Well no that's not the answer. There are about 7 people in the world that have the ability to double the amount of cash that exists - in the matter of seconds. Those people rule the money.
Your response was to the poster who said "It's a complex system, a feedback loop." That about sums it up. Your seven people operate inside this system. They don't have complete freedom to do what they want willy nilly.
Jerome Powell does actually have the freedom to do what he wants willy nilly. He might have consequences but he has the power and freedom to "set the price" of the USD.
1. Humans invented God (and HaShem and the Almighty). God has always been a human creation.
2. Having invented God, humans then assigned to Him their own powers of creation. […]
3. Having projected thought onto a non-human and invented entity, humans then subordinate themselves to it. Endowing their own creation with a specious authority, they take themselves to be lesser than it.
4. People make capital. Everything that counts as capital is a human creation. […]
5. Having created capital, people then assign to it the powers of creation. […]
6. Once the creative powers of work get misassigned to capital, actual workers are made subordinate to it. A created thing that lacks the powers to create is taken to be the all-creative thing and so allowed to lord it over the real creators.
Having created a $BETTER_ALTERNATIVE, people then assign to it the powers of creation
Once the creative powers of $WHATEVER get misassigned to $BETTER_ALTERNATIVE, other people are made subordinate to it. A created $WHATEVER that lacks the powers to create is taken to be the all-creative thing and so allowed to lord it over the real creators.
The real issue is that anything that is given power, will ultimately use that power to amass more power and prevent others from gaining power. This is natural - as it powers the evolutionary process on our planet
To break the cycle, we must break from our chains of mortal humanity. What price are we willing to pay to do so?
Or another question - is it really a bad thing? Some version of $BETTER_ALTERNATIVE will balance out the problems created by $PREVIOUS_BETTER_ALTERNATIVE, but will create new unforseen problems. Like capitalism for instance. We cannot predict the future
Up to now, results have shown that private organizations allocate capital better than governments, at least in domains where parties to a deal are free to walk away from a deal - just to keep the discussion outside of contentious domains.
Let's stipulate that, like a lot of unoriginal "knowledge work" that AI is/becomes better at capital allocation than humans. If that turns out to be true, why then keep capital allocation in the hands of private organizations?
Capitalist countries were only able to edge out socialist economies by banking on their extant head-start and behaving socialistically (copying socialism in a light way—redistribution, worker advocacy, etc.).
As soon as they were able to claw it all back in the direction of pure capitalism all hell was set loose.
Please note that the paragraph you are disagreeing with is heavy qualified. The coercive faux-markets where the consumer is held hostage are not part of my argument.
I'm talking about markets with low barriers to entry, little or no regulatory capture, that are discretionary purchases. A government bicycle factory, for example, makes no sense and would fail. Whereas, say, postal banking, which would be pilloried as capital-C Communism in the US would work fine because banks hate their small retail customers and it shows.
However unsatisfactorily stated, my question comes down to: Does it make sense for capital allocation to remain in private hands in a possibly immanent age of AI outperforming humans in capital allocation?
Oh, as narrowly as you pose it, not at all! Whoever manages capital best should manage it. If it's a three-way competition between workers, owners, and machines… may the best decision-maker win!
Private companies crash and burn far more than governments. Your statement is just one of survivorship bias without stakes. If 99 out of 100 companies fail its generally pretty low stakes. If one government fails, it commonly results in a lot of deaths.
I am be curious to see the same exact breakdown but with number 1 starting as “God created humans” to see what the difference in the rest of the list would be, if anyone wants to take a stab at it.
This sounds attractive at first reading, but it has a logical fault in that many things that are 'invented' are not just a creation of the inventor. Math is an obvious example. It is 100% a human 'invention.' Yet it's "real" enough that it will certainly be involved in the first dialogue with another intelligent species. It's a reality, even if it exists outside the material world.
Our economic system is dysfunctional and getting worse, but I don't think it's about capital so much as it is about endless interest requiring (and assuming) endless growth, as the article hits on. Another perverting issue is governments going infinitely into debt, the US in particular, really distorts economies, and consequently societies. Here [1] are a series of graphs across a practically endless series of data. It focuses on the inflection point of 1971, which is when the USD became a completely free floating currency, enabling infinite 'money printing.' It's not hard to see that things haven't really gone so well with that ability unlocked.
---
As one interesting aside, as I was typing 'wtfhapp..' into Brave Search to grab the URL, I found it telling that one of the autocompletes (likely due to large numbers of searches for it) was 'wtf happened in 1971 debunked.' The inflections following 1971 are so extreme people clearly just can't even believe it. But there's no trickery there. One can read more about the Bretton Woods System (which is what we pulled out of in 1971), here. [2]
Money is only valuable if it is scarce. If you print quadrillions of dollars and give each person 1 billion, a sandwich will soon cost 1 billion.
Then, if you manage to somehow to preserve the value and actually give each person 1 billion, they would have large families and a lifestyle with a higher carbon footprint.
That makes one unit of money less valuable than that same unit at some previous period of time. "Money" though is still just as required to not starve as it was in that past.
> Then, if you manage to somehow to preserve the value and actually give each person 1 billion
You're making the same mistake most people discussing these questions, by focusing on money.
Money is a convenient medium of exchange, and monetary policy is one of the many inputs into the economy. But at the end of the day, people don't care about money. You can't eat t-bills. Greenbacks won't put a roof and four walls around you, and you don't burn them to keep the lights on. What really matters, and what people really care about is wealth. Material wealth.
Wealth is only produced when people work. Whenever we talk about society as a whole 'not having the money' to afford something (Social security, social services, pensions, etc), money isn't the limiting factor. Our society's wealth is. And that wealth is measured in labour that goes towards producing useful goods and services - not in how fast money can be siphoned up by rent-seekers, or in how fast labour hours can be pissed away on make-work ditch-digging-and-ditch-filling.
Unlike money, you can't just magic up widgets into existence, by pretending to work.
On the one hand, labour participation is up. Productivity is higher than it has ever been in human history. But so is waste, active parasitism, and passive inefficiencies[1], due to the high upkeep requirements of modern societies.
[1] Car ownership is a great example of this. A mind-boggling amount of labour is poured into providing everyone with cars, and keeping them, and the infrastructure that they need running. And there's no practical way to opt out of it in most of North America. So much of the wealth we generate goes right back into maintaining the systems that we inflicted on ourselves.
Say a farmer can grow 20 bushels of wheat in a year. A farmer with a tractor can grow 200 bushels.
Does the guy who invented the tractor work as hard as the farmer? Probably not. But they (arguably) created much more wealth.
What about the banker who provided financing for the tractor? Let's assume it's a totally fair financial service, no need to stipulate anything predatory. The banker didn't work very much compared to the farmer at all, just wrote down some ledger entries. Yet without him, farmer is tractorless.
Any full view of the economy has to account for services and invention (and many more things, these are just illustrative examples.)
"Wealth is only produced when people work." does not imply every kind of work creates wealth at the same rate. I think the point was merely that creating money out of thin air without anything corresponding changing in the real world does not cause there to be more of what people actually want there to be more of.
1. God invented Humans (HaShem and the Almighty also credited). Humans has always been a gods' creation.
2. Having invented Humans, God then assigned to Them their own powers of creation. […]
3. Having projected thought onto a non-divinity and invented entity, Gods then subordinate themselves to it. Endowing their own creation with a specious authority, they take themselves to be lesser than it.
4. People make capital. Everything that counts as capital is a human creation. […]
5. Having created capital, people then assign to it the powers of creation. […]
6. Once the creative powers of work get misassigned to capital, actual workers are made subordinate to it. A created thing that lacks the powers to create is taken to be the all-creative thing and so allowed to lord it over the real creators.
Doesn't change much sadly except maybe ramming home we were made in a divinity's image.
The Federal Reserve (which, despite its name, is not a part of the US Government) is the de facto institution that controls money in the United States. All US Dollars are created by the Federal Reserve.
It was created "for central control of the monetary system in order to alleviate financial crises".
It is owned by member banks - "A member bank is a private institution and owns stock in its regional Federal Reserve Bank. All nationally chartered banks hold stock in one of the Federal Reserve Banks... The amount of stock a member bank must own is equal to 3% of its combined capital and surplus"
"Now, thanks to a Freedom of Information Act request filed late last year by Institutional Investor, we know the truth.
II asked the New York Fed for the capital stock holdings of its members as of year-end 2018, as well as for each year going back to 2007. The bank responded with copies of what it calls its Capital Stock Master Report, a compendium of shareholdings of member banks, for each of those years.
The big reveal for year-end 2018: Citibank, the No. 1 institution on the roster, held 87.9 million New York Federal Reserve Bank shares – or 42.8 percent of the total.
The No. 2 holder stockholder was JPMorgan Chase Bank, with 60.6 million shares, equal to 29.5 percent of the total. In other words, the two banks together control nearly three-quarters of the regional bank’s capital shares."
The Federal Reserve banks pay 6% dividend to member banks holding shares.
The big banks effectively own the Federal Reserve.
Federal reserve makes things equivalent to money and they use it to control the value of money. They do not own money.
Owners of money are those that actually own it in the bank. Then there are those who own it in the form of assets which also helps divert control of value away from the Fed.
In fact almost all rich people don't own money, they own some form of asset which has intrinsic value.
Therefore in a non-technical sense, rich people are the owners of "money" or "value" which is what we're really getting at here.
But there's another viewpoint of this. Corporations. Corporations own a lot of "value". But who owns the corporations? Rich people and also all of us. Generally upper middle class people and Rich people own most of the value and money.
> All US Dollars are created by the Federal Reserve.
What?
the US Mint in the US Department of Treasury creates money (which it then banks in its account at the federal reserve), though perhaps the ebb and tide of money into and out of the economy is more like what you describe?
That's a nice article, and thanks for linking to it, definite upvote, though it is sloppy with words, as "creation" above refers to issuing currency, not creating it.
Here's where money is physically created, somewhat of a curious point since so much of transacted 'money' is digital, and perhaps why the article above misleadingly says "creates".
Physical currency in existence is a very negligible sum of all money. This is thanks to what the article hits on - endless interest, and endless debt. If you took every single dollar in existence, you wouldn't be able to make whole even a small fraction of all debts. Interestingly enough, even if you took every dollar, digital or physical, in existence that would still be true. Isn't interest interesting?
The primary way money is made is through loans, though the Fed buying treasuries also creates large amounts of money. When you deposit at a bank, they're only required to create a fraction of that deposit available. Hence - fractional reserve banking. [1] You deposit at a bank, they take that deposit and lend it out to somebody who now spends that money which eventually ends up getting deposited at a bank again, and the process iterates. If at some point everybody demands their money, a run on the bank, which the bank could not afford as they've lent out deposits to other people, then the Fed bails them out.
The exact process is slightly more subtle, but not fundamentally different. There's a lot of great videos on a search for 'how money is created' at any video site. Because it's a question few know the answer to, everybody wants to know the answer to, and the answer itself is somewhat unsettling.
The fed has tools they use to influence the value of money, that's true and part of their core mandate. But it's a massive oversimplification to say that they set the price of money.
No, all US dollars are not created by the Fed. In fact, most US dollars in circulation have not been created by the Fed, but rather by private institutions. You get a mortgage from your bank? That's brand new dollars, never seen before.
The federal reserve being completely divorced from the government is intentional and a good thing. When you give the government the power of controlling the money, you get populist decisions that work in the short term while crippling the value of the dollar in the long term.
When you have banks that are incentivized to raise interest rates enough to make a ton of money but not enough to crash the economy, you keep the dollar as the strongest currency in the world. That's a good thing - the last thing I would want is for less free countries to expand their influence.
> populist decisions that work in the short term while crippling the value of the dollar in the long term.
Got these anyway. ZIRP priced the middle class out of equity ownership. That historic bull run is from goosing the numbers, not record productivity. The S&P was ~750 in 1990. Things are not 6x better.
We should let treasury auctions decide the yield curve, not a committee of 12 people.
Its not complicated though, The Federal Reserve a corporation run by a board of directors, those people decide how much money to make and who to give it to (mostly themselves/other bankers).
The share holders of the Federal Reserve are ALL private "regional" banks, then the profit of the Federal Reserve is shared with its shareholders. The two largest shareholders (owners) of the Federal Reserve, together with over 50% ownership is Citi and Chase. So Citi and Chase own the federal reserve.
This is simply false, though it's an exceedingly common false belief:
The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress.
...
Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors. Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.
Note the mention of "legally required dividend payments" in the 2nd 'graph above. Those are in fact accrued to the member banks, and amount to 6% of the stock price (itself, if I'm reading correctly, 6% of the total asset value) of each regional Federal Reserve Bank.
Strictly speaking this is not profit, though the dividends are only paid when the Fed itself has positive operating returns (which is almost always). But it is, yes, a benefit which accrues to member banks.
The operating profits however are paid to the U.S. Treasury.
The folks who have the power to create inflation rules money. They borrow first to buy real assets with nominal currency; later pay with inflated money. Inflation is a hidden interest rate.
real interest rate = inflation + nominal interest rate
> "neither the 87 monetary crashes over the last 25 years, nor World Wars I or II, nor social revolutions like the French, Russian or Chinese, have changed anything fundamentally in terms of the money system."
the ones who rules the money, are the same ones that ruled it 100, 200 or 500 years ago. more or less.
People believe that fractional reserve banking breaks down without exponential growth only because the natural rebalancing process is stopped by the government; every time the economy tips toward recession, there is government intervention both in stimulus programs and by national banks to halt economic downturn at all costs.
It is akin to forest fires. If small, natural fires are suppressed, eventually there will build up so much kindling an inferno becomes guaranteed. Our economy is like a town built in that forest.
There is no fractional reserve banking; in other words, deposits don’t create loans. On the contrary, loans create deposits. If people have good jobs with stability, they can get loans for homes, vehicles, vacations, etc.
The evolution of the Golden Rule has been as follows
Do to others as you would have them do unto you
Do not do to others as you would not have them do to you
He who has the gold makes the rules
He who makes the rules takes the gold
variation: alchemy / cryptocurrency (which are actually the same premises sitting atop different stages of technology substrate): he who makes the gold makes the rules
69 comments
[ 3.1 ms ] story [ 234 ms ] thread2. Having invented God, humans then assigned to Him their own powers of creation. […]
3. Having projected thought onto a non-human and invented entity, humans then subordinate themselves to it. Endowing their own creation with a specious authority, they take themselves to be lesser than it.
4. People make capital. Everything that counts as capital is a human creation. […]
5. Having created capital, people then assign to it the powers of creation. […]
6. Once the creative powers of work get misassigned to capital, actual workers are made subordinate to it. A created thing that lacks the powers to create is taken to be the all-creative thing and so allowed to lord it over the real creators.
https://redsails.org/communist-self-confidence/
It sucks that communism and pretty much anything related to it is almost impossible to discuss in earnest
I doubted even clicking on that link for a while, dismissing it just because you mentioned it was “the communist answer”
Having created a $BETTER_ALTERNATIVE, people then assign to it the powers of creation
Once the creative powers of $WHATEVER get misassigned to $BETTER_ALTERNATIVE, other people are made subordinate to it. A created $WHATEVER that lacks the powers to create is taken to be the all-creative thing and so allowed to lord it over the real creators.
The real issue is that anything that is given power, will ultimately use that power to amass more power and prevent others from gaining power. This is natural - as it powers the evolutionary process on our planet
To break the cycle, we must break from our chains of mortal humanity. What price are we willing to pay to do so?
Or another question - is it really a bad thing? Some version of $BETTER_ALTERNATIVE will balance out the problems created by $PREVIOUS_BETTER_ALTERNATIVE, but will create new unforseen problems. Like capitalism for instance. We cannot predict the future
(Some benefit from this more than others.)
Let's stipulate that, like a lot of unoriginal "knowledge work" that AI is/becomes better at capital allocation than humans. If that turns out to be true, why then keep capital allocation in the hands of private organizations?
Capitalist countries were only able to edge out socialist economies by banking on their extant head-start and behaving socialistically (copying socialism in a light way—redistribution, worker advocacy, etc.).
As soon as they were able to claw it all back in the direction of pure capitalism all hell was set loose.
Socialism remains the way forward.
I'm talking about markets with low barriers to entry, little or no regulatory capture, that are discretionary purchases. A government bicycle factory, for example, makes no sense and would fail. Whereas, say, postal banking, which would be pilloried as capital-C Communism in the US would work fine because banks hate their small retail customers and it shows.
However unsatisfactorily stated, my question comes down to: Does it make sense for capital allocation to remain in private hands in a possibly immanent age of AI outperforming humans in capital allocation?
Our economic system is dysfunctional and getting worse, but I don't think it's about capital so much as it is about endless interest requiring (and assuming) endless growth, as the article hits on. Another perverting issue is governments going infinitely into debt, the US in particular, really distorts economies, and consequently societies. Here [1] are a series of graphs across a practically endless series of data. It focuses on the inflection point of 1971, which is when the USD became a completely free floating currency, enabling infinite 'money printing.' It's not hard to see that things haven't really gone so well with that ability unlocked.
---
As one interesting aside, as I was typing 'wtfhapp..' into Brave Search to grab the URL, I found it telling that one of the autocompletes (likely due to large numbers of searches for it) was 'wtf happened in 1971 debunked.' The inflections following 1971 are so extreme people clearly just can't even believe it. But there's no trickery there. One can read more about the Bretton Woods System (which is what we pulled out of in 1971), here. [2]
[1] - https://wtfhappenedin1971.com/
[2] - https://en.wikipedia.org/wiki/Bretton_Woods_system
Then, if you manage to somehow to preserve the value and actually give each person 1 billion, they would have large families and a lifestyle with a higher carbon footprint.
You're making the same mistake most people discussing these questions, by focusing on money.
Money is a convenient medium of exchange, and monetary policy is one of the many inputs into the economy. But at the end of the day, people don't care about money. You can't eat t-bills. Greenbacks won't put a roof and four walls around you, and you don't burn them to keep the lights on. What really matters, and what people really care about is wealth. Material wealth.
Wealth is only produced when people work. Whenever we talk about society as a whole 'not having the money' to afford something (Social security, social services, pensions, etc), money isn't the limiting factor. Our society's wealth is. And that wealth is measured in labour that goes towards producing useful goods and services - not in how fast money can be siphoned up by rent-seekers, or in how fast labour hours can be pissed away on make-work ditch-digging-and-ditch-filling.
Unlike money, you can't just magic up widgets into existence, by pretending to work.
On the one hand, labour participation is up. Productivity is higher than it has ever been in human history. But so is waste, active parasitism, and passive inefficiencies[1], due to the high upkeep requirements of modern societies.
[1] Car ownership is a great example of this. A mind-boggling amount of labour is poured into providing everyone with cars, and keeping them, and the infrastructure that they need running. And there's no practical way to opt out of it in most of North America. So much of the wealth we generate goes right back into maintaining the systems that we inflicted on ourselves.
This is a little simplistic.
Say a farmer can grow 20 bushels of wheat in a year. A farmer with a tractor can grow 200 bushels.
Does the guy who invented the tractor work as hard as the farmer? Probably not. But they (arguably) created much more wealth.
What about the banker who provided financing for the tractor? Let's assume it's a totally fair financial service, no need to stipulate anything predatory. The banker didn't work very much compared to the farmer at all, just wrote down some ledger entries. Yet without him, farmer is tractorless.
Any full view of the economy has to account for services and invention (and many more things, these are just illustrative examples.)
Work is a requirement for producing wealth, but is not a sole and sufficient requirement. Useful work is.
There are, however, plenty of ways to produce money without doing any useful work.
2. Having invented Humans, God then assigned to Them their own powers of creation. […]
3. Having projected thought onto a non-divinity and invented entity, Gods then subordinate themselves to it. Endowing their own creation with a specious authority, they take themselves to be lesser than it.
4. People make capital. Everything that counts as capital is a human creation. […]
5. Having created capital, people then assign to it the powers of creation. […]
6. Once the creative powers of work get misassigned to capital, actual workers are made subordinate to it. A created thing that lacks the powers to create is taken to be the all-creative thing and so allowed to lord it over the real creators.
Doesn't change much sadly except maybe ramming home we were made in a divinity's image.
The Federal Reserve (which, despite its name, is not a part of the US Government) is the de facto institution that controls money in the United States. All US Dollars are created by the Federal Reserve.
It was created "for central control of the monetary system in order to alleviate financial crises".
It is owned by member banks - "A member bank is a private institution and owns stock in its regional Federal Reserve Bank. All nationally chartered banks hold stock in one of the Federal Reserve Banks... The amount of stock a member bank must own is equal to 3% of its combined capital and surplus"
https://www.institutionalinvestor.com/article/2bsx0wq4jdzo82... -
"Now, thanks to a Freedom of Information Act request filed late last year by Institutional Investor, we know the truth.
II asked the New York Fed for the capital stock holdings of its members as of year-end 2018, as well as for each year going back to 2007. The bank responded with copies of what it calls its Capital Stock Master Report, a compendium of shareholdings of member banks, for each of those years.
The big reveal for year-end 2018: Citibank, the No. 1 institution on the roster, held 87.9 million New York Federal Reserve Bank shares – or 42.8 percent of the total.
The No. 2 holder stockholder was JPMorgan Chase Bank, with 60.6 million shares, equal to 29.5 percent of the total. In other words, the two banks together control nearly three-quarters of the regional bank’s capital shares."
The Federal Reserve banks pay 6% dividend to member banks holding shares.
The big banks effectively own the Federal Reserve.
Owners of money are those that actually own it in the bank. Then there are those who own it in the form of assets which also helps divert control of value away from the Fed.
In fact almost all rich people don't own money, they own some form of asset which has intrinsic value.
Therefore in a non-technical sense, rich people are the owners of "money" or "value" which is what we're really getting at here.
But there's another viewpoint of this. Corporations. Corporations own a lot of "value". But who owns the corporations? Rich people and also all of us. Generally upper middle class people and Rich people own most of the value and money.
The Fed chair and board is appointed by the President and approved by Congress. It hasn't been tested in court whether the President can fire them.
https://m.youtube.com/watch?v=8NBSwDEf8a8
But essentially, the red shield aka rothschilds
What?
the US Mint in the US Department of Treasury creates money (which it then banks in its account at the federal reserve), though perhaps the ebb and tide of money into and out of the economy is more like what you describe?
"The actual process of money creation takes place primarily in banks." [0]
[0] https://en.wikisource.org/wiki/Modern_Money_Mechanics/Introd...
Here's where money is physically created, somewhat of a curious point since so much of transacted 'money' is digital, and perhaps why the article above misleadingly says "creates".
https://en.wikipedia.org/wiki/United_States_Mint
The primary way money is made is through loans, though the Fed buying treasuries also creates large amounts of money. When you deposit at a bank, they're only required to create a fraction of that deposit available. Hence - fractional reserve banking. [1] You deposit at a bank, they take that deposit and lend it out to somebody who now spends that money which eventually ends up getting deposited at a bank again, and the process iterates. If at some point everybody demands their money, a run on the bank, which the bank could not afford as they've lent out deposits to other people, then the Fed bails them out.
The exact process is slightly more subtle, but not fundamentally different. There's a lot of great videos on a search for 'how money is created' at any video site. Because it's a question few know the answer to, everybody wants to know the answer to, and the answer itself is somewhat unsettling.
[1] - https://en.wikipedia.org/wiki/Fractional-reserve_banking
When you have banks that are incentivized to raise interest rates enough to make a ton of money but not enough to crash the economy, you keep the dollar as the strongest currency in the world. That's a good thing - the last thing I would want is for less free countries to expand their influence.
Got these anyway. ZIRP priced the middle class out of equity ownership. That historic bull run is from goosing the numbers, not record productivity. The S&P was ~750 in 1990. Things are not 6x better.
We should let treasury auctions decide the yield curve, not a committee of 12 people.
The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress.
...
Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors. Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.
<https://www.federalreserve.gov/faqs/about_14986.htm>
Note the mention of "legally required dividend payments" in the 2nd 'graph above. Those are in fact accrued to the member banks, and amount to 6% of the stock price (itself, if I'm reading correctly, 6% of the total asset value) of each regional Federal Reserve Bank.
Strictly speaking this is not profit, though the dividends are only paid when the Fed itself has positive operating returns (which is almost always). But it is, yes, a benefit which accrues to member banks.
The operating profits however are paid to the U.S. Treasury.
More on Fed Dividends:
<https://bipartisanpolicy.org/blog/federal-reserve-dividends-...>
<https://newrepublic.com/article/116913/federal-reserve-divid...>
<https://www.federalreserve.gov/aboutthefed/appendix-b-divide...>
real interest rate = inflation + nominal interest rate
the ones who rules the money, are the same ones that ruled it 100, 200 or 500 years ago. more or less.
Material root cause, spiritual root cause.
It is akin to forest fires. If small, natural fires are suppressed, eventually there will build up so much kindling an inferno becomes guaranteed. Our economy is like a town built in that forest.
Do to others as you would have them do unto you
Do not do to others as you would not have them do to you
He who has the gold makes the rules
He who makes the rules takes the gold
variation: alchemy / cryptocurrency (which are actually the same premises sitting atop different stages of technology substrate): he who makes the gold makes the rules