View Full Version : The Money Matrix - Who Owns the FED? Jake Towne

11-17-2009, 08:53 AM
By Jake Towne--Ron Paul Forums member and candidate for Congress

The Money Matrix - Who Owns the FED?

[Note: I will speaking this Sunday, November 22nd in Philadelphia at the Constitution rEVOLution Tea Party event at City Hall and in front of the FED. Following the protest in the Independence Hall Visitor's Center I will give a talk entitled "END THE FED.... Then What? - The Transition to Sound Money." Details are here. My plank on the Federal Reserve can be read here.]
fedsealCARTEL - n. a combination of independent commercial or industrial enterprises designed to limit competition or fix prices (per Merriam-Webster's Dictionary) (emblem)


"Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create deposits."

- Josiah Stamp, President of the Bank of England in the 1920s

__________________________________________________ ___________________

[Note: This article is updated with more infomation and the March 2009 figures released from this February article in response to a couple press requests. The figures were calculated from the FED data here, using the same method described here.]

So, who owns the Federal Reserve? Well, it certainly is not the US government, as many would suppose. In fact, I have found that quite a few - including myself last year - who are roughly aware of how the FED works but believe that the owners of the FED is a secret. Well, it is not. The FED's Purposes and Functions (page 21/146) reads:

"As of March 2004, of the nation's approximately 7,700 commercial banks approximately 2,900 were members of the Federal Reserve Systema - approximately 2,000 national banks and 900 state banks. Member banks must subscribe to stock in their regional Federal Reserve Bank in an amount equal to 6 percent of their capital and surplus, half of which must be paid in while the other half is subject to call by the Board of Governors. The holding of this stock, however, does not carry with it the control and financial interest conveyed to holders of common stock in for-profit organizations. It is merely a legal obligation of Federal Reserve membership, and the stock may not be sold or pledged as collateral for loans. Member banks receive a 6 percent dividend annually on their stock, as specified by law, and vote for the Class A and Class B directors of the Reserve Bank. Stock in Federal Reserve Banks is not available for purchase by individuals or entities other than member banks."


So, the owners of the FED are simply other national and state banks. What is rather interesting is that this is no normal company stock! First, they are paid a perpetual annual dividend of 6% per the Federal Reserve Act of 1913 which is not a "law" in the technical sense that the FED implies. Second, apparently this "stock" is part of each member bank's balance sheet as only half is "paid in" to the FED and the "other half is subject to call" by the FED. The FED restates this here.

While many become quite alarmed by the mandated 6% dividend paid, please understand that this is just a babbling brook when compared to the powerful monetary torrents of fractional reserve banking and FED Open Market Operation's money creation/destruction as explained in Part 6. As I described here, in 2007 the FED earned $40.3 Billion from its security holdings, but passed $34.6 Billion to the government. The FED spent $3.3 Billion to run itself. Taking into account its revenue stream, I estimate the FED paid out roughly "just" $3.9 Billion in dividends in 2007.



Why do the owners of the FED not matter?

Well, as stated, the member banks have no ownership or decision-making rights as the shareholders of a corporation would. Their sole privilege is to influence the selection of several of the Reserve Bank division's directors who in turn may have a chance to influence a rotating chair on the FOMC (Federal Open Market Committee) or appoint the Federal Advisory Council. As seen in the below diagram, this is not much power at all.

So, why does who owns the FED matter?

Well, no American citizen, nor the American government, nor any other non-bank entity or corporation for that matter, can purchase stock. The FED is truly a "bank of banks" ruled by a small oligarchy of prominent central bankers. Ben Bernanke is just the current ringleader paraded out to the public. Given the vast power of the FED, I can claim with confidence that the Federal Reserve is a banking cartel. It has a monopoly over the money supply and credit of the United States. It is at best an unconstitutional quasi-governmental entity setup by the Federal Reserve Act of 1913. For an easy-to-understand FED analogy, please read "Ron Paul's rEVOLution Versus the "One Ring" of the Federal Reserve".

Note the lack of limits the government has on auditing or overruling the FED.

* "Monetary policy is exempt from audit by the Government Accountability Office." - (page 15/146)
* "The Federal Reserve is an independent agency, and that means, basically, that there is no other agency of government which can overrule actions that we take." -Alan Greenspan when asked by Jim Lehrer about the FED's relationship with the President.

[There is a movement to audit the FED as I last reported on here: STATUS REPORT: Ron Paul's Audit the FED Act, HR 1207 and S 604 ]

For the best estimate on the FED ownership please see below, note that the top 4 banks Bank of America, JP Morgan Chase, Citigroup, and Wells Fargo-Wachovia, control roughly 54% of the stock of the Federal Reserve Bank, and the top 10 banks, including Government Sachs, HSBC, and the Bank of New York, would control roughly 70% of the stock.

fedowners graph

[My dataset is here, but it won't be readable unless you download the XLS file and view it. I encourage anyone to check my work and offer comments.]

Of course, as I explained above, stock ownership in the FED does not confer control over the FED, but it is just more information pointing at the entire immoral cartel. There is complete documentation on the FED's website that it has acted in secret in the past to suppress the price of gold, and plenty of evidence that the same is going on today. Even Ben Bernanke admitted the FED caused the Great Depression! Since 1990, the FED has been orchestrating the outright ROBBERY of the savings of the American people by STEALING from the dollar's purchasing power.

The FED cartel is the arch-enemy not just of the free market, but of every living adult and child on the planet. It must be destroyed and the money powers returned to We the People.

Not nationalized. Not just audited. Not just more regulated. Destroyed. This topic must be debated in not just the halls of Congress but across the land, and there are plenty of viable replacement plans - mine is summarized here.

For the Republic!

Jake Towne is running for U.S. Congress in Pennsylvania's 15th District in the 2010 election as a citizen unaffiliated with any political parties. Jake also writes at www.LibertyMaven.com and www.CampaignForLiberty.com. A master campaign presentation for internet viewing is available. [Reach the Author Here!]


11-17-2009, 10:01 AM

11-17-2009, 10:01 AM
Good job helping to expose these bastards.


11-17-2009, 10:22 AM
Does anyone have any information on who owns the ECB? Because I have heard that it is completely public (wich does not make it any better) but I have also heard it is in part, property of the banks. Any info on the ECB?

11-17-2009, 11:10 AM
Does anyone have any information on who owns the ECB? Because I have heard that it is completely public (wich does not make it any better) but I have also heard it is in part, property of the banks. Any info on the ECB?

Here is what the ECB official wesbite says (not sure it directly answers your question):


How is the Bank's work organised?

The European Central Bank’s work is organised via the following decision-making bodies.

The Executive Board

This comprises the President of the ECB, the Vice-President and four other members, all appointed by common agreement of the presidents or prime ministers of the euro area countries. The Executive Board members are appointed for a non-renewable term of eight years.

The Executive Board is responsible for implementing monetary policy, as defined by the Governing Council (see below), and for giving instructions to the national central banks. It also prepares the Governing Council meetings and is responsible for the day-to-day management of the ECB.

The Governing Council

The Governing Council is the European Central Bank's highest decision-making body. It comprises the six members of the Executive Board and the governors of the 15 central banks of the euro zone. It is chaired by the President of the ECB. Its primary mission is to define the monetary policy of the euro zone, and, in particular, to fix the interest rates at which the commercial banks can obtain money from the Central Bank.

The General Council

The General Council is the ECB’s third decision-making body. It comprises the ECB’s President and the Vice-President and the governors of the national central banks of all 27 EU member states. The General Council contributes to the EC

The European Central Bank (ECB) was set up in 1998, under the Treaty on European Union, and it is based in Frankfurt (Germany). Its job is to manage the euro - the EU's single currency, and to safeguard price stability for the more than two-thirds of the EU's citizens who use the euro. The ECB is also responsible for framing and implementing the EU’s economic and monetary policy.

To carry out its role, the ECB works with the European System of Central Banks (ESCB), which covers all 27 EU countries. However, only 16 of these countries have so far adopted the euro. The 16 collectively make up the ‘euro area’ and their central banks, together with the European Central Bank, make up what is called the ‘Eurosystem’.

The ECB works in complete independence. Neither the ECB, the national central banks of the Eurosystem, nor any member of their decision-making bodies can ask for or accept instructions from any other body. The EU institutions and member state governments must respect this principle and must not seek to influence the ECB or the national central banks.

The ECB, working closely with the national central banks, prepares and implements the decisions taken by the Eurosystem’s decision-making bodies - the Governing Council, the Executive Board and the General Council.

Jean-Claude Trichet, from France, became President of the ECB in November 2003.

11-17-2009, 01:54 PM
I love Jake Towne

11-17-2009, 02:31 PM
A must read for all on this site

Jake Towne
11-17-2009, 08:30 PM
No sorry, unfortunately most of expertise is with the FED. Sounds like the answer below pretty much covers it - its a political machination just like the FED with a much shorter history.

The real sin of the ECB is that it constrains very different economies and countries to the same, fixed interest rate. Greece and Germany, for instance, should have different interest rates, which are best determined by the free market of course.

This will eventually rip Europe apart. (ie Greek riots)

The FED is doing the same thing with the US. From 1913-1930s, the different regions all had different rates. In recent years the FED funds rate is used across the land. Similar to the issue with the ECB, the more agricultural Midwest and the more-industrial East should have different interest rates, which should be left to the free market

Does anyone have any information on who owns the ECB? Because I have heard that it is completely public (wich does not make it any better) but I have also heard it is in part, property of the banks. Any info on the ECB?

11-18-2009, 09:33 AM
Here's why:

In return for this favor the Fed is allowed to amass a gigantic slush fund by earning interest income from the government securities it purchases through open market operations. Since the Fed earns money by buying securities but loses income by selling them, there is a built-in incentive for inflationary money creation.
A 1996 General Accounting Office audit revealed that the Fed's $2 billion annual budget was used to employ 25,000 well-paid employees, to operate its own Air Force of 47 Lear jets and small cargo planes, and to maintain a large fleet of automobiles (including personal cars for 59 Fed bank managers). A full-time curator oversees the Fed's collection of expensive paintings and sculptures.

The number of Fed employees earning more than $125,000 per year more than doubled (from 35 to 72) from 1993 to 1996, according to the GAO. Even the head janitor, known as the "support services director," was paid $163,800 in salary plus fringe benefits. Millions of dollars are spent on professional memberships, entertainment, and travel.

2002 GAO Audit of the Federal Reserve: http://www.gao.gov/new.items/d02774.pdf

July 1999, the Federal Reserve formed the Payments System
Development Committee (PSDC)

2000, the Treasury Investment Program was implemented, centralizing
services that the Federal Reserve provides to the Treasury Tax and Loan

2001, Federal Reserve’s Conference of First Vice Presidents recommended
incorporating this guidance to align the Reserve Bank budget projections
more closely with business strategies.


The Fed operates for the benefit of its executive branch controllers, the banking industry, and Fed employees themselves, at the expense of the rest of society which suffers from the economic instability it creates. Worse yet, many Americans have been conned into believing that the Fed Chairman operates like the Wizard of Oz, hiding behind dark curtains, pulling levers and pushing buttons to make the economy operate smoothly. So-called "scientific socialism" may have been the most absurd and destructive idea of the twentieth century, but it is nevertheless the guiding ideology of central banking.

Let's not forget this icon, one of the few @ WSJ to truly do investigative reporting and pursued corruption and put eyes on THE FED.

Journal's Wilke Dies of Cancer at 54

In recent years, he specialized in articles about deals cut by members of Congress to win special appropriations, known as earmarks, for friends, supporters and business associates back home.
One of his investigations helped lead to last year's indictment of then-Rep. Rick Renzi (R., Ariz.), who is accused of receiving favors from developers and copper-mining executives in return for congressional help. Another revealed the broad range of earmarks a powerful Democrat, Rep. John Murtha, used to bring federal contracts to his Pennsylvania district.

After moving to Washington for the newspaper in 1995, he covered the long Justice Department antitrust case against Microsoft Corp.
He also uncovered that Microsoft Chairman Bill Gates wasn't able to wrangle an invitation to join the exclusive Augusta National Golf Club, despite his considerable wealth and fame. (Mr. Gates eventually did get in to the club.)

01-04-2010, 01:27 PM
Bump--another member was looking for this piece

01-05-2010, 06:46 AM
Very interesting. Thanks

01-05-2010, 06:48 AM
Please check out Jake's site for more great articles


Jake is running for Congress and is a member of RPF.

01-05-2010, 02:48 PM
Very interesting. Thanks

Roma-I look forward to meeting you tonight at the RLC meeting

01-08-2010, 02:34 AM
Are not the majority of these bankers of a certain ethnic class, or religion?

01-22-2010, 11:15 AM
Are not the majority of these bankers of a certain ethnic class, or religion?

uh oh...