Posted on 10/18/2015 4:08:05 AM PDT by expat_panama
Antipathy to the central bank is a uniquely American tradition. No federal agency, except the Internal Revenue Service, is held in lower regard than the Federal Reserve, according to public opinion surveys. The left accuses the Fed of being too cozy with banks; the right says it is planting the seeds of a massive inflation.
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...President James Madison, previously an opponent, argued that a bank could be useful...
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...the Second Bank strengthened America’s currency and finances, Andrew Jackson reviled it as a tool of privilege. He vowed to “kill” it, and did. Tocqueville concluded that Americans “are obviously preoccupied by one great fear,” the fear of “centralization.”...
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...antipathy to the federal government stemmed from our experience as colonial subjects of a distant king...
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...Jefferson idealized farmers and scorned financiers. Bankers, by contrast, were slick and beguiling. This attitude persisted into the 20th century. After the stock-market panic of 1907, President Theodore Roosevelt objected to the revulsion against bankers...
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When Woodrow Wilson ran for president in 1912, he was forced to declare himself “opposed to the idea of a central bank”...
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Today, these groups have switched sides. Wall Street has largely supported Fed Chairwoman Janet Yellen’s low-interest-rate policy while populist critics have castigated the Fed for promoting inflation. Still, inflation remains low...
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But if the Federal Reserve didn’t exist, Congress would have a hard time enacting it now...
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...Some object to ultralow interest rates, fearing that they will lead to economic distortions, while others resent the bailouts and other programs designed to ease the 2008 financial crisis.
Acting as this sort of “lender of last resort” was the Fed’s original purpose, of course, but many Americans still think that the Fed has too much power. Jackson’s ghost lives on.
(Excerpt) Read more at wsj.com ...
Political cartoon from the early 1800's showing Jackson slaying the Bank---->.
iirc the name of the bank's president was "Biddle" --a name Dickens should have thought up.
At any rate, y'all know that Fed bashing is one of my hot buttons, but my thinking now is that we're better off with it than w/o it.
BS headline. I’d reckon that 90% of Americans don’t even know what the Fed does.
fwiw --something to browse thru after Sunday dinner...
--and that probably goes for 90% of the folks who work at the Fed too; but as long as you and I are here to keep an eye on things America will probably do just fine. ;)
I would agree....fewer than ten-percent can give a reasonable definition of the Fed (two lines).
Journalists (at least at national level) might have a 80-percent recognition factor. And if you got elected to DC....Representative or Senator....you have a 99-percent recognition factor.
The thing is...as much as you might think they are there to help the nation....it could be exactly the opposite in terms of what they do in results.
We could say that after 1929, for sure.
Once again the elites telling us what to think!
Wait a sec., up until the early '30's we were on the gold standard, and having the Fed control money w/ the Open Market Committee didn't even exist until the late 30's. Even the idea of having a 'lender of last resort' didn't bring about the FDIC until the Depression was already well under way.
People fear what they don’t understand. The question really is, if not the Fed then who?
Central Planning <> Free Market
The Fed has allowed the hack pols to get themselves elected using our money by giving away free stuff. Inflation numbers are lies. Normally the basket of goods and services used to figure inflation does not include oil and food which in the past were deemed too volatile, so no cola increase this year. Now they are being used so the Feds don’t have to allow us to see the real numbers, the same goes for unemployment.
As I understand it the Fed is a private bank and we are not allowed to know who owns it or who they really front for. In the real world what the Feds do would fall under the RICO Act, just another Mafia organization.
--or what? That's really the point, it's so easy to sit back and gripe "Central Planning <> Free Market" but we live on a planet where we have to set up governments to keep the peace and coin money. No way around it.
Of course there was other demand for treasuries besides the Fed. There was a periodic unwinding of the carry trade and that drove up T-bill demand in spurts. There was a general worldwide demand for the perceived safety of US securities. There was a perception of deflation and demand for treasuries as good as cash. And there is the Fed's excuse of fighting deflation.
But those are useless and contradictory excuses. The Fed did not have to print money and give it to politicians, but they did. They did it because that is the side their bread is buttered on. That portion of their policy is 100% political.
I could also bore you with the fact that they didn't need to prop up big banks via mortgage churn by lowering mortgage rates by buying mortgage securities. I could also go on and on about the carry trade that props up big banks at the expense of smaller foreign economies done in by the boom and bust. Or you could deny those are true, but I don't really care, because what you are really arguing is that we need a central bank, possible or alleged warts and all, for a stable currency and long term benefit of the economy.
The fact of the matter is that we need a stable central currency and the Fed is the best way of doing that. We all remember the phrase "don't bet against the Fed" and I have done poorly a few times when I did not follow that advice. The Fed can't be replaced, for example, with a piece of software that responds to the velocity of money and similar indicators because those indicators are imprecise and the markets in large part will figure out how to game the software. The result would be booms and busts that the human-run Fed is trying to avoid.
The problem is that the human-run Fed does not have the data to preclude boom and busts either. The one thing the human-Fed has going for it is inertia. That means conservative decision-making even if one believes, as I do, that the policies are wrong. But because of that inertia and the general focus on the value of the currency, the Fed is the best we can do at this point.
That's something too many folks don't know because they choose not to know it. The rest of us see the info's public record.
Actually, most of the money that the Fed's "printed" over the past few years has been spent buying up other people's T-bills --treasury notes that folks got when they gave money to politicians.
9. The management of a great funded debt and a extensive system of taxes will afford a plea, not to be neglected, for establishment of a great incorporated bank. the use of such a machine is well understood. If the Constitution, according to its fair meaning, should not authorize it, so much the better. Push it through by a forced meaning and you will get in the bargain an admirable precedent for future misconstructions.
8. (4) A great debt will require great taxes; great taxes, many taxgatherers and other officers; and all officers are auxiliaries of power.
6. But the grand nostrum will be a public debt…
11. As soon as sufficient progress in the intended change shall have been made, and the public mind duly prepared according to the rules already laid down, it will be proper to venture on another and a bolder step toward a removal of the constitutional landmarks.
The Annals of America - 1784-1796; Philip Freneau
-——a reasonable definition of the Fed (two lines)-——
You have a chance this morning to help out those of us >10%ers
what are your two lines?
One might consider currencies like Bitcoin as living outside the control of governments, yet providing a means of exchange. Historically, gold serves the same purpose. these are currencies outside the control and whim of governments, and that's a good thing.
A federally established bank agency with a board of governors, which monitors and regulates the monetary policy of the United States.
You could pump it up to eight lines and still be within the comprehension of twenty-percent of Americans. Beyond the forty-line point, it’s like the infield-fly-rule of professional baseball or the method by which the NCAA picks bowl matches.
I’m not saying this is all a bad thing. But let’s be serious....we all have priorities in our lives, and the text to the National Anthem, all the teams in the NFL, or the last time I did the oil change....is next to impossible to remember. Our lives are a bit complicated now, and it’s our own fault.
Many of those folks gave the money to the politicians knowing that the Fed would buy the treasuries from them, so it’s really just an extra step, not very meaningful.
How was the Fed supposed to stop that?
Normally the basket of goods and services used to figure inflation does not include oil and food which in the past were deemed too volatile, so no cola increase this year. Now they are being used so the Feds don’t have to allow us to see the real numbers, the same goes for unemployment.
In the first place the Fed does not determine the basket of goods used in the Consumer Price Index to determine inflation. That is set by the Bureau of Labor Statistics. Second, the CPI basket of goods does include food and fuel. Finally Social Security increases are not based on the CPI but on a sub-set of the CPI which is supposed to more accurately reflect senior spending. None of that falls under the Federal Reserve.
As I understand it the Fed is a private bank and we are not allowed to know who owns it or who they really front for.
The Fed is considered a quasi-governmental entity. The twelve regional banks are owned by the commercial banks in the region. The individual banks themselves are audited annually by outside accounting firms as well as internal auditors and the results are available.
In the real world what the Feds do would fall under the RICO Act, just another Mafia organization.
In the real world the Federal Reserve operates like any other central bank, just more openly. If you don't think so then just try looking into the Bank of England or the Bundesbank or the Bank of Japan and see how far you get.
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