In the present world financial system turmoil generated by the collapse for "sub-prime" mortgage bonds, the US Federal Reserve System functions, as it always does, with private meetings and telephone conferences with the great financial houses, deciding in apparent secrecy whether to increase the money supply and government lending to financial houses or whether to raise or reduce interest rates.
It is obvious that such critical financial decisions will likely change the value of every dollar around the world, including the price of labor, goods, services, and real estate, as well as the return on savings.
By using this approach he US appears "to take politics out of the management of the money supply and interest rates".
In reality what is happening is that in the eyes of many "private politics" have now fully replaced "public politics" and this looks like a perfect example of this.
How much truth was in Alan Blinder's, the Fed's vice chairman, remark on national television in 1994, when he said: "The last duty of a central banker is to tell the public the truth."
Whichever way you perceive the Federal Reserve, one thing is sure: this private corporation (yes re-read those last two words) is the key US decision-maker when it comes to determining what money is, how much there is, its price, and the terms of its circulation.
But why, even assuming that having such a private organization to handle such delicate public matters is OK, do the Board of Governors of the Federal Reserve need to act in near-complete secrecy? Can't their decision-making process stand a public scrutiny?
I am certainly not an expert at these matters but if I have to look and report at what mainstream media does not report about, while inviting each one of us to question and research in greater depth all such issues, this looks definitely like something on which we should all ask some more and better questions.
Did you know that: "Most of the important public policy decisions in the country now are being made not in any public forum nor even by elected officials.
They are being made in secret by unelected officials -- the Board of Governors of the Federal Reserve System."
Do you know how accountable are the individuals running the Board of Governors of the Federal Reserve System?
"While the governors are nominated by the president and appointed by the Senate, that is pretty much where accountability ends, since the governors serve 14-year terms, which is close to the life tenure of federal judges. There is a little more accountability for the board's chairman and vice chairman, who are nominated by the president from among the board's members and appointed by the Senate for four-year terms of leadership."
Unsurprisingly, most of the individuals constituting the Federal Reserve Board are very powerful people from the financial industry.
With their decisions these people are able to influence financial markets and to pick and choose at a table the winners and losers in the economy.
I realize that all this sounds pretty far fetched if you have not look into it before, but I invite you to go out and do some research for yourself to assess the validity of these statements.
As Chris Powell writes: "[The Federal Reserve] is the ultimate patronage."
"Some of its critics consider the Fed unconstitutional. After all, the Founders opposed central banking, and the Constitution says Congress "shall have the power to coin money, regulate the value thereof, and of foreign coin."
But Wall Street wants the monetary power and does not have to bear any political responsibility for it, and that is the system the United States now has -- a system in which the monetary power has been turned over to what used to be called the Money Power.
And this insult to public sovereignty over the most important issues of government is praised as the "independence" of central banking."
Should the US, reconsider the makeup and makeup of the Federal Reserve System so that it can serve the people of the United States in a meaningful and fully transparent fashion?
Do the United States need a Federal Reserve System or are there other solutions?
Wouldn't it be better for the US Congress to re-design the Federal Reserve System into something "democratic, open, and accountable, or to reclaim the monetary power itself"?
Source: and inspiration: "Country's top decisions made in secret by Fed" by Chris Powell, Journal Inquirer North Central Connecticut's Hometown Newspaper, August 25th 2007.