Fiat Power

clipped from mises.org The next requirement that must be met for a "variable interest" is either an "obligation to absorb losses" or a "right to receive benefits." The statement that "about 95% of the Reserve Banks' net earnings have been paid into the Treasury since the Federal Reserve System began operations in 1914" says it well enough. It is an irrefutable fact that the federal government possesses the overwhelming "right to receive benefits." There is, however, no denying that the banks have tremendous vested interest in influencing the policies of the Fed, nor that the power being so narrowly vested in the president makes him a special target for influence. Still, the power to control the Fed is not in the hands of its "owners" but firmly in the hands of the federal government and the president of the United States.