Fed News Friday – Who Owns The Federal Reserve?
April 26th, 2012When I was at CPAC this February working Silver Circle’s booth, there was a healthy number of Occupy activists hanging out at the Metro stop across the street from the hotel throughout the weekend to protest the annual Conservative Political Action Conference. At one point when I approached them, one of them immediately dismissed me, pointing to my Silver Circle End The Fed shirt and saying, “I see you’re wearing an End The Fed shirt. We probably don’t have a lot in common.” Puzzled, I asked, “What do you like about the Federal Reserve?” The young man said, “Honestly, I don’t really know enough about the Federal Reserve to talk with you about it.” He probably just thinks being anti-Fed is a “conservative” position because all those Ron Paul supporting Republicans are, and hasn’t looked into the issue further. It’s a shame he’s written the issue off entirely as one he probably wouldn’t agree with, because if he looked into it further and learned that all the banks that he’s protesting actually own the Federal Reserve, he might be as anti-Fed as an American can get. Just another example of hyper-partisan thinking muddying up the public policy discussion. Let’s take a closer look at the facts…
Many anti-Fed activists don’t really even know what the Fed is themselves, or who owns it. They’re quick to point out that it’s a private bank, not a public organization, and that’s partially true. It is a private bank, but it’s not. Many understand that it’s also a government organization. It’s that too, but it’s also not. The Federal Reserve System is in truth, the perfect blend of public and private enterprise, government agency and corporate business– straight out of the most die-hard 20th century fascist’s wildest dreams. The closest classification for it is a government sponsored enterprise, a private corporation chartered and sanctioned by the government, enjoying all of the legal and economic benefits of the government’s favoritism (including paying no taxes) that no truly private company in a free market would, yet bearing functionally no accountability to the government that created it and the people who that government ostensibly represents.
So who owns the Federal Reserve? Banks. Big banks. All those banks on Wall Street that got bailed out at taxpayers’ expense, infuriating conservatives and launching a nation-wide Tea Party protest movement in early 2009 weeks after the TARP bailout passed in late 2008. All those banks that happily prospered during a financial crisis that hurt middle class and poor Americans, doling out multimillion dollar “golden parachute” severance packages to reward top executives for running the economy into the ground, infuriating progressives and launching a nation-wide Occupy protest movement in late 2011. According to FactCheck.org:
“The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system, and thus own the Fed banks.”
Now that doesn’t mean the national banks that hold shares of the Federal Reserve get to set monetary policy. While they do have a voice in monetary policy, which is determined by the Federal Open Market Committee, only five of its twelve members come from the banks. The remaining seven, including the Chairman of the Federal Reserve, are appointed by the President of the United States and confirmed by Congress. But other than those seven members, starting with the remaining five in the Open Market Committee itself and then moving all the rest of the way down the food chain, the Federal Reserve Bank, which is owned by America’s nationally-chartered banks, including the big financials on Wall Street, is very intimately intertwined with the private banks of the finance industry. Now you see what America’s banking system looks like. It’s an ugly, unaccountable mess, a monetary monster with a hundred heads that lives in a sort of legal outer space that resembles nothing like a free market, a decentralized economy, a truly capitalist system, nor a civil society with clearly defined legal obligations and liability.
The Federal Reserve Bank creates dollars from nothing, loans them out to member banks that own shares in the Federal Reserve System, and then they loan that money out to the rest of the actors in the economy. This is what sound money advocates mean when they say the dollar is a debt-based monetary system. Each dollar represents a debt, not a value. How can a system sustain itself? How can loaned-out pieces of paper and electronic placeholders have any value? Only if the government can create an artificial demand for them by requiring the rest of the world to trade with them. How can it enforce that requirement? With violence. Start talking about trading oil in Euros instead of dollars like Saddam Hussein and you’ll end up like Saddam Hussein. Dead. Start talking about a gold-based, pan-African currency called the dinar like Muammar Gaddafi, and you’ll end up like him too. Dead. The purpose of America’s global military dominance is to guarantee America’s global monetary dominance with a debt-based fiat currency. The money in your pocket is blood money. This nation’s private banks are war profiteers.
No, it’s probably not a deliberate conspiracy controlled and planned perfectly from the very top by an elite few puppet masters, just a horrifying conglomeration of the worst within us, the most perverse incentives, the most excessive greed, the most self-serving unscrupulousness, the most pernicious dishonesty, all wrapped up together in human history’s most pervasive and destructive system of violence, theft, and lies. The first step to untangling such an infernal mess is to understand it. Now you do. Please help us spread the message.
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