Welcome to The Intolerant Lefty Blog! I started this blog of commentary and analysis on some of the most pressing issues of our time that just happen to effect me. From politics to mental health, addiction to psychedelics, I provide my perspective, backed up by facts.
Friday, September 23, 2022
The Powers That Be: Why the Federal Reserve Exists and What It Does
Most people have heard of the Federal Reserve, but few know what it actually does. The Federal Reserve is the central banking system of the United States and is responsible for creating monetary policy. This policy has a big impact on inflation, interest rates, and employment. In other words, the Federal Reserve has a lot of power over the American economy
The Origins of the Federal Reserve
The Federal Reserve was created in 1913 in response to a series of financial panics. These panics were caused by an over-expansion of credit, which led to a shortage of cash and a decrease in lending. In order to prevent future panics, Congress passed the Federal Reserve Act, which established the Federal Reserve System.
The Structure of the Federal Reserve
The Federal Reserve is made up of three parts:
-the Board of Governors,
-the 12 Federal Reserve Banks, and
-the Federal Open Market Committee.
The Board of Governors is responsible for making economic policy decisions while the 12 Federal Reserve Banks supervise commercial banks and implement monetary policy. The Federal Open Market Committee sets monetary policy through open market operations, or by buying and selling securities.
What Does the Fed Do?
The most important thing that the Fed does is manage monetary policy. Monetary policy is used to influence inflation, interest rates, and employment. The Fed accomplishes this by buying or selling securities in order to increase or decrease the money supply. By controlling the money supply, the Fed can also control inflation and interest
The Fed plays a big role in our economy and our lives! By controlling inflation, interest rates, and employment, the Fed can help keep our economy stable. So next time you hear about the Fed in the news, remember that it is an important part of our government and our economy!
I am not sure if most Americans know who Jerome Powell is, but he is the Chair of the Federal Reserve appointed by Donald Trump. And according to a recent Gallup poll, only 37% of Americans trust him to do what is best for the economy. Considering that the Federal Reserve is in charge of our economy, this isn't good news. Especially since many families are still struggling after the worldwide COVID pandemic that has hurt the worlds economy. I hope that Mr. Powell proves us wrong and starts to regain the trust of Wallstreet. I have to ask, is Jerome Powell the right man for the job as Federal Reserve Chair? That's up for debate, but what's not up for debate is whether or not we can trust him. Powell has a history of supporting policies that drive inflation, and with the current situation with the economy it appears he is doing it again. With the constant rate hikes one after another it appears that he is trying to ruin things on purpose. We need to be vigilant in watching his every move to make sure he doesn't cause serious damage until Biden is able to get his pick to chair the Fed in place.