Wednesday, March 23, 2011

What is the Federal Reserve Bank?

How safe is your money? Are you confident the money you save today, will be there tomorrow? Compare these two websites which compare the perceived view the bank has with an actual working definition of the Fed. Then describe where you stand.

How confident are you giving your money to the government?


  1. According to the mint, the Federal Reserve Bank is the central bank of all smaller commercial banks. The Federal Reserve is a group of people appointed by the Government. The Federal Reserve collects its profits and returns them to the Treasury. In all, the Fed checks and balances the smaller commercial banks, and acts as a lender to these banks as well. The Federal Reserve is also split up into 12 Districts, or the "central" banking for each district for each area of the United States. In the Federal Reserve Website, they have multiple links that are supposed to help consumers, including consumer guides. I believe that The Federal Reserve is very low key, as the general description of it on the main website is very vague. After clicking a few links, I find short descriptions of their programs, but noting about what they actually are doing with the money in which they are recieving. The Mint Website tells us that our taxes are paid to the US Treasury, and put into the Fed Bank. This money is then sent on to Outgoing Payments, and then a Shortfall for the Government is created. To cover this, they buy mint for four cents each, and then Redeems Government securities such as Bonds. Interest on these are paid, and the payments are handled by the Fed. This is an ongoing circle, as the Government spends more money, the Fed must cover up the shortfall. I do not feel confident giving my money to the government, as they spend more money than they actually should. In the longrun, our National Debt continues to increase.

  2. The Federal Reserve Bank is "one of 12 regional banks that monitor and act as depositories for banks in their region." ( According to, the Federal Reserve is a public/private "decentralized" central banking system regulated but not in any way related to the U.S. Government. The Federal Reserve Act was signed in 1913 which started the system we have today. The Federal open market committee rotates every so often, but the President of the New York Reserve is permanent. The twelve banks located across America provide regional banking services. There are 25 branches that branch off of these 12 banks which include: Boston, NYC, Philadelphia, Cleveland,Richmond, Atlanta, Chicago, San Francisco, Dallas, Kansas City, Minneapolis, and St. Louis. These banks regulated commercial banks so you can't open a checking account at these banks. They "analyze economic data and undertake a host of other activities." ( The Fed is where the other banks and the government do their banking, not us as citizens. The U.S. Treasury keeps a checking account in these banks as well as the commercial banks where we do our banking. According to, the Federal Reserve Bank is a "unique structure." They state, "Reflecting this structure, which balances centralization with regional presence, the Fed has web sites that are national in scope and regional." ( These two websites give us an overview of what these Federal Reserve Banks are responsible for and what they do. For example, the website tells us that the Federal Reserve Banks are like banking accounts for the government and for the commercial banks, but where exactly does this money go? I understand what these banks do, but I don't know where my money would go. Overall, I know these banks are there in case of a crisis, but I would like to know what the Federal Reserve Banks do with our money as well as the Treasury.

  3. I believe that the bank I have resided with is a safe bank that will be there tomorrow and not go bankrupt so abruptly/quickly so I have no fear in this bank. I am confident to save money in this bank I have. A Visual Guide to the Federal Reserve shows big and colorful text which leads me to believe that either the government is basically manipulating people of the nation with appealing text and background. This makes me believe that the government is trying to manipulate the citizens to believe that the government is based on the people, saying they care about them, and listen to them, and etc. Which I feel the government of America is corrupt because the government only cares about one thing and that is money.
    "Few understand the logic behind its policy decisions, decisions that have a profound effect on the US economy. "
    The Federal Reserve System Online shows of a more sophisticated point because its plain and straight forward which gets right to the point of what people want to know about their government. Me myself I am not confident in giving money to the government because I feel that they take most of the profit for themselves in which we pay for taxes and pocket for themselves.

  4. The first website is sarcastic, but truthful in a fun flow chart style. The second has basic information, but describes the Fed and it's Board of decision-makers. My confidence level in is a bit iffy, you could never be sure when giving your money to the government because there's always gonna be a chance that the banking system could crash and lose its' money. And also, just like the second website there is plenty of information that the Federal systems hide in order to make them look more safe than they are.

  5. I think that the money we put into banks is pretty safe based on the fact that whatever we put in is ensured. According to the mint, the federal reserve acts as the bankers bank in times of need for more cash flow or for the purpose of preventing the collapse of a bank. "On December 23, 1913, the Federal Reserve System, which serves as the nation's central bank, was created by an act of Congress. The System consists of a seven member Board of Governors with headquarters in Washington, D.C., and twelve Reserve Banks located in major cities throughout the United States."
    The federal reserve has responsibilities such as, "the group that makes the key decisions affecting the cost and availability of money and credit in the economy." The federal reserve keeps track of the money and controls the cash flow of the economy. Essentially, the government banks can take our money and invest in other deals to try to make more money, but in the end the money we put into banks is still ours, just not physically until summoned upon. The mint website is very easy to read and it's very explanatory. The federal reserve online site is a bit more grown up since there are more texts and then language has a wider range. The government is supposed to invest our money in things that they think will benefit and gain more money. They have been doing their jobs for many years, but it seem like they are not making the right decisions. THe national debt is gradually increasing and the government has not made significant changes to lower the debt. In the end I am not very confident about giving my money to the government.

  6. I agree with Lio as he is saying that we as investors can never really know where our money goes when having the government spend our money. The government doesn't always make the right decisions, which could cause a negative money amount than what was first there. There are many risks when dealing with investments. There are many doubts in how well our economy is holding. Trusting the Federal systems run by the government is subject to everyone's opinion, but there's aways going to be some information that isn't let out to the public. The government will try to censor what the public hear, so that we will not worry, but also to blind us of some negativities of investments. There is much to lose and with our decaying economy, which should make investors more precautions of where their money is actually going and being used.

  7. I am confident in my bank because i do not have that much in there. Most importantly i do believe in swiss bank accounts more because it truly seems that our government is corrupt and will find a way to not give back to us the money that the FDIC insured. I am fully confident in the idea that the government realizes it is run by the people but that is why they make the government always seem like they are doing good by the people while they are being corrupted or make unnecessary laws at times.
    I believe that the FDIC would eventually have to return the money that they insure because it would be a large political issue if they did not. I do also believe that they would take their sweet time returning your insured money. I think is colored and very appealing so that you will feel comfortable and feel confident reading the site and believing the information.

    I think Federal Reserve is made more professional so that serious people can read through the site and feel like they are looking at a true site that is not trying to hide them or manipulate them in any ways.