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  • Reviewed by pappyred on May 21, 9:25pm

    Long read but worth it!

  • Reviewed by mrsolutions on May 21, 6:31am

    That article needs to define profits, because I think what it means by profits is interest on the money they loan which is very very misleading. If the Fed creates money (or buys created money at $0.04 for $1) and then loans that newly created to the government at interest. They then get paid back this money plus interest. You refer to the profit only as the interest, of which they give back 94%, keeping 6% of the earnings from interest. So for example they create $1000 and loan it to the government. Government pays back $1100 (at 10% interest). The Fed pays back $94 of the interest and keeps $6 for itself. But what about the $1000 they created out of thin air? This is also profit and they keep 100% of it and then it goes to the secret shareholders of the member banks. So they create money, and then pay it to private shareholders, and we don't know who those shareholders are. Sounds like a great system for them, and crap for the public. My understanding is that in the UK their central bank pays back the principal they created out of thin air ($1000) and all the interest ($100) to the treasury (i.e the government, i.e the people). Source: 1940s Bank of England act making it independent. The Fed however keeps the principal and a tiny portion of the interest for private shareholders, essentially robbing the public by creating money out of thin air. I've done a lot of reading and that's the best I could confirm since information from the Fed on this subject is full of jargon and generally missing.