What is The Federal Reserve? How does Fed regulate the amount of money in the economy? Is it important?

Question

What is The Federal Reserve? How does Fed regulate the amount of money in the economy? Is it important?

Answer 1

It is a private bank which has far too much control over our currency and, hence, our economy.

The definition is too large to lay out here.  I agree with the poster above.  Go to Google video and look up some documentaries.  Be sure to watch "Freedom to Fascism" by the late Aaron Russo.

Answer 2

It is a private bank owned mostly by over sea banks . It dose what it dose to make money for it self only .

Answer 3

This will tell you better than I can.

http://video.google.com/videosearch?q=fe...

Answer 4

The Federal Reserve is the Central Bank of the United States, its importance is paramount in our economy.

As for how the fed regulates the amount of money in the economy, it does this by mainly buying and selling US Treasury Notes, Bonds, etc...

Since the Fed can create money from thin air, it has no problems in adding money to the economy. It usually does this by purchasing Treasuries at any price. You hand over the T-Note and the Fed Hands over Cash which gets spent in the economy. When the Fed wishes to reduce the money supply, it sells T-Notes at any price. You then hand over cash which gets destroyed and the fed hands over a T-Note.

There are many other methods like increasing the fractional reserve requirement on member banks and such.. There are many tools at the fed's disposal to add or subtract from the money supply. Just remember that adding to the money supply beyond the rate at which the economy can absorb the increase is inflationary. And reducing the money supply is deflationary.  And last, but not least, all money exists through Debt. Debt is Money.  For every dollar in your pocket, somebody else owes a dollar.

So when nuckleheads proclaim the debt of the US should be paid off, what you would create is a shortage of money. Deflation..  A bad idea...