[GJM] Myth, and Non-Myth about Monetary Matters.................

[robert searle]

The following myths are debunked but without direct
references!! I have known about Falherty before for
sometime.

R.Searle.

> Debunking the Federal Reserve Conspiracy Theories
> (and other financial
> myths)
> BY: Edward Flaherty, Ph.D. Department of Economics
> College of Charleston,
> S.C. 
> Facts: Yes, the Federal Reserve banks are privately
> owned, but they are
> controlled by the publicly appointed Board of
> Governors. The Federal Reserve
> banks merely execute the monetary policy choices
> made by the Board. In
> addition, nearly all the interest the Federal
> Reserve collects on government
> bonds is rebated to the Treasury each year, so the
> government does not pay
> any net interest to the Fed.
>  
> Facts: No foreigners own any part of the Fed. Each
> Federal Reserve bank is
> owned exclusively by the participating commercial
> banks and S&Ls operating
> within the Federal Reserve bank's district.
> Individuals and non-bank firms,
> be they foreign or domestic, are not permitted by
> law to own any shares of a
> Federal Reserve bank. Moreover, monetary policy is
> controlled by the
> publicly appointed Board of Governors, not by the
> Federal Reserve banks.
>  
> Fact: Independent accounting firms conduct full
> financial audits of the
> Federal Reserve banks and the Board of Governors
> every year. The Fed is also
> subject to certain types of audits from the
> Government Accounting Office.
>  
> Facts: The Federal Reserve rebates its net earnings
> to the Treasury every
> year. Consequently, the interest the Treasury pays
> to the Fed is returned,
> so the money borrowed from the Fed has no net
> interest obligation for the
> Treasury. The government could print its own
> currency independent of the
> Fed, but there would be no effective safeguards
> against abuse of this power
> for political gain.
>  
> Facts: The Federal Reserve banks have only a small
> share of the total
> national debt (about 7%). Therefore, only a small
> share of the interest on
> the debt goes to the Fed. Regardless, the Fed
> rebates that interest to the
> Treasury every year, so the debt held by the Fed
> carries no net interest
> obligation for the government. In addition, it is
> Congress, not the Federal
> Reserve, who is responsible for the federal budget
> and the national debt.
>  
> Facts: Kennedy wrote E.O. 11,110 to phase out silver
> certificate currency,
> not to issue more of it. Records show Kennedy and
> the Federal Reserve were
> almost always in agreement on policy matters. He
> even signed legislation to
> give the Fed more authority to issue currency.
>  
> Facts: McFadden was incorrect regarding the Fed
> costing the government
> money. However, later economic analysis agrees with
> him that Federal Reserve
> policy blunders had a substantial role in causing
> the Depression. However,
> his implication that this was done deliberately has
> no basis in fact.
> Moreover, for a dozen years prior to his rant,
> McFadden had been the
> chairman of the House subcommittee that oversaw the
> Federal Reserve. Why
> didn't he do anything to reform or abolish the Fed
> while he had the chance?
>  
> Facts: The banking system is indeed able to create
> money with a mere
> computer keystroke. However, a bank's ability to
> create money is tied
> directly to the amount of reserves customers have
> deposited there. A bank
> must pay a competitive interest rate on those
> deposits to keep them from
> leaving to other banks. This interest expense alone
> is a substantial portion
> of a bank's operating costs and is de facto proof a
> bank cannot costlessly
> create money. 
>  
> Fact: The term 'lawful money' does not refer to gold
> or silver coin, but to
> types of money which the government would permit
> banks to use when
> tabulating their reserves. These types of money
> included, but were not
> limited to, gold and silver coin.
> 
>  
> Myth #1: The Federal Reserve Act of 1913 was crafted
> by Wall Street bankers
> and a few senators in a secret meeting.
>  
> Myth #2: The Federal Reserve Act never actually
> passed Congress. The Senate
> voted on the bill without a quorum, so the Act is
> null and void.
>  
> Myth# 3: The Federal Reserve Act and paper money are
> unconstitutional
>  
> Myth# 4: The Federal Reserve is a privately owned
> bank
>  
> Myth #5: The Federal Reserve is owned and controlled
> by foreigners.
>  
> Myth #6: The Federal Reserve has never been audited.
>  
> Myth #7: The Federal Reserve charges interest on the
> currency we use.
>  
> Myth #8: If it were not for the Federal Reserve
> charging the government
> interest, the budget would be balanced and we would
> have no national debt.
>  
> Myth #9: President Kennedy was assassinated because
> he tried to usurp the
> Federal Reserve's power. Executive Order 11,110
> proves it
>  
> The Legendary Tirade of Louis T. McFadden
>  
>  
> A Brief History of Central Banking in the United
> States
> United States Monetary Policy
>  
>
http://www.geocities.com/CapitolHill/Senate/3616/FedReserveFacts.html

>  
PS. The above was presented on the Gang8 yahoo
discussion site by Michael Hudson.
>  
> 
> 
> 



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