Federal Reserve
The Federal Reserve System (also known as the Federal Reserve or simply "The Fed") is the central bank of the United States. It was created by the United States Congress and enacted on December 23, 1913, when President Woodrow Wilson signed the Owen-Glass Act into law.
The Federal Reserve System is composed of a central Board of Governors -- in Washington, D.C, and twelve regional Federal Reserve Banks located in major cities throughout the nation. Alan Greenspan currently serves as the Chairman of the Board of Governors of Federal Reserve.
Organization of the Federal Reserve\nThe Federal Reserve is comprised of a board of governors. The 7 members of the board are appointed by the President and confirmed by the Senate. The members are elected for a term of 14 years (with no re-appointment possible). The Federal Open Market Committee (FOMC) comprises the 7 members of the board of governors and 5 representatives from the Federal Reserve Banks. Alan Greenspan is the current chairman.Interest rates\nThe Fed is in charge of setting the Federal Funds Rate. This is the interest rate that banks are forced to charge each other for overnight loans to each other. This in turn influences the Wall Street Journal prime rate which is usually 3 percent higher than the federal funds rate. This prime rate is the relative rate that most banks price their loans at. The Fed usually lowers or raises its rates by 0.25% or 0.50%. The Economist, Merrill Lynch, Lehman Brothers, HSBC used to make predictions about how the rates will change. Since 2001, The Fed has lowered its interest rates several times to fight recession : lower rates make credit cheaper and so enable more investment, whereas saving brings less money (see monetary policy for more explanation). In November 2002, rates were cut to 1.75. Rates are below inflation level. It is said that the Fed doesn't have much ammunition left, since rates are already below inflation and that 1.25 means that there no much room left for further cuts (in theory five times 0.25) In March 2003, interest rates were at their lowest in 40 years. On the 23rd of July 2003 a Federal Reserve committee cut the federal funds rate by one-quarter of a percentage point - to 1 percent. The federal funds rate is also called the overnight rate because it is what banks charge one another for overnight loans. The last time it was lower was in July 1958, when the overnight rate averaged 0.68 percent. The Fed has cut the overnight rate 13 times since the beginning of 2001, when the rate was 6.5 percent. In June 2004, the target interest rate was raised 25 basis points to 1.25%Who Owns the Federal Reserve?\nThe Federal Reserve claims that nobody owns it – that it is an “independent entity within the government.” The Federal Reserve is subject to laws such as the Freedom of Information Act and the Privacy Act which cover Federal agencies but not private corporations; yet Congress gave the Federal Reserve the autonomy to carry out its responsibilities insulated from political pressure. Each of the Fed's three parts – the Board of Governors, the regional Reserve banks and the Federal Open Market Committee – operates independently of the federal government to carry out the Fed's core responsibilities. As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by the Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. The twelve regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized much like private corporations—possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold or traded or pledged as security for a loan; dividends are, by law, limited to 6 percent per year. (see section 3) The Federal Reserve System, frequently referred to as simply the Federal Reserve Bank, was created via the Federal Reserve Act of 1913 which "established a new central bank designed to add both flexibility and strength to the nation's financial system. The legislation provided for a system that included a number of regional Reserve Banks and a seven-member governing board. All national banks were required to join the system and other banks could join. The Reserve Banks opened for business in November 1914. Congress created Federal Reserve notes to provide the nation with an elastic supply of currency. The notes were to be issued to Reserve Banks for subsequent transmittal to banking institutions in accordance with the needs of the public.CriticismThe Federal Reserve Bank is the focus of much criticism and even, at times, conspiracy theories. Some critics say that the name was intentionally chosen to deceive and fool the U.S. citizens into acceptance. Such critics claim that the Federal Reserve's real purposes are (1) to make a profit by "skimming" a small percent of the 10 trillion dollar U.S. economy; (2) to redistribute wealth through the sales and purchase of the U.S. national debt (currently about 7 trillion dollars); and (3) to fix currency exchange rates with other country central banks throughout the world to generate an additional $1 Billion dollars a day in profits. Some of these critics say that the U.S. Congress was tricked by the world elite into creating the Federal Reserve System in 1913 for the purpose of money control through inflation (invisible taxation of the masses), extremely high and profitable interest rates, and outright taxation through the creation of liens and bonds paid for by U.S. citizens. These critics argue that, through unconstitutional changes in law, the words income (corporations) and wage (peoples job paychecks) were redefined. Taxation enforcement (Internal Revenue Service) could now force U.S. citizens to pay taxes, fees and fines under penalty of law, possible arrest and imprisonment.External links\n*Federal Reserve website\n*Federal Reserve Routing Directory\n*Opposition to the Fed\n*"Congress should stand up to the Fed" by Ralph Nader\n*Billions for bankers, debt for the people By Sheldon Emry\n*Secrets of the Federal Reserve by Eustace Mullins (Makes some specious arguments about the New World Order owning stock in the Fed, when it is banks that actually own the stock as mentioned above)\n*Creature from Jekyll Island (Chapter 10) by G. E. Griffin
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"There is only one nature - the division into science and engineering is a human imposition, not a natural one. Indeed, the division is a human failure; it reflects our limited capacity to comprehend the whole." - Bill Wulf |
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The organization committee was chartered with selecting the locations of between eight and twelve decentralized 