Hugolp, I am courious if you are familiar with the ideas of G. Edward Griffin (specifically his research on the FED in his book "The Creature from Jekyll Island")? And if, yes what do you think about it. Is this guy credible, or a crackpot? BTW, the author argues that the FED is an invention of the Bankers and financial elites of the time, American and European.
I have not read the book, but from talking to people that has read it, I think its mostly true, just some things are debatable. But at the end it was written some decades ago, there are new discoveries and no book is perfect.
It is true that the manuscript to create the Fed was written in a reunion of politicians and bankers at Jekyll Island. Some of the people at that meeting have written about it and explained how they went incognito. But keep in mind that the bankers were trying to get the government to create a central authority to manage money way before that. During the first decade of the XX century they managed to have the Treasury act as a sort of central bank for some years. And the USA had three central banks before the Fed.
The meeting at Jekyll Island was in 1910. You know what the Fed did at 2010, a hundred years later? They celebrated a meeting at Jekyll Island
. You know what the name of the conference by the Federal Reserve of Atlanta? 'A Return to Jekyll Island: The Origins, History, and Future of the Federal Reserve'. These suckers have a wicked sense of humor.
Regarding government and banks, dont you agree with the point of view that the powerful financial institutions are controlling the governments? The fact that governments seem to work for the interests of big banks seems to prove this, at least to me.
Yes. I actually believe governments exists to favour special interest. Its not a situation that can be ammended, its what governments are.
I feel I dont get why you separate elite private interests, from governmets. What makes you think they are separate entities. Of course this is the infromation the mainstream media and the government influenced schools teach us, but I guess you are a pretty intelligent and above average informed person, not relying solely on what school or tv says, so as an open minded person myself, I wonder which information I have been missing to have such a different point of view with you on the financial system.
Well, they are separate things even if they "love" each other. The government has its own dinamics and while its objective is to pander to the special interests, it has to give the appearence of worrying about the people. So its a "game" of smoke and mirrors, and while the people get usually the short stick, some very few times you can get something out of it.
I dont say your sources are right or wrong, but I would like to listen to them too, to have a common ground to discuss these things.
Any light on this will be wellcomed.
Private banks DO create money. It's just that they don't create money out of thin air (is back up in securities related to real world things) and that in order to create that money, the central bank has to start the money creation chain first.
Just a detail. The banks create money first, and then, later, the central bank creates money if the banks need it to cover the reserve requirements. So basically its not the central bank that creates money first, but the commercial banks, and later the central bank creates the money so they stay solvent. Supposedly the central bank will only create money and give it to banks that have worhty assets, but we have seen during this crisis that "worthy asset" is a extremely relative concept when it comes to save the big banks.
At the end what you say is more or less correct, because if the commercial banks know they dont have the central bank covering their backs they will not lend so much money. So even when they commercial banks are the ones lending the money first, they only do because they know the central bank is behind them.