How does the FED affect you?
The Federal Reserve — our Central Bank — is one of the country’s most powerful economic institutions. The Federal Reserve is relevant for Congress not only because the Constitution gives monetary powers to Congress but also because Congress created the Fed and, therefore, has critically important responsibilities for Federal Reserve oversight.The Federal Reserve System (the Fed) was created by Congress in 1913 to be the nation’s central bank. Most people are aware that there is a government body that acts as the guardian of the economy – an economic sentinel who implements policies designed to keep the country operating smoothly. Unfortunately, most investors do not understand how or why the government involves itself in the economy.
The Fed has a decentralized structure. It consists of a Board of Governors in Washington, D.C., 12 regional Federal Reserve Banks and their branches, and the Federal Open Market Committee (FOMC). The role of the U.S. Federal Reserve has come under increasing scrutiny in the wake of the 2007-2009 global financial crises.The Federal Reserve, through its power to change interest rates and purchase vast amounts of financial assets, has exercised more influence over economic growth and the level of employment in recent decades than any other government entity. The Federal Reserve is easily one of the most powerful–and misunderstood–of all American institutions. The Federal Reserve’s steady hand as America’s “central banker” has been especially critical to U.S. economic performance during the past 25 years.
The importance of congressional oversight of the Federal Reserve cannot be overemphasized. These functions are important, for example, because they imply that the Federal Reserve controls and hence is responsible for the management of total spending or aggregate demand as well as inflation.
How Does The Fed Affect You?
The Fed directly affects your stock and bond mutual funds and your loan rates. By having such an influence on the economy, the Fed also indirectly affects your home’s value and even the possibility that you may get laid off.Federal Reserve Chairman Ben Bernanke has also cited lax government regulation and gaps in oversight as causes of the crisis. In a March 2009 speech at the Council on Foreign Relations, Bernanke said, “The risk-management systems of the private sector and government oversight of the financial sector in the United States and some other industrial countries failed to ensure that the inrush of capital was prudently invested, a failure that has led to a powerful reversal in investor sentiment and a seizing up of credit markets.”
The Fed’s chairman, currently Mr. Bernanke and before him Alan Greenspan and Paul A. Volcker, dominates Open Market operations. Their main thrust has been to limit inflation, even at the risk of a recession — although they have cut rates when the nation seemed in danger of one.Mr. Bernanke has argued that the policies achieved worthwhile but limited objectives. The Fed must also consider the inflation implications of U.S. dollar strength or weakness relative to other global currencies. The Fed must also consider the conduct of monetary policy by other major central banks including the European Central Bank, the Bank of England, and the Bank of Japan…
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The Fed is a by proxy a privately owned central bank. Owners of the member banks own the fed. Owners of the member banks are a who’s who of ultra-rich European and American families. The fed purchases treasury bonds using money printed out of thin air called Federal Reserve notes thus creating money from debt. Because of this, all American money is ever growing debt and the IRS was created at the same time to service that debt. The debt can, and will never be repaid, it can only get larger. The private owners of this debt through the member banks of the fed continue to collect all of this interest. The Federal Reserve and the Internal Revenue service is a parasite on we the people for the benefit of a few fat cat bankers. The Fed is no more the federal government than Federal express.