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bacasper
Joined: 26 Mar 2007
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 Posted: Sun Aug 02, 2009 12:54 am Post subject: |
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| visitorq wrote: |
Bailout is just the term they use; what it really is, is outright theft. The Fed creates double the GDP worth of bogus, fraudulent money for the major banks (for which the Fed is really just a front) at the same time that they engineer the very collapse of the overall economy (happening right now), mainly by contracting the money supply, which allows them to use the bogus money they created out of thin air (first lent to the government at interest to be paid off by our taxes, then handed over to banks as a blank check, no questions asked, calling it a 'bailout') to buy up all the real assets in the economy at rock bottom prices.
In other words, they've literally bankrupted us and the economy forever, made us pick up the tab for them buying up our assets from us (at the resulting rock bottom prices they've created, even though banks produce nothing of real value), and then we have to pay them interest on the money they're using to do it! Nobody else has the power to create fake, bullsh-t money backed by legal tender laws as they do, so they basically own the rest of us. Little more than slaves. |
Right on.
I think you may be interested in listening to
The Finance Plutocracy and the 24 Trillion Dollar Heist
from Taking Aim Radio. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Sun Aug 02, 2009 2:15 am Post subject: |
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| Fox wrote: |
| visitorq wrote: |
| Fox wrote: |
I have to say, all these people trying to articulate just how big certain numbers are with weird examples related to things like "Minutes since the birth of Christ," or "Stacking pennies on top of each other," or so forth are getting really annoying. Comparing it to the yearly economic output of the United States has some merit, but that's all. Anything else is just a pointless scare tactic.
That said, the American people are getting exactly what they deserve on this account. A citizen-elected government -- especially in the modern era -- comes with substantial responsibilities, including the responsibility to remain informed, the responsibility to closely watch the actions of your representatives, and the responsibility to take appropriate action when your elected representative misbehaves; tolerance for misconduct should essentially be zero, and total transparency should be demanded. The American people have shirked those responsibilities, and the results are obvious. They let their representatives get away with murder. |
If you're actually naive enough to believe the US is a democracy, then perhaps you should just keep your mouth shut... |
Addressing someone on an internet forum to tell them they should keep their mouth shut is beyond stupid. If you don't want to see what I have to say, no one is forcing you to. |
It was just a suggestion. Why you would want to make of jerk of yourself by saying the American people deserve to be shat on by the totally undemocratic ruling class, is beyond me...
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Anything those individuals get away with, the American people collectively allow them to get away with. Indifferent, uninformed individuals who can hardly be bothered to vote keep the corrupt in power and ensure there are few meaningful checks upon them.
In a society of informed, involved individuals, the scenario you describe wouldn't occur. |
No offense, I'm not even really trying to pick a fight, but you should really get off your high horse here. You are partly right that the American people have long been ignorant of how the ruling class operates (behind the scenes, in secret, with their puppets in gov't taking the spotlight away), but the system is totally corrupt and cannot be simply voted away. At this point people are going to have to do some figurative storming of the Bastille to bring about real change, including abolishing the Fed (no easy task). Instead of blaming regular people and saying they deserve what they get, try a little compassion and understand the reality, with all the injustice, is much harder to deal with. Bottom up change does not come easily...
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| If the American people are getting "urinated on by the powers that be," but that will end soon, it could have ended sooner. Why didn't it end sooner? Because the American people didn't stand up and end it sooner. |
Because people are still very much ignorant and are bombarded their entire lives with BS. I myself didn't know much of what I'm talking about here until quite recently. It shatters your world view to understand that the US economy is built on a fraud and is without a legitimate money supply. Most people don't want to know, it doesn't make them bad people. Eventually they will have no choice but to deal with it, when they lose their jobs and homes, but again compassion is better than indifference.
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If you want to rage at the individuals who take advantage of the lazy indifference of our citizen base, feel free. Given that as long as said citizen base remains lazy and indifference someone will take advantage of them, though, I would prefer to address the real source of the problem. |
Indifference and laziness are part of the problem for sure, but that applies to us all. However, the system itself is totally at fault, the public is inundated with false information through the media and deliberately kept ignorant. The average joe shouldn't be expected to behave like a saint, most people are just getting by. However, if they at least understand the reality, as opposed to the falsehoods they are raised to believe all their lives, then change will take place. Getting people to wake up is no easy task however, but it's worth trying. Just research about the Fed, fractional reserve banking, think tanks (CFR, Trilateral Commission et al), understand it for yourself, and spread the word as best you can.
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| visitorq wrote: |
| Feel pissed off yet? |
Yes, I do. I feel pissed off at citizen base that not only allowed this to happen, but made it almost an inevitability. Even if the specific people who are taking advantage of things right now didn't exist, someone would have come along, because a society of lazy, uninformed people is emminently vulnerable to such things. When our citizens are willing to work to ensure the quality of their government, they will have a quality government. So long as the majority is indifferent, the results will be as they have been.
Blame all America's problems on a tiny group of people if you like. Even if they were to vanish off the face of the Earth tomorrow, more like them would replace them, until the average citizen stops enabling it. |
Railing against humanity is pointless and will get you nowhere... It's quite simple man, unless you at the top of the pyramid with the Rockefellers and the rest of the tiny elite who control things, then you are going to pay. I'm guessing you're just an average guy like myself and others here; that means the banks own you. If you want to break free, you're either going to have to become a hermit living outside the monetary system, or do whatever you can to change it. If the latter, then the 'lazy, uniformed' citizens are the only chance you have, so you may as well do what you can to change their minds. People are ignorant yes, but not stupid. You can convince as many as you want. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Sun Aug 02, 2009 2:27 am Post subject: |
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| Hater Depot wrote: |
| visitorq wrote: |
| Hater Depot wrote: |
| The math behind the $23 trillion number is bogus. That is twice the size of the entire US economy. It is thus impossible for the bailouts to cost anything close to that figure. |
Bailout is just the term they use; what it really is, is outright theft. The Fed creates double the GDP worth of bogus, fraudulent money for the major banks (for which the Fed is really just a front) at the same time that they engineer the very collapse of the overall economy (happening right now), mainly by contracting the money supply, which allows them to use the bogus money they created out of thin air (first lent to the government at interest to be paid off by our taxes, then handed over to banks as a blank check, no questions asked, calling it a 'bailout') to buy up all the real assets in the economy at rock bottom prices.
In other words, they've literally bankrupted us and the economy forever, made us pick up the tab for them buying up our assets from us (at the resulting rock bottom prices they've created, even though banks produce nothing of real value), and then we have to pay them interest on the money they're using to do it! Nobody else has the power to create fake, bullsh-t money backed by legal tender laws as they do, so they basically own the rest of us. Little more than slaves.
Feel pissed off yet? |
By your conspiracy theory? No. |
It's not conspiracy, it's fact. About 95% of the above is not only verifiable, but much of it is right from the horses mouth(s). Really, what more do you need to know than that the Federal Reserve is private, run for profit, creates fiat money at interest (which could be created interest-free by the US treasury as a service to the American people), caused the Great Depression (as well as the current one), has indebted the US gov't by $23 trillion, and refuses to even be audited?
If you can't even take the time to look the above up for yourself (please don't take my word for it), then your willful ignorance is contributing to the problem.
Just to help you along, here's a youtube clip of former Fed chairman Greenspan admitting the Fed is private and independent:
http://www.youtube.com/watch?v=ol3mEe8TH7w
(shorter version: http://www.youtube.com/watch?v=J2fjxaRLpQo&feature=related) |
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Fox
Joined: 04 Mar 2009
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| Posted: Sun Aug 02, 2009 5:47 am Post subject: |
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| visitorq wrote: |
| It was just a suggestion. Why you would want to make of jerk of yourself by saying the American people deserve to be shat on by the totally undemocratic ruling class, is beyond me... |
And why you would want to pretend a gigantic group of people can be taken advantage of by a very small group of people without the gigantic group enabling the very small group is beyond me.
| visitorq wrote: |
| No offense, I'm not even really trying to pick a fight, but you should really get off your high horse here. |
Not interested in your opinion of what I should or shouldn't do. You started trying to pick a fight as soon as you started a conversation with "shut up," and you're certainly continuing your pattern of hostile behavior here.
| visitorq wrote: |
| You are partly right that the American people have long been ignorant of how the ruling class operates ... |
And that ignorance is self-inflicted out of laziness and indifference. It's also what empowers said "ruling class" to do more or less as it pleases. When the average American gives a damn, things will get a better. Until then, the people you whine about will continue having their way with our society.
| visitorq wrote: |
| Because people are still very much ignorant and are bombarded their entire lives with BS. |
And they're doing nothing to change that. Most people don't want to live up to the responsibilities required of citizens in a society which elects its government.
| visitorq wrote: |
| Most people don't want to know, it doesn't make them bad people. |
You keep saying things like "The American people are good people," or "It doesn't make them bad people," as if that was at all relevent to anything. I'm not saying the average American is a bad person. I am saying the average American has very little interest in acting to remain even remotely informed, and even less interest in acting to ensure their elected officials are held to any meaningful standards.
No, Americans aren't bad. They are indifferent. In a society which elects its government, indifference is dangerous. You can see the results of indifference, because those results are exactly what you complain of.
| visitorq wrote: |
| Indifference and laziness are part of the problem for sure, but that applies to us all. |
Or most of us, anyway. There are individuals who do meet their responsibilities on this account, they're just in the decided minority.
| visitorq wrote: |
| However, the system itself is totally at fault ... |
And again, what that system has become over time is ultimately the result of what our nation's people have let it become.
| visitorq wrote: |
| The average joe shouldn't be expected to behave like a saint, most people are just getting by. |
I don't expect sainthood. A lot of people can't even name their congressmen! How can you expect a society of such people to not be taken advantage of? How can you expect corruption to not rise up in such circumstances?
| visitorq to Hater Depot wrote: |
| If you can't even take the time to look the above up for yourself (please don't take my word for it), then your willful ignorance is contributing to the problem. |
If you can accept that one person's willful ignorance is contributing to the problem, why does the fact that the problem you describe is ultimately caused by the willful ignorance of millions of people offend you so?
As much as you might like to portray me as such, I'm on no high horse here. I'd just much rather address the ultimate source of the illness than the symptoms of that illness (and yes, the things you complain of -- even your "ruling elite" -- are just symptoms of the real problem). We could remove those who are in power from power, but more like them will just replace them. We could change the fundamentals of our system, but so long as people barely care that system will just creep back to where it is now. If things are to really change, it's the average person that needs to change.
Given the average people are suffering from a problem that is ultimately caused by the collective actions of those same people, I think my portrayal of them deserving what they're currently getting is accurate. I'm sorry if you consider that being on a high horse; I simply consider it honest. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Sun Aug 02, 2009 8:41 am Post subject: |
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| visitorq wrote: |
It's not conspiracy, it's fact. About 95% of the above is not only verifiable, but much of it is right from the horses mouth(s). Really, what more do you need to know than that the Federal Reserve is private, run for profit, creates fiat money at interest (which could be created interest-free by the US treasury as a service to the American people), caused the Great Depression (as well as the current one), has indebted the US gov't by $23 trillion, and refuses to even be audited?
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"WHERE DO THE PROFITS GO?
A great deal of concern is often expressed with respect to the profits earned by the Federal Reserve System. These profits are a direct result of its power to create money -- and the power to create money is derived from the government. Many people argue that the earnings, then, should belong to the government rather than go to the Fed. The system is off-budget and a self-financing entity not subject to congressional appropriations. But in fact, the Federal Reserve's earnings from money creation do enter into the government's receipts.
The gross earnings from the system's operations first are dedicated to its operating costs. In addition, the regional Federal Reserve Banks maintain capital; they retain enough earnings to have on hand a "surplus" equal to the paid-in subscriptions of their member-owners. As explained above, the Federal Reserve Banks also pay the dividend to their member banks.
What remains is all paid over into the Treasury. Over its history, the Fed has paid to the Treasury approximately 95% of its earnings. These payments to the treasury are currently running about $25 billion a year. Given the fact that the Treasury, if it created money directly, would incur costs in its administration, the revenue and cost effects of having the Federal Reserve issue are about the same as having the Treasury do so.
In addition, the price of Federal Reserve Bank stock is fixed at $100 per share. It neither appreciates nor depreciates in value. That means that any growth in the capital of the Federal Reserve Banks does not belong to the Banks "owners," but to the Government which would get the accumulated value of retained earnings if the system were ever dissolved.
To the extent that Fed retains earnings for the purpose of maintaining its capital at a specifies proportion of its liabilities, there is no adverse effect on the governments receipts and outlays. Holding earnings means they are invested in Treasury securities, with the interest on the securities remitted to the Treasury. If the Fed did not retain the earnings, the funds would have passed to the Treasury, which would not issue that amount of securities, and thereby save an identical amount of interest. The formal procedure makes no difference to reality, just to which ledger-book column the numbers are placed in. " http://home.hiwaay.net/~becraft/FRS-myth.htm#hd11 |
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bacasper
Joined: 26 Mar 2007
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| Posted: Sun Aug 02, 2009 9:23 am Post subject: |
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| jaykimf wrote: |
What remains is all paid over into the Treasury. Over its history, the Fed has paid to the Treasury approximately 95% of its earnings. These payments to the treasury are currently running about $25 billion a year. Given the fact that the Treasury, if it created money directly, would incur costs in its administration, the revenue and cost effects of having the Federal Reserve issue are about the same as having the Treasury do so.
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How could that be known if the Fed has never been audited? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Aug 02, 2009 9:28 am Post subject: |
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| Quote: |
| What remains is all paid over into the Treasury. Over its history, the Fed has paid to the Treasury approximately 95% of its earnings. These payments to the treasury are currently running about $25 billion a year. Given the fact that the Treasury, if it created money directly, would incur costs in its administration, the revenue and cost effects of having the Federal Reserve issue are about the same as having the Treasury do so. |
As far as I can tell, this is true. I'm on a waiting list for the Book The Creature of Jeckel Island from my local library to better understand.
But now, the above isn't the relevant concern. The Fed is an off-balance sheet arm of the Treasure and big banks. If the profits are given back to Treasury, will the losses be too? Maiden Lane et al will lose massive amounts of money. The Fed was not intended to be an institution that absorbed the losses of the financial sector via accounting trickery.
Assume the fed is well designed for a moment. All institutions that are human run are vulnerable to human behaviour. Even if it is well designed, it hasn't been well run. Regulatory capture doesn't sufficiently describe the situation. Canada, the US, UK, EU and others are caught in a tough position. The economy is being propped up with low interest rates to benefit the equity markets and housing market. This, because pension funds are near broke and heavy in equities. For boomers, their largest source/store of wealth is their home. If rates are raised, the equity markets and housing/CRE markets will tank, again (though this will happen anyways). But without high interest, it is impossible for individuals to live off their retirement savings. The inevitable inflation makes it extremely difficult for most businesses to adequately plan and also will strongly decrease the purchasing power of those on fixed incomes. The tech bubble gave way to the housing bubble which is giving way to an equity bubble and government debt bubble (though bubble probably isn't the best work for that). Central banks are pushing the string as hard as they can. At some point, high interest rates are needed to drive a deflationary spiral and return asset prices to a reasonable level. There is no creative destruction (in the positive sense) when the system is functioning in a way that only enriches banks.
In Toronto, housing froth has returned. A starter home is 400k and banks are back giving 0down, 40 year loans to 20-somethings. Over 40 years, a 400k mortgage aggregates at $1,193,150.4@7% interest. That is an anvil on the necks of the "owner" and a secular tithe to the banks. The money being wasted on interest has much more productive uses in the economy. Much higher interest rates are needed to collapse housing prices and return affordability to the market. But the central banks won't do that, because the creditor banks would suffer huge losses (though apparently those would be absorbed by the central bank).
This is a pickle. |
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mises
Joined: 05 Nov 2007
Location: retired
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jaykimf
Joined: 24 Apr 2004
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| Posted: Sun Aug 02, 2009 10:13 am Post subject: |
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| bacasper wrote: |
| jaykimf wrote: |
What remains is all paid over into the Treasury. Over its history, the Fed has paid to the Treasury approximately 95% of its earnings. These payments to the treasury are currently running about $25 billion a year. Given the fact that the Treasury, if it created money directly, would incur costs in its administration, the revenue and cost effects of having the Federal Reserve issue are about the same as having the Treasury do so.
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How could that be known if the Fed has never been audited? |
The Treasury can easily confirm how much it has actually received from the fed. While it might be theoretically possible that the fed is criminally cooking the books to misrepresent its true income, visitorq's contention that the fed is entitled to keep its profits is clearly false. |
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Hater Depot
Joined: 29 Mar 2005
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| Posted: Sun Aug 02, 2009 11:07 am Post subject: |
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| bacasper wrote: |
| Hater Depot wrote: |
| The math behind the $23 trillion number is bogus. That is twice the size of the entire US economy. It is thus impossible for the bailouts to cost anything close to that figure. |
That number, actually $23.7 trillion, is from Neil Barofsky. Are you calling him, the SIGTARP himself, a liar? |
No. Those who are mispresenting his report are.
http://wonkroom.thinkprogress.org/2009/07/21/the-23-trillion-dollar-bailout/
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However, what everyone using this number failed to mention is what it means and how it was calculated.
...
To arrive at $23 trillion, Barofsky simply added together every financial rescue program that has been proposed, including those that were discontinued or never even started. In the New York Times, Floyd Norris broke the number down further:
It also assumes that every home mortgage backed by Fannie Mae or Freddie Mac goes into default, and all the homes turn out to be worthless. It assumes that every bank in America fails, with not a single asset worth even a penny. And it assumes that all of the assets held by money market mutual funds, including Treasury bills, turn out to be worthless. It would also require the Treasury itself to default on securities purchased by the Federal Reserve system. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Sun Aug 02, 2009 11:41 am Post subject: |
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| Fox wrote: |
| visitorq wrote: |
| It was just a suggestion. Why you would want to make of jerk of yourself by saying the American people deserve to be shat on by the totally undemocratic ruling class, is beyond me... |
And why you would want to pretend a gigantic group of people can be taken advantage of by a very small group of people without the gigantic group enabling the very small group is beyond me. |
It's the nature of power, things haven't really changed much in thousands of years.
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| visitorq wrote: |
| No offense, I'm not even really trying to pick a fight, but you should really get off your high horse here. |
Not interested in your opinion of what I should or shouldn't do. You started trying to pick a fight as soon as you started a conversation with "shut up," and you're certainly continuing your pattern of hostile behavior here. |
Whatever man, when it comes to saying my fellow Americans deserve to get robbed and terrorized by a group of ruthless bankster criminals and their cronies in government, then i get a bit touchy... But beyond that, I'm open to anything else you have to say (and being fair to you I addressed your points), and indeed I share your overall sense of frustration. It needs to be pointed in the right direction... The average people may be ignorant, but they're not criminals.
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| And that ignorance is self-inflicted out of laziness and indifference. It's also what empowers said "ruling class" to do more or less as it pleases. When the average American gives a damn, things will get a better. Until then, the people you whine about will continue having their way with our society. |
I guess I agree with you, but I think people are getting wiser already. It's not as easy as you make it out to be (fighting against tyranny), most people are just doing what they can to get by. Saying they're all lazy and indifferent is just generalizing, most people are just going with the flow (because to go against the grain alone is very hard).
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| And they're doing nothing to change that. Most people don't want to live up to the responsibilities required of citizens in a society which elects its government. |
It doesn't matter if people vote or not, it's a rigged game, both parties are bought and paid for by the bankers and all are members of the same Rockefeller funded/chaired think tanks (this is an absolute fact, easily verifiable, no conspiracy at all). Guys like Ralph Nader aren't even allowed to enter debates. It's a total sham. The responsibility you are talking about will most likely mean revolting against the utterly corrupt powers that be, and may result in violence. Most people just want to live in peace, not put their lives on the line. This is understandable.
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| You keep saying things like "The American people are good people," or "It doesn't make them bad people," as if that was at all relevent to anything. I'm not saying the average American is a bad person. I am saying the average American has very little interest in acting to remain even remotely informed, and even less interest in acting to ensure their elected officials are held to any meaningful standards. |
I disagree. Many are very interested and concerned, and most smell a huge rat in what's been going on. It's just that the media is so skillful at pumping the public full of nonsense and most of the facts are NOT easily obtainable. Most people have no idea what the Federal Reserve is, or that the Rockefellers are the most powerful people in the country. Propaganda is very, very effective, and the worldview of the American public has been heavily influenced by the media for generations. The Fed has been covering its tracks since 1913 for example, so it's not that surprising that most people have no idea how the US money supply works.
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| No, Americans aren't bad. They are indifferent. In a society which elects its government, indifference is dangerous. You can see the results of indifference, because those results are exactly what you complain of. |
Well, I just don't really agree here, I think you're generalizing too much. Some people are indifferent, not all. Again, I think most people are very concerned with how things are going, it's just hard to understand what is going on, especially if you turn to CNN and Fox news every day for your info. In any case, I don't think anyone deserves to get robbed and taxed to death by a bunch of criminals, regardless of how informed they are.
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| And again, what that system has become over time is ultimately the result of what our nation's people have let it become. |
This is true, at the same as it's true that the criminals are to blame. In the end, we've just got to make a stand. I don't know how it will turn out, but I hope that when things go to hell and judgment is passed, people will at least get enough of a clue to point fingers in the right direction (at the Fed and the banks, not the puppet president).
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| I don't expect sainthood. A lot of people can't even name their congressmen! How can you expect a society of such people to not be taken advantage of? How can you expect corruption to not rise up in such circumstances? |
This is chicken/egg, but again, I think people smell a huge rat, more than you are making out. The fat, lazy, stupid drawling American is much more of an unkind stereotype than a reality. I think most people can sense a huge problem.
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| If you can accept that one person's willful ignorance is contributing to the problem, why does the fact that the problem you describe is ultimately caused by the willful ignorance of millions of people offend you so? |
It doesn't offend me, it just worries me. I seriously want people to wake the hell up as much for my own sake as for theirs. Bickering is pointless, I just hope you and others can learn from these discussions (as I have) and spread the word. That is my only agenda.
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As much as you might like to portray me as such, I'm on no high horse here. I'd just much rather address the ultimate source of the illness than the symptoms of that illness (and yes, the things you complain of -- even your "ruling elite" -- are just symptoms of the real problem). We could remove those who are in power from power, but more like them will just replace them. We could change the fundamentals of our system, but so long as people barely care that system will just creep back to where it is now. If things are to really change, it's the average person that needs to change.
Given the average people are suffering from a problem that is ultimately caused by the collective actions of those same people, I think my portrayal of them deserving what they're currently getting is accurate. I'm sorry if you consider that being on a high horse; I simply consider it honest. |
Actually I will concede that you make a fair point. People do need to be responsible. However, just don't underestimate how abusive the powers running things are. The outright, unaccountable theft of $23 trillion of American taxpayers' money is a level of ruthlessness most people don't even want to believe is possible. But the rapacity of the banks knows no limits, they will literally take everything from you. Rather than blaming regular people, it's more constructive to spread the word. People already sense things are rotten, they just need pointed in the right direction and the outrage will set in. Then they'll act. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Sun Aug 02, 2009 12:00 pm Post subject: |
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| jaykimf wrote: |
| visitorq wrote: |
It's not conspiracy, it's fact. About 95% of the above is not only verifiable, but much of it is right from the horses mouth(s). Really, what more do you need to know than that the Federal Reserve is private, run for profit, creates fiat money at interest (which could be created interest-free by the US treasury as a service to the American people), caused the Great Depression (as well as the current one), has indebted the US gov't by $23 trillion, and refuses to even be audited?
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"WHERE DO THE PROFITS GO?
A great deal of concern is often expressed with respect to the profits earned by the Federal Reserve System. These profits are a direct result of its power to create money -- and the power to create money is derived from the government. Many people argue that the earnings, then, should belong to the government rather than go to the Fed. The system is off-budget and a self-financing entity not subject to congressional appropriations. But in fact, the Federal Reserve's earnings from money creation do enter into the government's receipts.
The gross earnings from the system's operations first are dedicated to its operating costs. In addition, the regional Federal Reserve Banks maintain capital; they retain enough earnings to have on hand a "surplus" equal to the paid-in subscriptions of their member-owners. As explained above, the Federal Reserve Banks also pay the dividend to their member banks.
What remains is all paid over into the Treasury. Over its history, the Fed has paid to the Treasury approximately 95% of its earnings. These payments to the treasury are currently running about $25 billion a year. Given the fact that the Treasury, if it created money directly, would incur costs in its administration, the revenue and cost effects of having the Federal Reserve issue are about the same as having the Treasury do so.
In addition, the price of Federal Reserve Bank stock is fixed at $100 per share. It neither appreciates nor depreciates in value. That means that any growth in the capital of the Federal Reserve Banks does not belong to the Banks "owners," but to the Government which would get the accumulated value of retained earnings if the system were ever dissolved.
To the extent that Fed retains earnings for the purpose of maintaining its capital at a specifies proportion of its liabilities, there is no adverse effect on the governments receipts and outlays. Holding earnings means they are invested in Treasury securities, with the interest on the securities remitted to the Treasury. If the Fed did not retain the earnings, the funds would have passed to the Treasury, which would not issue that amount of securities, and thereby save an identical amount of interest. The formal procedure makes no difference to reality, just to which ledger-book column the numbers are placed in. " http://home.hiwaay.net/~becraft/FRS-myth.htm#hd11 |
This is such a load of crap. As bacasper already pointed out, how do you know they pay their profits when they've never been audited, and moreover refuse to answer even simple questions regarding their book keeping? Your article states that the Fed pays the treasury $25 billion per year, and yet the interest paid to the Fed in last year on debt outstanding was a whopping $450 billion!
http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
In other words the American people paid the Fed $450 billion just to service the interest on debt owed by the government. Where did that money go? Probably an offshore tax haven, which is why Bernanke sh-ts his pants every time Ron Paul and others grill him on it. These people are such blatant criminals, the best answer they come up with is that they "don't know".
Please, stop drinking the koolaid... the Fed is a rapacious debt machine that serves only the banks it prints money for and has bankrupted our country. The money is fraudulent and could just as easily be issued debt-free by the treasury itself as a service to the American people. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Sun Aug 02, 2009 12:11 pm Post subject: |
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| mises wrote: |
| Quote: |
| What remains is all paid over into the Treasury. Over its history, the Fed has paid to the Treasury approximately 95% of its earnings. These payments to the treasury are currently running about $25 billion a year. Given the fact that the Treasury, if it created money directly, would incur costs in its administration, the revenue and cost effects of having the Federal Reserve issue are about the same as having the Treasury do so. |
As far as I can tell, this is true. I'm on a waiting list for the Book The Creature of Jeckel Island from my local library to better understand.
But now, the above isn't the relevant concern. The Fed is an off-balance sheet arm of the Treasure and big banks. If the profits are given back to Treasury, will the losses be too? Maiden Lane et al will lose massive amounts of money. The Fed was not intended to be an institution that absorbed the losses of the financial sector via accounting trickery.
Assume the fed is well designed for a moment. All institutions that are human run are vulnerable to human behaviour. Even if it is well designed, it hasn't been well run. Regulatory capture doesn't sufficiently describe the situation. Canada, the US, UK, EU and others are caught in a tough position. The economy is being propped up with low interest rates to benefit the equity markets and housing market. This, because pension funds are near broke and heavy in equities. For boomers, their largest source/store of wealth is their home. If rates are raised, the equity markets and housing/CRE markets will tank, again (though this will happen anyways). But without high interest, it is impossible for individuals to live off their retirement savings. The inevitable inflation makes it extremely difficult for most businesses to adequately plan and also will strongly decrease the purchasing power of those on fixed incomes. The tech bubble gave way to the housing bubble which is giving way to an equity bubble and government debt bubble (though bubble probably isn't the best work for that). Central banks are pushing the string as hard as they can. At some point, high interest rates are needed to drive a deflationary spiral and return asset prices to a reasonable level. There is no creative destruction (in the positive sense) when the system is functioning in a way that only enriches banks.
In Toronto, housing froth has returned. A starter home is 400k and banks are back giving 0down, 40 year loans to 20-somethings. Over 40 years, a 400k mortgage aggregates at $1,193,150.4@7% interest. That is an anvil on the necks of the "owner" and a secular tithe to the banks. The money being wasted on interest has much more productive uses in the economy. Much higher interest rates are needed to collapse housing prices and return affordability to the market. But the central banks won't do that, because the creditor banks would suffer huge losses (though apparently those would be absorbed by the central bank).
This is a pickle. |
The only reason interest is needed to keep investments afloat is due to the absurd fact that money is issued as debt in the current fractional reserve banking system. This is above all the case for the Fed itself which has the sole power (via legal tender laws) to issue US currency. All money issued by the Fed has interest attached, which is the main cause of inflation. If the money were issued by the government interest free, the economy would be stable and inflation would nearly vanish. This is just common sense.
As for the Fed giving it's profits to the US treasury, that is totally preposterous. The Fed apparently doesn't count the $450 billion in interest paid by taxpayers per year on outstanding debt (not even including the debt itself, which is literally un-payable) to be 'profits'. |
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
Location: retired
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