The Federal Reserve, enlightening an individual

I was talking to my roommate and giving him the lowdown on the Federal Reserve. He is a business major and has been told the regular.

I told him the Fed is privately owned by member banks who, as members, are required to invest a percent of their capital in the fed each year and get guaranteed returns and they are not allowed to buy, sell, or trade their stocks of the Fed (off the website). Then I proceeded to show him the New York Fed Board (off the NY Fed site) and how all the Board members of the NY Fed were CEOs, etc of member banks. I also showed him the Dallas Fed Board (Dallas Fed site) where the same situation is true.

Herein lies the conflict of interest. Am I correct in assuming the State boards report to and advise the appointees of the national board? The CEOs of member banks will work in their own best interest and they have been given a stunningly EASY way to manipulate the system. Why if I fail, I'll just get the fed to give me some money!

Also, These member banks typically finance political campaigns so the politicians they push into office are obligated to return the favor. So not only do the member banks have influence over the national fed board, they have influence over the politicians who the fed board reports too and who make the laws.

He did find this disturbing and will ask his economics teacher tomorrow about this.

Also, he just learned today that inflation is good and I told him inflation is good for a debt economy which he made a fuss about then read an article that reinforced my statement. He said that credit is good and I said it is like heroin and we are addicted. Because we went off the gold standard, inflation was allowed to rise quickly leading to lower savings rates then forcing increased loans thereby enabling a positive feedback loop with credit from our banks... our addiction.

I told him debt was control but at this point he wasn't listening anymore...