[Omega]

There has been a lot of talk recently about whether or not the Federal Reserve needs to be more transparent. Critics worry that the Federal Reserve, being one of our nations most powerful institutions, needs to be held accountable to the public.

Before I share my thoughts I'd like to know what a few of you think.

Do you agree with these critics?

[Mythros]

i think that they are the power behind the thrown. there will be no serious political opposition. nothing will be done and those who appose them will be blown off.

[Omega]

The Federal Reserve only has its independence so long as congress allows it to. Congress does have the ability to legislate themselves power over the Fed.

I do hope you're right in that there isn't the political will to do it.

[Omega]

Suppose that sort of gives away my position.. haha

[Mythros]

im sure they have congressmen in their pockets, just like they probably have had presidents in their pockets. the bush family for instance was on the board for the federal reserve.

personally, I think that it is idiotic to let a private group control the money flow of a country for obvious reasons.

[Omega]

The problem with allowing monetary policy to be controlled by congress is that our congress is extremely short sided by nature. Congress members by necessity must do what is going to get them reelected or they will be ousted and replaced by someone who will. The American public, quite frankly, is not well enough informed to want what is in their own long term best interest. They simply do not understand the complexity and repercussions of government actions. This all leads to a sort of natural selection of congress people where those who are short sided survive.

This is a problem because often there is a trade off between short term and long term goods. For example, in order to reduce unemployment in the short run we must endure inflation in the long run. When the congress controlled monetary policy they always chose to pursue the short term gain, reduced unemployment, to get reelected Unfortunately this caused our country to suffer from out of control inflation until congress delegated the responsibility of monetary policy to an independent central bank, the Federal Reserve.

Central bank independence is essential to the stability of the US economy as well as the credibility and subsequently the value of the dollar. Monetary policy is better left to economists. (of course this is coming from a student in the field)

[Dorothy]

Aren't you assuming that the Central Bank has the good of the nation in mind and not their own good? You accuse Congress of having their own good in mind (re-election). What makes you think the men who control the central bank are benevolent?

[Omega]

Those who are on the Federal Reserve board do not need to be short sided to keep their jobs. Their appointments tend to be unanimous, not partisan. It is in the best interest of those on the federal reserve board to do their jobs properly. I'm not sure how they could gain from purposefully doing what is bad for the country.

[Mythros]

in times of war banks give loans to both sides. the one who wins pays both his war debt and his enemies.

they would purposely do harm to this country because of financial gain and power. the more we owe them the richer they become and of course more powerful. every dollar they print is a "bill" literally owed to them. the more they print the less it is worth to us and the more they gain. to be a successful business they must print as much as possible. logic tells you that their success is our suffering.

i dont associate trust with the federal reserve, nor congress. in a perfect world each citizen of this country would own stock in the banking system. debt is a powerful thing. the man who owns it is master and the one who owes it, his slave.

[Omega]

It isn't in their best interest to print as much money as possible because with every increase in the monetary supply the value of the dollar decreases. I'm not sure how that is in their interest. The money they print doesn't actually belong to them. And it isn't owed to them. They buy back securities to increase the monetary supply.