http://en.wikipedia.org/wiki/Federal_Reserve_System

Cross-post question to DU Economy group, where experts post.

http://www.democraticunderground.com/?com=forum&id=1116
Welcome!

a video tape from the Fed and it describes what they do. Not sure if they still send that out. May have the video online now instead of a VHS tape.

It is more accurately described as the gov't employing them to be responsible for monetary policy.

The wikipedia page describes them well:

http://en.wikipedia.org/wiki/Federal_Reserve_System

...even print.

So a Bank needs money...blocks (pallets) of it electronically...where do they get it from?

1.) Each other
2.) The Fed (aka the Federal Reserve)

The cost of getting this money from each other is based of LIBOR rate (yeah, that rate) and the cost of getting it from the Fed is the Fed rate....

They get it from the Feds or Each other at 2% and lend it to you and I and 4 - 400% (they're bastards) then they either sell the loans as securities or underwrite (insure) them with hedges (yes, just like you would do on a craps table but with no 7 or 11). Now days they're even trying to make money off the hedging (See JP Morgan).

The Fed to keep money into circulation in the US can print more money if they want driving the cost of that money down and allowing banks to lend at lower rates ....keeping money into circulation and spiking an economy...cept the banks (the bastards) aren't lending at the rate that the Government and the Feds would like them to....screw the little guy, they're making their money of the derivatives (a high stakes form of hedging aka gambling with your deposit money) and really could care less about keeping money in circulation.

but who EXACTLY are they and how did they get there?

The history of the FED is wiki'd and it's pretty close....

But in a nutshell the regional banks (which are still in existence) used to do dumb shit that would crash a whole region of the country and everyone would pay creating runs on banks etc...this happened too many times and the Republicans (yes, they used to be the progressives) said the working person was getting hurt and their rich buddies stepped in with a mandate of the Fed

The Congress established three key objectives for monetary policy—maximum employment, stable prices, and moderate long-term interest rates—in the Federal Reserve Act

it is not an arm of government but is responsible for our economic policy...huh???

It's responsible for our monitory (money) policy and not he economic one....the FED doesn't create the policy of "trickle down economics" just how much THEY think it would take to keep the money supply (economic blood pressure) flowing at a predictable rate.

Who do they answer too?

Congress....

stop laughing...

it aint funny!!!

Paulians like Paul cause he wants the Feds books opened, he thinks they're being controlled too much by the executive and after GreenSpan I don't blame him...Greenspan was freakin stupid...his justification, on tv mind you, for allowing the housing bubble to happen (remember, they can pull back money when the money supply gets to heavy...or the blood pressure of the US monetary system gets to high) was he didn't want to become unpopular by slowing down the economy.

sigh...

we will endure as we have endured

But...... I can't help but smell something fishy. There seems to be LOTS of room for shenanigans. Yes?

The Fed controls the amount of currency in circulation by means of setting interest rates on loans that it makes to banks. Isn't it possible for The Treasury to do the same thing, but NOT attach an interest rate on the loans it makes, and use tax policy instead as a means of controlling inflation? What I mean is, if the Govt. were to make a loan to a bank, or a State, or you or me, (or print the money it needs to pay for all the things it buys in a given year) isn't it possible to to tax the same amount of money back out of the economy in the next fiscal year, so that inflation never becomes an issue? If this were possible, it would mean 2 things (I think)

1 The Treasury and the Congress would be directly responsible for the rate of inflation (and therefore the value of a given amount of Currency), therefore,

2 Currency (and the Work/Labor required to earn it) would become a MEANS to an end, rather than the end in and of itself...I.E., the ACCUMULATION of Currency would cease to be the measure of a person's wealth, rather, wealth would be measured by what you spent your earned currency buying (house, cars, education, etc...)

I think I read somewhere a similar system was how the pre-revolutionary colonies did this..(printed their own "money", used it to buy useful things that the colony needed, and recouped that cash in adjusted tax rates the next year)...
Am I crazy to think this might be a workable monetary system?

I am NOT a Paul-ite. I just don't know the answers to my questions...

So it doesn't really matter too much who they are. They're a mix of bankers and corporate ceo types.