Why do conspiracy theorists and libertarians hate the Federal Reserve so much? (union, refund)
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The Treasuries that the Fed holds produce interest. 94% of that interest goes back to the Treasury. So it is if almost all of that debt doesn't exist from an interest pay back stand point. The debt itself still passively stands.
If more QE is done in the future, the Fed might end up with more Treasuries.
So the FED takes the Bank's Debt and somehow changes it to Treasuries? I am not following. You probably dont want to get into more depth because I am uninitiated, and you will probably have a hard time trying to explain even the basics.
But anyways, why does the FED even need the Bank's Debt to begin with? If they want Treasuries cant they just buy the Treasuries directly?
Federal agency debt securities2
34,146
0
- 5,554
34,146
Mortgage-backed securities4
1,750,513
+ 360
+ 27,011
1,744,091
Unamortized premiums on securities held outright5
192,765
- 317
- 16,646
Now I would like the Fed to purchase something equally worthless like peanut shells from me. Well , not actually peanut shells, gold gilt securities that that entitle the bearer to peanut shells.
Quote:
I am not following. You probably dont want to get into more depth because I am uninitiated, and you will probably have a hard time trying to explain even the basics.
But anyways, why does the FED even need the Bank's Debt to begin with? If they want Treasuries cant they just buy the Treasuries directly?
The Fed doesn't need anything. The banks were insolvent and were made solvent by US government debt, all while 90% of the population still doesn't understand our national debt is the money supply.
So the FED takes the Bank's Debt and somehow changes it to Treasuries? I am not following. You probably dont want to get into more depth because I am uninitiated, and you will probably have a hard time trying to explain even the basics.
But anyways, why does the FED even need the Bank's Debt to begin with? If they want Treasuries cant they just buy the Treasuries directly?
Yeah , but the little detail that is glossed over is QE balances the books after the credit fraud engineered inflation. QE is just booking keeping so that banks can remain solvent.
* bank gives person bag of money to buy house
* person gives bag of money to person selling house( which is valuable not just because of the house but the surrounding property, meaning the labour/reward factor is already weakened)
* person with house sees "value rising" sleeping in and watching dirty movies.
* person gets HELOC to get more bags of money from bank.(think I'm joking. I interviewed a guy who made more money for 5 years cashing in home equity than he made....It showed. He had no skill at all. )
* person buys pink flamingo lawn ornaments and jumbo shrimp with bags of money.
* nothing is being supplied but demand for the spot the house is on while more money is borrowed into circulation.
* house is turns out to be on Indian burial ground and is discovered to be haunted.
* people run away screaming , but unfortunately all this money was borrowed into existence.
* bank can't collect and is "insolvent". QE puts rolls of TP in the closet to save the latrine because the law says 10 rolls of TP must be in latrine closet.
So yes there is inflation, but its during the credit bubble that it actually occurs . QE just dots the i for the regulators .
But anyways, why does the FED even need the Bank's Debt to begin with? If they want Treasuries cant they just buy the Treasuries directly?
The monetary policy decisions of the Federal Reserve are made independently of the borrowing decisions of the Treasury and are intended solely to fulfill the mandate set out for the Federal Reserve by law -- maximum employment, stable prices, and moderate long-term interest rates.
The Federal Reserve only purchases Treasury securities that are already held by the public, and typically does so through a competitive bidding process. The Federal Reserve does not purchase new Treasury securities directly from the Treasury, and Federal Reserve purchases of Treasury securities from the public are not a means of financing the federal deficit.
In financing the federal deficit, the Treasury borrows from the public by issuing Treasury securities which are sold at auction according to a schedule that is published quarterly. The Treasury determines the types and amounts of securities sold at auction with the goal of achieving the lowest financing costs for the federal government over time. The Federal Reserve does not participate in competitive bidding at Treasury auctions, and the Treasury's debt management decisions are not influenced by the Federal Reserve's purchases of Treasury securities in secondary markets.
[Don't worry -- most of the other posters here are as uninformed as you and won't understand a word of this either.]
Yeah , but the little detail that is glossed over is QE balances the books after the credit fraud engineered inflation. QE is just booking keeping so that banks can remain solvent.
Having a solvent financial system is a very good idea. That was very good work by those who fought to keep it that way. Meanwhile, all those "toxic assets" that the Fed acquired are netting them quite the pretty penny these days. The same can be said for the Treasury which is raking in all the profits of the revitalized GSE's.
Having a solvent financial system is a very good idea. That was very good work by those who fought to keep it that way. Meanwhile, all those "toxic assets" that the Fed acquired are netting them quite the pretty penny these days. The same can be said for the Treasury which is raking in all the profits of the revitalized GSE's.
Oh goodie so remaining solvent by all means necessary is good. No one will ever have to go out of business selling exploding baby bottles or boats with holes in em.
Did ya see the part of my post that had people buying crap cause their house was making them money because people could borrow money with out a job?
Insolvent things need to go bankrupt so that competent people can take its place. A quarterback who cannot throw a foot ball needs to be insolvent in the ball business. Ya know?
We may find a few of our esteemed Thought Cops now as they:
1) Attack the sources....part of the Skeptanazi Paradigm
2) Attack the poster
3) Spread disinformation
4) Go get drunk again
Thank God for rich people!! Such nice people. I want to give all 80 of them a big hug for all that they are doing - for themselves.
Among their accomplishments:
They steal from everyone legally by controlling the government and banking systems. Robber Barons in short. And they absolutely adore the concept of indentured servants.
A big smooch for all of the crooks.
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Originally Posted by richrf
I didn't say that the crooks were crooks because they have high net worth.
Oh goodie so remaining solvent by all means necessary is good.
Focus. Having a solvent financial system is a necessary good. Without a solvent financial system, there is no credit. Credit is the life blood of every modern economy. Without credit, payrolls are missed, jobs are lost, and plants are shut down. Economic activity does not occur without credit. The bailouts that you so love to hate were done to protect YOU, not the banks or the bankers. It was YOU and the rest of the Main Street economy that regulators were worried about.
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Originally Posted by gwynedd1
Did ya see the part of my post that had people buying crap cause their house was making them money because people could borrow money with out a job?
Yes, I did, and it was laughable pabulum, virtually unchanged from the time when the right-wing disinformation media poured it into a little bowl for you to lap up. Mortgage interest rates dropped by 335 basis points between mid-2000 and mid-2003. Everyone who had one of those 8% mortgages from back in the 1990's or before should have refinanced at least once. Interest rates and asset prices are meanwhile inversely related. As rates fall, prices rise. People and housing markets in fact behaved exactly as they should have at the time.
None of this of course touches on the abysmal behavior of the Wall Street cabal in producing the credit crisis through their knowing manufacture and sale of billions worth of born-to-fail mortgage paper. Nor does it address the hopeless malfeasance of right-wing, laissez-faire regulators in the Bush administration who saw nothing wrong, believing for instance that markets were wise enough to regulate themselves. What a huge and costly mistake that turned out to be.
And lets consider as well that real median wages began to decline at the same time, as right-wing corporatism sent greater and greater shares of productivity growth off into corporate profits rather than wage gains. The labor share of GDP peaked in 2000, but only because it was deliberately eroded from that point forward. Republicans after all are no friends of the working man. Then there were those lovely tax cuts for the rich. These created large new pools of capital in the hands if the wealthy, but (big surprise) it turned out that consumers could no longer afford to purchase all of the things that the economy was producing. In order to avoid the hideous curse of inventory carrying costs, the wealthy had to come up with schemes to lend people the money to make ends meet that they should have been paid as part of their wages to begin with. And all the while, Bush exhorted us all to go out to the Mall and help shop our way to prosperity.
Greed may well have played a role here, but it was ever the greed of the wealthy.
Quote:
Originally Posted by gwynedd1
Insolvent things need to go bankrupt so that competent people can take its place. A quarterback who cannot throw a foot ball needs to be insolvent in the ball business. Ya know?
Foolish analogies only highlight the extreme degrees of popular misunderstanding. The "White Knight" theory for example was and still is a load of worthless crap. Without a solvent financial system, those who might have hoped to play the white knight role would have gone bankrupt even more quickly than you, done in by their own over-exposure. They'd have been cripples themselves, while at the same time there would have been no potential partners or backers left out there having the wherewithal to join forces with them. Stop and think about it for 60 seconds -- none of that whole white knight scheme works at all without a reliably functional financial system, the very thing that you want to remove from the equation.
Last edited by Reynard32; 11-07-2015 at 07:55 AM..
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