Rss Feed

welcome to my space

In the us economy, the money supply is controlled by who?

March 12th, 2010 by , under nnmj.com.

  • The money supply is controlled by the Federal Reserve, which is the name of our central bank. They have the authority and there is no Congressional oversight over it. They can pretty much print however much money they want, and yes that can cause hyperinflation. And no, it is not backed by anything, not gold, so money is printed out of thin air.

    The extra money they print goes to themselves and other rich people like the ones on Wall street and the politicians who get their money. That is why the people on Wall street keep getting richer and richer. But regular people get hurt by higher prices like college tuition and food and gas (until the crisis), and they don't get more income, so when the central bank prints money, it is bad for normal people and good for the very rich.

    This is why Thomas Jefferson hated central banks, and nowadays, Ron Paul is the one who hates the Federal Reserve. For pretty good reasons.

    Instead the amount of money should be based on how much gold there is. That is, the value of the dollar should be tied to gold, like it was in the past. Then the government and the Federal Reserve won't be able to get money out of thin air and spend beyond its means.


  • Fozz is right, the Federal Reserve, the U.S.'s central bank, controls the money supply in the U.S.

    However, the rest of his statements is rather incorrect. The Fed was created by the Federal Reserve Act of 1913; i.e. the Fed was created by an act of Congress, and can be abolished by an act of Congress. That is why the Chairman of the Board of Governors reports to Congress twice each year, giving a detailed state on Fed Policy and the state of the U.S. economy.

    And no Fozz, the money the Fed prints does not go to politicians and "rich people." Heck, the Fed does not even print money in the way you think. In order to contract or expand liquidity, the Fed sells or buys T-bills (government bonds) on the open market to control the Federal Funds rate, which is the U.S.'s nominal anchor.

    And Fozz, why do you think a money supply backed by gold would be better than a fiat system? What happens when someone in central Africa discovers a massive gold mine, and the price of gold tanks? What happens when demand for gold drops or rises? Do you really want your purchasing power to be based on market forces outside of anyone's control? What happens when the economy expands and the money supply remains stagnant? Deflation would hamper future growth (just look back to the Great Depression).


  • FED


  • well congress decides how much to print, the fed controls how much is in the market and the bureau of engraving and printing actually makes the new money and shreds the old. So really there are a lot of entities involved.







    • #If you have any other info about this subject , Please add it free.#
    Your name:
    E-mail:
    Telphone:

    Your comments:


    If you have any other info about In the us economy, the money supply is controlled by who? , Please add it free.