Maybe you should quote that more fully and adress the point that I actually made here....Jonny_trigonometry said:"The income gathered from these activities is used to finance day to day operations, including information gathering and economic research."
So the day to day operations include these things. they also include many other things. This is what made you think that the Fed is not privately owned? When you get down to how they decide to spend thier money, things become very complicated very quickly.
The income gathered from these activities is used to finance day to day operations, including information gathering and economic research. Any excess income is funneled back into the U.S. Treasury.
You may also want to note this part of the source I cited...Me said:The "profit" made by the fed goes to fund the operations of the fed and any excess "profit" goes directly into the U.S. Treasury. Doesn't exactly sound like a privately owned operation to me.
There are several government bodies that are viewed as "independant entities" and are responsible for their own funding but this does not mean they are "privately owned". Please show and quote a source that says this and backs up the assertion with credible evidence. Unfortunately I don't have the time to comb through several pages of pdf looking for this evidence.The Fed is an independent entity, but is subject to oversight from Congress. Basically, this means that decisions do not have to be ratified by the President or anyone else in the government, but Congress periodically reviews the Fed's activities.
The Fed is headed by a government agency in Washington known as the Board of Governors of the Federal Reserve. The Board of Governors consists of 7 presidential appointees, who each serve 14 year terms. All members must be confirmed by the Senate, and they can be reappointed. The board is led by a chairman and a vice chairman, each appointed by the President and approved by the Senate for 4 year terms.
Actually in full it states that half goes into an account to gain interest as compensation for the services of the bank and after a certain mark has been reached that money held in the "surplus fund" does still find it's way into the US Treasury coffers. This is the way all banks make money for their services. In effect the fed is getting paid for being the bank of the US government in the same fashion that our personal banks get paid for the services they render private citizens except that in the case of the Fed this is determined by the customer(the US government) as opposed to the bank(the fed). So I still don't see how this makes the fed a private venture.J Trig said:http://www.richmondfed.org/publications/economic_research/economic_review/pdfs/er690201.pdf [Broken]
notice on page 9, after "expenses" and payment of dividends, 1/2 of the rest of the money goes to a surplus fund, and the other goes to the treasury.
Yep, and the same goes for the FBI and the NSA and just about any government body you can name.J Trig said:there are many ways the Fed can make purchases look legitimate. I bet most of the money they spend will look like it is a valid thing to do. I haven't been able to find much about wether or not the fed spends money that goes into the economy as a whole, or just thier buddies. Many things can be written off as a business expense.
Yeah like you said that called insider information and is illegal. This is one of the reasons why the Fed was made an "Independant Entity" so as to make some sort of seperation between the politicians and the decisions made in regards to monetary policy to try to assuage the issues that can and do arrise with regard to conflict of interest. Considering that this is the very purpose of the fed and that the fed in the entity that influences monetary policy I am quite sure that there are measures in place to prevent those who work for the fed taking advantage of their knowledge. How effect these are I don't know and just how much this sort of thing is taken advantage of I don't know but this sort of thing can and will be a problem no matter what as long as we are using a capitalist system. The only thing we can do is make it as hard as possible for these people to do such things and keep those that we would suspect of doing such things out of those positions of power.J Trig said:"A major responsibility of the Federal Reserve System is to provide the total amount of reserves consistent with the needs of the economy at reasonably stable prices. Changes in the volume of reserves influence the money supply, the availability of credit, interest rates, and as a result, the volume of spending. Depository institutions feel the impact of changes initially, but the effects quickly spread to the entire domestic economy, and often to the international economy as well." - http://www.richmondfed.org/publications/educator_resources/federal_reserve_today/policy.cfm [Broken]
This shows an idea of how many options a person has if they have inside information. If you know what desicisions will be initiated, you know better ways to invest in the economy and pull money out of it. It's not just all in the profits the Fed makes, but also the abilities the people in the know about the fed's dealings have in investing correctly. When you are as powerful as people in the board of directors of the fed, you have ways of getting around being accused of insider info. Of course I can't back up this claim with evidence, but you can't discount it either. The flow of money can be masked too, if it takes many twists and turns through complicated language and policies. There is no doubt an international influence of the fed also, those in the know don't have to just make money in the us.
I have not argued at all your stance on fractional savings yet I just want to clear up one of your other major arguments, that being the idea that the fed is a private organization. So far as I can find it is not. Please show me some proof that it is if you can find any and I will be more than happy to acknowledge that and stop raising this issue.
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