The FED Seeks Control, Not Profits.
posted by Josiah Garber on February 13, 2010
in Economics
by Gary North
This report is from Fortune. It says that the Federal Reserve System made $51 billion in 2009, and it returned over $46 billion to the government.
If you are a regular reader of my reports, you are well aware of this. I write articles on this at least once a year. Why? Because so few critics of the FED understand this. I keep getting questions on the forums about how the FED works.
The Federal Reserve System is not about making money at the expense of the government. It is about using a government-granted monopoly over money to regulate the economy to the benefit of a handful of large banks. This has always been its primary function.
The banking system is a cartel. The Federal Reserve System is the cartel’s protector and enforcer.
The Fortune article makes these points, all accurate.
The Fed, in a statement on Tuesday, said its members returned $46 billion of that sum to taxpayers. The central bank is an independent arm of the government and its member banks are required to return all profits to the Treasury, after certain deductions.
Those deductions account for the $6 billion difference between the two figures. Federal Reserve banks paid the private banks that control them $1.4 billion in dividends in 2009, while shoring up their own capital by $4.6 billion.
Who owns the FED? Member banks. How much money did the FED make in profit? About $1.4 billion. That’s not bad on $51 billion of income. It’s about 2.7%. But it is a far cry from the standard criticism from anti-FED critics that the FED makes huge profits by creating money out of nothing.
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