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- Troy did you read any of the posts I made above about the operation of the Fed? I already addressed the above issues except maybe 47, but I just posted a detailed explanation. IMHO Part of the problem is you are reading source that do not like the Fed and twist to the negative. As you can see the Majority of the FOMC is made up of Treasury appointed Governors so the Congress controlling the Board and it's budget have the hammer - not the members of the Fed banks.The majority is always the Treasury they have 7 votes to 4 of the Reserve banks.
Structure of the FOMC
The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.
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- Here we go again you all can provide factual sources that dispute any of the following post and I will attempt to respond.
Myth #5. The Federal Reserve is owned and controlled by foreigners
BY: Edward Flaherty, Ph.D. Department of Economics College of Charleston, S.C.Do foreigners own or control the Federal Reserve? Conspiracy theorists Gary Kah (1991) and Eustace Mullins (1983) certainly think so, as do many of their readers. Kah and Mullins each authored books alleging that the U.S. central bank – the Federal Reserve – is under the direction of an international banking community and that this financial elite, primarily British, uses its control to manipulate the U.S. economy and its financial markets for their personal gain. This is a very serious charge. The Federal Reserve sets the government’s monetary and interest rate policies. Any change in them has significant repercussions for just about everyone. An increase in interest rates that benefits savers could also price a new home just out of a family’s reach or make a manufacturing firm’s modernization plan too expensive to undertake. The Fed is supposed to choose a policy that benefits the whole of the U.S. economy, not an overseas banking cabal. The ultimate aim of this international banking elite, the conspiracy theory declares, is to establish a one-world government – the infamous New World Order. The Fed’s alleged role in this is simple according to Kah: At the appointed time, the New World Order schemers will instruct the Fed to sabotage the U.S. economy, causing financial and social chaos that will make it much easier for them to gain real political and military control over the United States. In the meantime they simply reap the Fed’s huge annual profits and manipulate the financial markets for further gain. Kah specifically claims that foreigners directly own the New York Federal Reserve Bank, the largest and most important of the twelve regional Federal Reserve Banks. Through the N.Y. Federal Reserve the international conspirators control the entire Federal Reserve System and gain its profits. In his book En Route to Global Occupation Kah also plays up the Fed’s alleged role in the New World Order plot. Mullins agrees on the importance of the N.Y. Fed, but claims that while domestic commercial banks own it, in reality a secret European banking club actually controls its policies from a distance. How much of these conspiracy theories, if any, is true? In this article I investigate the remarkable claims of Kah and Mullins. Specifically, I examine whether foreigners own the New York Federal Reserve Bank either directly or indirectly, whether the N.Y. Fed controls the whole of the Federal Reserve System, and whether foreigners receive the System’s large annual profits. As it turns out, very little of these conspiracy tales are true.Who Owns the New York Federal Reserve Bank?Each of the twelve Federal Reserve Banks is organized as a corporation in much the same way as many other firms. However, Gary Kah in 1991 claimed foreigners intent on global economic and political domination own a controlling interest in the shares of the New York Federal Reserve Bank. “Swiss and Saudi Arabian contacts,” according to Kah (p. 13), identified the top eight shareholders asRothschild Banks of London and Berlin
Lazard Brothers Banks of Paris
Israel Moses Seif Banks of Italy
Warburg Bank of Hamburg and Amsterdam
Lehman Brothers of New York
Kuhn, Loeb Bank of New York
Chase Manhatten Bank
Goldman, Sachs of New York.Kah describes these as the Fed’s “Class A shareholders” (p. 14). This is curious because Federal Reserve stock is not classified in this manner. It can be either “member stock” or “public stock.” However, the directors of a Federal Reserve Bank are separated into Classes A, B, and C depending on how they are appointed (12 USCA §302).Fellow conspiracy theorist Eustace Mullins presents a different list in his 1983 book Secrets of the Federal Reserve. He reports the top eight stockholders of the New York Fed in 1982 wereCitibank
Chase Manhatten Bank
Morgan Guaranty Trust
Chemical Bank
Manufacturers Hanover Trust
Bankers Trust Company
National Bank of North America
Bank of New York.He notes that together these banks own about 63 percent of the New York Fed’s outstanding stock. European banking organizations, most notably the Rothschild banking dynasty, he then claims, own many of these banks. Mullins also contends that through their American agents, the European bankers – who he calls the London Connection – select the board of directors for the N.Y. Fed. Since the N.Y. Fed supposedly controls the whole Federal Reserve System, this allows the London Connection to direct U.S. monetary policy. He explains,... The most powerful men in the United States were themselves answerable to another power, a foreign power, and a power which had been steadfastly seeking to extend its control over the young republic since its very inception. The power was the financial power of England, centered in the London Branch of the House of Rothschild. The fact was that in 1910, the United States was for all practical purposes being ruled from England, and so it is today (Mullins, p. 47-48).
Clearly, there is a discrepancy between the two lists. According to Kah, foreigners own shares of the N.Y. Fed directly. On the other hand, Mullins does not report any such direct foreign ownership. Instead, Europeans allegedly own the U.S. banks which, in turn, own the N.Y. Fed – an indirect ownership. So who is right? Mullins claimed the source of his information was the Federal Reserve Bulletin, however, that publication has never reported the shareholder list of any Federal Reserve Bank. It is not clear where he obtained his list. Kah’s source was supposedly an unnamed group of Swiss and Saudi Arabian contacts and so it is impossible even to verify his list. On the other hand, the two authors published their lists eight years apart. Since Mullins’ was the earlier of the two, it may be possible that sometime between 1983 and 1991 foreigners acquired a substantial amount of stock in the N.Y. Fed. It is also possible that both lists are wrong.To clarify this mystery, let’s first look at the Federal Reserve Act of 1913 itself. The law requires that all nationally chartered commercial banks and savings & loans buy stock in their regional Federal Reserve Bank, thereby becoming “member banks” (12 USCA §282).1 The amount of stock a bank must buy, called “member stock,” is proportional to the bank’s size. So, we would expect that by law the largest shareholders of the N.Y. Fed to be the largest banks operating in its district. This is consistent with Mullins since all of the banks on his list were, at the time, the largest banks in the N.Y. Fed region.Further examination of the law and the facts makes Kah’s list suspect. The law does not permit the stock of a Federal Reserve Bank to be traded publicly like the stock of a typical corporation. The original Federal Reserve Act called for each regional Bank to sell stock to raise at least $4 million to begin operations (12 USCA §281). The stock was to be sold to banks, not to the public. Only in the event that sales to member banks did not raise the necessary $4 million would the regional Fed Banks be permitted to sell shares to the public, called “public stock.” However, this did not happen and no stock in any Federal Reserve Bank has ever been sold to the public, to foreigners, or to any non-bank U.S. firm (Woodward, 1996). Note that foreign interests comprise half of the alleged owners on Kah’s list. Moreover, three of the hypothesized American owners are not even banks. The law permits neither foreigners nor non-bank firms from owning shares in any Federal Reserve Bank. Chase Manhatten is the only entity on Kah’s list that could possibly own shares of the N.Y. Fed.We can simply look at the most recent list of shareholders to test the claim that foreigners own the New York Federal Reserve Bank. According to the N.Y. Fed itself, as of June 30, 1997 the top eight shareholders wereChase Manhatten Bank
Citibank
Morgan Guaranty Trust Company
Fleet Bank
Bankers Trust
Bank of New York
Marine Midland Bank
Summit Bank.
All of the major shareholders seen here and all of the banks on the complete list are either nationally- or state-chartered banks. All of them are U.S.-owned. Kah’s claim that foreigners directly own the N.Y. Fed is completely wrong. This list is consistent, however, with Mullins in that all the owners are domestic banks functioning within the N.Y. Federal Reserve district. The discrepancies are likely due to mergers, new entries into the banking market, or other significant changes in the size of district banks since the publication of Mullins’ list. One point is clear: foreigners do not own the New York Federal Reserve directly.Global Domination Through the Back Door?Although foreigners do not own the New York Federal Reserve Bank directly, perhaps, Mullins argues, they own and control it indirectly via ownership of domestic banks. He claims that since the money-center banks of New York own the largest portion of stock in the New York Fed, they hand-pick its board of directors and president. This would give them, and hence the London Connection, control over Fed operations and U.S. monetary policy.The Securities and Exchange Commission requires that firms whose stock is traded publicly report their major stockholders each year. The reports identify all institutional shareholders (primarily, firms owning stock in other companies), all company officials who own shares in their firm, and any individual or institution owning more than 5% of the firm’s stock. These reports show that only one of the N.Y. Fed’s current largest shareholders, Citicorp, has any major foreign stockholders. As of January 1996, Price Alwaleed Bin Talad of Saudi Arabia owned 8.9% of Citicorp stock.2 None of the member banks on the above list have any significant portion of shares held by any foreign individual or institution. Mullins' claim that foreigners own the N.Y. Federal Reserve indirectly is also wrong.Moreover, the ownership rights of Federal Reserve Bank stock are different than the common stock of typical corporations. Usually, the number of votes a shareholder has is proportional to the number of shares he owns. However, ownership of Federal Reserve Bank stock entitles the shareholder to one vote when voting for its regional Federal Reserve Bank officials regardless of how many total shares the member bank may own. A group of international conspirators would need to purchase a controlling interest in a majority of the banks operating in the N.Y. district to guarantee the election of their desired minions to the N.Y. Fed’s board of directors. Buying that much stock in so many U.S. banks would require an outlay of hundreds of billions of dollars. Surely there must be a cheaper path to global domination.Mullins’ premise here is that the member banks control the policies of the N.Y. Fed. In the next section I detail why this is wrong, but an historical example also illustrates the fault of this assumption. Galbraith (1990) recounts that in the spring of 1929 the New York Stock Exchange was booming. Prices there had been rising considerably, extending the bull market that began in 1924. The Federal Reserve Board decided to take steps to arrest the speculative bubble that appeared to be forming: It raised the cost banks had to pay to borrow from the Federal Reserve and it increased speculators’ margin requirements. Charles Mitchell, then the head of National City Bank (now Citicorp, one of the largest shareholders of the N.Y. Fed at the time), was so irritated by this decision that in a bank statement he wrote, “We feel that we have an obligation which is paramount to any Federal Reserve warning, or anything else, to avert any dangerous crisis in the money market” (Galbraith, p. 57). National City Bank promised to increase lending to offset any restrictive policies of the Federal Reserve. Wrote Galbraith, “The effect was more than satisfactory: the market took off again. In the three summer months, the increase in prices outran all of the quite impressive increase that had occurred during the entire previous year” (Ibid). If the Fed and its policies were really under the control of its major stockholders, then why did the Federal Reserve Board clearly defy the intent of its single largest shareholder?Does the New York Fed Call the Shots?Mullins and Kah both argue that by controlling the New York Federal Reserve Bank, the international banking elite command the entire Federal Reserve System and thus direct U.S. monetary policy for their own profit. “For all practical purposes,” Kah writes, “the Federal Reserve Bank of New York is the Federal Reserve” (Kah, p.13; emphasis his). This is the linchpin of their conspiracy theory because it provides the mechanism by which the international bankers can execute their plans. A brief look at how the Fed’s powers are actually distributed shows that this key assumption in the conspiracy theory is wrong.The Federal Reserve System is controlled not by the New York Federal Reserve Bank, but by the Board of Governors (the Board) and the Federal Open Market Committee (FOMC). The Board is a seven-member panel appointed by the President and approved by the Senate. It determines the interest rate for loans to commercial banks and thrifts, selects the required reserve ratio which determines how much of customer deposits a bank must keep on hand (a factor that significantly affects a bank’s ability create new credit), and also decides how much new currency Federal Reserve Banks may issue each year (12 USCA §248). The FOMC consists of the members of the Board, the president of the New York Fed, and four presidents from other regional Federal Reserve Banks. It formulates open market policy which determines how much in government bonds the Fed Banks may buy or sell – the major tool of monetary policy (12 USCA §263).The key point is that a Federal Reserve Bank cannot change its discount rate or required reserve ratio, issue additional currency, or purchase government bonds without the explicit approval of either the Board or the FOMC. The New York Federal Reserve Bank, through its direct and permanent representation on the FOMC, has more say on monetary policy than any other Federal Reserve Bank, but it still only has one vote of twelve on the FOMC and no say at all in setting the discount rate or the required reserve ratio. If it wanted monetary policy to go in one direction, while the Board and the rest of the FOMC wanted policy to go another, then the New York Fed would be out-voted. The powers over U.S. monetary policy rest firmly with the publicly-appointed Board of Governors and the Federal Open Market Committee, not with the New York Federal Reserve Bank or a group of international conspirators.Mullins also made a great to-do about the Federal Advisory Council. This is a panel of twelve representatives appointed by the board of directors of each Fed Bank. The Council meets at least four times each year with the members of the Board to give them their advice and to discuss general economic conditions (12 USCA §261). Many of the members have been bankers, a point not at all missed by Mullins. He speculates that this Council of bankers is able to force its will on the Board of Governors:The claim that the “advice” of the council members is not binding on the Governors or that it carries no weight is to claim that four times a year, twelve of the most influential bankers in the United States take time from their work to travel to Washington to meet with the Federal Reserve Board merely to drink coffee and exchange pleasantries (Mullins, p. 45).A point Mullins neglects entirely is that the Council has no voting power in Board meetings, and thus has no direct input into monetary policy. In support of his hypothesis Mullins offers no evidence, not even an anecdote. Moreover, his Council theory is inconsistent with his general thesis that the London Connection runs the Federal Reserve System via their imagined control of the N.Y. Fed. If this were true, then why would they also need the Council?Who Gets the Fed’s Profits?Gary Kah and Thomas Schauf (1992) also maintain that the huge profits of the Federal Reserve System are diverted to its foreign owners through the dividends paid to its stockholders. Kah reports “Each year billions of dollars are ‘earned’ by Class A stockholders of the Federal Reserve” (Kah, p. 20). Schauf further laments by asking, “When are the profits of the Fed going to start flowing into the Treasury so that average Americans are no longer burdened with excessive, unnecessary taxes?”The Federal Reserve System certainly makes large profits. According to the Board’s 1995 Annual Report, the System had net income totaling $23.9 billion, which, if it were a single firm, would qualify it as one of the most profitable companies in the world. How were these profits distributed? By an agreement between the Board and the Treasury, nearly all of the Fed’s annual profits are paid to the federal government. Accordingly, a lion’s share of $23.4 billion, which represented 97.9 percent of the Federal Reserve’s net income, was paid to the Treasury. The Federal Reserve Banks kept $283 million, and the remaining $231 million was paid to the Fed’s stockholders as dividends. Regarding Schauf’s lamentation, the Federal Reserve System has been paying its profits to the Treasury since 1947.ConclusionThe allegation that an international banking cartel controls the Federal Reserve is wrong. Contrary to Kah’s claim, foreigners do not own any stock in the New York Federal Reserve Bank. Neither do they currently own any significant shares of the domestic banks that actually do own shares in the N.Y. Fed. Moreover, the central assumption that control of the New York Federal Reserve is the same as control of the whole System is badly mistaken. Also, the profits of the Federal Reserve System, again contrary to the conspiracy theorists, are funneled almost entirely back to the federal government, not to an international banking elite. If the U.S. central bank is in the grip of an international conspiracy, then Mullins and Kah have certainly not uncovered it.Footnotes:
1. State chartered banks have the option of becoming member banks of the Federal Reserve System. Interestingly, only 10% of have done so.2. Compact Disclosure CD-ROM, v3.0References:82nd Annual Report, 1995, Board of Governors of the Federal Reserve System, U.S. Government Printing Office. Galbraith, John K. (1990), A Short History of Financial Euphoria. New York: Whittle Direct Books.Kah, Gary (1991), En Route to Global Occupation. Lafayette, La.: Huntington House.Mullins, Eustace (1983), Secrets of the Federal Reserve. Staunton, Va.: Bankers Research Institute.Schauf, Thomas (1992), The Federal Reserve, Streamwood, IL: FED-UP, Inc. Woodward, G. Thomas (1996), “Money and the Federal Reserve System: Myth and Reality.” Congressional Research Service.United States Code Annotated, 1994. U.S. Government Printing Office.
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- Now the are the others - please feel free to post factual creditable sources to refute these works - Read them and you might start to understand what a pile of BS you have been sold. As you can see all items are sourced so you can check the documents for yourself. Now can we get over all this and go to something that is constructive. I thought we settled this last year on the other threads.
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- OK let us revisit this all over again - First is Article I section 8 as follows:Section 8 - Powers of CongressThe Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;To borrow money on the credit of the United States;To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;this give them the ability to delegate their powers to the Federal reserve Board - AKA the Treasury of the United States of America. I have highlighted they have the power to make and regulate the value of currencies under the necessary and proper clause they can let the Fed Board order the money from the Treasury but it is the TREASURY that mints the money will the full legal authority of Congress. They have allowed the Fed to buy, sell and issue Treasury debts as a tool to regulate interest rates and the amount of currency in circulation. the congress also approves the borrowing as you can see on TV each night. so, There is actually no need or requirement to create debt they could for instance just deposit the money directly in the many banks by sending the cash directly from the Treasury to the banks as a deposit, which would put the currency in the economy for the banks to loan.Now as for your concern over the leverage then banks use to loan more than they have on deposit is again approved by the Congress and the Treasury along with the FDIC. If you do not like the leverage or as your cartoon deems it fractional banking so the public will be confused. Leverage is used in all business in all industries clear around the world - commodities futures let farmer do the same thing. so, if you like congress can alter the reserve requirements on banks to offset loan loses or you can limit their leverage of taking their loans to the Fed window and borrowing against them.All of these things are to provide more liquidity to the markets so business can grow the economy and provide jobs for the growing population. Would you prefer that the banks can only loan X percent of their total deposits? That single change would IMHO create a great depression a reduction in the standard of living by over 50%. Congress has the power to do these things. if you need more examples or do not agree please take you best shot - congress creates money by a simple law or direct order to the FEDERAL Treasury. It does not require a debt they can dilute the fiat currency anytime they desire.Here is a article done by ToddyTell me your thoughts because mine have changed when I admitted that the Federal Reserve is a creature of Congress and is therefor controlled by congress. The chairman reports to Congress why? Congress controls it from behind the curtain like Oz.
The Income Tax came in April of 1913, the Federal Reserve December, what's your correlative again?? Yea the bs story of the patriot "community" is how they happened at the same time, well it's a lie. The Federal Reserve Act came after, and, the fact is, it was embraced by Wilson for the only real bad thing it does: liquidate a State's right to have their own currency.
I know you don't believe me and don't want to believe me, but I went through this too, and the following is what woke me up from my anti-Federal Reserve, blame the bankers it's all their fault, stupor: Title 12, Section 289, and in particular subsection (b):
" TITLE 12--BANKS AND BANKING
CHAPTER 3--FEDERAL RESERVE SYSTEM
SUBCHAPTER VI--CAPITAL AND STOCK OF FEDERAL RESERVE BANKS; DIVIDENDS AND
EARNINGS
Sec. 289. Dividends and surplus funds of reserve banks; transfer
for fiscal year 2000
(a) Dividends and surplus funds of reserve banks
(1) Stockholder dividends
(A) In general
After all necessary expenses of a Federal reserve bank have
been paid or provided for, the stockholders of the bank shall be
entitled to receive an annual dividend of 6 percent on paid-in
capital stock.
(B) Dividend cumulative
The entitlement to dividends under subparagraph (A) shall be
cumulative.
(2) Deposit of net earnings in surplus fund
That portion of net earnings of each Federal reserve bank which
remains after dividend claims under paragraph (1)(A) have been fully
met shall be deposited in the surplus fund of the bank.
(b) \1\ Transfer for fiscal year 2000
---------------------------------------------------------------------------
\1\ See Codification note below.
---------------------------------------------------------------------------
(1) In general
The Federal reserve banks shall transfer from the surplus funds
of such banks to the Board of Governors of the Federal Reserve
System for transfer to the Secretary of the Treasury for deposit in
the general fund of the Treasury, a total amount of $3,752,000,000
in fiscal year 2000.
(2) Allocated by Fed
Of the total amount required to be paid by the Federal reserve
banks under paragraph (1) for fiscal year 2000, the Board shall
determine the amount each such bank shall pay in such fiscal year.
(3) Replenishment of surplus fund prohibited
During fiscal year 2000, no Federal reserve bank may replenish
such bank's surplus fund by the amount of any transfer by such bank
under paragraph (1).
(Dec. 23, 1913, ch. 6, Sec. 7(a), (b), 38 Stat. 258; Mar. 3, 1919, ch.
101, Sec. 1, 40 Stat. 1314; June 16, 1933, ch. 89, Sec. 4, 48 Stat. 163;
Pub. L. 103-66, title III, Sec. 3002(a), Aug. 10, 1993, 107 Stat. 337;
Pub. L. 103-325, title VI, Sec. 602(d), Sept. 23, 1994, 108 Stat. 2291;
Pub. L. 106-113, div. B, Sec. 1000(a)(5) [title III, Sec. 302], Nov. 29,
1999, 113 Stat. 1536, 1501A-304.)"--Emphasis mine.
This statute is amended regularly, as you can see, and the point is to take the profits from the fed and put them in the United States Treasury, the very interest charged on the issue of our domestic currency is recouped along with any profits made from international operations by the fed, while, the U.S. Government has no interest in the Federal Reserve according to the omission portion of Title 12 Section 284:
" TITLE 12--BANKS AND BANKING
CHAPTER 3--FEDERAL RESERVE SYSTEM
SUBCHAPTER VI--CAPITAL AND STOCK OF FEDERAL RESERVE BANKS; DIVIDENDS AND
EARNINGS
Sec. 284. Omitted
Codification
Section, act Dec. 23, 1913, ch. 6, Sec. 2, 38 Stat. 251, was omitted
as obsolete pursuant to a communication from the Board of Governors of
the Federal Reserve System dated Mar. 7, 1941, which stated ``As
originally enacted the Federal Reserve Act provided for a Reserve Bank
Organization Committee to have charge of the initial steps in organizing
the Federal Reserve System and this Committee was authorized to allot
Federal Reserve Bank stock to the United States in the event that
subscriptions to such stock by banks and by the public were inadequate.
However, subscriptions by member banks were adequate and there was no
necessity or authority for the allocation of any stock to the United
States. Accordingly, [this section] is now of no practical effect, and
may be regarded as obsolete.''--Emphasis mine.
You need to go learn about the authors who are pushing the bs story of Jekyl Island and Eustace Mullins Federal Reserve Conspiracy crap. They happen to all be progressive Marxists. In fact Eustace Mullins was the guardian for poet Ezra Pound. Claims of political prisoner etc. have been made by them, while the fact remains Ezra Pound spoke against the United States Military in a foreign country on the border with an enemy nation during World War II I believe (It may have been World War I) which in any event is providing aid and comfort to the enemy.
Please, stop parroting the tripe of the latest patriot meeting and actually go read for yourself.
I have boatloads more on the Federal Reserve, as I once believed as you do, until I decided to go read for myself. Now I blame the appropriate manipulators of us, the bankers, and anyone that is conservative at all, and appreciates capitalism: the Progressive Government.
▶ By Toddy Littman
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- Maybe I can clarify your conflict - The Fed Board does this very same thing to control M-1, M-2 and M-3. to make more funds available for fractional banking they buy Treasuries which deposits a check in bank A which means bank A now has extra cash to loan under their limits.They loan to customer B that deposits that amount of money less the reserve requirement of bank A which now allows bank B to loan out more money and this process is repeated until the reserve amounts have used up all the cash injection. This is not new money that the banks are creating - it is the same money being worked through the system.Now if you want to expand that amount to make it more than the original injection that can happen under the laws of Congress and the Banking laws. Say bank A needs cash to make more loans - it can go to the Fed window and pledge the loans and borrow against the security paying the going Fed fund rate and now they can make more loans with NEW money Created by the FED from the Reserve amounts they hold.The reverse is also true if the Fed wants to tighten money they sell Treasuries from their holdings and when the checks come in they deposit them into the Treasury which takes that amount out of the member banks deposit base. This make loans tight and interest rates rise.If you have conflicts with the system please show me and I will attempt to make the points more clear.; ~ { )
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- Debate Advice and SuggestionsAdvice on Debating with Others
- Avoid the use of Never.
- Avoid the use of Always.
- Refrain from saying youare wrong.
- You can sayyour idea is mistaken.
- Don't disagree withobvioustruths.
- Attack theidea not the person.
- Use manyrather thanmost.
- Avoidexaggeration.
- Use somerather thanmany.
- The use ofoften allows for exceptions.
- The use ofgenerallyallows for exceptions.
- Quote sources and numbers.
- If it is just anopinion, admit it.
- Do not presentopinion as facts.
- Smile when disagreeing.
- Stress thepositive.
- You do not need to win every battle to win the war.
- Concede minor or trivial points.
- Avoid bickering, quarreling, and wrangling.
- Watch yourtone of voice.
- Don't win a debate and losea friend.
- Keep your perspective - You're justdebating.
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- OK let us revisit this all over again - First is Article I section 8 as follows:Section 8 - Powers of CongressThe Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;To borrow money on the credit of the United States;To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;this give them the ability to delegate their powers to the Federal reserve Board - AKA the Treasury of the United States of America. I have highlighted they have the power to make and regulate the value of currencies under the necessary and proper clause they can let the Fed Board order the money from the Treasury but it is the TREASURY that mints the money will the full legal authority of Congress. They have allowed the Fed to buy, sell and issue Treasury debts as a tool to regulate interest rates and the amount of currency in circulation. the congress also approves the borrowing as you can see on TV each night. so, There is actually no need or requirement to create debt they could for instance just deposit the money directly in the many banks by sending the cash directly from the Treasury to the banks as a deposit, which would put the currency in the economy for the banks to loan.Now as for your concern over the leverage then banks use to loan more than they have on deposit is again approved by the Congress and the Treasury along with the FDIC. If you do not like the leverage or as your cartoon deems it fractional banking so the public will be confused. Leverage is used in all business in all industries clear around the world - commodities futures let farmer do the same thing. so, if you like congress can alter the reserve requirements on banks to offset loan loses or you can limit their leverage of taking their loans to the Fed window and borrowing against them.All of these things are to provide more liquidity to the markets so business can grow the economy and provide jobs for the growing population. Would you prefer that the banks can only loan X percent of their total deposits? That single change would IMHO create a great depression a reduction in the standard of living by over 50%. Congress has the power to do these things. if you need more examples or do not agree please take you best shot - congress creates money by a simple law or direct order to the FEDERAL Treasury. It does not require a debt they can dilute the fiat currency anytime they desire.
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- Maybe I can clarify your conflict - The Fed Board does this very same thing to control M-1, M-2 and M-3. to make more funds available for fractional banking they buy Treasuries which deposits a check in bank A which means bank A now has extra cash to loan under their limits.They loan to customer B that deposits that amount of money less the reserve requirement of bank A which now allows bank B to loan out more money and this process is repeated until the reserve amounts have used up all the cash injection. This is not new money that the banks are creating - it is the same money being worked through the system.Now if you want to expand that amount to make it more than the original injection that can happen under the laws of Congress and the Banking laws. Say bank A needs cash to make more loans - it can go to the Fed window and pledge the loans and borrow against the security paying the going Fed fund rate and now they can make more loans with NEW money Created by the FED from the Reserve amounts they hold.The reverse is also true if the Fed wants to tighten money they sell Treasuries from their holdings and when the checks come in they deposit them into the Treasury which takes that amount out of the member banks deposit base. This make loans tight and interest rates rise.If you have conflicts with the system please show me and I will attempt to make the points more clear.
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Difference engine
Nikola Tesla's revengeTransport: The car industry’s effort to reduce its dependence on rare-earth elements has prompted a revival in the fortunes of an old-fashioned sort of electric motor
Jun 2nd 2011 | from the print edition
ONCE again, worrywarts are wringing their hands over possible shortages of so-called “critical materials” crucial for high-tech industries. In America the Department of Energy is fretting about materials used to manufacture wind turbines, electric vehicles, solar cells and energy-efficient lighting. The substances in question include a bunch of rare-earth metals and a few other elements which—used a pinch here, a pinch there—enhance the way many industrial materials function.It is not as though the rare-earth elements—scandium, yttrium and lanthanum plus the 14 so-called lanthanides—are all that rare. Some are as abundant as nickel, copper or zinc. Even the two rarest (thulium and lutetium) are more abundant in the Earth’s crust than gold or platinum.A decade ago America was the world’s largest producer of rare-earth metals. But its huge open-cast mine at Mountain Pass, California, closed in 2002—a victim mainly of China’s drastically lower labour costs. Today, China produces 95% of the world’s supply of rare-earth metals, and has started limiting exports to keep the country’s own high-tech industries supplied.
The rare-earth element that other industrial countries worry about most is neodymium. It is the key ingredient of super-strong permanent magnets. Over the past year the price of neodymium has quadrupled as electric motors that use permanent magnets instead of electromagnetic windings have gained even wider acceptance. Cheaper, smaller and more powerful, permanent-magnet motors and generators have made modern wind turbines and electric vehicles viable.That said, not all makers of electric cars have rushed to embrace permanent-magnet motors. The Tesla Roadster, an electric sports car based on a Lotus Elise, uses no rare-earth metals whatsoever. Nor does the Mini-E, an electric version of BMW’s reinvention of the iconic 1960s car. Meanwhile, the company that pioneered much of today’s electric-vehicle technology, AC Propulsion of San Dimas, California, has steered clear of permanent-magnet motors. Clearly, a number of manufacturers think the risk of relying on a single source of rare-earth metals is too high.The latest carmaker to seek a rare-earth alternative is Toyota. The world’s largest carmaker is reported to be developing a neodymium-free electric motor for its expanding range of hybrid cars. Following in AC Propulsion’s tyre tracks, Toyota is believed to have based its new design on that electromotive industrial mainstay, the cheap and rugged alternating-current (AC) induction motor patented by Nikola Tesla, a Serbian-American inventor, back in 1888.Think of it as a rotating transformer, with the primary windings residing in a stationary casing (stator) and the secondary conductors attached to an inner shaft (rotor). The stator surrounds—but does not touch—the rotor, which is free to rotate on its axis. An alternating current applied to the stator’s windings creates a rotating magnetic field, while simultaneously inducing a current in the separate conductors surrounding the rotor. With an alternating current now circulating within it, the rotor creates a rotating magnetic field of its own, which proceeds to chase the stator’s rotating field—causing the rotor to spin in the process and generate torque.Modern AC induction motors usually have three (or more) sets of stator windings, which smooths things out and allows more torque to be generated. Such machines are known as “asynchronous” motors, because the rotor’s magnetic field never catches up with the stator’s field. That distinguishes them from “synchronous” motors that use a permanent magnet in their rotors instead of a set of conductors. In a synchronous motor, the stator’s rotating magnetic field imposes an electromagnetic torque directly on the fixed magnetic field of the rotor, causing the latter assembly to spin on its axis in sync with the stator field. Hence the name.In the past the main problem with asynchronous induction motors was the difficulty of varying their speed. That is no longer an issue, thanks to modern semiconductor controls. Meanwhile, the induction motor’s big advantage—apart from its simplicity and ruggedness—has always been its ability to tolerate a wide range of temperatures. Providing adequate cooling for the Toyota Prius’s permanent-magnet motor adds significantly to the vehicle’s weight. An induction motor, by contrast, can be cooled passively—and thereby dispense with the hefty radiator, cooling fan, water pump and associated plumbing.Better still, by being able to tolerate temperatures that cause permanent magnets to break down, an induction motor can be pushed (albeit briefly) to far higher levels of performance—for, say, accelerating while overtaking or climbing a steep hill. Hybrid vehicles like the Toyota Prius or the Chevrolet Volt have to rely on their petrol engines and gearboxes for extra zip. By contrast, the Tesla Roadster uses just one gear—such is the flexibility of its three-phase induction motor.In moving to a pure induction design, Toyota will be taking a page out of Tesla’s book, in both senses of the name. Weighing in at 115lb (52kg), the Roadster’s tiny three-phase induction motor is no bigger than a watermelon. Yet it packs a hefty 288 horsepower (215 kilowatt) punch. More impressively, the motor’s 295lb-ft (400 newton-metres) of torque is available from rest to nearly 6,000 revolutions per minute, which eliminates the need for a conventional gearbox. The result is a motor that is light, compact and remarkably efficient.Overall, the Tesla Roadster achieves a battery-to-wheels efficiency of 88%. That is three times better than a conventional car. With its vast engineering resources, Toyota could well do even better. And somewhere, Nikola Tesla must be smiling.from the print edition | Technology Quarterly
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