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What is a method by which the Federal Reserve encourages or discourages bank loans?
Wiki User
∙ 13y ago
One of the method of discourage bank loans (and msot commonly used) is to influence the interest rate. With a high interest rate, people are more inclined to save rather than borrow (due to high return.)
Wiki User
∙ 13y ago
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What doese FCA mean?
FCA can be Full Cost Accounting, which is a method of accounting or False Claims Act (US federal law).
How much money do banks hold?
1. False. The Federal Reserve System was created by the Federal Reserve Act, and passed by both houses of Congress just prior to Christmas recess on December 22, 1913. Section 5 of the Act calls for a member bank to buy and hold stock in a district Federal Reserve Bank equal to 6% of its capital and surplus. For example, as of 1983, ten major New York City banks owned approximately 66% of the outstanding stock in the Federal Reserve Bank of New York. That Bank in turn owns a portion of the stock in the Federal Reserve Bank of the U.S. together with the eleven regional member banks. A review of the major stockholders of the ten New York city banks clearly shows that a few families related by blood, marriage or business interests control those 10 New York city banks, which in turn, hold the controlling stock in the Federal Reserve Bank of New York. In addition, approximately 38% of the stock of the Federal Reserve Bank of New York (as of 1983) was held by banks that are subsidiaries of foreign banks, namely the House of Rothschild which controls the Bank of England. The fact that the Federal Reserve System is controlled by private interests is one of the best kept secrets in American history. 2. False. Article 1, Sec. 8 of the U.S. Constitution provides that "The Congress shall have power to borrow money on the credit of the United States...and to coin money, regulate the value thereof, and of foreign coin, and fix the Standard of Weights and Measures." According to the National Recovery Act (NRA) decision in the 1930's, Congress can not delegate the power to coin money to the Federal Reserve System. However, during the great depression and during Franklin D. Roosevelt's first term as President, the U.S. went off the gold standard and gold and silver Treasury Certificates were gradually replaced by Federal Reserve Notes Which are "coined" by the Fed in violation of the Constitution. 3. False. Prior to 1933, the Federal Reserve Act required that a portion of the earnings of the Federal Reserve Banks go to the government, but the banks never complied. The Banking Act of 1933 legislated that all earnings of the Federal Reserve Banks go to the banks themselves. The assets of the Federal Reserve Banks increased from $143 million dollars in 1913 to $45 billion dollars in 1949, which enriched all of the shareholders of the banks. There is no evidence that the law or the method of accounting of earnings has changed since 1949. 4. False. The Fed has no restriction on the amount of money it can create since the U.S. went off the gold standard in the 1930's. As Congressman Wright Patman said in 1964, " The dollar represents a one dollar debt to the Federal Reserve System. The Federal Reserve Banks create money out of thin air to buy Government Bonds from the U.S. Treasury...and has created out of nothing a ....debt which the American people are obliged to pay with interest." In 1958 the U.S. owned $700 million ounces of gold. Today the nations bullion reserves have dwindled to a mere 281,000,000 ounces ($100 billion dollars) which is minuscule in relationship to the amount of paper currency in circulation and the amount of Treasury debt. The goal of the Fed is to make gold irrelevant as a measure of monetary value so it can continue to print an unlimited amount of paper currency. 5. False. Despite numerous attempts by Congressman Wright Patman and others who have called for an audit of the books of the Federal Reserve System, no audit has been made available to the public since the System was founded in 1913. On March 1, 1982, the Arizona State Legislature, as well as a number of other states passed a resolution calling for the abolishment of the Federal Reserve System. All efforts to expose and change the System have been thwarted. 6. False. Easy, Fed monetary policy in the late 1970's led to double digit inflation and a prime rate that eventually reached 21.5% in 1981. This caused the collapse of the Savings and Loan Industry. Congress, accommodating the banking lobby, passed the Garn-St Germain Act to bail out the Savings and Loans. Stimulated by a rush of new money created by the Fed, attractive real estate tax laws, and the authority to directly invest in real estate deals, the Savings and Loans quickly created a speculative bubble of overvalued real estate. By 1990 the massive amount of bad real estate loans caused a banking crisis. The Resolution Trust Corp. was formed to market foreclosed real estate, and the biggest write down of real estate assets since the Great Depression began. Thus, in a period of 12 years, the Fed was obliged to bail out both the Savings and Loan and the banking industries as a direct result of its own monetary policy. Incredibly, the losses were absorbed, not by the Fed, but by the taxpayers and the shareholders of the local institutions that collapsed. Millions of Americans went bankrupt in the early 1990's and to this day don't understand what happened. 7. False. The history of the Federal Reserve System in the U.S. is a study of money and power and its ability to determine world events. A small group of elitists, their successors and assigns have been able to influence public opinion through control of the media, elect or discharge Presidents and politicians, make wars and cause economic booms and busts. Neither the President of the U.S., nor the Chairman of The Federal Reserve Board act independently. They both hold office at the discretion of those who control the Federal Reserve System and those wealthy elitists who are intent on establishing a New World order. Alan Greenspan said in 1966 "The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit." Greenspan's view changed dramatically after he became a director of J.P. Morgan and Co. and later the Fed Chairman. 8. False. The markets and the demand for money ultimately determine interest rates. The fed sets in the Discount Rate (the rate at which member banks borrow from the Fed) and the Fed Funds Rate. (the rate which banks charge each other on overnight funds) Both of these rates are short-term interest rates. At present the Fed is increasing these rates while at the same time maintaining that inflation is only 2.6% and not a problem. Low rates and an increase in the money supply have fueled a "speculative bubble" in the stock market. Additional increases in rates could slow the economy and cause a market crash. The Fed has found itself again in a dilemma which it created. 9. False. The fed has acted directly as bank of "last resort." Normally, loans to other countries would be made by the International Monetary Fund, the Bank of International Settlements or other entities which are primarily funded by the Fed. In the case of Mexico, however, the Fed made a loan directly to that country after the President by-passed Congress and issued an Executive Order. Reliable sources indicate that the Fed has recently delivered approximately $40 billion newly printed $100 bills to Russian banks which are controlled by the Russian Mafia. Since 1940 the U.S. dollar has lost 94% of its value. The prolific printing of our currency, the mounting $5.3 trillion in Federal Debt and the widening trade deficit could soon result in the crash of the U.S. dollar and disastrous ramifications for Americans. 10. True. 66% of the Gross Domestic Product (GDP) in the U.S. is consumer spending, and the spending habits of the American people are greatly influenced by the cost of money. Understanding an overview of how the Fed works and anticipating a major shift in monetary policy can be extremely critical for a business person as well as an investor. The bottom line question is: Whose interest does the Federal Reserve serve? The bankers or the people? Now you know the answer to that question. SOURCE: "Secrets of The Federal Reserve" by Eustace Mullins. Available from We Hold These Truths for $15.00. --- The ABCs Of The Fed From Brasscheck
Why is the NPV method superior to payback method?
How is the method superior to the payback method
Difference between amalgamation under the nature of merger and purchase?
opening entries in the case of amalgamation in the nature of merger (pooling of interest method) 1) for purchase consideration payable: Business purchase a/c dr To liquidators of transferor(seller) company 2)for incorporation of assets,liabilities and reserves: various assets(taken over) a/c dr general reserve or (capital loss)a/c dr (bal fig) To creditors To bills payable To reserves(other than general reserve or p/l A/c when general reserve is not there) To p/l a/c To business purchase a/c To general reserve a/c (capital gain) (bal fig) BUT WHERE AS IN THE NATURE OF PURCHASE METHOD: purchase consideration remains the same ,but for incorporation of assets and liabilities: plant and machinery a/c (revised value) dr land and building a/c (revised value) dr other fixed assets a/c (revised value) dr debtors a/c (revised value) dr stock a/c (revised value) dr bank a/c dr goodwill a/c (bal fig) To creditors To bills payable To other liabilities To capital reserve a/c (bal fig) all other format remains the same... for more information refer bbm 3rd sem corporate accounting..:)
Where can I find a small business grant?
A small business grant may be obtained from a local financial institution such as a federal bank. A small business grant can be discussed with the representatives and they can help you form the best method to start up a bakery business.
What kind of time-series method does the Federal Reserve perform?
The Federal Reserve, for example, collects data on monetary policy and financial institutions and publishes that data in the Federal Reserve Bulletin.
What did Socrates did?
Socrates invented the Socratic Method. This is a method that encourages people to think on their own.
What was the reason for the Federal Reserve's Book Entry System?
The Federal Reserve System in the US was faced with high costs and risks associated with safekeeping and transferring bearer Treasury securities. The task had become huge and the Federal Reserve sought a more efficient method to manage these tasks. In 1966 the US Treasury and the Federal Reserve began to convert Treasury securities to "book -entry" or "nonphysical form". The conversion was also driven by the interest of the Reserve Banks and Treasury in lowering their operating costs and risks. Also, by the desire to preserve market liquidity and the goal to prune member bank operating costs. These goals were successful.
What did socrates invent?
Socrates invented the Socratic Method. This is a method that encourages people to think on their own.
Why is the monetary policy administered by the federal reserve the principal method of softening the effects of the business cycle?
Because there are more political complications with determining and implementing fiscal policy.
What is variable reserve ratio?
The variable cash reserve ratio is new method of credit control used by central banks in recent times. The term variable ratio refers to the minimum reserves with the central bank by the commercial banks. As per section 42 (1) of the reserve bank of india, 1934, every scheduled bank has to maintain a minimum cash balance as reserve to be calculated as a percentage on their time and demand liabilities. Variable reserve ratio was used as one of the credit control methods. This methods was suggested by keynes in 1930. This method was first introduced by federal Reserve System of USA in 1935.
What is philosophical method of inquiry?
The philosophical method of inquiry is sometimes called the Socratic Method. It encourages a look into the subconscious to find the answers to life's questions.
What method is used by Federal Reserve Banks to determine the amount of credit they extend?
Since the Federal Reserve Banks are not operated for profit, profit considerations have no effect on the amount of credit they extend. With that said, the amount of credit extended is determined primarily by the monetary policy being pursued in the public interest. These monetary policies will either increase or decrease the availability of bank reserves, and thus ultimately affect the amount of credit that can be extended at any particular point in time.
What is the Bradley method?
The Bradley method is called father-coached childbirth, because it focuses on the father serving as coach throughout the process. It encourages normal activities during the first stages of labor.
Who invented the Karvonen method?
The Karvonen method was founded by Finnish scientist Dr. M. J. Karvonen in 1957. The method deals with the heart rate reserve and the desired heart rate to burn calories.
Is the reserve to reserve method the most correct method to calculate the mileage?
no the best way is to fill up to the top set trip and drive. next time u need gas fill to the top again then divide miles drove by gallons it took to fill back up.
Us currency with red ink on it?
Red ink indicates that a bill is a United States Note, a form of paper money issued directly by the government instead of by the Federal Reserve System. US Notes were first issued in 1862 to help pay for the Civil War. They were issued in various designs and colors until 1928, when all US paper money was standardized. Red ink was used for US Notes, blue for silver certificates, and green for Federal Reserve Notes.During the 20th century US Notes only made up a small fraction of bills in circulation. They had similar designs to and were completely equivalent to green-seal Federal Reserve Notes, so production was discontinued in the late 1960s to save on printing and distribution costs.======The "Executive Order 11110 conspiracy" has been investigated numerous times and been shown to be a complete fabrication. The order itself is available publicly to this day and is simply a mundane authorization among many for the Treasury Department. It has nothing whatsoever to do with abolishing the Federal Reserve System, continued production of silver certificates, or "new" red-seal bills.President Kennedy issued Executive Order 11110 to provide debt-free US currency via the US Treasury. These notes have red ink.The normal method of issuing money is through the privately owned Federal Reserve. The Federal Reserve acts as a middleman and issues money to the US Treasury, all the while collect interest through the process. Kennedy wanted to get rid of the Federal Reserve and this is most likely the reason why Kennedy was killed. The last US President to try the same was Lincoln with his Greenbacks.
