The Federal Reserve is a wholly privately owned company.
Like all private companies, the Federal Reserve seeks to maximize the profits of it's major shareholders.
It is basically a giant money making scheme for the big banks.
The major influencers of Federal Reserve policy are those with the largest share ownership.
Chief among these are :-
The Rothschild family which owns just over 50%
JP Morgan (N.B. the Rothschild family own a large percentage of JP Morgan)
Goldman Sachs
The Rockefeller family (since the merger of JP Morgan with Chase Manhattan Bank and the Rockefeller's large family shareholding in Chase Manhattan - see 1).
N.B. The ownership of the Federal Reserve is more complicated than the above summary.
The detailed ownership is deliberately kept secret.
The Federal Reserve was set up in 1913 in order to extract interest payments on the money borrowed by the U.S. government as a result of it's future budget deficits.
The Federal government could print it's own currency and pay zero interest on it's borrowings (as was the case prior to 1913).
Increasing the amounts of government borrowings, naturally increases the amounts of the interest payments to the banks that lend to the government.
The Income Tax was also set up in 1913 in order to generate the revenues to the Federal government to pay the interest to the big banks. Prior to 1913, the revenues available to the Federal government were very small. A much larger revenue generating system was required, in order to pay the large amounts of interest on the very large amounts of money it was envisioned the Federal government would be encouraged to borrow in future years.
The 100 years of the Federal Reserve and the 100 years before.
For centuries, there has been no better way of increasing any government's borrowings than to encourage that government to pursue large scale or long term wars.
The Federal Reserve is forced by Statute to return any excess profits to the U.S. Treasury, so it has to use other means to generate large profits for it's shareholders.
As the big banks now make the vast majority of their profits from speculation, not from traditional bank lending, the Federal Reserve sets out to deliberately manufacture large booms and busts.
It does this by manipulating the money supply and interest rates.
It is very difficult to make large profits from speculation in flat markets.
The Federal Reserve is also guaranteed by Statute to pay a 6% dividend every year to it's owners.
The only private company in the world with this guarantee.
This dividend is paid by U.S. taxpayers.
The Federal Reserve makes money in other ways too.
E.G. It charges exorbitant rates to print dollar bills. (The Federal government could print dollar bills itself.)
The Federal Reserve can hide it's profits, losses, expenses and loan activity.
Also by Statute the Federal Reserve's accounts are not audited - it can put more or less any numbers (within reason) into it's annual reports.
Nobody, by Law, is allowed to check the numbers the Federal Reserve reports every year - not even Congress or the President.
Neither are they allowed to know the Federal Reserve's lending activity (the Fed publishes summaries, without any details of who it is lending to, which may or may not be accurate (no one can check).
Hence the recent proposals in Congress to pass Laws that enable "audit the Fed".
The Federal Reserve is now printing $1tn of additional currency every year, which it lends to the big banks at near zero interest.
81.5% of all the money printed in QE1, QE2, the current QE3 and QE to infinity has gone to bail out the balance sheets of large banks. It has not gone to expand lending or improve the economy.
High-Level Fed Official: QE Is “The Greatest Backdoor Wall Street Bailout of All Time”
http://www.washingtonsblog.com/2013/11/qe-wall-street-bailout.htmlIt is no good printing more currency if NOBODY wants to borrow it.
The only credit expansion is in student debt and subsidized car loans (and by government borrowings).
Officially American Banks already have $1.7tn of "excess" reserves.
The banks don't need any more money to increase normal bank lending - they could increase bank lending by $17tn tomorrow with the money they already have (if anybody wanted to borrow it).
The large American banks are using this "extra" money for various forms of speculation.
This increases the prices of various financial assets - mostly stock and bond prices, but also the prices of commodities like oil and food.
Pushing up the prices of oil and food reduces the disposable incomes of ordinary people, lowers GDP growth, increases unemployment and puts the American economy into the vicious circle we have seen over the last 12 years.
The current policies of the Federal Reserve private bank are :-
Massively increasing the profits of the big banks
Hurting the economy with lower GDP growth and actively increasing unemployment
The Federal Reserve has now created the largest financial asset bubble in history.
It is now around 20 times larger than the asset bubble of 2007 and the Fed continues to inflate it at the rate of $1tn a year (plus other Central Bank printing).
There are now huge financial asset bubbles in :-
Sovereign (government) debt
Corporate debt
Junk bonds
Stock markets
House prices
Student Loan Debt (now larger than the sub-prime mortgage market in 2007)
The bubble of 2007 supposedly led to near financial Armageddon in 2008.
When the current bubble bursts, as it has to at some point, the effects on the global economy will be truly devastating.
N.B. The $1.7tn of excess reserves is the illusory product of creative accounting trickery.
There hasn't been any proper pricing (mark to market) of bank balance sheet assets, particularly derivative assets, for several years.
References
1. The Chase Manhattan Bank: Rockefeller's Bank
http://thecounterpunch.hubpages.com/hub/The_Chase_Bank
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