How The Evil Federal Reserve REALLY Works

[Brutha]

We are discussing the Federal Reserve Bank of New York which is the Federal Reserve.

The first post of this thread is about the Federal Reserve System which means all institutions created under the Federal Reserve Act.

The 12 member banks in the Federal Reserve system each own shares in the central Federal Reserve bank and they receive by law a 6% dividend on their capital investments into the Federal Reserve Bank of New York.

The owners of those chairs get their dividend regardless of the policy decision that the Fed makes and whether those decisions are successful or aren't.
That's very different from the way a normal business operates that sells shares and give the owners of the shares a percentage of it's promise.
It's much more like a loan that has an interest rate of 6%.
You wouldn't say that someone owns treasury bonds owns part of the treasury.

There are basically two reasons why you might have a problem with the Fed being a private institution:
a) Private interests can't control the institution in a way that opposed to public interests.
b) The profit from the instiution goes to private holders.

If you believe a) is true than how about providing an example? What did the New York Fed do in the last two decades that wasn't supported by Board of Governours?
As far as b) goes, do you really think that those one and half billion are a significant problem?

[Still Growing]

Originally Posted by Brutha

The first post of this thread is about the Federal Reserve System which means all institutions created under the Federal Reserve Act.

The very first post AND the title used the word "Federal Reserve" not Federal reserve System. If you reread my posts I was very clear about pinpointing the Federal Reserve Bank of New York.

Originally Posted by Brutha

The owners of those chairs get their dividend regardless of the policy decision that the Fed makes and whether those decisions are successful or aren't.
That's very different from the way a normal business operates that sells shares and give the owners of the shares a percentage of it's promise.
It's much more like a loan that has an interest rate of 6%.
You wouldn't say that someone owns treasury bonds owns part of the treasury.

If the debate is whether the Federal Reserve Bank of New York is a private institution or a government institution then how would owners receiving a dividend that is more like a loan be supportive evidence that it was a government institution? Furthermore, you cannot compare a return on a treasury bond to being the same as actually owning shares.

Originally Posted by Brutha

There are basically two reasons why you might have a problem with the Fed being a private institution:
a) Private interests can't control the institution in a way that opposed to public interests.
b) The profit from the instiution goes to private holders.

If you believe a) is true than how about providing an example? What did the New York Fed do in the last two decades that wasn't supported by Board of Governours?
As far as b) goes, do you really think that those one and half billion are a significant problem?

It is clear that the Federal Reserve is monitored/regulated by the governmental agency "the Board of Govenors" and also the FOMC. It is also clear that since the Federal Reserve is not a C corp, an S corp nor an LLC that it is not a typical private corporation. We know that profits go back to the government however the issue is about private influence over the USD.

Lets look first at what we know as facts then I will draw questions and possible conflicts of interest.

FACTS:
We know that the Federal Reserve Bank of New York is not a government entity in that
A. its employees are not government employees which come with government benefits
B. it does not receive funding through a budget appropriated by the goverment
C. it has shareholders and pays dividends to those shareholders.
D. it was created by an Act of Congress so there are no other organizations like it... Its custom built
E. its acting Presidents are private citizens and so to are its Board of Directors
F. its acting President has a perminent seat on the FOMC's Board which determines interest rates, etc.
There are more but do not have time to list them...

So you see, A through F show that its not a government agency but a private entity. Its true that you and I can give examples how its not like a typical company however proving that its not a typical company does not prove in of itself that it is a governmental agency.

In a typical company, owning shares enables you to receive profits and also to issue votes. Since the Federal Reserve Bank of New York elects its own board and they determine who their President is which ultimately gets a seat on the FOMC then inadvertently the private sector has access and information that you and I do not have but also that all other banks do not have.

We know that the Federal Reserve has a watch dog....The BOG. We know that on paper the BOG and the FOMC have tremendous power so the question remains "Why are US Congressmen wanting to audit the Fed?"

Next look at capital being made to the market. We know that the FOMC not only decides the interest rates but also the amount of money supply. The housing crash could not have been possible had the money had not been pumped into the market so agressively. Now we are finding out that some private banks made billions off the derivatives from the failed banks.

Goldman Sachs made so much money off the derivatives from the housing crash. From 2008 to 2009 the Chairman of the Board for the Federal Reserve Bank of New York was Stephen Friedman. Mr Friedman is the retired Chairman of Goldman Sachs, was an owner of Goldman Sachs and bought more shares of Goldman Sachs while acting as the Chairman of the Federal Reserve Bank of New York. Is this a conflict of interest?Friedman Resigns as Chairman of New York Fed - NYTimes.com

Stephen Friedman - Federal Reserve Bank of New York

So lets get this straight..
Out of the 12 members of the FOMC, 4 are employed by one of the 12 private member banks, and 1 is the acting President of the private Federal Reserve Bank of New York. The Chairman of the Board for the Federal Reserve Bank of New York who is over the President of the Bank is the past Chairman of the Board for Goldmans, is a partner and shareholder of Goldman Sachs. The FOMC went out of its way to pump money into markets to further enable the growing housing bubble. Meanwhile Goldmans was busy buying derivatives that would reward them if the banks failed. The banks did fail then Goldman's made tons of money off the derivatives.

Simply put, Goldman Sachs appointed one of their partners to be the Chairman of the Board of the Federal Reserve Bank of New York and then the President of the bank made decisions that benefited Goldmans while being a member of the FOMC.

The above is just one way in which the private bankers "COULD" have profited from their position in the Federal Reserve. But rather than argue if they manipulated the market, just ask yourself, "is there a conflict of interest in the Federal Reserve being a private entity" ?

[Brutha]

If you reread my posts I was very clear about pinpointing the Federal Reserve Bank of New York. [...] We know that profits go back to the government however the issue is about private influence over the USD. [...] The FOMC went out of its way to pump money into markets to further enable the growing housing bubble.

If you yourself claim that the problem is private influence over the Federal Reserve Bank of New York than why don't you have an example where the Federal Reserve Bank of New York used that influence that doesn't involve FOMC decisions?

If you can only point to FOMC decisions than maybe the control of the FOMC is more important than the control of the Federal Reserve of New York?

[Still Growing]

Originally Posted by Brutha

If you yourself claim that the problem is private influence over the Federal Reserve Bank of New York than why don't you have an example where the Federal Reserve Bank of New York used that influence that doesn't involve FOMC decisions?

If you can only point to FOMC decisions than maybe the control of the FOMC is more important than the control of the Federal Reserve of New York?

All the employees and management of the Federal Reserve Bank of New York are private citizens so influence is a bit of an understatement when it comes to the private affect on matters of the Federal Reserve Bank of New York.

The topic of debate was firstly whether the Federal Reserve Bank of NY was a private entity like I said or a governmental entity like Snerp said.

I dont see why showing how the private Fed has power and influence via how it functions along with the FOMC to be counter to what I've been saying. Showing how the private Fed uses its power just shows how there is a conflict in the Fed being private in the first place.

You don't see the connection?

[maxinatlanta]

What is a dollar?

Here is what Senator John Ensign of Nevada put in the report by the Congressional Research Service.
Ballentines Law Dictionary, 3rd Edition (1969)

"Dollar. The legal currency of the United States; State v Downs, 148 Ind 324,327; the unit of money consisting.,.of one hundred cents. The aggregate of specific coins which add up to one dollar. 36 Am JIst Money A§ 8. In the absence of qualifying words, it cannot mean promissory notes, bonds, or other evidences of debt. 36 AM JIst Money A§ 8.

American Jurisprudence, Volume 36, A§ 8 [T]he term "dollar" means money, since it is the unit of money in this country, and in the absence of qualifYing words, it cannot mean promissory notes or bonds or other evidences of debt. The term also refers to specific coins of the value of one dollar. (27 Ohio Jm pp. 125, 126, A§ 3), (United States v. Van Auken, 96 US 366, 24 Led 852)

Then the report defines Federal reserve notes:

Black's Law,Second Pocket Edition (1996)

Federal Reserve Note
;:
Federal reserve note. The paper currency in circulation in the United States. The notes are issued by the Federal Reserve Banks, are effectively non-interest-bearing promisso:ry notes payable to bearer on demand, and are issued in denominations of $l, $5, $10, $20, $50, $100, $500, $1,000, $5,000, and $10,000. .

"Payable" in what? In dollars of course. You cannot pay with a "promissory note".

Therefore it is VERY CLEAR that Federal reserve notes ARE NOT dollars but should be able to be redeemed in "dollars." FRNs, however, cannot, presently, be redeemed in "money" but only in other notes. Remember that the "term 'dollar' means money" which CANNOT BE promissory notes according to the report.

Therefore, when you receive Federal reserve notes (promissory notes) issued in any "$" denominations, you must calculate their ''value'' in REAL "dollars" such as the report describes as:

DOLLAR. The unit employed in the United States in*calculating money values. * Blacks Law Dictionary, 4th Edition Revised (1957)

so here we have it......TV does not provide such information unfortunately for us


You say that each state has a right to print it's own money.
You are right, however in Constitution we have :

Section 8, Article I, of the US Constitution. Coining money and regulating the value thereof is power of the US Congress (we can not coin money).
U.S. Constitution - Article 1 Section 8 - The U.S. Constitution Online - USConstitution.net

Art. I, Section 10 specifically prohibits states from "coin[ing] money". However, that same provision also prohibits states from "mak[ing] any thing but gold and silver Coin a Tender in Payment of Debts".
U.S. Constitution - Article 1 Section 10 - The U.S. Constitution Online - USConstitution.net

Would you agree that state could mint it's own gold and silver coins? And then the state could have paper certificates running around representing the value of the gold.

Now, if you really want to get deep, here is an interesting case:

Robert Kahre Las Vegas 'Coin Wages'/IRS
Case Ends in Zero Convictions

Informally called the Kahre case -- after the primary defendant, local business owner Robert Kahre, who paid workers in gold and silver coins -- the trial lasted four months. It relied heavily on evidence gathered in a controversial armed raid in May 2003 on several of Kahre's local
business places.

Part of the case hinged on whether Kahre's workers were employees or independent contractors, who are responsible for paying their own taxes.

Michael Kennedy, who defended Lori Kahre, said the case turned on the notion that taxpayers could be wrong without being criminal. He was referring to the fact that his client, Lori Kahre, and other defendants had not paid taxes according to the market value of the precious metal content of the coins in which they were paid, as opposed to their face value. He conceded at trial that his client may owe federal taxes for her mistakes. The Internal Revenue Service had never before provided guidance on how to handle gold and silver coins that circulate, only on noncirculating collectible coins, according to Kennedy, who is a federal public defender. "If that's the case, we're not going to take someone's liberty from them, on something that a (certified public accountant) with a master's degree doesn't even know. That's a scary country, and I don't live in that country."

Good video to watch :

When Central Banks Rule the World by Joan Veon

[Still Growing]

I'll just assume that my point was made.

[Brutha]

The topic of debate was firstly whether the Federal Reserve Bank of NY was a private entity like I said or a governmental entity like Snerp said.

I don't think the label is the core issue.
The New York Fed is neither organized like a normal private corporation nor like a normal public entity.
It's a mix of both.

I dont see why showing how the private Fed has power and influence via how it functions along with the FOMC to be counter to what I've been saying.

I don't claim that it's counter to what you are saying. I say that it isn't strong enough to support the point you made earlier.

All the employees and management of the Federal Reserve Bank of New York are private citizens so influence is a bit of an understatement when it comes to the private affect on matters of the Federal Reserve Bank of New York.

"All"? I don't see where you are going? You know that 3 of the 9 people in the board are appointed by the Board of Directors don't you?
Every citizen of the us is a private citizen. Even Barack Obama is a "private citizen". He has book contracts to make money in a private way.

[Still Growing]

Originally Posted by Brutha

I don't think the label is the core issue.
The New York Fed is neither organized like a normal private corporation nor like a normal public entity.
It's a mix of both.

The topic of debate was whether the Federal Reserve Bank of NY was non government or a government entity. The Federal Reserve Bank of New York is not a government agency nor entity and you know it.

Originally Posted by Brutha

"All"? I don't see where you are going? You know that 3 of the 9 people in the board are appointed by the Board of Directors don't you?
Every citizen of the us is a private citizen. Even Barack Obama is a "private citizen". He has book contracts to make money in a private way.

We are discussing the Federal Reserve Bank of NY. ALL of their board are private citizens and none of the board is from the Board of Governors who are governmental. Barack Obama is not a private citizen. The very definition of a private citizen is "one who does not hold any official or public office". So how do you figure Barack Obama is a private citizen?

You say you don't see a conflict however I clearly drew conflicts that have actually happened. The New York Times and Wall Street Journal wrote about the conflicts and so they seem to see them. Also the former Chairman of the Federal Reserve Bank of NY was forced to resign from his position from the Chairman of the Federal Reserve Bank of NY. It was in the news Brutha... You are aware that the Federal Reserve Bank of NY has its own Board of Directors that are completely different than the Board of Governors aren't you?

As a matter of fact, I know that your country, Germany has very strict laws about conflicts of interest from the non government versus governmental sectors. I am surprised you are not more quick to be critical of the US governments private capitalistic outsourcing of critical sector... Interesting... Brutha, it seems you are (gulp) pro US capitalistic outsourcing (sorry for the sarcasm). I bet you also did not see a conflict of Halliburton's ex CEO, Dick Chaney getting elected to Vice President of the US either. I guess Halliburton landing of the contract had nothing to do with Dick's previous position just like Goldman Sachs does not get favoritism over similar arrangements with the US Government and the Federal Reserve.

You know Brutha, the US government is full of people just like you who also cannot see the conflict of 5 board members of the FOMC working for private banks. Because you cannot understand the scheme doesn't mean it doesn't exist.

[Brutha]

The topic of debate was whether the Federal Reserve Bank of NY was non government or a government entity. The Federal Reserve Bank of New York is not a government agency nor entity and you know it.

I don't think that labels matter much. Power does.

The very definition of a private citizen is "one who does not hold any official or public office".

I looked into the dictionary and it seems you are right.

You know Brutha, the US government is full of people just like you who also cannot see the conflict of 5 board members of the FOMC working for private banks. Because you cannot understand the scheme doesn't mean it doesn't exist.

I thought we were discussing the Federal Reserve Bank of NY?
If you pretend that we aren't talking about the FOMC this is a different discussion.

I am surprised you are not more quick to be critical of the US governments private capitalistic outsourcing of critical sector...

I don't argue by impulse. You don't achieve anything by being quick to be critical.

ALL of their board are private citizens and none of the board is from the Board of Governors who are governmental. [...]
CLASS C
appointed by Board of Governors to represent the public

Are you telling me that those 3 people in the board who are class c who are appointed by the Board of Governors to represent the public aren't "from the Board of Governors"? Or are you telling me that your previous post that said they were appointed by the Board of Governors is false.

[maxinatlanta]

This is all you need to know about Federal Reserve. 1 and half minutes video.

The Truth About the Federal Reserve - YouTube