Why does no one report on the fact that the Federal Reserve is a private bank.?

Question

Federal Reserve is an illegal intity operating inside our gov. without any oversight. You income tax does not pay for any programs it just pays the intrest on the debt from the Fed. Res. which is run by a handful of bankers.Your paper $ is only worth about 4 cents.

Answer 1

Way off base:

The Federal Reserve System was established by the Federal Reserve Act of 1913 to regulate the U.S. banking and monetary system. The Federal Reserve System is comprised of 12 Regional Federal Reserve Banks, their 24 branches, and all national and state banks that are part of the System. National banks are stockholders of the System.

The Federal Reserve System's main functions are to regulate the national money supply, set reserve requirements for member banks, supervise the printing of currency at the mint, act as clearinghouse for the transfer of funds throughout the banking system and examine the member banks to make sure they meet various Federal Reserve regulations. Although the members of the system's governing board are appointed by the President and confirmed by the Senate, the Federal Reserve System is considered an independent entity, which is supposed to make decisions free of political influence. Governors are appointed for 14 years, which further assures their independence.


So, the Fed is NOT illegal as it was created by the Federal Reserve Act of 1913 (ie. a LAW passed by the US Government).

Oversight is from Congress (who created the Fed), which is why the Fed chairman has to testify there all the time.

The Fed does not have anything to do with the US debt since it does NOT issue Debt - THAT is the role of the US Treasury.

Answer 2

* It is not wholly true that the Federal Reserve is private.

The Federal Reserve System is organized with a government agency at the top (the Board of Governors), and branches beneath them that resemble private corporations. (http://www.federalreserveeducation.org/fed101/structure/ )

The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress. It operates per it's charter and laws set by congress. it is overseen by congress. There is no structure or mechanism for private ownership at this level. Board members are forbidden by law to have any economic interest in a private bank.

The 12 branches, however, are organized similar to private corporations. Member banks are required to buy shares in their branch. They can vote for 6 of their 9 board members. The shares get a standard 6% dividend. These shares cannot be sold on the open market. All 'profit' from the Federal Reserve branches are turned over to the Treasury at the end of the year. (that's been about 95% since 1913). Are the Fed branches privately owned? The Fed says 'No' (ref http://www.federalreserve.gov/generalinfo/faq/faqfrbanks.htm#6 ). Courts have ruled that it can be treated as a private corporation for purposes of tort law.

* Illegal? Why would you say that? It is created by an act of congress. What law does its existence violate?

* Per the Federal Reserve Act of 1913, congress has oversight. The Fed creates reports and attends hearings.

* Regarding the 'income tax payments', that is an often repeated myth. You can dispel it yourself with some internet lookups and simple math.

Revenue from income taxes: $809B
(ref: http://www.publicagenda.org/issues/factfiles_detail.cfm?issue_type=federal_budget&list=7)

Interest on the national debt: $160B

Percentage of debt held by the Federal Reserve: 17%
(Ref: http://www.bondmarkets.com/story.asp?id=1215)

Budget of the Federal Reserve: $2.9B
(Ref: http://www.federalreserve.gov/generalinfo/foia/frbbankbudgets/2007ReserveBankBudgets.pdf)

Interest paid to the Federal Reserve: $27B

Interest returned to the Treasury: $24B

So when you think about it, when the Fed buys a T-Bill and it returns 90%+ of the interest back to the Treasury, it is practically an interest free loan.

* "handful of bankers" - There are about 2300 member banks in the Federal Reserve system

Answer 3

Really the most important function of the Federal Reserve Bank is to act as a clearinghouse between all other banks. For example, You have an account with xyz bank, you go to walmart and write a check for your purchase. Walmart does their business through the abc bank. They deposit your check, it then goes thru the nearest regional Federal Reserve branch to clear. Usually this takes around 3 business days. It serves other functions as well, but this is the most important. Incidentally, there is no currency in the world backed 100% by real assets (like gold) what makes the economy keep working, is our faith, that when we desire to make a purchase our currency will be accepted. It is our faith and only our faith that makes this possible. Anyone who tells you different is full of BS. Hope you find this somewhat helpful.

Answer 4

Dave,

I hear your frustration and agree with everything you said with the exception of the illegal entity. The FR Bank is designed to be the financial fuel for the US Government. I think the better question is, why the FR does not include the inflation prices of the US in their CPI reports, (i.e. Real Estate and US businesses), rather than just the foreign countries that create all our consumer goods. The common US tax payer has not been properly educated to ask the right questions, or know where to look for answers, all we are taught is that things are not fair. Well Dave, I think things are very fair, once you understand the game we are all playing in. If you look back at our history (going back to the Boston Tea Party) we did not have taxes in this country. The idea of taxation was sold to the poor and middle class so that they could tax the rich. Well, that backfired, and guess what; it will always remain that way. The middle class (because of their lack of education, and ways of thinking) will always be taxed the heaviest. What needs to happen is, instead of a middle class citizen going out and spending $2500 on a new television, they need to spend that money on self education. Learn how money works, and how to make it work for you.

Lastly, you are correct about the dollar, and how much it is worth today, and close to how much it will be worth tomorrow. However, you must understand that, that is what the dollar is designed to do. The US government has a license to print money, and as a nation we have an obligation to pay for it. That’s the bad news, the good news is that, if financially educated people were to invest properly in appreciating assets (real estate, business), rather than depreciating liabilities (cars, boats, televisions) then the deprecating dollar would work in your favor.

Dave, though you are correct in your observations about the FR Bank, remember one thing; we live in a capitalist society, and the institutions designed to lead this capitalistic society, are designed to make us rich and strong if used correctly, but can also make us poor and weak if not taken advantage of properly.

I don't know what led you to ask your question, but from my experience, there are thousands of private banks and private investors out there and it just so happens that the FR Bank is perhaps one of, if not the, largest private bank in our nation, and their biggest client is.....the US government. It is the equivalent of going to the gas station every time your big SUV needs gas, and getting it filled up without having to pay for it. It isn't illegal....if you know the owner, however, once and in while the owner is going to need a favor and guess who they are going to get it from. That's right the big SUV owner.

Best of luck to you Dave.

Answer 5

Yes it bothers me and it particularly bothers me that I am not allowed by law to use a competing, metal-backed currency which would actually hold its value independent of the federal reserve's self-serving inflation techniques. Several answers here have summed it up very well, so I only want to add a couple of things for anyone interested in this extremely important issue. First, something that has not changed in a thousand years, and never will:     Bankers have no loyalty except to money, and no nationality but Profit. Second, a prophetic quote from one of our first presidents: "History records that money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.” — James Madison

Answer 6

I thought everyone knew that the Federal Reserve Bank was private.

We all learned that in business school...in Business 101!

It's private for a reason...do you want the government controlling EVERYTHING???

Answer 7

Stop

Keep your hands away from the keyboard. Turn off your computer and step away. Go to the phone and call your local community college and tell them you wish to enroll in some business courses and learn about Money & Banking.

Stay away from sharp objects.

You really do have a lot to learn.

Answer 8

Please learn to spell before you pose such questions. So far as a a paper dollar being worth 4 cents, it certainly buys quite a lot of goods. If you know of a better system, and where it is located, would you advise? Best wishes

Answer 9

The federal reserve is not a bank in your terminology, it is an arm of the federal gov't, you can't buy shares in it., It does not pay out dividends and has no stock shares.

Answer 10

It is not really totally private. It has some qualities of being public. They follow a lot of federal regulations.