1 FEDERAL RESERVE
The Federal Reserve controls the money. It tells the Treasury Department when to print money and mint coins. It raises and lowers interest rates. The Fed consists of 12 banks run by a Board of Governors. The Board has 7 members who serve 14 year terms. The president appoints the chairman, and Trump appointed Jerome Powell, another Jew.
The 12 Federal Reserve Banks are in these cities. Issuing banks are printed in District Seals.
B New York
H St. Louis
J Kansas City
L San Francisco
Congress created the Federal Reserve in 1913 as the country's central bank. Much is made of the Fed's independence. To some degree, the Fed operates free of politics. But it is not privately owned as some people think. It is an independent entity within the government, having both public and private aspects.
The Fed is independent in that decisions do not have to be ratified by Congress. But the Fed reports on monetary policy, and Congress has the power to amend the Federal Reserve Act.
Congress gave the Federal Reserve independence to keep politics out of monetary policy. The Fed is self-financed and non-profit. It gets its income from interest on loans to banks. After expenses, remaining money goes into the U.S. Treasury.
Federal Reserve Banks are like corporations in that they issue shares of stock to member banks. The difference is that this stock cannot be sold.
Michael and I toured the Federal Reserve Bank of New York in 2009. We were taken to the Gold Vault underground to see $190 billion in gold. One bar was worth $118,000.
The economy is about money! It involves wages, prices & the distribution of goods. In a capitalist economy, machines are owned by individuals and corporations. In a socialist economy, the means of production are owned by the people. Countries may specialize in agriculture or industry. The middle east exports oil. Inflation means rising prices. Deflation means falling prices.
2 TREASURY DEPARTMENT
The Treasury Department is powerful. It collects income tax and makes bills and coins. The Secretary of the Treasury is nominated by the president and confirmed by the Senate. George Washington appointed Alexander Hamilton as the first Secretary. Donald Trump nominated Steven Mnuchin, another Jew.
3 BUREAU OF ENGRAVING AND PRINTING
The Bureau of Engraving and Printing is in the Treasury Department and located one block off the D.C. Mall. BEP designs and prints money. The front sides of bills are printed with black ink. Back sides are printed with green, which is why we call them green-backs. New money is delivered to the 12 Federal Reserve Banks, which loan it to other banks.
The federal government was on the gold standard until 1971, and money could be redeemed for gold. Money is now backed by confidence that it will be accepted for goods. Money is worthless anyway unless people can be trusted.
After printing money only in Washington, D.C., the Treasury Department authorized BEP to open a facility in Fort Worth. The Western Currency Center makes it easier to ship money west.
1 dollar bill - George Washington is on the front. The Treasury Department Seal is to his right. In the Seal are scales for justice and a key to show that our money is safe. The Secretary of the Treasury's signature is at the bottom right.
The Great Seal of the United States is on the back of the dollar. Its 2 sides are in circles. The pyramid has 13 layers of bricks. The space in the pyramid allows growth. The eye of God watches over us.
2 dollar bill - Thomas Jefferson is on the front. The signing of the Declaration of Independence is on the back.
5 dollar bill - Abraham Lincoln is on the front. The Lincoln Memorial is on the back.
10 dollar bill - Alexander Hamilton is on the front. The U.S. Treasury is on the back.
20 dollar bill - Andrew Jackson is on the front. The White House is on the back.
50 dollar bill - Ulysses S. Grant is on the front. The U.S. Capitol is on the back.
100 dollar bill - Benjamin Franklin is on the front. Independence Hall is on the back.
Bills were redesigned after 9/11. Colors and freedom symbols were added.
$5 - Colors are purple and gray. The freedom symbol is the Great Seal, the eagle and shield. The watermark is a 5.
$10 - Colors are red, orange & yellow. There are 2 images of the Statue of Liberty torch. Hamilton is the watermark. The 10 at the lower right shifts from copper to green.
$20 - Colors are peach and blue. There are 2 eagles and a color-shifting 20.
$50 - Colors are red and blue. The freedom symbol is the American flag.
$100 - It features a bell in an inkwell and the Franklin watermark.
Michael did a paper in college about improving BEP. I had some ideas:
A Put Ronald Reagan on the $5 bill. He was a popular president who served 2 terms. He ended the Cold War. Lincoln was the worst president in American history. Even a lousy president might have prevented the Civil War.
B Put James K. Polk on the $50 bill. America is what it is because Polk embraced the doctrine of manifest destiny. U.S. Grant was a drunkard.
C Make bills last longer. Paper money stays in circulation 2 years. It is a fabric: 75% cotton, 25% linen. That is why it does not fall apart when wet. The Treasury Department and BEP might alter the composition of bills to make them more durable. The longer they last, the less they need to print.
D BEP engravers use outmoded technology. Computers need to replace dated techniques.
4 UNITED STATES MINT
The Mint is in the Treasury Department and distributes coins to the Federal Reserve Banks.
Coins are made at 2 mints. One is in Denver. One is in Philadelphia. The Mint has custody of our gold and silver. The Bullion Depository is at Fort Knox.
Banks are institutions which accept deposits, make loans & provide financial services. They profit from interest on loans. Regulating authorities issue banking licenses.
Biggest U.S. banks by assets:
1 JPMorgan Chase
2 Bank of America
3 Wells Fargo
5 U.S Bank National Association
6 PNC Bank
SunTrust has its headquarters in Atlanta. It has 1400 branches across the southeast. SunTrust offers commercial and retail banking. It offers mortgage banking.
Michael started as a teller with SunTrust. He worked as a Financial Services Representative, selling CDs, IRAs & 401Ks. He opened accounts and took applications for personal and business loans. He became a bank officer licensed by the State of Tennessee. He managed the Brentwood branch.
PINNACLE FINANCIAL PARTNERS
Pinnacle was founded in 2000 by Nashville businessmen. It went public on NASDAQ in 2002. The Pinnacle at Symphony Place is its skyscraper in Nashville. Pinnacle has 115 locations in Tennessee, North Carolina, South Carolina & Virginia. Terry Turner is CEO.
MasterCard & Pinnacle Credit Card
My MasterCard acts like a check because money is deducted from my savings account. I use my credit card to establish credit.
6 STOCK MARKET
People invest when they buy stock. They do so with the idea of making money. They are paid dividends by the company they invest in. Investors may sell their stock back to the company. The unit in which stock is bought and sold is called a "share." An investor might buy shares for $20 and sell them for $25 if the company makes money.
The 3 stock exchanges in the U.S. are the New York Stock Exchange, American Stock Exchange & NASDAQ. The NYSE trades stock for 2800 companies. NASDAQ lists 3300. NASDAQ has no trading floor. Trading is done with computers. Pinnacle is on NASDAQ.
The Dow Jones Industrial Average & Standard and Poor's 500 are stock market indexes. Dow Jones indexes 30 stocks. S&P indexes 500. The Dow is at 24,875. The S&P index is 2683. Points go up and down.
Index averages rise as stock prices rise. It means people are buying stocks, and it a bull market. It is a bear market when prices go down.
Merrill Lynch, Charles Schwab & Edward Jones are investment firms. Their Investment Consultants are aggressive. ICs working for banks get referrals.
There are 2 types of bonds. Treasury bonds are sold by the federal government. Corporate bonds are sold by corporations.
Annuities are sold by insurance companies. Michael sold me an annuity from New York Life.
New York Life Insurance Company
New York Life is on the Fortune 100 list. Its building is on Madison Avenue in New York. It has a gold cone on top.
Pacific Life Insurance Company
Pacific Life sells annuities and insurance. Its headquarters is in Newport Beach, California. The humpback whale is its symbol.
BlackRock and Franklin Templeton are asset management firms. They are portfolios. A portfolio as a collection of investments held by a person.
The importance of money cannot be overestimated, especially for people like myself who live in the city. It takes money to buy food, pay the rent & keep a truck on the road.