I do not have the will, or patience, to educate you on banking and the FED.

Yes, the FED does return a large portion of it's interest every year to the treasury, but since the FED has never been audited, how do we know what the percentage really is? You posted a figure of 29 billion dollars returned to the treasury, which is fine and dandy, but considering that the US taxpayers pay over 300 BILLION a year on servicing the national debt, 29 billion doesn't sound that great anymore. You see, the US national debt is in large part, a result of Federal Reserve policies.

Did you see Bernanke admit that the FED helped cause the great depression on Milton Friedman's 90th birthday? Friedman was attacked and criticized for decades because of his claims of FED involvement in the great depression. Finally, we have a FED chairmen who is at least willing to admit the truth on this one page in history. Bernanke repeated his admission on 60 Minutes.

Here are a few videos, if you are interested........

Bernanke in front of Congress........

YouTube - Bernanke warns that meddling with Fed's monetary policy cause harm economy

Ron Paul to Bernanke....

YouTube - Ron Paul: Bernanke Deliberately Destroying Dollar

Congressman Brad Sherman on the Bailout bill and Fear Mongering.......

YouTube - Congressman Brad Sherman: Martial Law if We Voted No [1]

Here is Congressman Larry P. McDonald just 3 months before he was killed on board a Korean airliner that was shot down by Russian MIGs.

YouTube - Larry McDonald on the New World Order. Pt 1/2

These videos barely scratch the surface relating to what is wrong with the FED, but they can be useful. The McDonald interview is important in tying all the pieces together, but only if you watch him with an open mind.

The choice is yours. You can continue to look at solving symptoms, or you can look at curing the disease which is causing the symptoms. Retrofit spelled it rather plainly, you might want to listen to what he has to say.

You would have a point, except that the Fed is not responsible for fiscal policy. Our elected representatives to government are charged with appropriations. This has not changed much since the Continental Congress was in charge of the printing press at the US Mint, and gave us a currency that was "not worth a continental". What would have replace a mostly autonomous Fed; the Bank of Congress?

Concerning the Great Depression, our understanding of economics was much less then. They didn't have deposit insurance then, which led to bank runs.

However, to blame the Fed and not Congress or that administration could be considered specious argumentation on your part.

In any event, the Drug War is an extra-constitutional waste of money, while the Fed provides a market based income for the federal government. Any priorities in eliminating "institutions" should be self-evident.

I don't want to debate the problems with the FED anymore, I am too tired.

Let's just agree that the war on drugs should end tomorrow.

Alright lets see...

The federal reserve doesn't do this except as a lender of last resort. Member banks do, and they did so long before the fed.

Other then internally and from the SEC then yes.

This doesn't create money. If I sell a person my car for a day on the agreement that I'll purchase it back the next day, I haven't created money, but I have engaged in a repurchase agreement. What repurchase agreements do contribute to is controlling the money supply and affects banks willingness to lend.

Actually makes the use of the lender of last resort option less likely.

Affects stability more then the money supply

You mentioned this already. So I count one way that money is created, and a few ways the Fed is involved in that one way.

Have they done so? Their staff is incredibly closely watched lest someone give inside information and their changes are fractions of a percent. Rather then being a maniacal organization throwing its weight around the federal reserve is one of the more cautious parts of the US Government.

Have you ever looked at what happens during deflation? What it actually means for the economy or are you simply convinced that inflation is bad.

And since there are no "reserves" to lend where does the money come from? Not from reserves of "Member banks", there are no reserves. It is all new money.

Theres no oversight.
Fine, if you use the same funds to repurchase. There's no way of knowing how it is funded.

What I meant was using interest from imaginary reserves to achieve the minimum reserve so that another ten times reserve amounts can be loaned with interest again. The fed and member banks are loaning money that does not exist, then manipulating the profits to loan out more money that doesn't exist.

We do not know what they are doing. They can do what they want and all anyone can do is assume they act in a ethical manner? Their a bank for christ sake, they have no ethics.

Every fiat currency runs a cycle. At the end of that cycle the only options are hyperinflation or devaluation or starting the cycle all over with a new currency. The people live good through certain stages of the cycle, but will lose at least 90% of that "fiat" prosperity when the inevitable correction takes place. What about this do you find good?

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It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford

Member banks pay a fee to be a part of the federal reserve network. As well the federal reserve makes money by using their own built up money to lend to banks and to borrow from banks. The discount window you mentioned is how they make it profitable. Because they borrow at a lower rate then they lend they are able to make a fair amount of profit. At the same time they are providing a service by making sure the overnight market clears.

Except somehow I seem to have learned how it was funded...

This is a fundamental misunderstanding of the monetary system. I take out a loan for 300,000 which I will pay back to bank A under certain conditions, I deposit the money in bank B. Bank B has $300,000 correct? They know on average only a fraction of this money will be withdrawn and I know that so long as I can retrieve my money on demand that it is reasonable to let them do with it as they please.

Now this may seem to be increasing money, however, it is really only increasing the utilization of that money. The multiplier effect is M=1/(RR) however the RR is higher than the demand for money.

They have only a handful of economic tools, tracking which of those tools they use is pretty simple. They give press releases on it, what do you mean we don't know what they're doing?

You know gold, silver, etc. are also fiat currencies right?

god dammit how the hell did this thread turn into a discussion about the fed. start a thread about the fed!

in the context of this thread i am neither in favor of nor against the abolishment of the federal reserve, but legalizing pot can (and most likely will) happen regardless of whether or not the fed exists. whatever your opinions are about the fractional reserve banking system, they should have nothing to do with your opinion on the illegality of marijuana.

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"My country is the world, and my religion is to do good." --Thomas Paine

Save the Fed. End a Drug War that is "not worth a continental".

Fiat money is currency that gains its value by decree. In other words, some government said it is money, but it has no intrinsic value. Gold and Silver have value just by their very nature. They have multiple uses above and beyond being mashed into a coin.
"Built up money"? You just finished saying they were non profit..Which is it? The only service they are providing is completely collapsing our economy.

Since there is no oversight you can delude yourself all day but you still wont know shit about what they are doing.

You can take out a loan for $300k from Joe's bank. But, Joe's bank only has to have $30k in deposits (reserves) in order to lend you that $300k. The fed (or member FDIC banks) supply the other $270k with a few strokes of their keyboard. This is new money from out of thin air that you now have to flow out into the economy. As you make your payments, Joe's bank keeps their portion of the interest & other fee's and sends the rest off to the Fed (or Member FDIC bank) where they keep their portion of the interest. The principal is dissolved back into thin air but there is still now $300k + interest,of new money, created from nothing, that is out in circulation driving the prices of everything up higher, incrementally, every time a loan is made.
*Well hell, if its in the newspaper it must be true*. There is no oversight, thus there is no way to know what they are doing.

*denotes sarcasm.

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It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford

You will soon come to the cold harsh conclusion that the Fed's dysfunctional and fundamentally flawed monetary system guarantees that the "Green back" will take its rightful place in history, right next to the Continental. How can I be so sure? Because every single fiat currency since the Romans first began the practice in the first century, has ended in devaluation and eventual collapse, of not only the currency, but the economy that housed it as well.

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It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford

That anecdotal evidence may only be a coincidence. Our understanding of economics has improved since the Iron Age.

Let's say, for the sake of argument and line of reasoning, that the type of money, fiat or commodity has no relevance; as long as it is a more perfectly competitive medium of exchange than can be obtained in the private sector. This is usually accomplished by a legal monopoly on forms of money.

The Fed has no relevance in argumentation for the elimination of the Drug War. The Fed is a mostly autonomous organ of the executive branch of the general government of the Union.

We already agree that the Drug War has no basis in our Constitution since the repeal of the prohibition amendment.

Eliminating the Drug War should be a moral and ethical priority over any reduction in social spending and that provides for the general welfare of the populace of the United States.

Decreasing friction in any market always leads to improvement in the standard of living for participants in those markets.

Generating revenue while reducing public sector costs, is what the republicans should have been doing with the republican doctrine; as they claim to be the party of markets, individual liberty, and freedom.

Are you related to Miss North Carolina?

It is not the Republicans nor Democrat function to be "Generating" revenue. It is their job to insure that Money coming in is allotted properly.
Ok, then lets assume, for the sake of argument that all the money that every 65 year old American had scrimped and saved all of their working lives to retire on, disappears when they wake up one morning.
Now, lets assume that it has no relevance to you because it wasn't your money and it was all done nice and legal through a corrupt government and central bank under the guise of insured prosperity through benevolent overseers.
If the Fed is so good, why are things so bad?
The only monopoly that's a good monopoly is a board game by Parker Bros.

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It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford

True. But all that knowledge acquired from centuries of trial and error still didn't keep the Fed from making the same mistake again. I can only assume, therefore, that this scenario is what the Fed intended to happen. After all, one can't pay for multiple wars, the 700 permanent military bases in over 120 countries, Wars on drugs and a massive bureaucracy if they have to earn the cash the old fashioned way.

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It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford

I disagree. Our elected representatives to government should be well enough informed on the signal advantage that public sector "means of production" can do to improve the general welfare.

How did all that capital disappear? Are you implying that an individual with capital is helpless in a faux, Capitalist economy?

An individual with capital could invest that capital. It could also be lost in the investment, but that is a calculated risk.

The argument I was rebutting was that simply resorting to fiat money is a detrimental in the long term. How many of the civiliazation you cite, had a central bank?

How many of the civilizations you mentioned, had a central bank?