A lot of “conspiracy theories” revolve around the Federal Reserve Bank. This inconvenient truth will reveal facts about the Fed, from their own publication, “Federal Reserve Purpose and Function”, of which I have attached a link to both the “live” and “archived” copies (I archived it in case the live copy disappears from the internet).
This document explains the history and function of the Fed. A few points that should be noted here are:
a. The Federal Reserve is NOT a “Federal” institution. Proof of this is by it’s statment that it is “…considered to be an independent central bank because it’s decision do not have to be ratified by the President or anyone else in the executive branch of government…” [p 2].
b. Though it is true that the Fed is subject to oversight by the U.S. Congress, “…the description of the system as ”independent within the government” is more accurate…”[p3]
c. Though the Fed goes through a “quasi-audit” each year, note the following:
“…The Board is audited annually by a major public accounting firm…Monetary policy is exempt from audit by the GAO because it is monitored directly by Congress through written reports, including the semiannual Monetary Policy Report to the Congress, prepared by the Board of Governors…” [p6]
d. As proof that the U.S. Treasury does not print currency without approval of the Fed, note:
“…A network of twelve Federal Reserve Banks and their Branches (twentyfive as of 2004) carries out a variety of System functions, including serving as banker for the U.S. Treasury…” [p6]
e. Seeing thru the mumbo jumbo about it’s board of directors, we can find the following fact’s about each of the 12 regional Federal Reserve Banks (not a bank at all, but a “collection” of PRIVATE banks):[p 10]
– “…Each Reserve Bank has its own board of nine directors…”
– “…Three directors, designated Class A directors, represent commercial banks that are members of the Federal Reserve System…”
– “…Three Class B and three Class C directors represent the public…”
– “…The member commercial banks in each District elect the Class A and Class B directors…”
– “…The Board of Governors appoints the Class C directors to their posts…”
– “From the Class C directors,the Board of Governors selects one person as chairman and another as deputy chairman….”
– “…The directors in turn nominate a president and first vice president of the Reserve Bank, whose selection is subject to approval by the Board of Governors…”
– “Each Branch of a Reserve Bank has its own board of directors composed of at least three and no more than seven members. A majority of these directors are appointed by the Branch’s Reserve Bank; the others are appointed by the Board of Governors…”
From the above statements, we find that:
- There are 9 directors for each Federal Reserve Bank (12 banks in all)
- Please remember that the 12 “banks” are not banks in the traditional sense, they are comprised of commercial banks.
- the class “A” Directors (3 ea),represent the commercial banks that make up the Federal Reserve “Bank”. The Class “B” (3 ea) and class “C” (3 ea) directors represent “the public”.
- These class “A” directors are chosen by…the commercial banks themselves!
- Additionally, the class “B” directors, who supposedly represent the public, are chosen by…the commercial banks!
- The class “C” directors, supposedly representing the public, are chosen by…The Board of Governors (heads of commercial banks)
- The Board of Governors (heads of Commercial Banks) next choose the chair and vice-chair!
- The “Directors” of each Federal Reserve Bank then “nominate” (not choose) a President and Vice-President, who are “approved” by…The Board of Governors! (heads of commercial banks)
- Each Branch of a Federal Reserve Bank (remember, each Federal Reserve Bank is just a container made up of commercial banks), get’s to select it’s own directors…and the Board of Governors selects the rest.
- Now, in all the above, did anyone in any position of control get selected from the public’s interest? NO! All positions of authority and decision making are from the commercial banks themselves.
Archived link: The Federal Reserve
Official link (if available): http://www.federalreserve.gov/pf/pf.htm