Please take a look at this short video and then educate yourself as to what the Federal Reserve Bank is and what it does and who owns it. Try reading "The Creature From Jekyll Island". Or if you aren't much of a reader, consider buying a two DVD set produced by Edward Griffin called "The Federal Reserve: Discourse"
The Federal Reserve is not part of the government. It is not any more "Federal" than Federal Express. It is a privately owned bank. It is also not a reserve, although it does hold all of America's gold bullion. However there has never been an accounting for our gold. We only have the word of the private bankers that the gold is still in their vaults.
The Federal Reserve has created the cycles of boom and bust by inflating the money supply or as they say "lowering the interest rates" or "increasing liquidity". All three things mean exactly the same thing. Whenever the Fed inflates the money supply, they take away the motivations to save and instead they promote the motivation to speculate. If the Fed had not doubled the money supply over the last five years, the interest rates would have risen and banks would not have speculated wildly in the Real Estate market.
Derivitives and hedge funds are only possible when the investors can leverage their personal investments massively. That is only possible when money is very cheap. Unqualified buyers would never be given home loans if investment money was limited. But since money has been so cheap for so long, some banks decided to gamble. The Fed has kept money very cheap for over ten years and thereby they created the dotcom boom and bust and now this much more serious crisis. This is actually a crisis of excess liquidity and the answer suggested by the governemnt and the Fed is their all-purpose answer to any calamity: Print more money.