From: Alan Horowitz <alanh@mailhost.infi.net>
Date: Tue, 9 Apr 1996 19:09:39 +0800
To: "Perry E. Metzger" <perry@piermont.com>
Subject: Re: e$ Signorage
In-Reply-To: <199604080206.WAA29767@jekyll.piermont.com>
Message-ID: <Pine.SV4.3.91.960408195750.12112A-100000@larry.infi.net>
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The Board of Governors of the Federal Reserve Bank is a government agency.
Everyone else in the Fed - really the various regional Feds - are not
government employees. Perry explicitly mentions that there are overhead
expenses that detract from the profit - videlicet, the US Treasury doesn't
pay the operating expenses of the Fed. Therefor, the profits do not go to
the US TReasury. Certainly, the Board is in total control of the picture.
And the Treasury doesn't need the profits. HEck, somewhere around here,
I've got a quote of a Fed Regional President from the 1940's, in which he
says that the govt doesn't need revenues beyond the current interest
payable. TEchnically correct, but politically incorrect. Although, some of
us may live to see such a scenario.  It's happened to lots of countries,
and the sky didn't fall down. People just got sloshed downward on the
real-income-in-constant-dollars scale, via the mechanism of inflation.
This is not a Conspiracy Theory (tm), this is history. 

We've already experienced a massive loss of affluence in this country 
since October 1973, and it didn't cause a revolution. That's why people 
like Greenspan make the big bucks.