Anonymous
Anonymous asked in Politics & GovernmentGovernment · 1 decade ago

What is the purpose of the Federal Reserve bank?

If you are familar with how the Federal Reserve bank came into existance,you will understand. In light of the suffering economy, high interest rates, inflation, foreclosers etc. Why do we need the Federal Reserve bank, Why can't the Government print unlimited money instead of paying the familes who run the Fed bank.

Is it really neccessary to have a bank that holds our debt, while they have limitless money?

The Government IMO doesn't rule this country, the Fed bank rules this country.

So can someone reiterate on this.

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  • 1 decade ago
    Favorite Answer

    ===> What is the purpose of the Federal Reserve bank?

    ---> From there mission statement:

    "The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.

    Today, the Federal Reserve’s duties fall into four general areas:

    - conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates

    - 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 financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system "

    (Ref: http://www.federalreserve.gov/generalinfo/mission/...

    ==> Why do we need the Federal Reserve bank?

    --> A central bank provides many important functions for a vital economy. We didn't always have a central bank so we can look to history for what it would be like without one.

    Without a publicly owned central bank:

    -There would be no national coordinated monetary policy. Each bank would expand or contract credit based on their immediate business needs, not the natons requirements.

    - Smaller banks would be dependent on larger banks for credit extensions, currency, etc. History has shown that larger banks often consider smaller banks as competition and didn't care if they failed. (After 1935, the Fed was charged with looking after the overall health of the system)

    - Before 1905, there was over 30,000 different currencies in circulation.

    - In international monetary matters, the nations largest private banks would represent America

    - There would be no elasticity to the currency. You would see more cycles of inflation/deflation, and boom/bust as we saw in the 1800s

    - Banks would return to being audited soley by themselves in their shareholders interest. (After 1935, the Fed was charged with being the nations bank auditors to serve depositers interest as well.)

    - Clearing of checks would go back to private clearinghouses often run by large banks. Without an impartial clearinghouse, decisions in the process would sway toward the private interests that control it.

    So we really don't need a Federal Reserve if you prefer what the historical record has shown us.

    ==> Why can't the Government print unlimited money...?

    Some governments have tried to print money for expenses or pay debt. And this is the root cause for Hyperinflation.

    Currency is only useful if it can maintain its ability to act as a temporary storage vehicle for wealth, and be subsequently exchange for a good or service. Printing unlimited money would destroy the value and usefulness of currency.

    ==> ...instead of paying the familes who run the Fed bank.

    No families own the Federal Reserve.

    The Board of Governors is a 100% government agency with no mechanism for private ownership.

    The Branches are organized like corporations where member banks are required to buy shares. Each member bank has one vote toward electing their board of directors. Oversite of the branches resides with the Board of Governors. The Shares get a standard 6% interest. All other 'profit' is turned over to the U.S. Treasury at the end of the year.

    ==> "The Government IMO doesn't rule this country, the Fed bank rules this country."

    --> The Fed has some awesome power but ultimately cannot make laws, enforce laws, or direct armies. They are also subject to oversight by congress who tend to meddle in Fed affairs if things are not going their way.

    "Ruling" implies the ability to control most actions of the government and it's people. . All other branches of the government. The Fed's power fall short of that definition.

  • Anonymous
    4 years ago

    Purpose Of The Federal Reserve

  • Anonymous
    5 years ago

    This Site Might Help You.

    RE:

    What is the purpose of the Federal Reserve bank?

    If you are familar with how the Federal Reserve bank came into existance,you will understand. In light of the suffering economy, high interest rates, inflation, foreclosers etc. Why do we need the Federal Reserve bank, Why can't the Government print unlimited money instead of paying the familes...

    Source(s): purpose federal reserve bank: https://biturl.im/52TXO
  • Anonymous
    5 years ago

    For the best answers, search on this site https://shorturl.im/avC3X

    yes, all devaluation is ultimately the consequence of fractional reserve banking. Opponnets of the original founding of the Fed like unsung hero Louis B. McFadden warned of this up until his suspicious death. They've caused every 'boom-bust cycle' since their illegal founding in 1913 by expanding and then contracting the money supply including during the Great Depression which was largely their doing. They profit massively from war by indebting governments which borrow of them to pay for it at interest of course. They funded all sides in many wars including BOTH world wars. 40% of all US income tax goes to them. This time they seem to be driving up the price of hard assets like gold and snapping up public utilities so that when the world's main fiat currencies collapse i.e. US Dollar, English Pound, Euro they can buy up all the assets on pennies on the Dollar. The same banking dynasties incidentally have seized the majority of the world's gold reserves including those which were in Fort Knox which is empty . They also want to create the pressures to persuade the public to agree to the NAU as the 'only solution', when in truth shutting them down is the only solution.

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  • 1 decade ago

    The purpose of the Federal Reserve Bank is to make inflation higher while printing money the value of which is held up by nothing more than "Hot Air".

    Inflation is a net worth tax on All Savings. That is why there is little savings in America today. That's why you should buy Gold & remember if it isn't in your hand, you Don't have it.

  • OGUN
    Lv 7
    1 decade ago

    You are absolutely right. The Federal Reserve bank rules the country just like the Centralized Banking systems rules the world. Think about it like this, typically a bank makes money not through savings but by loaning money. The Federal Reserve banker doesn't have to loan money because it charges the full value of bill to banks that only cost (4 cents?) to make. Because of this we will always be in debt. Now that the gold standard is gone from money and plastic is being promoted over paper soon all money will be virtual. Your drivers license or state ID will be all you need. Those without these things a person will be completely disenfranchised. I could gone for days with money conspiracies. Bottom line is these organizations that go unchecked setting the value of money are all powerful and it is they who rule the world...

  • 1 decade ago

    Gold Standard?

  • 1 decade ago

    The Federal Reserve is a check in the system, like the courts. It attempts to take politics out of our monetary policy. It has its faults, but overall it works.

    No one was complaining when they dropped rates to 1% to help the economy after 9/11 or that Alan Greenspan was as responsible for the Reagan revolution as the President.

  • Anonymous
    1 decade ago

    To make the bankers richer so they can get even richer fleecing the public. They have plenty of printing presses!

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