Who Owns The Federal Reserve?
The Fed is privately owned. Its shareholders are private banks
This article was first published by Global Research in October 2008
“Some people think that the Federal Reserve Banks are United
States Government institutions. They are private monopolies which prey
upon the people of these United States for the benefit of themselves and
their foreign customers; foreign and domestic speculators and
swindlers; and rich and predatory money lenders.” – The Honorable Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s
The Federal Reserve (or Fed) has assumed sweeping new powers in the
last year. In an unprecedented move in March 2008, the New York Fed
advanced the funds for JPMorgan Chase Bank to buy investment bank Bear
Stearns for pennies on the dollar. The deal was particularly
controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of
the New York Fed and participated in the secret weekend negotiations.1
In September 2008, the Federal Reserve did something even more
unprecedented, when it bought the world’s largest insurance company. The
Fed announced on September 16 that it was giving an $85 billion loan to
American International Group (AIG) for a nearly 80% stake in the
mega-insurer. The Associated Press called it a “government takeover,”
but this was no ordinary nationalization. Unlike the U.S. Treasury,
which took over Fannie Mae and Freddie Mac the week before, the Fed is not a government-owned agency. Also unprecedented was the way the deal was funded. The Associated Press reported:
“The Treasury Department, for the first time in its history,
said it would begin selling bonds for the Federal Reserve in an effort
to help the central bank deal with its unprecedented borrowing needs.”2
said it would begin selling bonds for the Federal Reserve in an effort
to help the central bank deal with its unprecedented borrowing needs.”2
This is extraordinary. Why is the Treasury issuing U.S. government
bonds (or debt) to fund the Fed, which is itself supposedly “the lender
of last resort” created to fund the banks and the federal government?
Yahoo Finance reported on September 17:
“The Treasury is setting up a temporary
financing program at the Fed’s request. The program will auction
Treasury bills to raise cash for the Fed’s use. The initiative aims to
help the Fed manage its balance sheet following its efforts to enhance
its liquidity facilities over the previous few quarters.”
financing program at the Fed’s request. The program will auction
Treasury bills to raise cash for the Fed’s use. The initiative aims to
help the Fed manage its balance sheet following its efforts to enhance
its liquidity facilities over the previous few quarters.”
