The Federal Reserve is a SCAM?

jgrisham's picture
Rank: Monkey | 51

I am a novice about this myself and don't have a strong feeling either way, but was doing some research on the US deficit and came across certain points about the Fed (on the web and youtube) I had no clue about.

The Question: No one really seems to be able to answer why the US, the most powerful country in history, should not print its own money, and be free of debt and interest to a private corp - the Fed, which is creating this same money out of nothing....

The Fed (and most central banks of the world) is a privately owned company, not part of the government and hence theoretically has no legal obligation to the American public, but only to its private shareholders. Fed and other central banks are apparently owned by a small group of people and financier families - Rothschilds, Rockefellers et al.

The Fed, a private corporation, can legally create Trillions of dollars out of nothing (no asset backing??) and then lend this fictitiously created money at interest to the US govt. In return for creating money out of thin air with no assets backing it, a private corporation gets to lay claim over tangible physical assets belonging to the US govt and its people. In addition, they get to collect interest on this fictional money, from our taxes (and make decisions about rates that lead to booms and busts). ****Why the heck doesn't the US govt print all the money it wants interest free and debt-free (as stated in the constitution), but for some reason a private company is creating this money out of scratch and then lending it at interest?? ****

There are some interesting videos on YouTube explaining the above points.

All this doesn't seem to make sense - what am I missing?? Thanks for your patience.

Added June 7:
SORRY was really not trying to be a troll or a conspiracy theorist...... Was just struck by the secrecy, unfair/lucrative monopolistic advantage and potential conflict of interest with a private corp like the FED. Had always assumed the Fed was under the Federal Govt. Why does this entity get to enjoy a monopoly, earn virtually risk-free interest, and be subjected to far less transparency than every other private corp in the US?? We seem to treat these people like Gods and give them complete benefit of the doubt, which would not be granted to any other private or public entity in the country.
If the thread ended up being trollish - my apologies.

Comments (174)

Jun 6, 2011

Zeitgeist?

Jun 6, 2011

you dont say? You just now figuring this out?

The one who does not fall, does not stand up

Jun 6, 2011

You have so many things wrong here...where shall I begin..

Most notably the Federal Reserve does not print money. The U.S. Treasury Department (through two divisions, the Bureau of Engraving and Printing, which prints notes, and the United States Mint, which makes coins) prints U.S. currency. The U.S. Treasury then ships this money to the 12 Federal Resrve Banks, who then circulate the currency. The 12 Federal Reserve Banks are required by law to pledge collateral at least equal to the amount of currency it has issued into circulation. The bulk of the collateral pledged is in the form of U.S. Government securities and gold certificates owned by the Federal Reserve Banks.

Jun 6, 2011
Chicago85:

You have so many things wrong here...where shall I begin..

Most notably the Federal Reserve does not print money. The U.S. Treasury Department (through two divisions, the Bureau of Engraving and Printing, which prints notes, and the United States Mint, which makes coins) prints U.S. currency. The U.S. Treasury then ships this money to the 12 Federal Resrve Banks, who then circulate the currency. The 12 Federal Reserve Banks are required by law to pledge collateral at least equal to the amount of currency it has issued into circulation. The bulk of the collateral pledged is in the form of U.S. Government securities and gold certificates owned by the Federal Reserve Banks.

Hehe where did you get all this farce? Gold certificates owned by the FRB? Hehe silly rabbit. I can name quite a few very intelligent and successful investors who would disagree with you. In todays world obviously we just add a zero to a number on a computer and boom! money is circulating in the system. Yea according to Moden Monetary Theory the FED or Treasury cant print money but like most economic models they are wrong.

The Keynesian end game is coming, you go on believing it is our savior!

The one who does not fall, does not stand up

Jun 6, 2011
ProdigyOfZen:
Chicago85:

You have so many things wrong here...where shall I begin..

Most notably the Federal Reserve does not print money. The U.S. Treasury Department (through two divisions, the Bureau of Engraving and Printing, which prints notes, and the United States Mint, which makes coins) prints U.S. currency. The U.S. Treasury then ships this money to the 12 Federal Resrve Banks, who then circulate the currency. The 12 Federal Reserve Banks are required by law to pledge collateral at least equal to the amount of currency it has issued into circulation. The bulk of the collateral pledged is in the form of U.S. Government securities and gold certificates owned by the Federal Reserve Banks.

Hehe where did you get all this farce? Gold certificates owned by the FRB? Hehe silly rabbit. I can name quite a few very intelligent and successful investors who would disagree with you. In todays world obviously we just add a zero to a number on a computer and boom! money is circulating in the system. Yea according to Moden Monetary Theory the FED or Treasury cant print money but like most economic models they are wrong.

The Keynesian end game is coming, you go on believing it is our savior!

This farce came from the NY Federal Reserve website and you are a moron.

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Jun 6, 2011
Chicago85:

You have so many things wrong here...where shall I begin..

Most notably the Federal Reserve does not print money. The U.S. Treasury Department (through two divisions, the Bureau of Engraving and Printing, which prints notes, and the United States Mint, which makes coins) prints U.S. currency. The U.S. Treasury then ships this money to the 12 Federal Resrve Banks, who then circulate the currency. The 12 Federal Reserve Banks are required by law to pledge collateral at least equal to the amount of currency it has issued into circulation. The bulk of the collateral pledged is in the form of U.S. Government securities and gold certificates owned by the Federal Reserve Banks.

haha the fed doesnt actually physically print money, they create it digitally from fractional reserve lending through the issuance of debt. The "collateral" is NOT backed by gold certs.../

Jun 6, 2011
mfoste1:
Chicago85:

You have so many things wrong here...where shall I begin..

Most notably the Federal Reserve does not print money. The U.S. Treasury Department (through two divisions, the Bureau of Engraving and Printing, which prints notes, and the United States Mint, which makes coins) prints U.S. currency. The U.S. Treasury then ships this money to the 12 Federal Resrve Banks, who then circulate the currency. The 12 Federal Reserve Banks are required by law to pledge collateral at least equal to the amount of currency it has issued into circulation. The bulk of the collateral pledged is in the form of U.S. Government securities and gold certificates owned by the Federal Reserve Banks.

haha the fed doesnt actually physically print money, they create it digitally from fractional reserve lending through the issuance of debt. The "collateral" is NOT backed by gold certs.../

Thanks for the assist on this MFoste! Thats why i was laughing in my first post, the Fed most certainly does not have "gold certificates" to back its debt printing. I really just didnt care to enlighten these people on the total farce of the FED.

Its a ponzi scheme just like SS and Medicare. The world economy cannot grow without issuing more money and more money and more money. Why do you think they fear deflation so much Chicago?

They will reinflate until they cant or the world wakes up and realizes the huge risk of owning US debt and they dump it.

The one who does not fall, does not stand up

Jun 6, 2011

Youtube conspiracy =/= reality

Take fifteen minutes to learn how it works:
http://en.wikipedia.org/wiki/Federal_Reserve_Bank#...
Here's the skinny: it's not run at a profit, and is a better system than all that have come before it. Read 'The Power of Gold' to get an understanding of the history driving the current system.
http://www.amazon.com/Power-Gold-History-Obsession...

Jun 6, 2011

@Chicago85. Thanks.... yup I phrased it wrong, I realized the Fed does not really "print" money per se. But it does seem to create fictitious money supply by buying T-bills out of money created with thin air...

@manbearpig yup Zeitgeist is one...but there are others too.....pretty scary sh** if this is anywhere close to real.

@ProdigyOfZen .... :-) not really - I had sort of heard about this before but figured the people propagating it were being a bit overzealous - I mean the system cannot be that scammy, otherwise someone would have figured it out and done something about it.... I guess I was the only clueless guy in that conversation....

Jun 6, 2011

@UFOinsider.... yup saw those posts.... my impressions however are not derived only from youtube vids. There are respectable economic schools such as Ludwig Von Mises Institute which seem to say something similar..

I guess my question is - how would you know what exactly these guys are doing and why they are doing so?? Statistics (lies, damn lies and statistics) and economic theory are not exact science (especially since many of the leading economic schools like LSE pushing these theories seem to be perversely funded by the same guys). Someone in a Fed leadership position could easily manipulate whole markets and cause booms and busts based on some BS theory, and no one would be the wiser (I mean we are still arguing over the causes of the great depression as well as the recent market crash). After all there are more than one ways to make a profit - don't tell me insider trading and insider favors never happen... Another way - deliberately causing booms for the profit of your owners/shareholders during the upside, getting out in time, shrinking the money supply to cause busts and then having shareholder companies coming in like vultures to pick up assets on the cheap...as long as the Fed can surreptitiously control the boom and bust cycles (through the trillions of dollars at its disposal), there are several ways for the shareholders of this privately-held entity to profit....how the heck would one on the outside ever know the difference??

Their meetings are private and not open to public, they are not subject to Freedom of Information Act, they have never been audited - so all you have to go by is their word that they have hearts of gold and are looking out for your interests rather than their shareholders.

Jun 6, 2011

You are not even speaking to any points I made. I simply stated a few facts about how our currency is made and circulated. What economic history did I bring up? Did I mention Keynesian economics? What are my BS economic theories? You are delusional.

Jun 6, 2011

@Chicago85

The FED Admits: We Have No Gold Reserves - http://goldbasics.blogspot.com/

Jun 6, 2011

Look if you dont believe in Austrian economics and believe in the Modern Monetary Theory or that the Fed does not print money then you are ascribing to Keynesian economics which is what governs the Fed. Wasn't it Nixon who said we are all keynesians now after he took us off the gold standard.

Chicago, sorry if my assumptions are wrong about what economic theory you tend to follow. I am laughing at this process because with all the mounting evidence agaisnt thinking that the Fed doesnt print money people STILL believe that the Fed does not print money.

You have Kyle Bass on national television saying that the Fed prints money along with Marc Faber, JIm Rogers etc etc. They dont know how to do anything else.

No, chicago you simply stated facts that are posted on the Federal Reserves website which turn out to be farce.

Happypants think whatever you like but the only reason I am laughing over here is because I am flabbergasted that supposedly smart people still do not see that the main problem in the economy is the excessive money printing at the Fed.

It truly is remarkable.

The one who does not fall, does not stand up

Jun 6, 2011
ProdigyOfZen:

Look if you dont believe in Austrian economics and believe in the Modern Monetary Theory or that the Fed does not print money then you are ascribing to Keynesian economics which is what governs the Fed. Wasn't it Nixon who said we are all keynesians now after he took us off the gold standard.

Chicago, sorry if my assumptions are wrong about what economic theory you tend to follow. I am laughing at this process because with all the mounting evidence agaisnt thinking that the Fed doesnt print money people STILL believe that the Fed does not print money.

You have Kyle Bass on national television saying that the Fed prints money along with Marc Faber, JIm Rogers etc etc. They dont know how to do anything else.

No, chicago you simply stated facts that are posted on the Federal Reserves website which turn out to be farce.

Happypants think whatever you like but the only reason I am laughing over here is because I am flabbergasted that supposedly smart people still do not see that the main problem in the economy is the excessive money printing at the Fed.

It truly is remarkable.

Dude, turn off the conspiracy loons and read up on how this shit works. The nuts MAKE MONEY by exploiting fear and ignorance. Educate yourself and realize that the nations economy is in the hands of the smartest, hardest working people on the planet who want nothing more than to be written down in the history books as the greatest.....

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Jun 6, 2011
UFOinsider:

the smartest, hardest working people on the planet who want nothing more than to be written down in the history books as the greatest.....

Yea, either that or to be pants shitting rich

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Jun 6, 2011
UFOinsider:
ProdigyOfZen:

Look if you dont believe in Austrian economics and believe in the Modern Monetary Theory or that the Fed does not print money then you are ascribing to Keynesian economics which is what governs the Fed. Wasn't it Nixon who said we are all keynesians now after he took us off the gold standard.

Chicago, sorry if my assumptions are wrong about what economic theory you tend to follow. I am laughing at this process because with all the mounting evidence agaisnt thinking that the Fed doesnt print money people STILL believe that the Fed does not print money.

You have Kyle Bass on national television saying that the Fed prints money along with Marc Faber, JIm Rogers etc etc. They dont know how to do anything else.

No, chicago you simply stated facts that are posted on the Federal Reserves website which turn out to be farce.

Happypants think whatever you like but the only reason I am laughing over here is because I am flabbergasted that supposedly smart people still do not see that the main problem in the economy is the excessive money printing at the Fed.

It truly is remarkable.

Dude, turn off the conspiracy loons and read up on how this shit works. The nuts MAKE MONEY by exploiting fear and ignorance. Educate yourself and realize that the nations economy is in the hands of the smartest, hardest working people on the planet who want nothing more than to be written down in the history books as the greatest.....

Whoa whoa whoa, so you are telling me that Kyle Bass is a conspiracy loon? That Marc Faber and Jim Rogers are conspiracy loons?

Honestly your second statement about the nations economy and how it is in the hands of the smartest people on the planet made me crack up laughing. Bernanke doesnt understand economics nor does Geithner. In fact I would venture to say that NO ONE understands exactly what is happening.

Please stop believing what the main stream media is telling you. I now know for a fact you have no clue who Kyle Bass is and the amount of respect he commands from even the precious MSM.

The one who does not fall, does not stand up

Jun 6, 2011

lol who doesnt know that the fed is nothing more than a criminal ponzi scheme? When will this get to MSM?

Mar 1, 2012

Disgusting.

If the OWS people were going after this, rather than pay structures I'd be fully behind them. Sadly people are so obsessed comparing their pockets to the guys next to them, that this will be drowned out.

This shit makes me angry.

Mar 1, 2012
trazer985:

Disgusting.

If the OWS people were going after this, rather than pay structures I'd be fully behind them. Sadly people are so obsessed comparing their pockets to the guys next to them, that this will be drowned out.

This shit makes me angry.

Unfortunately, if OWS focused on this, their conclusion would not be to end the Fed, but rather to end money like some hippie utopia. Money plays a necessary part in the functioning of society, but that doesn't mean a room full of white men (or Herman Cain) can or should get together and determine the price of it.

OWS should target the Fed and the ruling 1% aka state and federal government. While there are certainly dirt bags in the richest 1%, there are also a decent number of innovators and societal developers in there as well. I think it only takes ~300k annually to get into the top 1%, which can be broken into pretty quickly with a good idea that can benefit even a small niche of people. The Fed and state/federal governments and the associated 1% ruling class do not provide the same benefits. They are leaches under the disguise of fascist economic principles, warfare & welfare programs that benefit their donors, and perpetuate the myths of Keynesian voodoo. We have moved into a civil society where well over 50% of the population is dependent on some type of government assistance to maintain their standard of living. From Section VIII housing, to student loans, all the way through to tax breaks and subsidies for oil companies, and even further through to financial institutions who were relieved of counterparty risk by the Fed's money printing back in 2008, we are all dependents, and we are all in for one hell of a lifestyle readjustment once the house of cards catches some wind.

Mar 1, 2012

Eddie... this deserves a clip from Judge Dread.

Clearly, the Fed can't break the law when they are the law!

In all seriousness, it's a clusterfuck that, on the regulatory side, won't get solved until the regulators are made truly independent and there are more stringent measures enforced on the Fed. Unfortunately, this requires changes at the top, politically speaking, in order for anything to be done to fix the problem in the first place.

Mar 1, 2012

This is pretty shocking. I knew the public -> private track was common practice in Japan and that our own politicians go to consulting/PE firms, but this is at a different level. This was all occurring while they were working at the fed. As the arbiter of monetary policy and organizer of the bailouts, the Fed must be absolutely unbiased.

Heads should roll, but won't. The public won't demand change; most barely know what the Fed does. I would be interested to see how these actions compared to Raj's insider trading.

Mar 1, 2012

the banks paid back their tarp tarp with high interest that is n't a bailout tha's an invetment. GS and MS shouldn't be bank holding companies I think they should b aloowed to convert back and be exempt from the volcker rule.

Mar 1, 2012

Hrm... well, about this:

waterloomonkey:

the banks paid back their tarp tarp with high interest that is n't a bailout tha's an invetment. GS and MS shouldn't be bank holding companies I think they should b aloowed to convert back and be exempt from the volcker rule.

Yeah...

1) It's not an investment - it's a bailout. Whether the banks repaid the money or not (and Fannie and Freddie still owe money, by the way), by accepting taxpayer money, they were bailed out. Better yet, to enlighten you: a bailout is an act of loaning or giving capital to an entity (a company, a country, or an individual) that is in danger of failing, either in an attempt to save it from bankruptcy, insolvency, or total liquidation and ruin or to allow a failing entity to fail gracefully without spreading contagion.

2) There are already exemptions to the Volcker rule to allow for a certain degree of prop trading in certain assets. As far as I'm concerned, limiting the abilities for firms (particularly with large clearing arms - and if I need to point the obvious list out here, then clearly you're not as informed as you should be on the matter) to trade in their own accounts is meant to protect the clients against their executing and clearing brokers from trading against them in order to create more profit for their firm while harming their clients. If you've ever read a prime brokerage agreement, which I'm assuming you haven't from the look of things, you would be able to understand the concern. This is especially true with the old SL&K clearing agreement.

3) I beseech you to learn how to use proper diction, grammar and spelling. It would make it easier to take your posts with an iota of seriousness, which is something more than your blatant trolling would allow for.

Eddie, the thing that everyone forgets is that the Fed, for all their voodoo and public limelight, is still a private institution. That's a pretty important factor when you consider that they have only one oversight commission to look at. Here's the sad part. Despite having the oversight of the government, it's legal status is extremely nebulous, as both the courts are still not sure how to define the fed with respect to the nature of its instrumentality. Without a clear definition of what is protected under it's quasi-federal status, it becomes difficult to truly determine what is actually "proper" with respect to how conflicts are handled - particularly when you consider that the board of governors inter alia is viewed differently than the regional banks themselves. It's a legal clusterfuck.

Mar 1, 2012

I don't agree with above posters that this is shocking (the this being that board members are composed of bank leaders like Jamie Daimon). Its literally spelled out in the rules for selecting board members for the regional banks.

Board members of regional banks are either bankers representing the interest of bankers, bankers representing the public, and public officials representing the public.

http://en.wikipedia.org/wiki/Federal_Reserve_Syste...

The Federal Reserve is a quasi-government entity, and it is structured as such. It is supposed to have members from private banks and institutions in order to have those interests accomodated. I don't see how this is "shocking" or "news" to anyone, its always been like this.

As for the actual law, here is the law on the responsibilities of Board members.

U.S. Code TITLE 12 > CHAPTER 3 > SUBCHAPTER VII:

SS 301. Powers and duties of board of directors; suspension of member bank for undue use of bank credit

How Current is This?

Every Federal reserve bank shall be conducted under the supervision and control of a board of directors.

The board of directors shall perform the duties usually appertaining to the office of directors of banking associations and all such duties as are prescribed by law.

Said board of directors shall administer the affairs of said bank fairly and impartially and without discrimination in favor of or against any member bank or banks and may, subject to the provisions of law and the orders of the Board of Governors of the Federal Reserve System, extend to each member bank such discounts, advancements, and accommodations as may be safely and reasonably made with due regard for the claims and demands of other members banks, the maintenance of sound credit conditions, and the accommodation of commerce, industry, and agriculture. The Board of Governors of the Federal Reserve System may prescribe regulations further defining within the limitations of this chapter the conditions under which discounts, advancements, and the accommodations may be extended to member banks. Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities, real estate, or commodities, or for any other purpose inconsistent with the maintenance of sound credit conditions; and, in determining whether to grant or refuse advances, rediscounts, or other credit accommodations, the Federal reserve bank shall give consideration to such information. The chairman of the Federal reserve bank shall report to the Board of Governors of the Federal Reserve System any such undue use of bank credit by any member bank, together with his recommendation. Whenever, in the judgment of the Board of Governors of the Federal Reserve System, any member bank is making such undue use of bank credit, the Board may, in its discretion, after reasonable notice and an opportunity for a hearing, suspend such bank from the use of the credit facilities of the Federal Reserve System and may terminate such suspension or may renew it from time to time. "

It doesn't shock me that their might be a potential abuse of power. I think the point of having bank members on the board in the first place is to create a system of checks-and-balances, and that this kind of failed in the last few years.

I am not a legal expert. Perhaps Frieds can read through this and determined if any law in particular was broken.

Mar 1, 2012

Eddie:

Wouldn't you agree that the biggest reason that none of this shit gets fixed is that it's just so damn hard for most people to understand? Shit, explaining the actual reasons for the financial crisis and the actual actions that took place (beyond TARP) takes a lot of time and a nuanced, informed mind. So few people actually understand any of this so they don't know what to be angry about.

This is why I support OWS even though I think many of the protestors have no idea what they're really protesting. All of these opaque financial shenanigans are so hard to understand, but people generally get the idea that they are bad and that the game is rigged. If it takes a bunch of clowns making a ton of noise and pissing off the "serious" crowd in Washington and in the "serious" media, then I'm all for it and hope they stay in the park for months on end.

Side note: how disgraceful is it that basically no politician presents any actual solutions to these real problems? Obama was a fraud in this regard and the Republican candidates just seem to want to take us back to the days of corporate scandals and push even more deregulation.

There is no one worth voting for.

Mar 1, 2012
TheKing:

There is no one worth voting for.

I know how you feel. I probably wont be voting next election cycle.

Mar 1, 2012

Uh...wait, wait...

Soooo....the non-government agency with governmental features and supra national powers which is controlled by special interests is giving preferential treatment to precisely those interests?!?!

Thank goodness I am not a Princeton PhD and do not understand such high brow complexities.

Mar 1, 2012
Midas Mulligan Magoo:

Uh...wait, wait...

Soooo....the non-government agency with governmental features and supra national powers which is controlled by special interests is giving preferential treatment to precisely those interests?!?!

Thank goodness I am not a Rutgers* PhD and do not understand such high brow complexities.

Mar 1, 2012
Mar 1, 2012

The Federal Reserve is the perfect cartel because if you tried to establish a government-chartered oligopoly in any other industry but the financial industry, you wouldn't be able to create an infinite supply of capital/assets out of nothing like the Fed can [fiat money], and then sell it to yourselves for less than fair value.

If we went back to a free banking system we'd also have much faster economic corrections that would reduce a lot of ongoing suffering that has come about because of a refusal to let market forces work.

Jun 6, 2011

The people in the street basically understand that they don't stand a chance playing by the rules written by the people overseeing the rules.....and so their response is an angry mob. Everyone, especially the media, are blowing them up to be way more than they are, but the simple truth is that the average person DOESN'T CARE about the details, and they don't matter anyway. The guys at the top will always get their cut of all the action, they just have to let enough scraps fall off the table to keep the peace.

Mar 1, 2012

Ok guys slightly off topic , I am reading Free to Choose by Milton Friedman right now, so if we end the fed, whose gonna make sure the fractional reserve banking will work?

Mar 1, 2012
go.with.the.flow:

Ok guys slightly off topic , I am reading Free to Choose by Milton Friedman right now, so if we end the fed, whose gonna make sure the fractional reserve banking will work?

Ending the Fed would not necessarily entail ending the FDIC. The FDIC would still have regulatory jurisdiction over individual banks, along with the authority to seize said banks for net capital violations (in case an individual bank decided to play fast and loose with fractional reserve requirements). Additionally, depositors would still be protected up to X dollars in deposits because the FDIC is essentially private insurance (don't go apeshit on me for describing it thusly, I'm in a hurry) for which the individual banks pay a premium.

Mar 1, 2012

I actually think the FDIC is one of the better run agencies in the US financial markets. They keep a pretty tight rein on the banks (I'm not talking TBTF banks - no one reins them in) and when a bank is even close to in trouble they are generally quick to step in.

Since it's run like an insurance company, their business model is actually pretty easy to quantify. While I think the premiums they charge are too low (mostly because of the implied government backstop), I'm generally not an FDIC hater.

And I think the opposite of what you said is true regarding making the banks ultimately responsible for customer deposits. If we've learned anything over the past 5 years, it's that bank management doesn't give a fuck about customers.

Jun 6, 2011
Edmundo Braverman:

And I think the opposite of what you said is true regarding making the banks ultimately responsible for customer deposits. If we've learned anything over the past 5 years, it's that bank management doesn't give a fuck about customers.

Speaking of which: deferred compensation is the only realistic thing that I've heard of that makes any sort of sense. Are there any other ideas?

Mar 1, 2012

Read the report and loved how beat-around-the-bush all the "possible" conflicts of interest were. Even little johnny knows that Eddie is not his "Uncle" that happens to spend the night from time to time

Mar 1, 2012

I understand all the anger around the conflicts of interest and so on. But do you not agree that at some times these are the best people for the job?

Do you not think that the Chairman and CEO of the largest bank in America, should not have some say or be asked for his opinon for how certain things will affect the financial sector or the economy? Do you not think Immelt, head of one the largest companies in America may have the best idea of how to create jobs and make sure manufacturing is not squeezed? Or that Goldman Sachs has some of the best and smartest people working for them so its not a total coincidence that those same people end up being the ones to advise the government?

Did the government not go to Larry Fink to ask him to clean the doo-doo of Fanny and Freddie, even though Fink was one of the first people to create MBS and basically led to the problem. But his firm got huge fees to solve the doo-doo leftover that he may have very well created. It's a clear conflict of interest but on the other hand who else but Fink could get them out of the doo-doo?

Mar 1, 2012
marcellus_wallace:

I understand all the anger around the conflicts of interest and so on. But do you not agree that at some times these are the best people for the job?

If they were the best people for the job, they would have done a better job.

Would you agree that its a little more than coincidence that the companies these guys work for end up doing relatively better than the American taxpayer?

Jun 6, 2011

If you want to seriously discuss Austrian Economics or the bearded cluelessness of Bernanke, start another thread.

This one is dead.

F'ing chimps.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

Mar 1, 2012

fair warning it's about 45 minutes but definitely worth the watch

Mar 1, 2012
Midas Mulligan Magoo:

fair warning it's about 45 minutes but definitely worth the watch

That was good but he lost a lot of credibility by saying gold's "real" value has never changed. Gold was heavily devalued in Europe after England and Spain started colonizing Africa, South and Central America and mining gold there.

I am not cocky, I am confident, and when you tell me I am the best it is a compliment.
-Styles P

Mar 1, 2012

This is a terrible idea. The G.O.P overseeing the Fed?

The whole idea of federalism and the independence of the central bank is now gone.

Mar 1, 2012
sanjose04:

This is a terrible idea. The G.O.P overseeing the Fed?

The whole idea of federalism and the independence of the central bank is now gone.

And how is that so, exactly? Is Congress going to be voting on whether or not to increase / decrease the money supply come January? Did I miss something?

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Mar 1, 2012
sanjose04:

The whole idea of federalism and the independence of the central bank is now gone.

The claim that the Fed is independence is just smoke and mirrors.
http://www.econtalk.org/archives/2008/05/meltzer_o... http://www.econtalk.org/archives/2010/01/belongia_...

Mar 1, 2012

I may start believing in a god if the government finally learns to stay out my fucking business.

When you are great, people will often mistake candor for arrogance.

Mar 1, 2012

Amazing video. Will def check out the book.

And Ron Paul is the man. Inspirational. He ranks as one of the top figures I look up to.

Mar 1, 2012
Mezz:

Amazing video. Will def check out the book.

And Ron Paul is the man. Inspirational. He ranks as one of the top figures I look up to.

Good to see you bud, hope all's well.

Mar 1, 2012

As a fellow texan and libertarian this is a great day....

Mar 1, 2012

2nd!

Mar 1, 2012
Midas Mulligan Magoo:

Ron Paul is one of the few politicians in Washington who I respect and who I genuinely believe to have a complete and thorough understanding of our financial and banking systems.

I am counting on him to do right by all of his countrymen.

Just out of curiosity, how exactly do you expect him to do so?

Mar 1, 2012
econ:
Midas Mulligan Magoo:

Ron Paul is one of the few politicians in Washington who I respect and who I genuinely believe to have a complete and thorough understanding of our financial and banking systems.

I am counting on him to do right by all of his countrymen.

Just out of curiosity, how exactly do you expect him to do so?

I don't need a hero. I'm a big boy and I know that politicians are just a different former of businessmen/women. I am not insulted by their corruption, their greed or their lack of morals which they duplicitously preach. I am insulted by their lies. The erosion of morals and values which have reached epidemic proportions in America are not due to the illegality or immorality of the shit which has transpired as of late, our slow, middling downfall has been the result of people ignoring, hiding from and lying about basic truths.

Ron Paul's no messiah. He's just a guy who looks people in the eye and tells them what he thinks. So to answer your question, I don't expect him to do anything other than to continue what he has done throughout his whole political career...which is to be straight forward, honest and to set a good example for junior politicians in D.C.

Mar 1, 2012

I echo the above poster^^^

Mar 1, 2012

Very, interesting video. I thought it made some good points but I also didn't like how he essentially stated that gold has a constant value. I have to agree with eokpar on this one. Gold and silver only have value because we give it value. It's true that you can't replicate it as easy as fiat money but you also can't eat precious metals or heat your home with precious metals or build a car out of them. Gold only has value if we give it value.

And let's face it, if we go from fiat currency to economic chaos many of us will just use physical force and violence to get what we want. "I have guns so what do I need gold for?"

Mar 1, 2012

Also, you can't use seigniorage to pay for all gov't spending. At least, not with our level of gov't spending. Israel tried that and had some success but they were also taxing the people and using seigniorage as a portion of their revenue.

Another thing is the fact that gold and silver can have massive price fluctuations from market speculation. If we balanced the budget and went back to gold, we would have our standard of living dramatically worsened by a crash in gold as we import so much.

Life and business would also become more unpredictable as our competitive advantage against other countries would depend on the price of gold that day/month/year. CEO's would be afraid to open new ventures because they wouldn't know where to place the factory. This plan only works if the rest of the world adopts an identical precious metal mix as backing for their currency.

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Jun 6, 2011

Conspiracy theories abound I see. The FED wasn't formed by with the explicit or implicit design to rob the American people. It was formed essentially fulfill the role that James Pierpont Morgan played in the panic of 1907 among other objectives such as full employment, issue currency, etc. Sometimes it has had a positive impact, sometimes it has not. Nothing dark or sinister.

Making money is art and working is art and good business is the best art - Andy Warhol

Jun 6, 2011
dwight schrute:

Conspiracy theories abound I see. The FED wasn't formed by with the explicit or implicit design to rob the American people. It was formed essentially fulfill the role that James Pierpont Morgan played in the panic of 1907 among other objectives such as full employment, issue currency, etc. Sometimes it has had a positive impact, sometimes it has not. Nothing dark or sinister.

my my, how naive you are young grasshopper!

Mar 1, 2012

I never like the government refusing to expose information especially when no human lives are at stake. MAKE IT PUBLIC!

Yours truly,
The Young Investor

Mar 1, 2012
The Young Investor:

I never like the government refusing to expose information especially when no human lives are at stake. MAKE IT PUBLIC!

Much agreement.

I am not cocky, I am confident, and when you tell me I am the best it is a compliment.
-Styles P

Mar 1, 2012

I don't think it should reveal it yet tbh. Should wait at least another year. Secret bailouts means that the confidence in the business is maintained. Over here in the UK the bank of England provided loans secretly to some major banks which meant that they weren't forced to nearly collapse unlike the previous ones which got the loans publicly. Althoug saying that the secret loans were made public a lot sooner than how much the fed would like

Mar 1, 2012

And the "Federal Reserve is Privately Owned" conspiracy crowd gets more ammunition!

Mar 1, 2012

Agree with loki276, think they should wait at least another year before disclosing the information. The reason is that I believe it might be a bit counterproductive having provided that bailout money only to inflict damage to these institutions' reputation now when they are starting to do slightly better by disclosing who took what and how much etc. That being said, I def agree that they should reveal it at some specified time in the future, people have the right to know how that money was allocated/used.

Mar 1, 2012

These are US taxpayer dollars, the information should have been released when they took the funds.

~If money could talk, it would say "goodbye".

Mar 1, 2012
Haywood J'Ablowme:

These are US taxpayer dollars, the information should have been released when they took the funds.

But than the US taxpayer would have to do another bailout as markets would lose confidence in the institutions that were bailed out privately

Mar 1, 2012

That will further fuck up the DJI when released 8000 by next week

Mar 1, 2012

^^^^^ what I just said in different words

Mar 1, 2012
barboon:

^^^^^ what I just said in different words

tbf it was posted at exactly the same time

Mar 1, 2012

I'm all about naming and shaming, but if revealing such information would really could cause "irreparable harm to the institutional borrowers whose information will be revealed" then maybe the Fed has pretty logical reasoning here. I think with the markets the way they currently are, now is not the time to name and shame. Maybe in say, 10 years??

Sometimes what we don't know can't hurt us.

Mar 1, 2012

Haywood, the traditional form of capitalism is focused around a large number of small, but competitive firms. This is not capitalism. Banks simply get bigger and bigger, to ensure safety. After all if you are big to fail, then you get bailed out if in trouble. Until you get too big and then the dominos fall down. There is a certain tipping point for all levels of structure (whether business or political) where an increasing level of size and complexity brings you down as innovation is choked out.

Mar 1, 2012

Haywood, the traditional form of capitalism is focused around a large number of small, but competitive firms. This is not capitalism. Banks simply get bigger and bigger, to ensure safety. After all if you are big to fail, then you get bailed out if in trouble. Until you get too big and then the dominos fall down. There is a certain tipping point for all levels of structure (whether business or political) where an increasing level of size and complexity brings you down as innovation is choked out.

Mar 1, 2012

Listen, I am all for freedom of information, but human beings are retarded. You know what happens when you tell everyone a bank is getting close to being insolvent? A huge run on the bank which causes it to go under. People will hear which banks sucked a couple years ago and panic like the little fools they are and shoot the dow even lower. Just like every time there is a hurricane people go ape shit and clean out every store of water and batteries because god forbid people just filled up old milk jugs or sat in the dark for a couple days.

Keep the info private until we are stable again. It really isn't too hard to figure out which banks were worse off. It is like Santa. Everything points to him being fake, but until mommy and daddy admit it people still hold out. Move on, we have more important things to deal with then revealing some old news.

Mar 1, 2012

^^^Happened to northern rock here after that treasury and BoE were quick to act and not wait week before deciding what to do and than eventually doing private bail-outs

Mar 1, 2012

@loki - agreed partially. True form of any idea can exist in a small community alone, however, the general principles of capitalism have held in large countries for a prolonged period. It is true that size kills eventually. If a virus multiplies to destroy the host, it dies too. Same with idelogy. Still, the biggest problem of capitalism today is not that its fails in a large economy but rather the people have simply gotten to be too fat, wealth and lazy. They are viewing each additional dollar with diminishing returns, rather with greed that the orignial users of capitalism did. It is the cycle of life that guides all things men do. Things are born, grow up, mature to power and age toward eventual death.

@Anthony - I don't agree with you there. Instead of stating which banks needed support, the gov't locked the whole industry in a room and forced them to state they are all in deep trouble effectively. If anything that gave the impression that the whole industry was completely busted compared to a few individual players. Besides, someone will always know and since they will, how do you select who is the smart person vs an idiot? All the secrecy did is allow the people who knew to benefit from the information but it did very little for the actual stability of the industry. The Santa analogy is flawed because while we suspect him to be fake, we know he brings good things not bad. In the case of a crisis, even if no one tells us that something is fake we would prefer to panic and sell out completely because we know the alternative is a negative outcome.

Jun 6, 2011

Marc Faber is the epitome of a broken watch. It's fun as hell to watch him throw his own shit out of his cage, but his forecasting ability is blah.

Also, the financial system collapsing in 2008 would have had too much collateral damage since capital-dependent companies would be locked out of the commercial paper market through no fault of their own. Not much creative destruction there, just Harley not able to get a loan to finance its products (which I assume people want).

Jun 6, 2011
FinancePun:

Marc Faber is the epitome of a broken watch. It's fun as hell to watch him throw his own shit out of his cage, but his forecasting ability is blah.

Also, the financial system collapsing in 2008 would have had too much collateral damage since capital-dependent companies would be locked out of the commercial paper market through no fault of their own. Not much creative destruction there, just Harley not able to get a loan to finance its products (which I assume people want).

This is always the excuse for every crises, but it would have been this or would have been that. Yeah so what? Now the problem is 100x bigger and the next crises will be 1000x bigger. You can't just kick the can down the road. Its too much debt and a system dependent upon money creation to survive.

The one who does not fall, does not stand up

Mar 1, 2012

well your downfall isn't going to pain anyone else, except maybe your momma?
famous paraphrased expression:
"Owe the bank a million dollars and the bank owns you, owe the bank a billion dollars and you own the bank"

But in anycase, realize that there won't be a moral hazard (?) because there are still huge costs to pay even with a "bailout" (e.g. what happened to BS employees and investors)

Mar 1, 2012

who wastes money on strippers and martinis? from what i know... its hookers and blow

Jun 6, 2011

This thread sucks.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

Jun 6, 2011
veritas14:

This thread sucks.

Pretty much

Jun 6, 2011
UFOinsider:
veritas14:

This thread sucks.

Pretty much

So much.

Jun 6, 2011

OK, I wish someone would answer the trillion $ question:

How does one know whether the boom and bust cycle that everyone (including Ron Paul) accuses the Fed of causing are sins of omission or commission?? ....how the heck would one on the outside ever know the difference??

Their meetings are private and not open to public, they are not subject to Freedom of Information Act, they have never been audited - so all you have to go by is their word that they are the only private corp with a heart of gold and are looking out for your interests rather than their shareholders?? I guess we can assume they are inherently more honest and trustworthy than all others in industry and govt????

At the very least they need to be more transparent and open the shroud of secrecy that they currently surround themselves with.

Jun 6, 2011
jgrisham:

OK, I wish someone would answer the trillion $ question:

How does one know whether the boom and bust cycle that everyone (including Ron Paul) accuses the Fed of causing are sins of omission or commission?? ....how the heck would one on the outside ever know the difference??

Their meetings are private and not open to public, they are not subject to Freedom of Information Act, they have never been audited - so all you have to go by is their word that they are the only private corp with a heart of gold and are looking out for your interests rather than their shareholders?? I guess we can assume they are inherently more honest and trustworthy than all others in industry and govt????

At the very least they need to be more transparent and open the shroud of secrecy that they currently surround themselves with.

Agreed, I'd like to see some of the internal documentation. An audit would also be nice. They're not the CIA.

Mar 1, 2012
jgrisham:

OK, I wish someone would answer the trillion $ question:

How does one know whether the boom and bust cycle that everyone (including Ron Paul) accuses the Fed of causing are sins of omission or commission?? ....how the heck would one on the outside ever know the difference??

The boom and bust cycle existed well before the federal reserve. There were a number of depressions during the 1800s. In particular, there was a 30-year period after the Civil War in which most equities didn't gain value and there was terrible unemployment.

Their meetings are private and not open to public, they are not subject to Freedom of Information Act, they have never been audited - so all you have to go by is their word that they are the only private corp with a heart of gold and are looking out for your interests rather than their shareholders?? I guess we can assume they are inherently more honest and trustworthy than all others in industry and govt????

Actually, the Fed agreed to an audit. I think it's been completed. Meanwhile, they do publish minutes and dozens of FRB employees sit in on the meeting. You are alleging a conspiracy of enormous proportion lasting for decades.

I do agree that the Fed's monopoly on currency is unfair and people should not go to jail for coining their own gold or silver or commodity-backed currency.

At the very least they need to be more transparent and open the shroud of secrecy that they currently surround themselves with.

They have.. A few decades ago, they didn't even announce their target rate. Today, the Fed Chairman is having a press conference and taking questions from the media after each meeting.

There's not much of a conspiracy left here. I agree that there are problems with fiat currency, but we need a system where the currency supply can be better controlled than gold.

Jun 7, 2011

So what happens if what you say comes to fruition, all the physical and intellectual capital in America is just going to vanish overnight? Nuclear winter? You crazy people never give a possible mechanism behind the armageddon that you claim will occur.

Jun 7, 2011
laudrup10:

So what happens if what you say comes to fruition, all the physical and intellectual capital in America is just going to vanish overnight? Nuclear winter? You crazy people never give a possible mechanism behind the armageddon that you claim will occur.

The event isn't an Armageddon- The world can function (albeit to a lesser extent) without the US economy at full force. The cataclysmic event that you are talking about will be the day when Moody's/S&P downgrade US notes from it's "risk-free" AAA rating. We base every last one of our DCF and financial models on the notion of risk-free interest rates. Without AAA U.S. treasuries, we won't have a point of reference which will spiral into more and more credit uncertainty.

I heard somewhere that the there are trillions of dollars of CD swaps out there betting against treasuries. Could you imagine the windfall of these improperly priced instruments paying out?

Jun 7, 2011

this thread should be taken of the front page to save us all embarrassment. the USAs monetary policy is necessary and not at all a problem. the real problem is fiscal policy,

Jun 7, 2011

Fucking thread sucks ass.

Still I Rise

Jun 7, 2011

this is an embarasment for WSO.

Jun 7, 2011

wso slowly dying, too much trolling.

Jun 6, 2011

I think someone still can't accept that the rapture isn't until October....

Jun 6, 2011

It's always fun to cry "Conspiracy!" when simple incompetence will suffice.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

Jun 6, 2011
veritas14:

It's always fun to cry "Conspiracy!" when simple incompetence will suffice.

I'd also add ignorance on the part of the accuser: just because they don't understand or like the Fed's role, that doesn't make the Fed a conspiracy. It's time to the the 'crazy' of the public debate......it's starting to grate on me.

Jun 6, 2011
UFOinsider:
veritas14:

It's always fun to cry "Conspiracy!" when simple incompetence will suffice.

I'd also add ignorance on the part of the accuser: just because they don't understand or like the Fed's role, that doesn't make the Fed a conspiracy. It's time to the the 'crazy' of the public debate......it's starting to grate on me.

Facts:

The Fed enables a massive transfer of wealth from savers to borrowers, and shifts economic authority from consumers/producers to special interest groups.

The Fed enables the financing of massive overseas military action and overgrown entitlements at home.

The Fed accelerates and exacerbates economic booms/busts. (quick reminder: the BOOM is the problem for which the bust is the cure)

None of these are conspiracy theories. None of these require the Trilateral Commission, the Illuminati, the Freemasons, Skull & Bones. Crazy people should be ignored.

These effects are just the natual consequence of perverse government incentives and the proven failure of central planning.

It's not that sexy.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

Jun 7, 2011
jgrisham:

Guys,

I was doing some research into US debt and the Federal Reserve, and am discovering information I had no clue about.....

The Fed (like most central banks of the world) is a privately owned company, not part of the government and hence theoretically has no legal obligation to the American public, but only to its private shareholders. Fed and other central banks are owned in some way or another by a small group of people and financier families eg, the Rothschild family, the Rockefeller family, the Warburg family etc.

Basically the Federal Reserve is a private corporation owned by the above guys, which can legally create Trillions of dollars out of nothing and then lend this fictitiously created money at interest to the US govt. This money then filters down the system and when people are unable to pay their mortgage and stuff, the banks repossess real physical assets (home, land, property etc). So essentially in return for creating money out of thin air with no assets backing it, a private corporation gets to lay claim over tangible physical assets (such as land, natural resources etc) belonging to the US govt and its people. In addition, they get to collect interest each year on all the fictional money they have created, in the form of taxes. I also read somewhere that each dollar we pay in taxes goes not to the US govt but to this private company - the Fed. Isn't this a bit of a scam?? Basically, the US govt can print all the money it wants interest free (as stated in the constitution), but for some reason a private company is creating this money out of scratch and then lending it at interest. The confusing name Federal Reserve makes most people (including me till recently) think its part of the US govt. Several past US presidents tried to resist such a meaningless central bank (Lincoln, JFK), but then in 1913 the bank was able to pass legislation to make itself legal.

There are some interesting videos on YouTube explaining the above points.

All this doesn't seem to make sense - what am I missing?? Thanks for your patience.

You must be 12

Jun 6, 2011

Why is this bullshit on the front page when my hilariously well written and cogent musings are dismissed as the ramblings of a drunk? I am playing the race card.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Jun 6, 2011
happypantsmcgee:

Why is this bullshit on the front page when my hilariously well written and cogent musings are dismissed as the ramblings of a drunk? I am playing the race card.

I think you just illustrated how every serious journalist feels when they see Geraldo Rivera on the tele

Mar 1, 2012

No, just a conspiracy theorist. He probably believes the NSA is listening in on his phone calls- oh wait.

Jun 7, 2011

Nasa? He believes in SNASA

Jun 6, 2011

haha i see a lot of ppl are in denial

Mar 1, 2012

Im about to start spraying monkey shit.

Jun 7, 2011

Please, not again...

Jun 7, 2011

I'm late to the party on this but I only have one question for the OP: if the Waburgs, Rockefellers and Rothschilds owned the Federal Reserve, why would they print money and erode the value of their money?

Jun 6, 2011
GoodBread:

I'm late to the party on this but I only have one question for the OP: if the Waburgs, Rockefellers and Rothschilds owned the Federal Reserve, why would they print money and erode the value of their money?

Im actually pretty certain they are the majority share holders in the fed, through their subsidiaries of course. Im going to try and find proof of this today when I get a break and post it on here. Erode the value of their money? They have a MONOPOLY on the money supply of the largest economy in the world, it doesn't matter to them. How does one not see this?

Jun 7, 2011
mfoste1:
GoodBread:

I'm late to the party on this but I only have one question for the OP: if the Waburgs, Rockefellers and Rothschilds owned the Federal Reserve, why would they print money and erode the value of their money?

Im actually pretty certain they are the majority share holders in the fed, through their subsidiaries of course. Im going to try and find proof of this today when I get a break and post it on here. Erode the value of their money? They have a MONOPOLY on the money supply of the largest economy in the world, it doesn't matter to them. How does one not see this?

I'm assuming your being facetious, but that doesn't answer my question.

Jun 6, 2011
GoodBread:

I'm late to the party on this but I only have one question for the OP: if the Waburgs, Rockefellers and Rothschilds owned the Federal Reserve, why would they print money and erode the value of their money?

Hey goodbread I have an interesting quote for you from the Scion of the Rothschild family.

Mayers Rothschild said

"Allow me to print and coin the money of a nation and I care not who makes the laws"

It was John Law the Scot who figured out the secret of the philosophers stone. "I have discovered the secret of the philosophers stone! It is to turn fiat money into gold! "

John Law became one of the richest most powerful men in France before his fiat money scheme came to an end and bankrupted France even more. You should read the story it truely is fascinating what he was able to accomplish.

All of my decisions are based off of history and what previous "investors" "economist" "politicians" have done because there are no new tricks it is all the same.

The one who does not fall, does not stand up

Jun 6, 2011

an interview with Debra LaBabera, PR at FRBNY..... http://www.nolanchart.com/article6061_The_Federal_...
{excerpt from interview}

Me: Thank you very much for your reply! Only one of my initial questions remains. Can the Federal Reserve lawfully purchase or sell Treasuries directly with the US government - ie not involve the primary dealers? Has this ever happened before in the history of the Federal Reserve?

LaBarbera: Yes, when proceeds are reinvested, the auctions are directly with the Treasury not primary dealers.

{end excerpt}

Ok, so then why is the Fed not purchasing bonds from the treasury and reinvesting?! The treasury has EXCEEDED the debt limit in May. The treasury is broke and it has stopped investing in specific pension funds last month and this month. So these primary dealers are making millions every day all the while that money could have been returned to the treasury. This is a SCAM and it is blatant THEFT. I don't know how much simpler I can put it.....

Jun 7, 2011

Except we don't live in a closed system and exchange rates are no longer pegged. Unless the aforementioned families shifted all their holdings to gold, using the Fed to print money would be useless. This whole "The Fed is a private corporation" thing is painfully stupid.

Jun 6, 2011
GoodBread:

Except we don't live in a closed system and exchange rates are no longer pegged. Unless the aforementioned families shifted all their holdings to gold, using the Fed to print money would be useless. This whole "The Fed is a private corporation" thing is painfully stupid.

I think you should go back and read Mayers Rothschild or John Law. The point of their concepts is that devauling the currency and printing fiat money is very powerful. The worst thing they would want is a constant money system backed by some tangible object like gold or silver.

The FED effective controls the entire worlds money supply. Most of the rest of the world did not start growing at 8% a year until the dollar went off the gold standard in 71 and allowed the FED to print money for the world. Increasing the money supply is the only option they have because when it decreases at a rapid pace look out world.

The one who does not fall, does not stand up

Jun 6, 2011
GoodBread:

Except we don't live in a closed system and exchange rates are no longer pegged. Unless the aforementioned families shifted all their holdings to gold, using the Fed to print money would be useless. This whole "The Fed is a private corporation" thing is painfully stupid.

how can you not see that the fed is a PRIVATELY held bank?! Its major shareholders are BB banks! WTF don't you understand?

Jun 7, 2011

Since you appear to be serious about this, two things:

  1. The Fed is not owned by private backers, nor does the Fed just send bags of money to certain wealthy families. The Fed has been a distorting influence on asset prices but when you consider the dollar's decline over the past century, it can be the only institution you hold responsible for increasing income disparity in the US (and if that were the case, what was the Fed doing up until the 1980s, putting us to sleep?).
  2. The Fed does not effectively control the world's money supply. It merely has a disproportionate impact on world asset prices thanks to the dollar's reserve currency status (which it didn't have back in 1913) and size of the US economy.
Jun 6, 2011
GoodBread:

Since you appear to be serious about this, two things:

  1. The Fed is not owned by private backers, nor does the Fed just send bags of money to certain wealthy families. The Fed has been a distorting influence on asset prices but when you consider the dollar's decline over the past century, it can be the only institution you hold responsible for increasing income disparity in the US (and if that were the case, what was the Fed doing up until the 1980s, putting us to sleep?).
  2. The Fed does not effectively control the world's money supply. It merely has a disproportionate impact on world asset prices thanks to the dollar's reserve currency status (which it didn't have back in 1913) and size of the US economy.

I'm sorry, but you're completely wrong. The fed controls the money supply of the worlds largest economy, therefore they control the largest portion of global money supply. I wasn't saying that the fed "sent bags of money to certain wealthy families", however, they have a fiduciary responsibility to make money for their shareholders. So why does the fed buy bonds from primary dealers instead of directly from the treasury?

Jun 6, 2011
mfoste1:

So why does the fed buy bonds from primary dealers instead of directly from the treasury?

This is a money and banking 101 subject - why don't you just look up how the Fed works?

The government demands that banks have a portion of their cash tied up in the system: they have skin in the game. The banks get a dividend and that's it - there is not secret wholesale distribution of money to a secret lizard elite (Referencing Icke, since we're in looney land). The banks have no say in its decision making. The decisions aren't perfect, and some argue for a better system [I'm one of them], but tearing down the existing one is a mistake.

Andrew Jackson tried to dismantle the central bank once and it almost [quickly] pushed the country over the edge. He was a military man who didn't understand or trust banks, and instead of learning how to make the system work for him and the good of the country, he attacked it in his ignorance:
http://en.wikipedia.org/wiki/Andrew_jackson#Opposi...
"This was a direct cause of the Panic of 1837, which threw the national economy into a deep depression. It took years for the economy to recover from the damage."
http://books.google.com/books?id=VL_6X5zWOokC&pg=P...

Jun 7, 2011

Dude, you are completely off your rocker. The Fed uses primary dealers because the NY Fed money market desk does repos and reverses with them everyday to expand or contract the money supply. It buys Treasuries at acution just like everybody else in order to have the inventory to do so. The Fed has no shareholders, save the American taxpayer and even then,the Fed is more or less insulated from political pressure. The Fed has regulatory oversight over all banks in the US and these banks have a stake in the Fed only insofar as that they must keep a certain amount of reserves with the Fed.

Jun 6, 2011
GoodBread:

Dude, you are completely off your rocker. The Fed uses primary dealers because the NY Fed money market desk does repos and reverses with them everyday to expand or contract the money supply. It buys Treasuries at acution just like everybody else in order to have the inventory to do so. The Fed has no shareholders, save the American taxpayer and even then,the Fed is more or less insulated from political pressure. The Fed has regulatory oversight over all banks in the US and these banks have a stake in the Fed only insofar as that they must keep a certain amount of reserves with the Fed.

Goodbread just tow the party line! Mfoste and I can go back and forth forever with you. In all my posts I have never said there is this HUGE conspiracy etc etc I am just trying to point out the fallacies of the FED.

The biggest one of all is that it shouldnt exist. Before the FED there were two central banks in the US that at various times existed. Both were closed by an act of congress because of their fraudulent actions and how they tried to control the US economy. This is the reason Andrew Jackson closed the Central Bank with a vote from congress.

It wasnt until 1913 that the "congress" changed the law and said that it no longer took an act of congress to create or dissolve a US Central Bank. Thus the reason why the FED exists today outside of supposedly political influences and even exists at all. We should at least as a nation have the right to vote it out of existence which we dont. Dont you find that odd?

Dont you find it odd that the FED reserve act was enacted on Christmas Eve when more than half of congress was out and didnt even vote on it? None of this is made up its all right there for you to read and research.

I wish i had some magic potion to sell you because apparently you believe and trust everything you hear and read.

I dont even think you should believe and trust me from what I write on this website, you should go and explore for yourself then make your own conclusion.

The one who does not fall, does not stand up

Jun 6, 2011
ProdigyOfZen:

Goodbread just tow the party line!

Correctly being able to spell and read are necessary for adequate reading comprehension. What's your level of education? My baby brother used to think there was a monster under his bed too, then he finished third grade.

Jun 6, 2011
Jun 6, 2011
jgrisham:

@Goodbread @UFOinsider.

I guess, then you gentlemen strongly disagree with these guys:

http://www.amazon.com/End-Fed-Ron-Paul/dp/B004IEA4DM/ http://www.amazon.com/Case-Against-Fed-Murray-Roth...
http://www.amazon.com/Secrets-Federal-Reserve-Eust...

1. Ron Paul is wrong on this one, I just gave you a historical example of what happens when the central bank shuts down. Read something and learn.

  1. Murray Rothbard was an anarchist. ANY form of gov't was a problem to him. Minimal gov't = good. No gov't = total chaos.
  2. Eustace Mullins was Joe McCarthy's lapdog and assistant speechwriter.....EVERYTHING is a communist conspiracy to him.
Jun 6, 2011

Your views are so extreme, irrational, and extremely irrational that I now find myself arguing against people that I actually agree with on a number of issues. Do yourself a favor, and accept and learn how the real world works: indulging yourself in conspiracy theories is not going to get you anywhere.

I'm done with this thread.

Jun 6, 2011
UFOinsider:

Your views are so extreme, irrational, and extremely irrational that I now find myself arguing against people that I actually agree with on a number of issues. Do yourself a favor, and accept and learn how the real world works: indulging yourself in conspiracy theories is not going to get you anywhere.

I'm done with this thread.

The problem is UFOinsider you are confusing me with grisham or mfoste. I have never once on this thread argued about how the FED reserves open market operations work etc.

All i have done is point out the fallacies of the thread, so please tell me which person you are directing this projection onto as irrational and extreme?

I believe i have a good framework of how the real world works. The banks that are part of the FED and are political cronies of the FED have it made while banks like Lehman bros can be thrown to wolves. Why save one and not the other? Why didnt they just let all of them collapse which is what should have been done.

Dont say i am irrational without pointing to specific statements i have said that are irrationaly. Remember my member name is ProdigyofZen not jgrisham or mfoste so I dont speak for them nor do they for me just because I agree with some things they write here.

The one who does not fall, does not stand up

Jun 6, 2011
ProdigyOfZen:
UFOinsider:

Your views are so extreme, irrational, and extremely irrational that I now find myself arguing against people that I actually agree with on a number of issues. Do yourself a favor, and accept and learn how the real world works: indulging yourself in conspiracy theories is not going to get you anywhere.

I'm done with this thread.

The problem is UFOinsider you are confusing me with grisham or mfoste. I have never once on this thread argued about how the FED reserves open market operations work etc.

All i have done is point out the fallacies of the thread, so please tell me which person you are directing this projection onto as irrational and extreme?

I believe i have a good framework of how the real world works. The banks that are part of the FED and are political cronies of the FED have it made while banks like Lehman bros can be thrown to wolves. Why save one and not the other? Why didnt they just let all of them collapse which is what should have been done.

Dont say i am irrational without pointing to specific statements i have said that are irrationaly. Remember my member name is ProdigyofZen not jgrisham or mfoste so I dont speak for them nor do they for me just because I agree with some things they write here.

Whoops, my bad!

Jun 7, 2011
ProdigyOfZen:

I believe i have a good framework of how the real world works. The banks that are part of the FED and are political cronies of the FED have it made while banks like Lehman bros can be thrown to wolves. Why save one and not the other? Why didnt they just let all of them collapse which is what should have been done.

There's an irrational statement. All banks hold desposits at the Fed, including Lehman before it blew up. Lehman wasn't saved because it was believed it wouldn't pose a systemic risk. Spreads blew out and it was decided that saving banks was the safer option. I don't disagree that firms should have been left to blow up, but it certainly had nothing to do with "being part of the Fed" or being the Fed's "political cronies."

Jun 7, 2011

It's not a question of toeing some party line. I take issue at much of the Fed's actions but you guys have descended into some sort of lunatic conspiracy theory. I'm fine with entertaining what you guys are saying, else I wouldn't be in this discussion.

But in this case, you clearly are the guys drinking the Kool-Aid. Our economy wasn't some ideal bastion of free market perfection back in the 19th century. Banks blew up constantly because of fraud, lack of transparency and regulations. The Fed did a lot to change that and it is imperative for large economies to have some form of central bank to control the money supply. If anything, the elite financiers you guys describe had more control over the money supply before the founding of the Federal Reserve than not.

As far as those 3 books you mentioned, the first two are misguided in their desire to restore the gold standard. Democratic pressures and the integration of capital markets make that impossible. The third falls into full-blown conspiracy theory and isn't worth discussing.

Jun 6, 2011
GoodBread:

It's not a question of toeing some party line. I take issue at much of the Fed's actions but you guys have descended into some sort of lunatic conspiracy theory. I'm fine with entertaining what you guys are saying, else I wouldn't be in this discussion.

But in this case, you clearly are the guys drinking the Kool-Aid. Our economy wasn't some ideal bastion of free market perfection back in the 19th century. Banks blew up constantly because of fraud, lack of transparency and regulations. The Fed did a lot to change that and it is imperative for large economies to have some form of central bank to control the money supply. If anything, the elite financiers you guys describe had more control over the money supply before the founding of the Federal Reserve than not.

As far as those 3 books you mentioned, the first two are misguided in their desire to restore the gold standard. Democratic pressures and the integration of capital markets make that impossible. The third falls into full-blown conspiracy theory and isn't worth discussing.

I largely agree with most of what you write here Goodbread. But i think the market was more of a free market before the FED and it didnt take the FED to make it more free (which it didnt). Also who says that it takes a large central bank to govern over a large economy? Obviously the US had no Central Bank for most of its history up until 1913 and we did just fine?

Look i am not arguing to go back to a gold standard because while constant money linked to something tangible like gold is an okay way to run an economy there are also a lot of problems with it.

What I am trying to point out is that the FED is following a path that many other central banks have followed by debasing the currency and inflating the money supply. This will be the end of the Dollar and the US economy as the worlds best. They do this by running a Fiat money system and as

Voltaire said ""Paper money eventually returns to its intrinsic value -- zero".

No system is perfect I just think this largely fiat money system that was decoupled from some tangible asset aka Gold in 1971 is a sure fired way to destroy a nation. Wether they are doing it or purpose or not, I dont care i just will profit from it. This is now a purely FIRE economy (Finance, Insurance, Real Estate) that produces nothing. Do we really want to look like Britain in 10 years? They produce nothing and if not for the City part of London, and its perch as a western democracy it would be a shit place.

Its great that banks blew up constantly due to fraud as it should happen, the badly run companies go under and their assets are sold to the well run companies and life goes on. Shareholders lose all their money but then again they were the ones with capital to risk in the first place. That is how capitalism is supposed to work. But now you have he FED bailing out everything, what is going to happen when they have to bail out muncipalities, states and the US postage service?

It will increase the debt ever more. We clearly are heading toward a hyperinflationary debt default with a loss of confidence in our currency. I am not saying it is going to happen tomorrow but it seems like it is going to at some point.

Its almost impossible to have a deflationary environment in a fiat money system because all they have to do is reinflate thus this is the main reason we went off the gold standard.

The one who does not fall, does not stand up

Jun 6, 2011
GoodBread:

It's not a question of toeing some party line. I take issue at much of the Fed's actions but you guys have descended into some sort of lunatic conspiracy theory. I'm fine with entertaining what you guys are saying, else I wouldn't be in this discussion.

But in this case, you clearly are the guys drinking the Kool-Aid. Our economy wasn't some ideal bastion of free market perfection back in the 19th century. Banks blew up constantly because of fraud, lack of transparency and regulations. The Fed did a lot to change that and it is imperative for large economies to have some form of central bank to control the money supply. If anything, the elite financiers you guys describe had more control over the money supply before the founding of the Federal Reserve than not.

As far as those 3 books you mentioned, the first two are misguided in their desire to restore the gold standard. Democratic pressures and the integration of capital markets make that impossible. The third falls into full-blown conspiracy theory and isn't worth discussing.

"Banks blew up constantly because of fraud, lack of transparency and regulations" what do you think has been going on for the past 3 years! good god wake up man....

I haven't once said ANYTHING about a conspiracy theory. I just stated the facts

  1. the fed has a monopoly on the US money supply
  2. the fed is a private bank which includes BB banks as majority shareholders

These are facts and there is no disputing them. I have 2 good friends who work at the Cleveland and Boston fed who have told me those two facts.

Jun 6, 2011

GoodBread, UFOinsider:

No one is assuming a massive conspiracy hatched by repitilians. But it would be naive to believe that the individuals at a private all-powerful entity like the Fed might not be "motivated" by pressure from its shareholders, presidential election cycles and other inducements. That would mean ignoring the precedents of all govt and corporate scandals, wall-street insider trading, Watergates, Enrons, high-level govt and CEO manipulations etc. This combination of secrecy and enormous power afforded to the Fed is just a dangerous combo. To get an idea of the heinous corruption in the international monetary system from a guy who has presumably been in it (and perpetrated it), read:

Confessions of an Economic Hit Man - by John Perkins - http://www.amazon.com/gp/product/0452287081/
Scary if its true. But then again one can argue that this guy is making it all up and nothing like this happens.

Jun 7, 2011

jgrisham, the Fed does not have shareholders. The presidential 3rd year effect on equities is well documented and does not appear to depend on the President's political affiliation. As far as secrecy goes, the Fed is one of the most transparent organisms in our government. Their minutes are easily accesibles and they have gone to great lengths to make their views on interest rates easily decipherable. Whether you agree with their decisions or not is a different matter.

ProdigyOfZen, you're seriously underestimating how crazy capital makets were during the 19th century. Read some financial history and you'll see that there were constant crises and that the system was routinely brought to the brink before being saved by charismatic leaders such as J.P. Morgan, with the blessing of our government. Every large economy in the world has a central bank in place to ensure the stability of capital markets. It's a development that came from real-life practice, not some desire to control the economy by an elite few. Also the Fed doesn't bail out anyone, that's the Treasury's gig.

For some legitimate, scholarly discussion of monetary issues, I would recommend the following:
http://www.amazon.com/gp/product/0691139377/ref=pd... http://www.amazon.com/Exorbitant-Privilege-Dollar-...

I'm done with this thread, thanks for the back and forth (no homo).

edit for the sake of closure:

Mfoste1, your second point is not a fact. It's entirely and unremittingly untrue.

Prodigy, LTCM was bailed out by a group of banks, not the government and only so far as to be able to wind down their contracts. The fund went down, just like Lehman did. Goldman was saved after panic had hit the money markets, once the extent of the crisis was revealed. Furthermore, Lehman was the BB in the worst shape at that point and it's where the line was drawn. There's nothing sinister about it.

Jun 6, 2011
GoodBread:

jgrisham, the Fed does not have shareholders. The presidential 3rd year effect on equities is well documented and does not appear to depend on the President's political affiliation. As far as secrecy goes, the Fed is one of the most transparent organisms in our government. Their minutes are easily accesibles and they have gone to great lengths to make their views on interest rates easily decipherable. Whether you agree with their decisions or not is a different matter.

ProdigyOfZen, you're seriously underestimating how crazy capital makets were during the 19th century. Read some financial history and you'll see that there were constant crises and that the system was routinely brought to the brink before being saved by charismatic leaders such as J.P. Morgan, with the blessing of our government. Every large economy in the world has a central bank in place to ensure the stability of capital markets. It's a development that came from real-life practice, not some desire to control the economy by an elite few. Also the Fed doesn't bail out anyone, that's the Treasury's gig.

For some legitimate, scholarly discussion of monetary issues, I would recommend the following:
http://www.amazon.com/gp/product/0691139377/ref=pd... http://www.amazon.com/Exorbitant-Privilege-Dollar-...

I'm done with this thread, thanks for the back and forth (no homo).

edit for the sake of closure:

Mfoste1, your second point is not a fact. It's entirely and unremittingly untrue.

Prodigy, LTCM was bailed out by a group of banks, not the government and only so far as to be able to wind down their contracts. The fund went down, just like Lehman did. Goldman was saved after panic had hit the money markets, once the extent of the crisis was revealed. Furthermore, Lehman was the BB in the worst shape at that point and it's where the line was drawn. There's nothing sinister about it.

Goodbread I have tried to be civil with you but you can have your road and I can have mine. When I see you write " charismatic leaders like JP Morgan" it sounds as if you are really nuthugging here haha.

Have you not been reading what I write? I have pointed out many financial figures throughout history like John Law who caused immense problems with their fiat money system. I have done most of my research in financial history/economic history and that is where I draw my conclusions because there are no new tricks.

Read a book like Charles Mackay's Extraordinary popular delusions and the madness of crowds. You have pointed out many things but this is the biggest one "you serously underestimate how crazy capital markets were in the 19th century" !!!

BINGO we have a winner, yes wow the capital markets were crazy and to my knowledge still are! but guess what? wanna know a secret? Even as crazy as you say those capital markets were the US became the greatest financial force i history with deep markets! Not because of the FED and it trying to control the economy but because of unfettered capitalism! OH man those crazy markets but people still ate, people still produced, economies still increased their GDP all over the world, in other words life went on when we didnt have the FED.

It seems to me that you dont want booms and busts in the economy and think that the FED can actually control it? Or even Obama can control it just like he said! Booms and Busts are part of capitalism. One sector rises another falls people lose money, the dumb get fleeced, the smar get fleeced., but we are still here. The end has not come to an end.

The one who does not fall, does not stand up

Jun 7, 2011

OK, I really need to give it a rest with this thread but I'm not hugging JP Morgan's nuts. You simply can't underestimate his importance as to how Wall Street was run at the turn of the century.

I'm not arguing that the Fed is going to solve all our problems. I'm as vocal a critic of the Greenspan/Bernanke put as the next guy, possibly more. That being said, I have yet to see or hear anything convincing regarding the need to abolish the Fed. There simply isn't any credible alternative, other than nominating more competent people, more like a Volcker for the Fed or somebody who would advocate for a restructuring of PIG bonds at the ECB.

Zip it up and zip it out!

Jun 7, 2011

Hi,
I am very interested in this topic and would love to understand this argument more - unfortunately I can't quite understand both sides' arguments.

If anyone has some extra energy/time, would you summarize the goals of both arguments being made here and the base facts justifying the claims ? I understand there are two sides to this debate...or perhaps there are three?

As I understand, some are maintaining not so much that the Fed is a beneficial tool, as much as they refuting the argument that the Fed is corrupt or faulty and would be better off abolished. Obviously the other argument opposes this. Correct me if I'm wrong...

Thank you!! Anyway, hopefully this will serve to help keep the debate transparent and on track.

  • gnicholas
  •  Jun 7, 2011
WSOhusky:

Hi,
I am very interested in this topic and would love to understand this argument more - unfortunately I can't quite understand both sides' arguments.

If anyone has some extra energy/time, would you summarize the goals of both arguments being made here and the base facts justifying the claims ? I understand there are two sides to this debate...or perhaps there are three?

As I understand, some are maintaining not so much that the Fed is a beneficial tool, as much as they refuting the argument that the Fed is corrupt or faulty and would be better off abolished. Obviously the other argument opposes this. Correct me if I'm wrong...

Thank you!! Anyway, hopefully this will serve to help keep the debate transparent and on track.

Summary: One side sees fault with the FED but recognizes its practical significance and does not believe it to be some all-powerful controller of the United States financial system.

The other side seems to have limited knowledge of what the FED does and believes that it in some way is behaving unscrupulously for the personal gain of unclear individuals despite no evidence of this being the case. These people probably also believe that JP Morgan will go bankrupt because of their silver short.

Jun 6, 2011
gnicholas:
WSOhusky:

Hi,
I am very interested in this topic and would love to understand this argument more - unfortunately I can't quite understand both sides' arguments.

If anyone has some extra energy/time, would you summarize the goals of both arguments being made here and the base facts justifying the claims ? I understand there are two sides to this debate...or perhaps there are three?

As I understand, some are maintaining not so much that the Fed is a beneficial tool, as much as they refuting the argument that the Fed is corrupt or faulty and would be better off abolished. Obviously the other argument opposes this. Correct me if I'm wrong...

Thank you!! Anyway, hopefully this will serve to help keep the debate transparent and on track.

Summary: One side sees fault with the FED but recognizes its practical significance and does not believe it to be some all-powerful controller of the United States financial system.

The other side seems to have limited knowledge of what the FED does and believes that it in some way is behaving unscrupulously for the personal gain of unclear individuals despite no evidence of this being the case. These people probably also believe that JP Morgan will go bankrupt because of their silver short.

NO actually it should be: one side, sees fault with the FED but just like any organization it just has some faults but is ultimately not responsible for what happens in the economy. They don't think outside the box and couldnt possibly think that the FED is an institution designed by the monied elite for the elite. They also tend to be people who believe everything that Paul Krugman says and also to believe in the Modern Monetary Theory that the FED does not actually print money. These people will most likely believe what "supposedly very smart economists say like Krugman for example, i mean obviously he won the nobel prize!" They also tend to believe in the efficient market hypothesis and the risk free rate of the market which to the second group are both bogus. They also hold really fancy degrees to high value and think the only smart people come out of wharton and harvard.

Second: This camp finds serious fault with the FED which was supposedly established to reign in Boom and Bust cycles in the economy which for as long as it has been around has only increased them. These people realize that the FEDs only choice is to inflate the money supply in any crises and once the supply is inflated or increased that they cant just reign in that money printing without having a severe affect on the economy which just leads to more money printing. They tend to believe in the thought process of Thomas Jefferson where he has that famout quote

""If the American people ever allow private banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their father's conquered ... I believe that banking institutions are more dangerous to our liberties than standing armies ... The issuing power should be taken from the banks and restored to the Government, to whom it properly belongs."

No one can deny that the FED is atleast a quasi public private institution where it requires all banks to own debt in the FED etc. http://en.wikipedia.org/wiki/Criticism_of_the_Fede... you can find more info there and here http://en.wikipedia.org/wiki/Federal_Reserve_Act
This second group seems to think that the FED operates like a banking cartel and realizes that looking through past history of Fiat money systems and how one institution is allowed to make all the money decisions of a nation is probably not going to end well. They know the greatest way to control a nation is to control its money supply because as Mayers Rothschild said "Allow me to print and coin the money of a nation and I care not who makes the laws" That quote is not from some loon but by one of the most powerful financial figures in history. These people also realize that it is almost impossible to control an economy because markets are bigger than any institution but do realize that the FED has an unlimited supply of money.

Third Group: These truly are the conspiracy theorists and while they are most likely not entirely right a lot of what they say has merit. Just knowing how humans are they realize that yea its possible the FED was set up to control the nation.

The one who does not fall, does not stand up

Jun 6, 2011

OK. So could someone PLEASE answer the original and very simple question (apologize if this sounds uninformed) - instead of creating our own money without any interest and debt, why are we paying hundreds of billions of dollars in tax revenue to the Fed to create it out of thin air for us?????

And, is this site totally inaccurate: http://www.reformation.org/federal-reserve.html

Jun 6, 2011
jgrisham:

And, is this site totally inaccurate: http://www.reformation.org/federal-reserve.html

Much like Glen Beck, Lyndon Larouche, Alex Jones, or a John Birch publication, it starts off with some basic facts but then wanders into cuckoo territory.

jgrisham:

instead of creating our own money without any interest and debt, why are we paying hundreds of billions of dollars in tax revenue to the Fed to create it out of thin air for us?????

We don't pay taxes to them. We don't pay taxes to the post office either.

I too am curious to learn more about the interplay of taxes and fed rates, but I can do that on my own time. There are some interesting thoughts that come out of thinking all of the way outside of the box [and reality] but read what happens to a country with no central bank: it's not pretty

Jun 6, 2011

Great UFOinsider.

OK, maybe that site is incorrect. This is not an attempt to think outside reality, but to understand what exactly is going on. My impression about taxes was derived from the interest the US govt pays the Fed as interest for all the T-bills that they hold. Basically:

The Fed generates digital money --> Fed buys T-bills using this money --> Fed earns interest on T-bills, which are paid through our tax dollars.

Is this inaccurate?

Mar 1, 2012

This is accurate, but it leaves out one last thing:

Fed earns interest on T-Bills-> Fed refunds this interest back to the treasury.

Net-net, the federal reserve doesn't cost us anything. In fact, it actually saves us money by using the proceeds of seigniorage to lower the governments' borrowing costs.

Jun 6, 2011

great..

Jun 6, 2011
jgrisham:

great..

...balls 'o fire

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