Published on Pravda.ru, by William H. Helbig, 03.10.2008.
The Federal Reserve System’s building on Constitution Avenue was completed in 1935 for a total cost of $750,000. The Federal Reserve’s Board of Governors purchased the land from the federal government. A deed, secured from the Treasury Department, relinquished “all the right and title and interest of the United States of America.” At the time, Representative Wright Patman of Texas correctly noted that the federal government did not own the building. Privately owned commercial banks and twelve Reserve Banks owned The Federal Reserve System. Therefore, the building was not tax-exempt from local property taxes …
… When you boil away all of the legalese, the Federal Reserve is (from government) an independent department. The tax collector reasoned that if the Fed were a part of government, why would the government sell land to itself? After several years, the tax collector sent a notice of delinquent taxes to the fed. It took several more years of legal wrangling until the Federal Reserve System semi-officially became a part of the federal government. Although many politicians believe the Fed is a part of federal government when it wants to be, and vice versa, clearly independent in its decision-making. The Fed can manipulate the money supply as it sees fit to stimulate, stabilize, or slow the economy when needed.
However, the chairperson and board can manipulate the money supply as it sees fit for any conceivable reason, even for political purposes. If the Fed prints more money than necessary, then there is too much money chasing too few goods, inflation, and people spend less on items that cost too much. American citizens are now experiencing inflation and recession, as well as high gas and energy costs, as well as an American economy flooded with too much cash. (full text).