Federal Reserve--what people should know

The most important thing to know about this entity is this, the Federal Reserve is not a part of the United States Federal government. The Federal Reserve is a privately held corporation. The owners of the Federal Reserve are kept confidential.

The main responsibility of the Federal Reserve, is the formation of monetary policy. Monetary policy deals with the supply of money and cost of money via interest rates. The Federal Reserve conducts open market operations, this principally involves the purchase and sale of US Treasury and other federal securities. The Fed also controls the discount rate. This is the rate charged to banks and depository instituions on loans they get from the Fed's discount window. The last leg of open market operations the Fed uses is reserve requirements. This allows the Fed to state the amount of money on hand that they require institutions to hold against deposit liabilities. This also allows the Fed to control the overnight rate banks charge other banks to lend money overnight.

The Fed also has regulatory oversight over banks that are part of their system, and some other financial institutions. On the site, http://www.federalreserve.gov/pubs/frseries/frseri.htm, the Fed also advises that they develop and halp administer major federal laws such as the Truth in Lending Act.

The Federal Reserve holds enormous power over peoples lifes. They control the cost of borrowing through their open market operations. The Federal Reserve Act of 1913 provides the authority for this entity. In the constitution, it is noted that only Congress shall have Power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.

Everyone know that the time of 1913 was different from the late 1700's. I'm not saying the Federal Reserve is unconsitutional, as some pretty smart people claim. However, with the vote for Mr. Bernanke 2nd term approaching, I think it's important that people understand what the Federal Reserve is. They set monetary policy. Monetary policy should help the economy, and the citizens, and businesses that make up the producers of that economy.

I don't want to tip over the apple cart, but I am not satisfied with their recent actions. Their distribution of hundreds of billions to banks will have huge effects for people in the future. The Federal Reserve, with questionable performance since 1913 (a suit that cost $10 in 1913 would cost more than $211 these days), has never been audited by congress.

I wanted to bring to everyones attention how important the Fed is to everyone. The election of the Federal Reserve chairman is an important one. The financial meltdown we have recently experienced happened on Mr. Bernanake's watch. Should he get another 4 years?