Posted on 06/08/2014 6:42:22 PM PDT by Perseverando
But we were discussing physical FRNs.
Are you changing your claim?
Does the government now have to repay every single dollar in existence, with interest?
I don't think your changing claim makes any more sense than your original claim.
The facts are clear, any and all federal reserve notes in circulation, be they actual paper notes or characters on a computer screen, represent a debt owed to the federal reserve banking cabal by the tax payers of the Unites States.
Unbelievably silly claim. Let me demonstrate.
I go to the bank to get a car loan. My loan increases the money supply. How does my increased liability put "the tax payers of the Unites States" on the hook?
When taxes are insufficient to cover their liabilities, they issue a treasury note to the federal reserve bank
You are mistaken. The Treasury does not sell or issue Treasury notes to the Fed.
No they don’t.
You’re confused. I already figured that out.
“See, the debt existed before the money was printed. Now go forth, and correct that error.”
The Weimar Republic printed money to pay back a massive debt from the Treaty of Versailles. We are doing the opposite, printing money first, creating inflation, and then supposedly paying back the debt created with devalued money. Although none of the debt-reducing has happened yet.
How do you figure they are "retired"?
They take them off the books. They aren’t counted as part of the official debt, and they’ll never be repaid. It’s not like the Fed is ever audited or can go broke.
The Treasury is not printing money to repay Treasury debt.
“No one wants to blame their self for making too little money. It’s always easier to blame the government or a “bad economy.”
Likewise, people who are under-employed think that everything costs too much. Cars are too expensive and groceries “keep going up in price.””
Just because you or I am doing well, doesn’t mean it is a healthy or stable economy. Ifvthe vast majority are experiencing stagflation or are under-employed, the economy as a whole isn’t sustainable. Even during the Civil War, some individuals amassed fortunes off of the rest of the population. That type of ‘success’ isn’t something to be proud of.
Off what books? I can look up bonds held by the Fed in less than a minute.
They aren’t counted as part of the official debt,
Sure they are.
and they’ll never be repaid.
When they mature, the Treasury pays the Fed. When interest is due, the Treasury pays the Fed. It happens all the time.
It’s not like the Fed is ever audited
Except for the annual audit they publish every year.
or can go broke.
That's true, a central bank can't go broke.
That’s exactly what I said.
The debt will be repaid eventually, supposedly, and at that point it will be with inflated money. It’s not cause and effect but an eventual consequence.
Here’s a little better explanation of how the Fed monetizes debt. Additionally I’ve heard Tom Sullivan talk about the amount of debt the Fed has bought being far more than what they report holding, in other words it’s been retired.
************************
How does this monetize the debt? The U.S. government borrows from individuals, corporations and even foreign governments when it auctions Treasury bills, bonds and notes. The Fed turns this debt into money, by taking those Treasuries out of circulation. This decreases the supply of Treasuries, making the remaining Treasuries more valuable.
Treasuries that are more valuable don’t have to pay as much in yield to get buyers. A lower yield drives down interest rates on the U.S. debt. Lower interest rates means the government doesn’t have to spend as much to pay off its loans. This is money it can use for other programs.
The net effect is that it is as if the Treasuries bought by the Fed didn’t exist. But they do exist on the Fed’s balance sheet. Technically, the Treasury must pay the Fed back one day. Until then, the Fed has given the Federal government more money to spend and increased the money supply. This is called monetizing the debt.
http://useconomy.about.com/od/monetarypolicy/f/fed_monetizing_debt.htm
Pre-1965 dimes, quarters and halves are what you want in silver and fractional gold coins. I would not collect bars.
This debt exists whether or not the Fed prints new money.
In other words, folks, every US dollar represented in the denomination of Federal Reserve Notes, in circulation today, represents a debt owed to the Federal Reserve System. The Federal Reserve System only issues money when a rate of return is paid on that money to keep it in circulation. And so, when the Federal Reserve continues to infuse additional dollars into the monetary system, such as it is doing in amounts previously unheard of, each additional dollar in circulation yielding a return on its par value to the Federal Reserve System, that return must come from somewhere. That "somewhere' is your pocket and mine, and anyone who holds Federal Reserve dollars. Since the money to pay the interest back to the Fed System is never created, interest to the Fed System can only be paid by removing enough Fed Dollars already borrowed into circulation to pay the specified interest rate. But the principle owed is not removed! And so contrary to what one might believe, bank interest is never paid out of a debtor's assets. Bank interest is paid by borrowing more funds from the Federal Reserve. You may not be the one borrowing to pay the interest, but SOMEONE is. In this system, the American economy, over time, is being owned more and more by the Federal Reserve, and less and less by private equity.
........was not written by Robert H. Hemphill.
And?
Check this out and help me understand it all.
Who does the audit?
Look, I know you think this is a funny game you’re playing.
Eventually the game of 3 card monty being played with the currency and the debt is going to catch up with us. And it won’t look pretty.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.