Question on conflictual interest of central banks

[Nicolas Dorier]

There is no incentive for the FED as a hole to kill any banks, but might be for private interest.
And why the FED is owned by private corporation, if there is no profit ? Why corporations own stock the FED ?

[twiifm]

The FED is "owned" by private shareholder, why government gave the key to their freedom to private shareholder ? I don't get it.
Does other central bank like ECB are the same ?

From Wikipedia

The Federal Reserve Banks issue shares of stock to member banks. However, owning Federal Reserve Bank stock is quite different from owning stock in a private company. The Federal 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. The stock may not be sold or traded or pledged as security for a loan; dividends are, by law, limited to 6% per year.[9]

The dividends paid to member banks are considered partial compensation for the lack of interest paid on member banks' required reserves held at the Federal Reserve. By law, banks in the United States must maintain fractional reserves, most of which are kept on account at the Federal Reserve. Historically, the Federal Reserve did not pay interest on these funds. The Federal Reserve now has authority, granted by Congress in the Emergency Economic Stabilization Act (EESA) of 2008, to pay interest on these funds.

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The Fed is designed to operate independent from Congress so that govt won't abuse printing of money.  Its to protect the bankers from govt, but at the same time it can act as "lender of last resort"

[Nicolas Dorier]

I see, thanks for the information, I'm going to learn more about the system.
This is really interesting, I never asked so much question on economy and the system since I started buying BTC, trying to understand why some people are or are not convinced about it.
Uncharted territory for me... looking the coursera video

[twiifm]

I see, thanks for the information, I'm going to learn more about the system.
This is really interesting, I never asked so much question on economy and the system since I started buying BTC, trying to understand why some people are or are not convinced about it.
Uncharted territory for me... looking the coursera video

Banking is not easy to understand but that course is good because he covers some history you can understand why it has evolved to where we are today.  He doesn't talk politics which is good.

A lot of people think banks & govt are in bed together but I think its not like that.  Govt is like parent that try to make rules but the banks (kids) keep getting into trouble.  Then the parents have no choice but to bail them out.  Some believe we should allow banks to fail and the small ones do fail.  But when they get too big the failure would pull down the rest of economy. As a Central Banker, the moral thing to do is save the economy.  Theres a reason why they let Lehman fall but saved AIG. 

I do think the legislators need to make greater restrictions on financial sector thru regulations.  But its hard because after repeal of Glass-Steagal Act the commercial & investment banks became merged.  People here criticize money creation & Federal Reserve System often.  But I think the problems come more from the investment side of banking mores than the commercial side.

[tooil]

The system is put in place to serve the narrow group of powerful families.

People who think we live in a democracy society are delusional.

[Nicolas Dorier]

The system is put in place to serve the narrow group of powerful families.

People who think we live in a democracy society are delusional.

So what are your claim ?

Govt is like parent that try to make rules but the banks (kids) keep getting into trouble.  Then the parents have no choice but to bail them out.

Govt is not parent but puppet, they have no choice other than bail out because if they don't their head will finish on the top of a peak. (Litteraly)
But the more I think about it, the more I realize that central banks might also have done the best they can.
My belief is that so much power should not be held in the hands of a central authority. But I will listen to coursera video more to see what the teacher has to say, and also read about milton friedman point of view.

[twiifm]

Friedman is a monetarist.  But hes influenced by Adam Smith.

He believes the market will work itself out without govt intervention.  But he was also a Central Banker so he believe monetary policies could correct financial problems

Its hard to say how much powerba govt should or shouldn't have.  Maybe you are right that govt is puppet.  But their job should be regulators

[Benjig]

Monetary policy can't solve the problems that have to be solved by financial and economic policy, structural policy, "Some deleveraging is necessary and it is completely irresponsible to suggest that some countries that are so vulnerable should now go for growth with stimulus programs for their economies,"

[Nicolas Dorier]

Friedman is a monetarist.  But hes influenced by Adam Smith.

He believes the market will work itself out without govt intervention.  But he was also a Central Banker so he believe monetary policies could correct financial problems

Its hard to say how much powerba govt should or shouldn't have.  Maybe you are right that govt is puppet.  But their job should be regulators

To what I've seen (yet to finish the book), Friedman is not for central banks, he tolerates them "because they are here, they might do something", but actually would prefered a life without.

[twiifm]

Friedman is a monetarist.  But hes influenced by Adam Smith.

He believes the market will work itself out without govt intervention.  But he was also a Central Banker so he believe monetary policies could correct financial problems

Its hard to say how much powerba govt should or shouldn't have.  Maybe you are right that govt is puppet.  But their job should be regulators

To what I've seen (yet to finish the book), Friedman is not for central banks, he tolerates them "because they are here, they might do something", but actually would prefered a life without.

Yeah you are right.  I confused Friedman w someone else

[Trading]

As far as I know, the Fed is the only important central bank that isn't public.

Not even Thatcher dare to privatize the Bank of England (it was nationalised in 1946).

[Coinsera]

Lots of people believe (me included) that the root of our problem is that the central banks (be it fed or european central banks) are heavily affiliated with private banks.
Central banks should behaves in a way that benefit the users of their currency, but their affiliation encourage them to behave for the benefit of private banks.

My question is : Why do you think it is the case ? In central banks, how decisions are made and by whom ? What is the link (relationship) between these people and the private banks ?

Can you give me the names, and with evidences that back your claims ? (I always heard the Rotshild controls that, but at the same time people that claims such thing never prove it by linking their concrete roles into private banks and central banks)

I am not understanding the policy of the government, why don't they come with a clear policy instead of making so much different rules and stating everything differently. If a clear policy come in the market that will give a good benefit to investors and govt as well in the shape of taxes on earnings. I am strongly recommending that earning from the Bitcoin and gain should be taken care by finance  Ministry and allow bitcoin to enter into the open investor market as well as in exchange.

Thanks