THE FED

How they control EVERYTHING..........................(kinda)

The Federal Reserve:

The Federal Reserve is the central banking center of the United States. The Federal Reserve has branches, called Reserve Banks. These reserve banks are placed in 12 different districts in order to serve the banks surrounding that particular region. These banks are wittingly titled a "banker's bank," as they store currency, and process electronic transactions. All member banks hold stock in Regional banks and receive dividends for this.


The Federal Reserve is able to influence the economy by encouraging or discouraging business practices. Keep in mind- the Fed controls EVERYTHING. The Fed controls the Reserve banks which controls the 38% out of 8,039 commercial banks in the United States. Non-member and non-commercial banks are still under Fed policies, and therefore, kind of under their rein. no bank is safe- commercial or not.

Federal Open Market Committee

The Federal Open Market Committee, or FOMC is the Fed's policy-making authority. The FOMC is used to encourage stable prices and economic growth. The FOMC can't CONTROL everything- due to the fact that we're a capitalist country, and the government cannot CONTROL how corporations price their products, but they do have a big say in how the banks do what they do, and how they do it.


Over the next 5 years, I am going to be going to become an adult, move out, go to college, graduate, and perhaps purchase a house. At the moment, i am using a Credit Union for my primary banking needs. When I move out, I will be moving away from said Credit Union to a more popular area, so it's likely that I will have to move my banking to a commercial branch, and therefore, will probably be connected to a Reserve Bank, especially if I choose to go to Richmond for college. With that being said, when I eventually try to take out a loan for a house, whether in the next 5 years or not- the Fed will directly affect how that happens because the Regional banks keep a close eye on the member banks and how they deal with their money.

Summary:


- The Fed is the main bank of the United States

- Reserve Banks are placed in districts that allow them to keep a close eye on member, commercial, and non-commercial banks in that region.

- Member banks are directly connected to the local Reserve Bank, and they even hold stock in those banks that they cannot invest or share.

- Commercial and non-commercial non-member banks still have to adhere to the Fed's rules, regulations, and specifications, despite not being directly connected and holding stock