A Visual Guide to the Federal Reserve

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The Federal Reserve steers the American economy and yet it remains a system that is shrouded in mystery. Few understand the logic behind its policy decisions, decisions that have a profound effect on the US economy. And over the years it has operated seemingly independently of the more democratically elected arms of the US government. Its public stance, generally lacking in transparency has fueled conspiracy theories. Some even suggest its formation lead directly to the Great Depression.
So just what is the Federal Reserve? Why was it formed in the first place? And how does its monetary policy affect the lives of everyday US citizens? Here we do our part to demystify the Federal Reserve.
For more visualizations see: WallStats.com
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« Previous 1 2Gheesh . . . Talk about propaganda! As usual, half-truths put out to make us think that everything is A-o.k. This is a knee-jerk reaction to the fact that their game is coming to an end, people are waking up, and are not going to “go-with-the-flow” any longer. That which hides in darkness will always be brought to light. Good Luck to the Fed continuing in their “Business as usual” fashion!
These comments are hilarious.
What I’d like to know is why does the Ron Paul fan club use the internet as their playground? Obviously in a world without the Fed or the IRS, the internet would not exist for them to annoy the rest of us.
Please Ron Paulers, write a book-of-a-comment about why the government is secretly manipulating me so that they can fund a secret project at Area 51 to de-thaw the cryogentically frozen head of FDR (of course, frozen by aliens). Please spend a lot of time on it. The more time you spend on here spewing nonsense, the less time you’re spending elsewhere trying to ruin someone else’s attempts at enjoying their evening.
@huck, you were right the first time, the graphic was meant to be informative and explain the workings of the Fed which IMHO it does. I think it’s kind of funny that the consensus of people vocal enough to comment on a blog post is somehow deemed the truth. Gotta love the internet.
I like how this graphic is filled with hard, verifiable facts, and all of the vitrolic comments are filled with emotionally charged weasel words. Linking to a book on Amazon does not suffice as a counterpoint.
Hey James, what does the FED and the IRS have to do with the existence of the internet? And if hearing both sides of the discussion bothers you so much, why do you read this stuff? And what do you have against Ron Paul? He is simply a strict Constitutionalist. Don’t you like the US Constitution or what?
Most of the commentator’s here seem to have at least done a little research. Have you? Don’t believe in conspiracies? Roughly half of the inmates in Federal prisons are there for conspiracy of one sort or another, so the Federal Government certainly believes in conspiracies!
Watch “The Obama Deception HQ” on YouTube and get back to us…
Hey Matt!
Show me the law that requires you to pay Federal Income tax on wages and I’ll send $100 to your PayPal account. I’ll give you a head start: be sure to check the legal definitions of words like “income” and “US Citizen” as used in the IRS Code. Don’t just assume that you already know what they mean because you don’t.
Russo’s video on Google, “America: Freedom to Fascism – Director’s Authorized Version” has a great part about a Failure to file tax case.
I’m waiting to pay you…
Fractional reserve banking has destroyed the US. This “guide” is childish drek.
@James, exactly!
Ron Paul supporters are perhaps the most hypocritical/delusional people I have ever met.
They’re huge advocates for “free markets” yet they claim that David Rockefeller (whose grandfather became rich because of free markets) is involved with this “New World Order.” So basically, they’re saying that, “Rich people are planning a New World Order but I want to have free markets so they can become richer.” There’s a reason why big businesses hire lobbyists. It’s because they don’t have complete control over Washington politics. So they bribe those who are weak and the strong ones are socialists (according to Ron Paul supporters). The idea of Ron Paul’s “no government involved with markets” theory will resurrect the robber barons and it will further the gap between the rich and poor. Less government means more potential corruption in markets. It’s already corrupted enough. Why do we need less regulation? If there are free markets, big businesses won’t have to hire lobbyists anymore because they can pretty much do anything they won’t have to worry about the government preventing them from paying their employees $2 a week.
They complain about the “growing police state” and that border patrol officers are using “unnecessary force” to achieve fascism.
Ron Paul is against vaccination for swine flu. Supporters know that he’s a doctor so they think that he must be credible. Wrong. He’s an obstetrician which means he knows more about vagina than viruses. 25 People Died?! And somehow that had to do with the vaccine? MILLIONS OF PEOPLE TOOK THE SAME VACCINE TOO AND DIDN’T DIE EITHER. And the swine flu right now seems to be growing problem and this guy is still advocating ignorance.
http://www.youtube.com/watch?v=TB5-Y08qbjo
Ron Paul was against “bailing out” the victims of Huricane Katrina yet he was all for “bailing out” his district. I’m pretty sure the representative of New Orleans would disagree. Judging from the comments on that video, Ron Paulers are loons. Their argument is that “Ron Paul is just doing his job”…yeah…so was the representative from New Orleans and Tim Russert.
http://www.youtube.com/watch?v=KmhkbIDwK50
They complain about the government “spying” on their citizens and that the constitution is sacred. Well, sorry to bust you Ron Paulers, but 20 years from now, our grandchildren will be laughing at us. Because 20 years from now, EVERYTHING will be monitored, tagged, and recorded because 20 years from now, technology will be so readily available that an ordinary guy from Ohio could probably make a nuclear bomb in his backyard.
Overall, I think they’re just a bunch of hipsters who think it’s alternatively cool to vote for third party (because no one else is going to) and they think V for Vendetta is a true story.
“They complain about the “growing police state” and that border patrol officers are using unnecessary force” to achieve fascism.”
Left this out…
Ron Paul wants troops to come back home to protect the borders. While complaining about “police state”, he also wants the border patrol squad to become even bigger. How f*cking nice of you, Mr. Paul.
Wow, the comments here are just ridiculous. You want to end the Federal Reserve Bank because some other guy from another part of the Internet told you that it was a good idea. In reality, you have no freaking clue what the FED even does. And calling this propaganda is just another one of your “conspiracy theories.”
There’s really one idea that we can really all agree upon. It’s the fact that people on the board of directors at the Federal Reserve Bank are just as capable of being succumbed to greed and power similar to politicians in Washington. So while you’re calling Obama a socialist, you’re becoming a socialist yourself because you’re against the greedy capitalist pigs that work at the Federal Reserve Bank.
And stop it with your NWO bullshit. If you want your “so-called” NWO to fail, then say no to corporations and say no to powerful individuals with billions of dollars that attend . But then again…that will make y’all hypocrites because you’re all for capitalism and you’re all for the good old fashion free market system. Am i rite?
* that attend Bilderberg Group meetings
@James That’s preposterous! Just take the head out of the freezer and it’ll thaw.
I, too, hate it when people comment on topics they’re passionate about. They should learn to keep their mouths shut, especially when it comes to criticism of the government. Comment sections are reserved for trolling.
The other day I read a blog supporting gun control. To my surprise, most of the comments were negative! It really annoyed me that these people disagreed with me. They completely ruined five out of my six attempts to enjoy the evening. What gives them the right to voice their opinions, anyway?
If there were enough people who adamantly believed that this was even close to the truth, the comments would be pretty even for both sides. William Wendt, the only students you are teaching are your CIA or FBI recruits, and its called brainwashing, not teaching.
William Wendt, which of Ron Pauls “claims” are you even disagreeing with? All the debunkers do is just hate and make fun of, while the crazy “conspiracists” are bombarding you and the comments board with cold hard facts.
@James:
I don’t think people here are using the internet as their playground. Free discussion is the only way to test the merits of opposing ideas. For whatever reason, no one has really presenting any arguments to the many people pointing out the problems with the Fed, so it appears there aren’t any. I wish there would be a real discussion instead of labeling or pigeon holing by defenders of central banking.
@Lee Sherman:
It wouldn’t seem like possible truth if it were argued against with facts and or logical points.
@Noah et all,
I invite all Fed conspiracy theorists to debunk the following debunking of their myth.
http://www.publiceye.org/conspire/flaherty/Federal_Reserve.html
Another economists take. It’s comical to see the largely ignorant masses bashing the comments of the only economist in this discussion while citing claims made by an obstetrician turned politician (Ron Paul), a child actor who later located Noah’s Ark (G. Edward Griffin), and Bette Midler’s former Manager who later produced Trading Places with Eddie Murphy (Aaron Russo).
Not that these people don’t have a right to their opinion, but they are hardly qualified to have their opinion vaulted onto the pedestal of truth.
Question, if the Fed is so overwhelmingly bad, and the conspiracy so obvious, shouldn’t there be some reference to it in a peer reviewed economic journal? Or is that part of the conspiracy too?
@ James
@ Joe
@Simple-minded people
Ok. So let me get this straight. You’re tired of people passionately writing about a topic on a blog?
Whoa, ok, good thing that I’m a 1st grade elementary teacher, because I actually specialize in explaining complex ideas to simple minds.
K, lets start with this:
What is a blog? A blog is short for “weblog”. A weblog is a collaborative space on the internet where people, if passionate or motivated enough, can share and express ideas, thoughts, and information. Once again, this requires passion and/or concern, for the sake of motivational writing.
A common feature in a vast majority of blogs is the “comments” section, usually located below the blog article itself. The comments section was designed for the blog’s readers to show their appreciation, dismay, agreement, or disagreement to the related article. Once again, a motivated act, which accompanies passion and/or concern.
So, there…now you know what a blog is, why it has a comments section, and why both of these components often include passionate remarks.
And by the way, for all the readers and posters on this blog, I’d like to point out the peaceful collaboration, intellect, and respect being shown by those who have made comments critical of the federal reserve, and compare that to the rudeness, ignorance, and blatantly immature and disrespectful attitude of those who defend and support the Fed.
Coincidence? I think not. Intellectualism, collective wisdom, and respect has always, and will always, win in the long-term.
Thanks for the link, Jess. According to that economist, “later economic analysis agrees with McFadden that Federal Reserve policy blunders had a substantial role in causing the Depression.” I don’t believe it’s a conspiracy; it’s just bad economics.
Keynes himself wrote, “Lenin is said to have declared the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of upturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does so in a manner which not one man in a million is able to diagnose.”
The Federal Reserve definitely supports a “continuing process of inflation.”
Jess
first and foremost you are in the same problem that we are in, unless you work for them, the bank cartel. It is clear that you are new to this because there is an insurmountable amount of quotes against central bank by the the founding fathers and good portion of presidents since the beginning of this country. As you quoted three people, but failed to quote 1)benjamin franklin; 2) Andrew jackson 3) thomas Jefferson 4) woodrow wilson eventual comment on the fed 5) Congressman Lindberg 6) Congressman McFadden 7) nobel prize winner milton friendman, etc.
The board of governors is selected from a group and by the advise of the federal advisory committee. There has never been a board of governor selected outside this federal advisory committee. In the flaherty article as well as the article on this page there is never a mention of FRACTIONAL RESERVE BANKING , and how that affect inflation. Neither flaherty nor this article explain how a car in 1970 cost $5000 and today it cost $50,000 despite inprovements in robotics which should have made the manufacture of the car cheaper. jess my friend, as you go to the grocery store and notice that yesterdays milk has increase in price, remember, you as a wage earner, is the last to adjust to the prize. Neither the Flaherty article nor the can bring to logic why on earth…does money…have to come into circulation by debt!!! why why why. Money is suppose to aid commerce, that is all. Why are you so convince that money has to be borrowed into circulation? PLEASE PLEASE SHOW ME THE LOGIC.
To prove that there is a far reaching conspiracy, pick up a college textbook on tax law. In the college text book they will teach you that: 1) the 16th amendment created the income tax 2) that the income tax is a direct tax 3) that the 16th amendment overturned the pollock decision. But if you read the supreme court archives you will plainly read that the supreme court stated unanimously that 1) the 16th amendment did not give congress any new taxing power 2)that the income tax is in its nature is an indirect tax 3) that the 16th amendment did not affect the pollock decision. There is no where in title 26 a law that makes you tax liable for the particular activity that produces your income.
All i have to say is that…if we continue to argue about ending the fed… we are going to loose this country.
Hey Jess,
I don’t have time to dispute every issue listed there but the point about the Fed never having been COMPLETELY audited seems to stand according to your source (The GAO is responsible for auditing the FED):
/quote/
The Government Accounting Office does not have complete access to all aspects of the Federal Reserve System. The law excludes the following areas from GAO inspections (31 USCA §714):
(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, open market operations;
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to items.
In 1993 Wayne D. Angell, then a member of the Board of Governors, submitted testimony before a House subcommittee on the reasons for the restrictions on GAO access. He commented,
By excluding these areas, the Act attempts to balance the need for public accountability of the Federal Reserve through GAO audits against the need to insulate the central bank’s monetary policy functions from short-term political pressures and to ensure that foreign central banks and governmental entities can transact business in the U.S. financial markets through the Federal Reserve on a confidential basis.2
/unquote/
Since all we’ve heard lately is “It’s a global economy” and since China, among other countries, owns huge amounts of our debt, it seems that “transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization” are really a large part of of the financial dealings of the Fed.
It is against the law to even audit these transactions. This is why we say there has never been an audit of the FED, much of their activity is secret and confidential, by law.
Jess? I like how you pinpointed certain certain critics that you could easily criticize (though your criticisms had little to do with any evidence reflecting the validity or accuracy of their opinions). So what that Aaron Russo directed “Trading Places” ? I’m sure there’s several economists who may have had prior jobs unrelating to their particular field, but does it make their job or opinion disqualifying? Perhaps the economist Alan Greenspan once had a job as a jazz musician (see wikipedia: Alan Greenspan), but I don’t necessarily see you looking that up and using it against him as a criticism of his reputation. So what if Ron Paul or Aaron Russo had prior jobs, hobbies, and interests? What exactly is your point, if valid?
Secondly, you hand-picked the particularly easy critics to abuse. Why don’t you perhaps try debunking the more important and key players of America’s fight against cnetral bank, as opposed to the little guys who are easier to pick on.
Here’s a list of people for you to debunk, criticize, and prove wrong. All of these men were our nations most hardcore critics of centralised banking, and I would like for you to back up your circumstantial opinions by showing all of us here at this forum how, and why these men were wrong, and if not wrong, how their opinions differ from modern day critics such as Paul and Russo.
List of critics:
George Washington
James Madison
Thomas Jefferson
Abraham Lincoln
Woodrow Wilson (upon later regret)
John F. Kennedy
I encourage you to educate yourself further by reading the memoirs and quotations all of these men individually gave concerning their strong stances against a system of centralized banking run by private corporations.
@Jess
Oh, and also, the only piece of evidence you gave justifying your opinion was the controversial website http://www.publiceye.org
I encourage you to go to their website and read their 2002 reports wrongfully supporting the invasion of Iraq based on their assumption of Iraq having weapons of mass destruction.
This website and organization, upon initial glance, seem’s healthy, alternative, and progressive. But upon further reading, they become closer and closer to being just another mouthpiece for the same misleading, exaggerative, and inaccurate news stories being told by the White House press, CNN, Fox, and others. Your evidence is quite weak compared to others who have posted here, and you have failed miserably to back up your debunking. Please try doing a little bit more research on the topics you plan to butt into, and also look more closely into the websites you choose to use as your evidence before you mislead yourself, or more dangerously, mislead others.
@Jess
Here ya’ go:
Griffin responds to Flaherty, point by point.
http://www.freedomforceinternational.org/freedomcontent.cfm?fuseaction=meetflaherty
Remember how the country laughed, joked, made fun of ROSS PEROT, when he warned us (the Country) about NAFTA? He was even called a “conspiracy theorist!”
Look what’s happened . . . he has turned out to be right.
For years people in the U.S., and even around the world have said that the “powers-that-be” are moving us to a “NEW WORLD ORDER.” These people were laughed at, made fun of, joked about – and believe it or not – labeled as “conspiracy theorists!”
Look what’s happening right now . . . it looks as though they have been right.
It seems that more-and-more, these so-called “Conspiracy Theorists,” are actually THEORIZING ON REALITY, and “the powers-that-be are the people that operate in this “Conspiracy” realm – either running one (or more) and then they (the powers) who seem to be running a CONSPIRACY, then throw the word back on those that appear to have figured out their TRUE AGENDA . . . How convenient!
So the new term for “Conspiracy Theorists” should be “REALITY THEORISTS!” IT’S MORE DESCRIPTIVE OF WHAT THEY ACTUALLY DO, AND, WELL . . . REALITY!
One thing which I fear most is that the Bank Cartel has acquired controlling interest in many corporations such that if we attempt to take away their monopoly on money, they will conspire to do something drastic (like they did in 1907)for a political effect. Remember, a century of boom and burst have given them control of commerce, maybe more so than we realize.
This is an interesting way to show the information, but I don’t really like how you made any “theories” around the information not being credible seem irrelevant…
There are MANY respected individuals who have taken the time to point out flaws in the Federal Reserve system, and many great presidents that have admitted all power is lost when the banks are in charge.
This has happened, and the banks are in control. I actually saw a really cool timeline of events… takes time to read, but really helps you understand how the housing bubble is the catalyst for funneling money to banks. Check it out… http://www.ehomemortgages.com/blog/img/mortgage-crisis.png
Looks Like the Tinfoil hat brigade is out in full force on this thread. Keep up the entertainment folks!
-Bill
…and yes, I am a member of the secret International Banking committee who controls economic cycles and the weather.
This is absurd. I cannot believe you would print this Mint. How about the real story? You do not even mention the amount of interest we pay on this imaginary money we borrow which just so happens to be covered with our federal income taxes. Print the real story Mint! Audit the Fed.
Well I think we can now see that mint is not giving a “fresh” take on finance.
The most frustrating thing about Ron Paul supporters is that they say they oppose the Fed, but they don’t do anything about it outside of the rigged game of politricks.
I just picked up the book 5 STEPS TO FREEDOM: How to Cut Your Dependence on Institutions and Escape Financial Slavery. If Ron Paul supporters are as smart as they say they are, they follow that book… then we’ll see how many of them there really are.
The Fed doesn’t do anything that couldn’t be done just as well by the U.S. Treasury Dept.
Cut out the middle man. END THE FED.
just watched “Zeitgeist” and was amazed by the central bank history shown. And if even the 50% of the so called facts shown about the central reserve bank are true then its really admirable how a small bunch of people are cntrolling the life of whole US and world.
Wow! What a convoluted load of BS. This quote alone tells it all:
“The Fed lowers its discount rate, allowing banks to borrow more, which effectively increases the money supply.”
I doesn’t increase the money supply – it increases the amount of debt that can be loaned out at interest. The Fed merely conjures it up out of nothing based on the fractional lending system allowing almost $99 to be loaned out for every $1 on deposit. The debt pool is 99 times bigger (not including interest) than the actual amount required to be on deposit. That’s sort of like saying that you have an empty gallon jug called debt, and a one ounce shot glass of water to pay it all off.
It is simply impossible for everyone to pay off their debt – and no article describing the Federal Reserve can ever claim otherwise. Furthermore, even if everyone was a certified CPA doing everything right, and never taking any risks – not everyone would be able to pay off their loans, and what’s worse, some would still go bankrupt.
I believe that banking institutions are more dangerous to our liberties than standing armies.
Thomas Jefferson
Does any one need to say more!!!!!
Thomas Jefferson once said, “I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.”
James Madison was quoted saying “History records that the”money changers” have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it’s issuance.”
“The few who understand the system, will either be so interested from it’s profits or so dependant on it’s favors, that there will be no opposition from that class.” — Rothschild Brothers of London, 1863
One ongoing circle 8(
Why doesn’t the Fed just publish the list of all its Shareholders (the big fish), the amounts they have put in (or are in hock for) and let the Market decide if it is worth while continuing with them? That is, if it still trusts tem? Dammit, they are the high priests of the (rationalist) Religion of wealth creation. Even the Vatican has been more open in these last few years.