather its "dealing desk" continuously tries to push it towards the rate that they have determined in their meetings to be "right" at any given time
Since banks are needed to keep 10% of their demand-deposits in reserve with Fed, the banks are continuously looking to make up their shortfalls on reserve-requirement by borrowing from banks that have surpluses & the rate at which they lend/borrow from one another is the "Federal Funds Rate", Fed's decide a target for where they think it "should" be according to them, to meet their economic objectives, when the ACTUAL interbank rate is lower than the Fed's target, they sell Treasury-securities (http://en.wikipedia.org/wiki/United_States_Treasury_security) to reduce moneysupply & thereby raise the cost of borrowing on the interbank market & they buy Treasury-securities when the rate goes above their intended rate - http://en.wikipedia.org/wiki/Federal_funds_rate

So this is how they manipulate the interest in the economy, which is what leads to booms & busts & recessions, due to unnecessary meddling in the moneysupply; for more on this - http://wiki.mises.org/wiki/Austrian_Business_Cycle_Theory

JFK myth also been exposed, he was not necessarily against Fed or anything, its just one of those JFK conspiracies - http://www.freedomforceinternational.org/freedomcontent.cfm?fuseaction=jfkmyth (the owner of this website is author of "Creature from Jekyll Island" which is one of the most famous expose of the Fed & its workings)

It is true though that a lot of people, including those banks skim off the system, do NOT want Paul to be heard or be president & that's why they black him out of MSM

A lot of untrue & misguided conspiracy theories out there but if you want a reasonable account of US modern monetary history then the following video is a good start - it's the perspective of "Austrian Economics" (the economics that Ron Paul follows & which is what enabled him to predict the housing bubble in 2001 (http://www.youtube.com/watch?v=A5nGCpzel6o))

By the way, welcome to the forums :) For more on economic issues, try the "Economics & Sound Money" section of this website



http://www.youtube.com/watch?v=iYZM58dulPE


The entire thing. That's not what the fed does, how it works, or why it works.

http://en.wikipedia.org/wiki/Federal_Reserve_System

I encourage you to read that, but to touch on a few of the more important points: The Fed does not lend money to the government at the interest rate. It engages in open market activities, buying and selling government securities to manipulate the federal funds rate, the rate that banks pay each other for overnight reserves as needed. This determines the effective demand for money, and changes the money supply. The Fed isn't charging people for money that it prints. The U.S. Treasury prints money.

We RPers don't like it because they are completely manipulating the markets. Additionally, there are other side effects, such as offering low-cost loans to foreign governments, undeserving private business, and engaging in quantitative easing, which is expansion of the supply of money, and how we get inflation.

It has nothing to do with the Fed being owned by private banks and the fed making tons of money for them. Aside by the required, and unchanging, dividend paid to private banks that initially funded the system, all profits the fed makes are returned to the U.S. Treasury.

+1

[Carson]

Some might say the government does not lend money to the government at an interest rate.

The government does end up printing up interest bearing bonds in exchange for the right to print Federal Reserve Notes. Some might say the government doesn't give the Federal Reserve interest bearing bonds. I suppose that would also be another detail to avoid another truth. Actually they give them to an intermediary, Goldman Sachs was the one that added their commission and handled the deals in recent memory.

Then again the central banks deal with lots of other organizations other than the host countries their leaching off. They have their beaks in everyone business.

[Kylie]

Probably the only correct thing you said was that about the devaluation of the currency, which reflects as inflation & thereby we're able to buy less stuff than we otherwise would have been able to

Pauljmccain has already addressed some of the issues already including the fact that government does NOT actually "pay" anything to Fed as such but rather all the Fed's "profits" come straight back to Treasury; so don't buy into some of the conspiracy theories out there

Firstly, Fed is NOT "private" as such but more like "hybrid" of public & private sector because it IS a part of the government & it was formed by an act of Congress/government

The thing is that Fed doesn't directly dictate interest-rates but rather its "dealing desk" continuously tries to push it towards the rate that they have determined in their meetings to be "right" at any given time
Since banks are needed to keep 10% of their demand-deposits in reserve with Fed, the banks are continuously looking to make up their shortfalls on reserve-requirement by borrowing from banks that have surpluses & the rate at which they lend/borrow from one another is the "Federal Funds Rate", Fed's decide a target for where they think it "should" be according to them, to meet their economic objectives, when the ACTUAL interbank rate is lower than the Fed's target, they sell Treasury-securities (http://en.wikipedia.org/wiki/United_States_Treasury_security) to reduce moneysupply & thereby raise the cost of borrowing on the interbank market & they buy Treasury-securities when the rate goes above their intended rate - http://en.wikipedia.org/wiki/Federal_funds_rate

So this is how they manipulate the interest in the economy, which is what leads to booms & busts & recessions, due to unnecessary meddling in the moneysupply; for more on this - http://wiki.mises.org/wiki/Austrian_Business_Cycle_Theory

JFK myth also been exposed, he was not necessarily against Fed or anything, its just one of those JFK conspiracies - http://www.freedomforceinternational.org/freedomcontent.cfm?fuseaction=jfkmyth (the owner of this website is author of "Creature from Jekyll Island" which is one of the most famous expose of the Fed & its workings)

It is true though that a lot of people, including those banks skim off the system, do NOT want Paul to be heard or be president & that's why they black him out of MSM

A lot of untrue & misguided conspiracy theories out there but if you want a reasonable account of US modern monetary history then the following video is a good start - it's the perspective of "Austrian Economics" (the economics that Ron Paul follows & which is what enabled him to predict the housing bubble in 2001 (http://www.youtube.com/watch?v=A5nGCpzel6o))

By the way, welcome to the forums :) For more on economic issues, try the "Economics & Sound Money" section of this website



http://www.youtube.com/watch?v=iYZM58dulPE



+1

Holy crap. Brain freeze.

They make this shit so difficult as to hide the lies and thievery, I presume?

[pauljmccain]

It's even more complicated now with all of the new instruments the Fed has introduced over the past 5 years. There's a reason why financial people make millions- it's not easy to understand.

[Kylie]

And we've been schooled into being so short an attention span that things like this throw most into a thought freeze. Eyes glaze over.

[Carson]

A simple seemingly overlooked point;

If I was to dig around an find something green, then sell it for a dollar, I would be required to pay capital gains taxes on it.

[Zippyjuan]

This is a much better explination of how the Fed really works:
http://useconomy.about.com/od/governmentagencies/p/fed.htm