The Federal Reserve Is A Privately Owned Bank

Discussion in 'Economy' started by Mad Scientist, Nov 17, 2011.

  1. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    For those of you who are under the impression that the Federal Reserve is a Gov't entity I ask you this: What other Gov't agency has Shareholders?
    FRB: Federal Reserve Act: Section 7
    Well ok, they're not a Gov't agency, but surely they must pay taxes on what they make right? I mean, every privately owned bank pays taxes on earnings right?

    Not the "Non-Federal" Reserve:
    Oh but they graciously pay property taxes. How nice of them!

    I wish I was exempt from Federal, State and Local taxation!
     
  2. editec
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    editec Mr. Forgot-it-All

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    Yup.

    Its originally largest investor?

    The BANK OF ENGLAND, though the beard J.P. Morgan.




     
  3. Toro
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    Toro Diamond Member

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    nm
     
    Last edited: Nov 17, 2011
  4. Toro
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    Toro Diamond Member

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    Virtually all of the profits are swept away to the Treasury. Banks who are members of the Federal Reserve System receive a 6% dividend off the profits from the regional banks. In past years, this dividend paid has accounted for 1%-2% of total profits generated by the Fed banks, i.e. 98%-99% of the profits go to the government.

    That's not exactly a model for a private institution.
     
  5. expat_panama
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    expat_panama Silver Member

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    True, and irrelevant. Hey Toro, they don't call him 'Mad' for nothing. Anyone starting a thread about sinister powerful 'shareholders' is really in this league--
    [​IMG]
    --because any serious question of--
    --should have stopped with--

    * Corporation for National and Community Service (Americorps)
    * Corporation for Public Broadcasting
    * Federal Crop Insurance Corporation
    * Federal Deposit Insurance Corporation
    * Legal Services Corporation
    * Millennium Challenge Corporation
    * National Railroad Passenger Corporation (Amtrak)
    * Overseas Private Investment Corporation
    * Panama Canal Commission
    * Pension Benefit Guaranty Corporation
    * St. Lawrence Seaway Development Corporation
    * Tennessee Valley Authority​

     
  6. editec
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    editec Mr. Forgot-it-All

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    AGreed.

    It is neither fish nor fowl.

    It is an entirely unique organziation that doesn't fit into the private v public model.
     
  7. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    The Fed paid the Treasury 78 Billion last year. That more than covers the 16 Trillion they lent out doesn't it?
    Audit: Fed Lent $16 Trillion Globally in Three Years | The American Pundit
    Let's see; 16 Trillion divided by 78 Billion, it should only take the Fed a little over 200 years to get all that money back (and that's not including interest)

    Tell me: What "Model of Economics" does that fit into? Rape and Pillage or just plain Mafia?
     
    Last edited: Nov 19, 2011
  8. CentristFiasco
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    CentristFiasco Member

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    I'm liking what you've researched on your own and you bring an excellent point, pal about the Federal Reserve System. What I've researched in the past too is how if you search, "Recessions of the United States" by taking a read at the Wikipedia Contribution to the subject you'll find an interesting connection between the Reserve and the Private Sector Economy. Of course, the private sector engages in mischievous practices on practically a daily to monthly basis but they produce results which have always driven the American economy to remain strong. It's the fact that the Reserve keeps on interfering as if they're the government into these Matters to the extent, they end up making fools out of themselves by their assumptions that the economy is going to burst or even collapse. This is what makes the Reserve rise interest rates and so on and so forth. I can't believe that the Congress agreed to former President, Woodrow Wilson's idea about establishing an independent central banking entity. Unconstitutional.

    General Reading at the Recessions of the United Statess
     
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    Last edited: Jan 21, 2012
  9. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    do you think a person steals money from the Fed?
     
  10. DSGE
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    Banks entering the Federal Reserve System are forced to buy equity in the Fed. The equity is there to absorb any losses the Fed may take on its balance sheet.

    Private banks are allowed to elect presidents of the 12 regional reserve banks. The Board of Governors is comprised of 12 people appointed by the President of the US and confirmed by the senate. The Board of Governors controls the discount rate and reserve requirements.

    The Federal Open Market Committee (FOMC) makes monetary policy decisions and is composed of 7 members of the Board of Governors (including the Chairman) and 5 regional presidents (who serve on a rotating basis).

    So it's strange that private banks are allowed as much input as they get still, definitely something that needs to be reformed (why not just make monetary policy decisions the Board of Governors' job?). But the BoG forms a voting majority on the FOMC. Monetary policy decisions are ultimately decided by people appointed by the President and confirmed by the senate. So it's hard to say that it's a "privately owned bank" since the people who are forced to own equity ultimately don't get to make any decisions.
     

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