Why is the Federal Reserve Bank neither Federal or a Reserve?
Answer:
Yes, it is Federal, but it operates with some independence in order to reduce political influence.
Yes, it does keep reserves.
You really should read Title 12, Chapter 3 of the U.S. Code and take some graduate level economics classes.
To the other answerer about Clinton and his paying off the debt. Exactly how did you come up with that? When Clinton took office, the debt was $4.2 billion. When Clinton left office it was $5.7 billion, exactly how is that paying off the debt? Even the last two years he was in office when there was supposed to be a surplus of about $200 billion, the debt actually increased. $5.6 trillion on 1/4/1999 and $5.73 trillion on 1/19/2001. BTW, did you know that 44% of the total debt is actually held by.....(drumroll please).....the U.S. government? Yep, the government borrows money to lend to itself. :) There is a little over $1 trillion in treasury bills held by the Social Security Trust fund. Some are held by the Federal Reserve where interest payments are refunded to the Department of Treasury. People really should educate themselves instead of watching some video by a guy who never finished a high school education.
The name just sounds spiffy and is meant to mislead.
The Federal Reserve bank is both Federal and a Reserve. So the answer to your question is, well, it's a stupid question.
The Federal Reserve is made up of regional banks, with governors who sit on the Federal Open Market Committee, a Congressionally mandated body. So while the regional Fed bank that is in any of the many cities they sit in might not be a "Federal" bank, they are all still just branches of the overall system.
They are also a Reserve bank. They may no longer hold gold to back up our currency in the traditional sense of a reserve, but there are other things that can be reserved than just gold. The Fed still holds in reserve U.S. government notes, which are loaned at the overnight lending rate, and through which they do their job of controlling inflation and unemployment (as spelled out in their mandate).
Learn some facts before you go asking dumb questions. Hell, start with wikipedia. It may not be exhaustive, but it will give you a good start.
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In response to the other answerer (some clarification):
The Federal Reserve IS, I repeat IS, part of the Federal government. Yes, it is an independent body, without direct presidential or congressional control, but this is so that the Fed can work with independence instead of being prey to the political will of either branch. Many other government institutions operate under the same congressional mandate, and no one says they are not part of the government. Not all are as independent, but the Fed is a special case.
Second, the U.S. Treasury does issue money, and the Fed does not. It does not mention in the Constitution that there should be a separate banking facility, but what it does say is Congress shall have the power "To coin money, and regulate the value thereof" (Art. 1, Sec. 8). The Fed's mandate is: "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". The way they do those things, is by regulating the value of money in the US. Congress has the power to do that, and in 1913 gave it to the Fed.
Finally, 'We the People' do not owe the Fed $9 trillion. 'We' do owe the Fed, but not the whole $9 trillion. 'We' also owe China and other foreign countries, corporations, private banks, as well as little old grandmas who own a T-bill or two. The Fed is not some boogey man. Stop pimping a candidate and learn some economic theory.
The federal reserve bank is not a part of the federal government, like the U. S. Treasury department is.
No where in the Constitution does it mention a banking facility that is separate from the full control of 'we the People' should exist.
The U.S. Treasury is supposed to issue money.
The federal reserve is owned by the very powerful banking elite, they do allow the U.S. President to appoint a chairman, but that is as far as 'We the Peoples' power extends concerning the federal reserve.
'We the People' owe the federal reserve about 9 trillion interest bearing dollars because the American legislators borrows from the FED whenever they spend more than they take in.
Ron Paul wants to abolish the federal reserve and the IRS to allow Americans to once again re-gain control of the money...which would be some form of Gold/Silver as mandated in the U.S. Constitution.
Thank you, for the question.
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It's a catchy quote but not true.
- is it Federal? Of course! Just look at the structure and you see that it is very closely tied to the rest of the Federal Government.
The Federal Reserve System is organized with a government agency at the top (the Board of Governors), and branches beneath them that resemble private corporations. (http://www.federalreserveeducation.org/f... )
The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress. It operates per it's charter and laws set by congress. it is overseen by congress. There is no structure or mechanism for private ownership at this level. Board members are forbidden by law to have any economic interest in a private bank.
- Does it have a reserve?
Yes, and it in multiple ways.
The reserve that backs up currency was $854B as of last week (see http://www.zentralbank.us/releases/h41/c... ) of which $11B is gold stock.
Or how about the gold it holds for other countries? The Federal Reserve bank of New York reportedly has the largest gold repository in the world, even more than Fort Knox. It holds approximately 5000 tons of gold. (Ref:
http://en.wikipedia.org/wiki/federal_res... )
Who told you it wasn't Federal?
Who told you they don't keep reserves?
I pray it wasn't an economics professor/teacher, but in today's world you never know. :(
Just a note here. The US was paying off it's debt under Clinton, and we only elected Gore, the possibility exists that we would pay most of our debt, even with the supposed evil FED.
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