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When is the U.S. Treasury allowed to print more money?
Can they simply print as much as they want, or are there rules for making more?
- Anonymous1 decade agoFavorite Answer
The US treasury does not print money.
Money is printed by The Federal Reserve, a private bank, who then sell it the treasury, and charge interest on the unpaid debt.
This is one of the big scams which is perpetrated on the American public.Source(s): The Federal Reserve is PRIVATELY OWNED http://www.worldnewsstand.net/today/articles/fedpr...
- 1 decade ago
The treasury prints money that is backed by real gold. Meaning, for ease sake (not real number) there is $1 million dollars in Ft. Knox representing the amout of "backed" money...then the US Treasury can have $1 million worth of paper money floating around. Every day banks send destroyed or worn out money back to the treasury and shred it and print new money to replace it. Some of the shredded money is put into pens and paperweights, etc. that people can buy as a novelty...it might say "this pen includes $1000" but it is worthless shredded money. Some of it is recycled. This is a simplistic explanation but it gives you the general idea. Of course, everythis is well documented and the people at the treasury have to sign for and account for everything that is shredded...and there are no free samples of the new product!
- Anonymous1 decade ago
You have a great answer from David, but let me add, that Deficit spending results in printing more money- and Bush has the printing presses running full speed.
- brinlarrrLv 51 decade ago
they can print as much as they want, however if they print too much they will cause inflation
how much is too much? no one knows
as the economy expands and america produces more they have to print more money to keep up with the increase in wealth or they will cause deflation. it is interesting to note that most money isnt in the form of bank notes but rather as notaions in differnt banks , so if every one with drew their money at once there wouldnt be one10,000 th of enough notes
the us$ has not been backed by goldeven in part since 1972 and then then it was only 22%. The usa does have gold reserve but there doesnt seem to be any point to holding them and they are being sold off as gold no longer performs a funstion in currancy trading.
the federal reserve isnt privatly owned it a governement instituion totaly owned by the governemt
What is the Federal Reserve System?
The Federal Reserve System, often referred to as the Federal Reserve or simply "the Fed," is the central bank of the United States. It was created by Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role has evolved and expanded.
When was the Federal Reserve created?
The Federal Reserve was created on December 23, 1913, with the signing of the Federal Reserve Act by President Woodrow Wilson. The act had been drafted as House Resolution 7837 by Representative Carter Glass (D-VA), incoming chairman of the House Banking and Currency Committee.
What are the Federal Reserve's responsibilities?
Today, the Federal Reserve's responsibilities duties fall into four general areas:
conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices
supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments systems
For an overview of the Federal Reserve and its responsibilities, see The Federal Reserve System: Purposes and Functions.
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How is the Federal Reserve System structured?
The Federal Reserve System has a structure designed by Congress to give it a broad perspective on the economy and on economic activity in all parts of the nation. It is a federal system, composed basically of a central, governmental agency--the Board of Governors--in Washington, D.C., and twelve regional Federal Reserve Banks, located in major cities throughout the nation. These components share responsibility for supervising and regulating certain financial institutions and activities; for providing banking services to depository institutions and to the federal government; and for ensuring that consumers receive adequate information and fair treatment in their business with the banking system.
A major component of the System is the Federal Open Market Committee (FOMC), which is made up of the members of the Board of Governors, the president of the Federal Reserve Bank of New York, and presidents of four other Federal Reserve Banks, who serve on a rotating basis. The FOMC oversees open market operations, which is the main tool used by the Federal Reserve to influence money market conditions and the growth of money and credit.
Who owns the Federal Reserve?
The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.
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 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 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. Therefore, the Federal Reserve can be more accurately described as "independent within the government."
The twelve regional Federal Reserve Banks, which were established by 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, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
- Anonymous1 decade ago
Not rules, but regulations. If there is too much money in circulation, the value of it decreases and you have inflation