You seem to be up on a lot of this shit, so I have a question.

The Fed

WTF is it?

Why do peeps think it has too much power?

Do Conservatives and libs have the same opinion about it?

Type questions.

BTW...In one sentence or less. :)

Seriously, I can't read shit for too long so keep that in mind. And if you are too fuckin busy, IGNORE THIS THREAD

BTW...In one sentence or less. :)

Seriously, I can't read shit for too long...

'splains it

Obviously will be the least popular "Aks" thread.

Not that any of them are earth shattering.

Aks Pharaoah was great, but Pharaoah left.

I'm not sure he left.

I think All Y'all are like 2 peeps and just come back with different names. :)

But if he did and he doesn't come back for Hoops, I vote he gets the dildo till he does come back + 1 week.

My grossly oversimplified understanding of it is this: when banks engage in lending they create money (http://answers.yahoo.com/question/index?qid=20090421022234AAHxyJ3). The Fed is the central bank of the US, the bank where all the other banks store and borrow from and as such is the ultimate source of that type of creation, controlling the supply by way of the interest rate it charges. They do a laundry list of other things as well but controlling the flow of money is the thing that makes them so profoundly powerful.

As far as I can tell, the debate over the role of the Fed doesn't break down neatly along conservative/liberal lines.

controlling the flow of money

Sounds awefully powerful to me.

And they have the power to:

Print more?
Set int rates?


And is there regualtions on the Fed? Prolly not like banks anyway, right?

The 1/10 law that gee pointed out is sadly true, and responsible for both inflation and the dollar getting weaker on the global market (2 different things entirely). It pisses me off.

Sounds awefully powerful to me.

And they have the power to:

Print more?
Printing happens down the street at the Department of Treasury. The current relationship between the two is a whole 'nother rant.



Set int rates?


This. By setting the interest rate, they effectively set the cost of money. When they make it cheaper, more of it flows, more is created through lending and the overall supply goes up. Raising the rate conversely makes money more expensive and constricts the flow.




And is there regualtions on the Fed? Prolly not like banks anyway, right?


Congress created the Fed by legislation and ultimately has the power to redefine or even eliminate it. At this point however it's so entwined in the global financial system you could tweak it but removing it would probably kill the patient.

The Fed is a strange beast with many parts, some government, some private, some unicorn. There are rules and laws that regulate it but the parameters are extremely broad. It can raise its own revenue--no congressional pursestrings--and act with no need for prior approval from the president or congress. In a lot of ways it's like a fourth branch of govenment with power over the economy.

In a lot of ways it's like a fourth branch of govenment with power over the economy.

Thats somewhat scary since the Fed Chairman is appointed.

Thats somewhat scary since the Fed Chairman is appointed.

At the risk of overextending the metaphor, kind of like the judicial branch where members are appointed by the executive and approved by congress.

Tahoe, just to clarify something -- there's a whole lot more wealth and value expressed in dollars than there is in printed and stamped money. It's not like the Fed has to physically print money to jigger the value of money. They have a variety of mechanisms to make the quantity and quality of $ "elastic".

That said, as far as how money gets printed, the Fed is in cahoots with the Treasury to print the greenbacks. The Fed backs it with value, which is why everyone's $ bills have "Federal Reserve Note" written on them.

Good stuff Mxy.

Do you know this guy?

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YEA... Denny didn't float away in the Pacific Ocean. Nice storm, huh?

YEA... Denny didn't float away in the Pacific Ocean. Nice storm, huh?

Rain is a necessary evil.

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