Larry,

The FED is “an arm of the federal government” in name only. Both the federal government and the FED are captive of/act hand in glove with the interests of Private Finance. Private banks create loans which create deposits…and then look for any reserves they may need later. The money system is endogenous. We require a central bank which is both a sovereign branch of the national government and also has policy mandates which effect the economic and financial freedom of the individual and the free flowingness of the system. Those mandates are not mutually exclusive.