Tuesday , 27 September 2016


The Federal Reserve: What It Is & What It Isn’t

The Federal Reserve system is an imperfect, but rather innovative,Ways-to-make-money-1  clearinghouse. Its structure as, “independent within government,” makes it hard to decipher precisely who owns it [but here’s my understanding of what it actually is].

The following article by Cullen  Roche (pragcap.com) is an edited ([ ]) and abridged (…) version of the original to provide a fast & easy read.

What is the Fed – Really?

The Federal  Reserve System was modeled after the New York Clearinghouse that existed in New  York during the 1800′s and 1900′s.  As its name states, the New York  Clearinghouse was just a big clearinghouse where many of the big banks would  come to settle their interbank payments. Unfortunately, it wasn’t broad enough to handle the scope and complexity of the U.S. banking system so these  regional clearinghouses were deficient in dealing with banking crises and  liquidity issues.

The Fed System took this private model and ramped it up  into a public/private hybrid model to create a national clearinghouse for  interbank payments.  You don’t hear much talk about this on a daily basis,  but that’s really what the Fed is – it’s just a big clearinghouse to help smooth the payments system.  All the other stuff it gets attention for (like  monetary policy) is just a sideshow to this primary purpose it’s serving – to  maintain a healthy functioning payments system.

Who Owns the Fed – Really?

The Fed is a weird entity when it comes to “ownership”.  It exists due to an act of Congress but it is also considered an independent entity because it is not part of the Executive or Legislative branches of government. The Fed exists because Congress created it, but it doesn’t enact policy  measures with any Congressional or Presidential approval.  Politically,  this makes it a very independent entity.

What About the Regional Feds?

The Regional Fed banks are arms of the Fed system that serve like regional  versions of the NY Clearinghouse. They issue stock to the member  banks which pays a fixed… dividend…[What remains after said payout is] remitted back to the US Treasury...

Let’s also not forget the primary purpose of the Fed:

  • to serve the payments system.  This means it is a supporter of the U.S. banking system. Before it can ever achieve its dual mandate on price stability and full employment the Fed must ensure the payments system is healthy.  Therefore, the Fed is often viewed as a servant to the banking  system while also trying to be a public purpose servant.  It has, in  effect, two masters by design…

I prefer to think of the Fed as  being an entity designed to help support the U.S. payments system (which thereby makes it a bank facilitating entity) which serves public purpose and private purpose.  In other words, it’s better to think of the Fed as a  public/private hybrid and not really being “owned” by anyone.

Disclosure: The original article, was edited ([ ]) and abridged (…) by the editorial team at munKNEE.com (Your Key to Making Money!) to provide you with a fast and easy read. “Follow the munKNEE” on Facebook, on Twitter or via our FREE bi-weekly Market Intelligence Report newsletter (see sample here , sign up in top right hand corner)

Other Articles Regarding the Fed:

1. How Likely Is the Fed to Go Bust & What Would it Mean For YOU?

At this point, thanks to a long-standing policy of wanton money printing, the Fed has more liabilities than ever before in its history – by an enormous margin – and this precarious balance sheet is dangerous, because if the Fed goes bust, everyone loses [- including YOU. Let me explain why that is the case].

2. Believe It Or Not: 147 Financial Institutions Control 40% of the Global Economy

Are the big banks really as powerful as some people say that they are?  Do they really control the global economy?  If you asked most people, they would tell you that governments control the global economy but the fact is that the campaigns of our politicians are funded by the ultra-wealthy, the big banks and the large corporations that they control.  Others would tell you that the Federal Reserve and the rest of the central banks around the world control the global economy but the truth is that the Federal Reserve was established by the bankers and for the benefit of the bankers.  As you will see below, at the very core of the global economy there exists a “super-entity” of financial institutions that control an almost unimaginable amount of wealth and power.  These financial institutions, and the ultra-wealthy individuals behind them, are really the ones that are pulling all the strings.

 3. Noonan: The Fed Will Never Ever Taper & What That Means For Gold

The Ponzi bubble is bigger than most can imagine. Western central planners… [continue to try to] suppress gold and silver in order to keep their sorry lives alive.  In the process, the destruction of people’s financial well- being is unabated…

4. Talk of Jobs Coming Back Courtesy of the Fed is Ridiculous! Here’s Why

Despite the preponderance of evidence that money printing doesn’t create jobs, Bernanke and his Central Bank colleagues continue to perpetuate the myth that the recovery is just around the corner, as long as we continue to print money. It’s complete and utter insanity as all it will accomplish is bankrupting the U.S. resulting in higher costs of living – and lower quality of life – for all of us. [Let me explain why I believe that is the case.]

5. The Central Bankers’ Theme Song: “Money, Money, It’s a Rich Man’s World!”

I was afforded a most extraordinary experience recently that has given me unique insight into our global financial and political systems. The information I gleaned from this experience is disturbing. What you are about to read will forever change your view of banking, politics, economics and money. It certainly did mine! Read More »

6. Funny Business: An Expose on What the World’s Central Bankers Are Up To

This article relates to a recent dinner I had with an European Central Bank [ECB] “executive” during which it was expressed/revealed (some might say, confirmed) that there is an on-going global conspiracy by Central Bankers to overthrow democracy and take over the world so to speak in what many refer to as a New World Order (NWO). My first reaction was that what he had to say was outlandish but, upon reflection, I think, in spite of the humorous circumstances surrounding the meeting, what he had to say was of considerable merit. Read on and express your own views in the Comment Section at the end of the article.

 

One comment

  1. Well, it seems that big European banks are going to be able to borrow ‘any amount’ of money in three separate auctions in October, November and December. Banks will have to put up collateral, or security, to tap the emergency funds.