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Lionel,
With respect you are confusing two separate issues:
1) The independence of Central Banks to set monetary policy free from
political interference (for example in the UK, past chancellors have
been rightly suspected of easing interest rates with a view to
sparking pre-election economic boomlets).
2) Who pays for the bill as the lender of last resort in the event of
disasters in the financial system.
The latter is more pertinent in the case of the present discussion.
Fed member banks hold their stake in the form known as shares for a
reason; this also explains why their shares carry not the right but
the onerous obligation to buy as many more shares as the politically
appointed board may unilaterally dictate.
It is that this form embodies the principal of banks' collective
responsibility for the banking system. In this way the banks' own
capital represents the first financial line of defense against a
financial disaster where the lender of last resort role would come
into play.
If this were not the case, and the public finances were solely
responsible, there would rightly be uproar that the tax payer was
unilaterally footing the bill for reckless gambling by private sector
financial institutions.
This gives banks an clear inbuilt incentive to watch over not only
their own lending practices but also their competitors, since they
could end up footing the bill if it all goes wrong.
--- In equismetastock@xxxxxxxxxxxxxxx, "Lionel Issen" <lissen@xxx> wrote:
>
> After WW 2, I was astounded to earn that most central banks were
privately
> owned. ( I was young and naïve at the time.) There were several
news items
> that the Labor party in Britain announced that they were going to do
away
> with the archaic practice of the Bank of England being a private
company
> responsible to no one. Shortly after this the French government made a
> similar announcement. I think that several other countries followed
suit,
> except of course the US. I'm not sure about Canada except that the major
> banks seem to approve the nominee for the Governor of the Bank of
Canada,
> but at least some of the directors do not have to be approved by the
banks.
>
>
>
> This has been an interesting thread.
>
>
>
> My personal thanks to all the contributors.
>
>
>
> Lionel
>
>
>
> From: equismetastock@xxxxxxxxxxxxxxx
[mailto:equismetastock@xxxxxxxxxxxxxxx]
> On Behalf Of Jose Silva
> Sent: Friday, May 04, 2007 6:37 AM
> To: equismetastock@xxxxxxxxxxxxxxx
> Subject: [EquisMetaStock Group] the Federal Reserve Bank is not owned or
> controlled by the US government
>
>
>
>
> Lionel, the Federal Reserve Bank is NOT a US federal agency, anymore
that
> FedEx (Federal Express) or the Red Cross may be.
>
> There is no question that the Federal Reserve is a privately owned and
> controlled corporation, even if the greater majority of its
paper-printing
> profits (after expenses and dividends) end up in the US treasury. The
> question is whether it may be owned, either directly or indirectly, by
> foreigners.
>
> If you have any doubt about the ownership and control of the federal
> Reserve, search for "US+Government+ownership" within the The Federal
> Reserve Act itself:
> http://www.federalreserve.gov/generalinfo/fract
>
> From a seemingly reputable source, the American Monetary Institute
(which
> is not a US federal agency either):
>
> http://www.monetary.org/federalreserveprivate.htm
>
> ----------------------------------------------------
>
> The Federal Reserve Act
>
> Reading the Act with the question of control in mind, what one finds
are
> primarily an enumeration and description of vast powers over our
monetary
> system being ceded to the non - governmental Federal Reserve. Primary
> among these are the powers necessary to administer a fractional reserve
> banking system in which the creation of money - what we use for
purchasing
> media ? is in private hands.
>
> One is struck by the general absence of governmental controls over Fed
> activity, and lack of requirements toward our elected representatives.
>
> One is struck by the lack of accountability of the Fed to our
> governmental officials or bodies.
>
> One is struck by the lack of any specified penalties should the
system be
> found to not be promoting governmental public policy at all.
>
> One is struck by the lack of formal oversight procedures to determine
> whether that is happening or not.
>
> ----------------------------------------------------
>
> Further reading:
>
> http://www.save-a-patriot.org/files/view/whofed.html
> http://land.netonecom.net/tlp/ref/federal_reserve.shtml
>
> jose '-)
> http://www.metastocktools.com/#USindex
>
> --- In equismetastock@xxxxxxxxxxxxxxx
> <mailto:equismetastock%40yahoogroups.com> , "Lionel Issen" <lissen@>
> wrote:
> >
> > Pastor:
> >
> > Thanks for confirming my suspicions that the USD printing press is not
> > privately owned. It doesn't really matter much since so much of our
> > "money" is electronically generated by the more irrational elements of
> > the private sector.
> >
> > About 10 +/- years ago there were a spate of postings on the internet
> > claiming that the IRS was a private company incorporated outside
of the
> > US, and thus we didn't have to pay any income taxes. These stopped
after
> > the IRS publicized several Supreme court rulings enabling the IRS to
> > forcibly collect income taxes, and I think the Feds went after these
> > fanatics and discouraged them from further spreading these misleading
> > falsehoods (aka lies).
> >
> > Lionel
> >
> >
> >
> >
> > From: equismetastock@xxxxxxxxxxxxxxx
> <mailto:equismetastock%40yahoogroups.com>
> > On Behalf Of pastor_barr
> > Sent: Wednesday, May 02, 2007 1:01 PM
> > To: equismetastock@xxxxxxxxxxxxxxx
> <mailto:equismetastock%40yahoogroups.com>
> > Subject: [EquisMetaStock Group] Re: Day of Week Function?
performance for
> > the specified day of the week.
> >
> >
> > "The USD printing press is privately owned."
> >
> >> It's amazing the number of sites that try and point the above
fact, and
> >> disappear in the process...
> >
> > Hmmm.
> >
> > To use an - in this case unrepresentative - corporate analogy the
> > executive branch appoints the Fed board that takes all strategic
> > decisions.
> >
> > The US treasury owns the net profits of the Fed system and can at its
> > sole discretion transfer said profits to the treasury or leave them in
> > reserves.
> >
> > The "dividend" mentioned in the Fed's accounts are at a 5% fixed rate
> > on capital committed in cash to the reserve system (like a preferred
> > dividend), that for the vast majority of history has not come close to
> > covering member bank's cost of capital. In accounting this equates to
> > interest expense, not an economic share of profits generated as
> > accrues to shareholders in the ordinary sense; this is a distinction
> > not lost on the Fed's auditors in their statement of departures from
> > accounting convention, last time I checked.
> >
> > Further, member banks can not sell any shares if they wish to retain a
> > banking license. On the contrary, member banks are obliged to
> > unconditionally subscribe for new issues as determined at the sole
> > discretion of the politically appointed board of governors from time
> > to time.
> >
> > So, while the Fed member banks are for archaic reasons known as
> > "shareholders" they are not private owners of the Fed in any
> > meaningful sense.
> >
> > Maybe that is why the sites you refer to disappeared; perhaps people
> > realized they were peddling misrepresentations so egregious that they
> > can only be accurately described as a pack of lies.
> >
> > Nice indicator though ;-)
>
>
>
>
>
> [Non-text portions of this message have been removed]
>
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