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Understanding the Fed’s (our Central Bank) ‘point of view’!

February 5, 2015

Our U. S. Fed (also called our private Central Bank) operates to protect the current bankster system and the banking operations which they manage. The need to fully AUDIT this private organization is now rather obvious. The Financial Times had a full article on the progress to date. Legislation is now being offered (mostly by Republicans) so that a full audit (including monetary policy) can reveal the hidden operations of this private operation. The Fed eventually will be exposed as a fraudulent operation which is unsound and un-American (from a moral perspective and also a growth perspective). Few, however, will fully understand this institution and its operations as transparency has not been allowed for over 100 + years. The clammer for more transparency is now growing among educated Americans (and within our Congress) and this trend should continue.

It is healthy to understand the Fed operations from the perspective of its elite administrators. If you read the writing below and then go to this link, you can get a better understanding of what the Fed has been doing these past 6 years and why (from their viewpoint and/or mostly the viewpoint of Big Ben): http://www.federalreserve.gov/newsevents/speech/bernanke20091008a.htm. I read the entire speech by our prior Fed Chairman and found it logical but also deceptive. Big Ben does not really explain the nature of our cyber money digits (now our unofficial/official legal tender) nor does he seem to desire to explain QE (quantitative easing) as it is actually accomplished. QE (as I have noted many times) is really Official Fed Counterfeiting of our dollar (now a cyber currency). Big Ben also does not cover the nuanced operations at the New York Fed (which implements all these Fed actions). The real important issues (the moral issues, the operational issues, and implementational issues) are not revealed.

Chairman Ben S. Bernanke

At the Federal Reserve Board Conference on Key Developments in Monetary Policy, Washington, D.C.

October 8, 2009

The Federal Reserve’s Balance Sheet: An Update

To fight a recession, the standard prescription for a central bank is to lower its target short-term interest rate, thereby easing financial conditions and supporting economic growth. In the current downturn, however, the Federal Reserve has faced two historically unusual constraints on policy. First, the financial crisis, by increasing credit risk spreads and inhibiting normal flows of financing and credit extension, has likely reduced the degree of monetary accommodation associated with any given level of the federal funds rate target, perhaps significantly. Second, since December, the targeted funds rate has been effectively at its zero lower bound (more precisely, in a range between 0 and 25 basis points), eliminating the possibility of further stimulating the economy through cuts in the target rate. To provide additional support to the economy despite these limits on traditional monetary policy, the Federal Open Market Committee (FOMC) and the Board of Governors have taken a number of actions and initiated a series of new programs that have increased the size and changed the composition of the Federal Reserve’s balance sheet.

I thought it would be useful this evening to review for you the most important elements of the Federal Reserve’s balance sheet, as well as some aspects of their evolution over time. As you’ll see, doing so provides a convenient means of explaining the steps the Federal Reserve has taken, beyond conventional interest rate reductions, to mitigate the financial crisis and the recession, as well as how those actions will be reversed as the economy recovers. I laid out some of these points in April at a conference sponsored by the Federal Reserve Bank of Richmond, but a lot has happened in the intervening period and so an update seems timely.1

For those of you who might be interested in learning more about the Federal Reserve’s policy strategy, by the way, an excellent source of information is a feature of the Board’s website titled “Credit and Liquidity Programs and the Balance Sheet.”2 This source provides extensive and regularly updated information on our programs and goes well beyond the basic balance sheet data that we publish every week.3

To get started, slide 1 provides a bird’s-eye view of the Federal Reserve’s balance sheet as of September 30, the quarter end, with the corresponding data from just before the crisis for comparison. As you can see, the assets held by the Federal Reserve currently total about $2.1 trillion, up significantly from about $870 billion before the crisis. The slide shows the principal categories of assets we hold, grouped (as I will explain) so as to correspond to the various types of initiatives we’ve taken to address the crisis. The liability side of the balance sheet, also summarized in slide 1, primarily consists of currency (Federal Reserve notes) and bank reserve balances (funds held in accounts at the Federal Reserve by commercial banks and other depository institutions). Later in my remarks, I will discuss the relationship between Federal Reserve liabilities and broader measures of the money supply. I will also discuss ways we can manage the link between the size of the Federal Reserve’s balance sheet and the broader money supply during the transition back to a more familiar framework for monetary policy. Our capital, the difference between assets and liabilities, is about $50 billion. Go to link for a continuation of the speech!

For the full speech and details on asset manipulations and liability manipulations go to this link: http://www.federalreserve.gov/newsevents/speech/bernanke20091008a.htm. There are many philosophical issues about the concept of a Central Bank, its operational structure, who benefits from Centralization of money creation operations, and does this type of operation fit into the VALUE structure of Constitutional intentions…which are not mentioned. The BIG issues could be open for all Americans (to ponder) if a FULL audit can be accomplished of this private entity. Let’s hope that our current crop of Republicans (with help from a few Democrats and Independents) can get this FULL audit accomplished. I am somewhat doubtful but always hopeful! Enjoy! https://kingdomecon.wordpress.com.

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