Are you completely confused by the whole Federal Reserve system? If so you are not alone, but you really should at least attempt to understand it. The Federal Reserve plays a huge part in how our economy runs, and every American should be concerned with that right now. While most explanations I've read about the Federal Reserve would probably be confusing for most non-economists to read, a recent one published by James Hamilton on Econbrowser does a fabulous job explaining how the Federal Reserve works.
As a bonus Hamilton also explains all the new and creative things the Fed is doing to help get us out of the financial mess we are in, as well as the present state of the Fed's balance sheet. If you are at all interested in how the Federal Reserve works, and what is going on there today, I strongly recommend that you read his article.
Click here to read the full article.