Federal Reserve System

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• published: 11 Oct 2016
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The Federal Reserve While the Federal Reserve is not an entity of the US government, they are important binding them to federal authorities. Under the Federal Reserve Act of 1913, the Federal Reserve was set up to manage monetary policy. Were given the power to print money and to regulate how the money would move the entire market. Because the central bank is considered private, any of their shares to be ratified by Congress or by the President. While it certainly makes things more efficient, the Federal Reserve is not the ideal solution for monetary problems.federal reserve bank Why was it created? Before the Federal Reserve, had a lot to try to establish a strong central bank. The Bank of the United States was initially successful, but when heavy debts, strong opposition rebelled against the bank. An independent treasure is established for a short time but forgotten after a short period. Without a strong central bank left the financial panic of the devastated economy. Realizing something must be done to avoid such a catastrophic panic, the Federal Reserve was established as a private entity to control the monetary system. How did they do? Since its inception, the Federal Reserve has to recover little success. In 1929, less than 20 years after its foundation, the Great Depression took place, the greatest financial panic to date. While it is true that the event was too big to handle for the Federal Reserve, it was still in debt for much of the pain caused by the replica. Without proper preparation, depression lasted nearly a decade and ended only with the United States entered World War II. federal reserve bank In his first major test of his abilities, the Federal Reserve is not good to do their work. Much of the responsibility for the financial crisis is to blame for the inflation that has led to an asset boom and the Federal Reserve failed to do their job and just tight inflation when it was too late to correct the problem. With their first real test, the central bank had failed and caused the greatest economic collapse in history.federal reserve bank Some will say that the fact that the Federal Reserve is inexcusable, because they were new and young organization not prepared for what they would face. In some ways they are right. The recession may apologize after World War II, considering most US funds were diverted to fight against the war. After the Second World War, no Great Recession far. However, one aspect of our monetary system that everyone complains about but not fingers point to the falling dollar. In fact, since the creation of the Federal Reserve in 1913, the dollar has dropped 97%. Only worth three hundred in 1913 is now worth a dollar. Inflation is natural and expected, but not this kind of scandalous levels.federal reserve bank inflation bubble begins to grow during the Second World War, but ended after the tragic war. Most of the money will be printed after the war was not for our own benefit, but to rebuild our allies. Although the cause seemed noble, we were sucked into a machine, as it gives rise to give more. Finally, we had our good will has left us in a bad state and becoming the dollar lose its value. Since then, the dollar continued to lose value, and has recently been on a very high value blade.federal reserve bank Even now, in the midst of our worst recession since World War II, no one pointing the finger the real culprit in the disaster. The bulk of the blame for this financial mess was with the Federal Reserve. Although they can not control the raw materials or housing, they supervise the banking collapse, which coincidentally, the beginning of the recession. The Federal Reserve was well aware of the swelling real estate bubble and if it broke, banks would not be able to handle stress. One of the tasks of the interest that the federal government is that they do not, that regulate the collapse. When buyers have flooded the housing market with money to shovel, there is more of a primary economy to understand how to deal with this problem. The sudden influx was too much to handle for the banks, but the FBI is not theirs, standing arms crossed, that stimulate the flames of disaster. If interest rates had been raised, would be more buyers are discouraged from looking for a new home, helping to reduce the housing bubble. Instead, the rate remained at the same level began to consume banks to disaster. Only when the FBI to intervene and lower interest rates.