Dr. Martin Hash Podcast

The Federal Reserve Bank, the de facto implementation of a Central Bank in the United States, was created by Congress in 1913 to stabilize the famously volatile banking system. It's composed of 12 regional Reserve Banks, and governed by a presidential-appointed Board. All of these people have Capitalist interests but work in a socialist framework, mostly successfully, creating imaginary money to cure real monetary problems. Because the imaginary nature of money is hard to imagine, The Fed has become a scapegoat for monetarists who have no imagination.

The Fed is most famous for setting interest rates, but does a lot more. It buys U.S. Treasuries at zero interest and can forgive them, essentially making part of the National Debt disappear. Even more importantly, but least publicized, is that through various subsidiaries, The Fed can act like a Central Bank and participate in the Stock Market. They’re among the foreign Central Banks driving up stock prices, a means of controlling the Volatility Index, stabilizing the banking system while protecting retirement accounts. Right now, The Fed is holding over $4 trillion of Treasuries, and nobody quite knows what their equity holdings are, but probably a similar number, dwarfing the federal budget. This all seems rather manipulative and suspect, fueling the Libertarian view that The Fed is preventing private Markets from fixing all of America's economic ills, but it's more likely that The Fed is barely holding off economic catastrophe; the question is, for how long?