Listened to the podcast Monday (it’s one of my favorites, I bought the book too and I just finished the chapter on Mutual Funds and at this point I anticipate writing a favorable review on amazon.com which is where I bought the book.)
Something on the podcast irked me a bit and I have to get it off my chest. One of the guests (can’t remember which one) mentioned that the Fed is a servant of the public. I’m not sure why the guest said that. The Fed is a privately-owned for-profit corporation that has been granted a monopoly by our government to control the money supply of our country. When I was in college, I learned that the first responsibility of a for-profit entity was to increase the wealth of the owners. The fed is not a government program/institution – it’s a private corporation. It’s not a servant to the citizens of the U.S., it’s a servant to it’s private owners, who have the power to manipulate the money supply to their own financial gain.
In the publication “The Federal Reserve System: Purposes and Functions” (published by the Federal Reserve Board of Governors) it is stated in Chapter 2, “The Federal Reserve sets the nation’s monetary policy to promote the objectives of maximum employment, stable prices, and moderate long-term interest rates.” Stable prices? Do they ride bikes to work? Do they buy their own gas, milk, rice, flour, etc? It seems that they either shop somewhere we don’t know about, or they aren’t achieving their goals. Was the great depression, the 1987 “correction” or our current economic status the shining star for stable prices and maximum employment?
One thing I do know, is that the Rockefeller/Aldrich family is one of the owners of the Fed, and that when the Great Depression was in full swing, Rockefeller was hailed as a hero for purchasing land in Manhattan and employing men to build Rockefeller Center. I have a different view. If I had the ability to control monetary supply (and in effect, the economy of a country) would I want to buy the land and hire people to do a death defying construction job during the Roaring ’20′s? Nope, if I got to manipulate it to my benefit, I’d create a huge crash and do it when the price for the land was low, and workers would risk their lives for their jobs just to get anything for a wage. I’m not going to say that’s what Rockefeller did, but he had the power to do that, and it is within the realm of possibility that it is what happened (however unlikely, it is possible.)
And when the President of the U.S. picks the chairman of the Fed, he picks it from a list that the Fed provides for him.
J.P. Morgan (another one of the private owners of the fed that controls monetary supply and the economy?) buys Bear Stearns for $10 a share (which was over $150/share less than a year ago.) Didn’t they just buy Bank One about a year or two ago? No, the big banks aren’t making sweet deals in a rough economy. They’re a servant of the people remember?
Sorry, I can’t believe what the guest said. The Fed is not a servant of the people. The Fed is a servant to the private owners of the Fed.