Who is the Federal Reserve?
This is a topic that I have been researching for awhile. In the midst of the numerous bailouts, we need to know who is behind them.
The Federal Reserve is a quasi-public central banking system composed of the presidential appointed Board of Governors, the Federal Open Market Committee, the 12 regional Federal Reserve Banks, numerous private banks, and various advisory councils.
Ben Bernake is the currently serves as the Chairman of the Board of Governors of the Federal Reserve System.
The Federal Reserve was enacted by the 1913 Federal Reserve Act. The man behind this act was Nelson Aldrich. Aldrich was criticized because of his ties to J.P. Morgan and his daughter’s marriage to John D. Rockefeller Jr. However, Aldrich believe that a centralized bank was better than the government-issued bond system. Aldrich fought for a central bank with little government influence, yet conceded that the government should be represented on the board of governors, hence why they are appointed by the president.
The point of the federal reserve is that it is supposed to put a stop to banking crises. A particual banking crisis in 1907 was the leading cause of the enacting for the Federal Reserve Act of 1913. Most history lessons will show this as the beginning of the great depression.
The basic image the Federal Reserve is supposed to show is that it is to protect the credit rights of the consumer, maintain the financial system and containing systematic risk within the financial institutions, and strengthing the US standing in the world economy.
What does this last passage mean to you? The Federal Reserve Act gives the Federal Reserve the ability to bail out any private institution who they deem as a risk of failing if it will hurt the US economy. Hence why the Federal Reserve bailed out Bear Sterns, Freddy Mac, Fannie Mae and now AIG. This 1913 Act gives the Federal Reserve the authority to use your tax money to buy out any private institution whose failing may have a large impact on the nations economy.
Yes, you have read that right. In our republic country, we have a socialist law that protects private institutions from failing by using your tax money. Is this proper? NO!
The government should not bail out any company. If a company fails, it should be because of their own downfall and should not be bailed out by the government. While we’re trying to pay for our two front war, numerous bases around the world, and now bailing out failing institutions for their investments in the risky mortgages how can our government survive without going into a deficit?
They can’t.
We’re currently 9.6 trillion dollars in debt and with our constant spending, we will be heading toward a sharp recession and/or great depression. If the US fails, numerous countries around the world may fail due to their Treasury Bond investments.
When will the bail outs stop? It is obvious that we are heading toward a recession and possibly a great depression. I do not feel that the government should have a hand in how our nations economy works. It should be left up the market itself. However, this just won’t work out because of the political stance in who currently owns a lot of money in our Treasury Bonds and have played the United State’s hand in how it will eventually work out.
I can only hope that things will work out at the end of the day. However, I would wish that the federal government would live within it’s means and produce a surplus of money to pay down the federal deficit. If you didn’t know, you are actually $31,000 dollars in debt to the US government. Food for thought.
