[:tinfoilhat:]Follow

It's not being heralded much in the news, but yesterday the Fed announced that it would buy up a trillion dollars in Treasury bonds and mortgage-backed securities.

Now to me, this marks what I've been suspecting for a long time: that the Fed is positioning itself to own a commanding share of the United States.

For those not aware, the Federal Reserve is a bank that isn't exactly government-owned. It is, according to Wikipedia, "a quasi-public (government entity with private components) banking system that comprises (1) the presidentially appointed Board of Governors of the Federal Reserve System in Washington, D.C.; (2) the Federal Open Market Committee; (3) twelve regional privately-owned Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the U.S. Treasury, each with its own nine-member board of directors; (4) numerous other private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks; and (5) various advisory councils."

The long and short of it is: it acts as the monetary regulation system for the US, but in reality it's a privately-owned, for-profit bank. The most powerful bank in the world.

The Fed has had a voice in every major economic decision our nation has faced since it's creation in the early 20th century. We frequently heard from Bernenke, and his predecessor Greenspan, about steps they have taken or will take to alleviate our current crisis over the last few years.

But what is never mentioned is that the Federal Reserve is in total control of the most powerful (or I suppose formerly the most powerful) currency in the world. A privately-owned bank controls our interest rates. They run our economy. They have a century's-worth of data to pull from, dating back to the tribulations of the Great Depression. One would assume they know what they're doing.

One would also assume they saw this coming. The stock market has been on a downward spiral for more than a year. Now, I'll leave it to the true conspiracy theorists to debate whether they actually engineered this economic crisis, but you can't deny that they are in a position to profit from it, and profit huge.

Because in this economic crisis, the immediate losers are people with short-term portfolios on Wall Street. Corporations had millions, billions invested to boost their day-to-day profits and diversify. Individual investors were ruined that had banked heavily on day trade, daily stock price shifts. Banks were ruined, because they had tied up the lion's share of their capital in these dangerous, volatile assets.

But not the Fed. The Fed plays the long game. The Fed knows that actual physical property, not bits of speculative paper, maintain, or at the very least regain, their value through economic hard times.

So now a significant portion of our national debt is in their hands. A significant portion of defaulted mortgage-backed securities are in their hands. And what happens to a mortgage-backed security when the debtor defaults on the mortgage? The property becomes collateral. An insurance policy. The holder of the security now has control of land, of a house, of a building, rather than a note with monetary value. And if they can afford to weather the storm of economic turmoil, that land will regain it's value. If they play the long game, and you know they will, the Fed is going to end up owning a significant portion of the United States. And that makes me really uncomfortable.

Edited, Mar 19th 2009 8:03am by AshOnMyTomatoes

Your Fed scares me. My Reserve Bank is wholly government owned. Whatever it does, everyone in Australia owns a teeny slice of the pie.


Are any of the member banks of the US Fed Reserve public corporations that you can buy shares in? Cause it sounds like almost a patriotic duty, or a really smart move, to aquire at least a little fistful of their shares.

Edited, Mar 19th 2009 9:25am by Aripyanfar

Not in the US perhaps, but its big news in the rest of the world.

No. You're too busy argueing partisan politics and pointing fingers at each other to see that you are all in the crapper.

Fiddling while Rome burns......

This might change in the near future