Most Americans believe that the United States government is responsible for the United States money. After all, it makes perfect sense the country’s government would be responsible for the decision-making as a relates to the country’s money, Right?
Congress makes the decisions regarding the US dollar, Right?
The reality is that the United States monetary policy is determined by the Federal Reserve and NOT Congress.
The Federal Reserve act of 1913, which was passed by Congress, gave the Federal Reserve the autonomy to act independent of Congress when it comes to the monetary policy of the United States currency.
What does this mean for you and me? It means that the Federal Reserve sets the interest-rates for home mortgages, Auto loans, college tuition….. Basically everything that effects our daily living, by setting the Federal funds rate. The federal funds rate is an important benchmark in the world financial markets and it is the rate that all lending is based off of.
How could something so important to a country’s financial well-being not be determined by Congress?
The answer is that it makes no sense at all!!!!