Originally Posted by Firegoat7
Hi,
Maybe there is some confusion caused by the micro macro picture. I am not sure. I understand the USA federal reserve is a private banking system, closely linked with the World bank and IMF. But, Is the Australian federal reserve a private body? I don't know. Maybe you and Alex are talking about different organisations Axiom.
cheers Fg7
The Federal Reserve Board acts as a lender of last resort and a general control of the money supply. Something that is absolutely necessary in a modern economy. While each bank that is part of the federal reserve does technically own shares in the Fed, the government has the whip hand.
The dramatic booms and busts of the 1870's-1900's were in large part due to the lack of a central bank... and most of the ones up until the Great Depression was because the Fed was often reluctant to do anything.