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Federal Reserve To Use Internet For Money Transfer
An anonymous reader writes "According to the New York Post, the Federal Reserve (i.e. Alan Greenspan and Co.) is going to change the way that it transfers money between banks so that transfers now take place over the internet instead of via a private banking network. They aren't specifying the types of security measures that will be used (security through obscurity?) Am I the only one who thinks that this is a very bad idea? Might a DDOS attack on the Fed's computers bring down the entire banking system?" The banks have put some thought into security.
what makes you think "using the internet" equates to "having a server completely open to the public with no backup processes"? in the UK you can do your taxes online, I guess if they get DDOS'd no one will have to pay?
Money has no intrinsic value. It's all in our minds, really. Our collective faith in the artificial scarcity of this so called "money" is the ultimate con-job that's being perpetrated since the hallowed antiquity.
I'm more worried about another slammer-type attack that floods the Internet.
:)
Besides, encryption and such are fine, but just keeping everyone else off your network (the old method) makes the security model much simpler.
The more access there is, the more possible attacks there are. Which means that more attention has to be spent testing and checking these systems.
Which means more jobs! So it isn't all bad.
Well, they have DOS systems connected to a private network.
The weird thing is that they're looking at moving to the Internet to get away from the limitations of their DOS system.
Why don't they keep the current, private network and just upgrade the machines and the software on that? Why do the upgrade AND move to a less secure network?
There just seems to be no good reason to do this. They claim that they're doing this to get rid of their DOS-based system. The application has nothing to do with the network transport mechanism. They could just as easily re-write the existing application to use private lines as they could to use the Internet. This project was apparently driven by the vice president of national marekting at the Fed. Why does this position even exist? Does the Fed have any competitors at all? For those of you that have never worked in Government IT, there is only one thing you need to know. Write this down, because you may need it one day: Government IT does eveything the stupidest way imaginable.
Why is "Laura Hughes, vice president of national marketing" in charge instead of computer experts?
Some people die at 25 and aren't buried until 75. -Benjamin Franklin
"...maintaining strict access standards and a clear audit trail."
You mean, like voting machines in the USA???!!!
The main job of the Fed is to adjust interest rates as the governing board deems necessary to keep the economy stable.
You mean that they adjust the interest rates to ensure that the US Gov't will never be able to pay back the debt that they owe to the Fed, thus keeping all of us normal citizens forever enslaved to pay back a loan that we never even asked for.
It's convenient for the people closest to the top of the pyramid...
+++ATHZ 99:5:80
The Federal Reserve is a system set up by capitalists (banks) for capitalists (banks). They control the amount of money in circulation. The amount of money is supposedly determined by the strength of the economy and the need to keep inflation in check. Instead of giving the money to individuals (which is the way it should be done in a truly free system), they pass it out to their buddies in the banking system who make a profit by leasing the money to individual borrowers.
The Federal Reserve also has a very powerful way of making a shit load of money: inflation. They just print a lot more money that they would be allowed to print if the system were regulated by just laws. Who or where does all this money goes to? I have no idea.
Essentially, we have the wolves in charge of the chicken coop. There're making a killing, so to speak, and there's nothing you and I can do about it. Other than complain.
Would you prefer gold, some other metal dug out of the ground or rare sea shells?
A lot of people do... Putting money in gold and other precious metals has been the hallmark of "un-patriotic" money management for years.
Basically your choices are:
a) put faith in a completely made up system run by "the authorities".
b) put faith in continued scarcity of certain once-precious resources.
Neither is really all that appealing. Personally I put faith in my ability to make computers do stupid tricks. Other than that, I figure ride the tides of fortune that come your way.
Both efficiency and accuracy would have been better served if you had just replied "I have no idea." in the first place and left it at that.
What I'm listening to now on Pandora...
Much has been made of the evil of monopolies on Slashdot (from Microsoft dominating the desktop to Apple regulating music formats).
The Federal Reserve is a private corporation operated and owned by private banks and given special monopoly existence by congress back on Christmas Eve in 1913. This is a very scary monopoly that has (perhaps unconstitutionally) usurped Congress's power to coin, issue, and regulate the American money supply.
While I won't attempt to proffer all of the observations (probably labeled as "tinfoil hat theories" because neither political party wants to call them into question) I will point out a very human readable web page that highlights some of these issues in a phone call to the Federal Reserve Bank of San Francisco.
I realize that the Internet is a public network and that the Fed has every right to switch its internals over to using it. But it will likely cause two bits of controversy.
First, they are a private corporation so if the receive a private set of Class A IP addresses or other special treats it will expose some flaws in the public vs. private issues of control of the internet. (This is probably of more interest to slashdotters.)
Second, The Fed may be exposing tremendous auditability and accounting problems that don't exist on the private network. While their books and procedures are publicly audited, they have simply "lost" money (both physical and transactional). The paranoid would suspect that perhaps they've been inspired by the Diebold voting systems which can apparently cause votes to simply come and go in an unaccountable manner. The less paranoid should still see that this change will need a great deal more publicly auditable security to keep robber barrons from simply coming up with a new means of screwing over those of us who rely on cash & credit.
I can understand the need to migrate from old proprietary technolgies to new ones, but this migration should be watched VERY closely and where possible should be opened up for further audit and regulation.
Obscurity does not decrease security in and of itself. If you have a truly secure system, obscurity may increase the security somewhat. However, if your system is insecure, obscurity won't stop a determined adversary.
Aaaaaaaaaaaaaaaaaaaaaaargh!
Where to start? OK, what do you mean by saying that money should be given directly to individuals? If you are saying that citizens should just be handed free money on a regular basis (a la Alaska), that's just nonsense. The economy would respond by making that amount of money worthless: if everyone can suddenly afford stuff, prices will rise hard and fast. Not fun. If you are suggesting the Fed should be lending direct to individuals, that's simply not possible. The Fed manages and drives the economy as a whole; it makes decisions about trillions of dollars, not a few thousand for your new kitchen. The overhead of dealing with this kind of loan is not appropriate for what the Fed is for. They loan capital to individual banks, who then loan it out again to consumers. The individual banks get to decide the risk and take on the cost of managing the administration, meaning they have higher costs than the central lenders, which is why the Fed can loan at 3% and you haven't a hope of getting money at a rate like that.
This, by the way, *is* a free system. You don't like it? You can scrape together a few trillion dollars and start your own reserve, if you like. This is the system that has evolved, it works better than the alternatives, and it isn't going to go away.
By the way, I can assure you there are no 'buddies' in the world of higher finance: buddies tend to make very little money, and hence don't last very long.
[FUCK BETA]
I work for a small community bank, and we use both the old FedLine for DOS system as well as the new FedLine for the Web. Currently, the Fedline/Web has a decent amount of the features of the old DOS system, but is still lacking certain ones that the Fed has refused to do over the internet for some time due to security.
The DOS based system uses a 19.2k modem connection back to the Fed, and the data is encrypted using a Jones Futurex hardware encryption board. Security is rather tight, requiring both a local username and a remote username, and there are strict requirements on what features each user can use (no one user can do to much).
The new FL/Web uses HTTPS, with a 128-bit encryption requirement, and client SSL certificates to determine and confirm (to a limited extent, since the certificate can be copied) a user's identity and what features they should have access to. The Fed's instructions for installing the certificate state that a user should set high security which requires that they enter a user chosen (read: weak) password, and re-enter it every time to use the certificate. I've witnessed several users both bypass that setting altogether or just check the "Save Password" box the first time they have to put the password in, so obviously this isn't preventing any access. They also recommend that the certificate be exported to a floppy (labeled "Bob Smith FedLine Certificate") with the same weak password used to secure the certificate on the PC in case it is lost. To access a large portion of FL/Web, all that is required is the client certificate. Certain features do require an additional password. Obviously there are still a few flaws in this security design.
US $80,000 college education is about the equivalent of most European high school diplomas. The fact that you were raped at a cost of $80,000 means nothing. And I hate to tell you but in today's world of easy credit and massive debt any moron who does in fact just drink and beats his wife does in fact drive around in $50,000 SUVs and in essence they are community owned since the pool of credit from which those funds are drawn is the public trust. Educate yourself before spewing simpleton 80s propaganda.
the choice is a non-choice within the current system, that is, capitalism.
the entire idea behind capitalism is that humans have labor, for which they are paid capital, while capital commands labor, and the profits gained from employing the use of labor create more capital which can be invested, used to hire more labor, etc etc. The point of it is that the way needs are met and life is lived happen according to what makes this artificial construct called the monetary system live and breathe, which may not necessarily be at all like what is ideal for a human being with all of our nontangible traits.
the other end of the one-dimensional line of this thinking is socialism/communism, which has been proven by history to not account for human nature and thus to always end up in a massive concentration of power like a dictatorship. so neither of these has worked on its own.
as it is now capitalistic systems are heavily regulated to prevent extreme monopolies and other abuses of power deemed reasonable to forbid. this is not an ideal solution, just a working compromise.
the real challenge would be to find a system that works in the real world and has none of these disadvantageous tendencies. the only other model of which I am aware that fits these criteria are the primitive ones, where everything is kept small and local, and often such communities could not be smaller without compromising long-term self-sufficiency. Corruption and other abuses are kept to a minimum, which is what you would expect when the leader/elder is your neighbor and shares in work much like you do. There exist right now many such societies of primitive tribes who need no police, no central government, and very little authority in any single person's hands. Of course they also don't have indoor plumbing, airplanes, or computers.
I would love to see the merging of both of those worlds instead of the mere compromises we've implemented large-scale so far.
WHY is this modded funny?????
----- Question authority, but not ours. Hate the man, but we're not him.
What hard money? You actually think banks hold enough gold to back the dollars the federal reserve is printing? Do a search for ``fractional reserve banking'' on google...
That's grand and everything, but don't you think that maybe they'll not have a press conference where they give out all of their IPs? The only people who need to know about the machines are the large banks, and I believe there's generally a policy in such places to not hire skript kiddies.