Nine answers and most including the original person who asked the question are fooled by an idiotic conspiracy theory.
How about some of you taking a money and banking class and actually learn how it works?
The structure and status of the Federal Reserve is CLEARLY defined BY LAW. U.S. Code, Title 12, Chapter 3 covers the structure and governance of the Federal Reserve system.
The Federal Reserve System is controlled by a Board of Governors, also known as the Federal Reserve Board. The Board of Governors, located in Washington, D.C., provides the leadership for the System.
The Board of Governors is the national component of the Federal Reserve System. The board consists of the seven governors, appointed by the president and confirmed by the Senate. Governors serve 14-year, staggered terms to ensure stability and continuity over time. The chairman and vice-chairman are appointed to four-year terms and may be reappointed subject to term limitations.
A network of 12 Federal Reserve Banks and 25 branches make up the Federal Reserve System under the general oversight of the Board of Governors. Reserve Banks are the operating arms of the central bank.
Each of the 12 Reserve Banks serves its region of the country, and all but one have other offices within their Districts to help provide services to depository institutions and the public. The Banks are named after the locations of their headquarters-Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
The Reserve Banks serve banks, the U.S. Treasury, and, indirectly, the public. A Reserve Bank is often called a "banker's bank," storing currency and coin, and processing checks and electronic payments. Reserve Banks also supervise commercial banks in their regions. As the bank for the U.S. government, Reserve Banks handle the Treasury's payments, sell government securities and assist with the Treasury's cash management and investment activities. Reserve Banks conduct research on regional, national, and international economic issues. Research plays a critical role in bringing broad economic perspectives to the national policymaking arena, and supports Reserve Bank presidents who all attend meetings of the Federal Open Market Committee (FOMC).
Each Reserve Bank's board of directors oversees the management and activities of the District bank. Six of the nine board members of a district bank are selected by the member banks with approval of the Board of Governors. The other three board members are chosen directly by the Board of Governors. Reflecting the diverse interests of each District, these directors contribute local business experience, community involvement, and leadership. The board imparts a private-sector perspective to the Reserve Bank. Each board appoints the president and first vice president of the Reserve Bank, subject to the approval of the Board of Governors.
All member banks hold stock in Reserve Banks and receive dividends. Unlike stockholders in a public company, banks cannot sell or trade their Fed stock and THE AMOUNT OF STOCK HELD BY EACH MEMBER BANK IS SET BY LAW TO A CERTAIN AMOUNT OF THE MEMBER BANKS' CAPITAL. Currently, it is 3?This allows the Fed to have some direct control over a portion of the reserves a member bank is required to have. Reserve Banks interact directly with banks in their Districts through examinations and financial services and bring important regional perspectives that help the entire Federal Reserve System do its job more effectively. Additionally, by law, private individuals, non-banking corporations, and foreign corporations cannot own more than a tiny amount of Federal Reserve stock and these small owners have no say in the operation of the banks. These member banks don't really 'own' the Federal Reserve. The stock structure is setup so the Federal Reserve system can have some control over the member bank reserves and to offset the lost ability to generate revenue from the mandatory reserves.
Approximately 38 percent of the 8,039 commercial banks in the United States are members of the Federal Reserve System. National banks must be members; state-chartered banks may join if they meet certain requirements.
Another interesting fact: The Federal Reserve owns outright $11 billion in gold reserves as evidenced by the Fed's balance sheet. http://www.federalreserve.gov/Releases/h41/Current/
Another interesting fact #2: The Federal Reserve is required to return interest collected less a small amount for operations on U.S. Government securities to the U.S. Treasury. In 2006, the Federal Reserve collected $36.5 billion on the $770 billion in U.S. Government debt that it held. Of that amount, $29.1 billion was returned to the U.S. Treasury. Don't believe me? Check the INDEPENDENTLY AUDITED financial statements of the Federal Reserve banks for yourself. They can be found in the Federal Reserve's ANNUAL REPORT to Congress.
Another interesting fact #3: The Federal Reserve only holds about 8?f the total U.S. debt. Another 44?s held by THE U.S. GOVERNMENT! Yes, the government lends money to itself. Only about 47 to 48?f the total U.S. debt is held by private individuals, corporations and foreign governments.
Individual income taxes do not all go to pay the interest of government debt. A little common sense can show that they don't. Current government debt is $8.9 trillion. The government collected $1.04 trillion in individual income taxes in 2006. In order for all income taxes to pay for interest on the debt, the interest rate would have to be 11.8?It is not anywhere near that. Interest rate on government debt is usually between 4 and 5?In March 2007, $3.8 trillion was held by intragovernmental accounts, $777 billion was held by the Federal Reserve and only $4.28 trillion was held by the public. http://www.fms.treas.gov/bulletin/b2007-2ofs.doc
The Federal Reserve is audited each year. The Federal Reserve's financial statements are audited by an outside auditor retained by the Office of the Inspector General. The GAO has completed numerous reviews and audits of the Federal Reserve over the years. Completed and active GAO reviews and completed OIG audits, reviews, and assessments are listed in the Board’s Annual Report. The Board's Annual Report is one of the reports that the Federal Reserve is required to submit to Congress each year.
So, you can believe Google videos and conspiracy theories or you can actually take the time to learn how our economy really works.