Posted on 02/09/2014 7:58:51 AM PST by Errant
The Federal Reserve (or Fed) has assumed sweeping new powers in the last year. In an unprecedented move in March 2008, the New York Fed advanced the funds for JPMorgan Chase Bank to buy investment bank Bear Stearns for pennies on the dollar. The deal was particularly controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of the New York Fed and participated in the secret weekend negotiations.1 In September 2008, the Federal Reserve did something even more unprecedented, when it bought the world’s largest insurance company. The Fed announced on September 16 that it was giving an $85 billion loan to American International Group (AIG) for a nearly 80% stake in the mega-insurer. The Associated Press called it a “government takeover,” but this was no ordinary nationalization. Unlike the U.S. Treasury, which took over Fannie Mae and Freddie Mac the week before, the Fed is not a government-owned agency. Also unprecedented was the way the deal was funded. The Associated Press reported:
“The Treasury Department, for the first time in its history, said it would begin selling bonds for the Federal Reserve in an effort to help the central bank deal with its unprecedented borrowing needs.”2
This is extraordinary. Why is the Treasury issuing U.S. government bonds (or debt) to fund the Fed, which is itself supposedly “the lender of last resort” created to fund the banks and the federal government? Yahoo Finance reported on September 17:
“The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters.”
(Excerpt) Read more at marketoracle.co.uk ...
FOX Analyst Charlie Gasparino: JP Morgan $13 Billion Fine Was ... Oct 21, 2013 - FOX Analyst Charlie Gasparino: JP Morgan $13 Billion Fine Was Political Punishment for Criticizing Obama (Video). Posted by Jim Hoft on ...
And I know that banks cannot.
Back in the days when a trillion dollars in debt seemed like real money.
Banks are accountable for the money they create out of thin air via loans. They cannot just “make” this money and steal it.
The Fed is not accountable. It does the real “money creation” out of thin air. And it does do a lot of stealing by hiring a huge do nothing (highly liberal and affirmative action) workforce that churns out useless studies. Plus the lavish salaries and bennies they pay themselves. The FR workforce gets paid way too generously plus the Fed is always building and upgrading office space to be suitably lavish. Billions that does not get remitted to the US Treasury
Banks create money by lending deposits. They cannot create money out of thin air.
Fractional reserve banking means you have created money. 500 years ago.....You (banker) have one bar of gold in your vaults but have loaned out the equivalent of three bars of gold. Your business behaves as if it possesses three bars of gold not just one. Same thing goes on today but the banks are accountable for the books they keep on all this activity
But the Fed is where the real money creation and destruction takes place
Nope. If the bank has one "bar of gold" ($10,000) they lend out less than one "bar of gold" ($10,000), not three "bars of gold" ($30,000)
While banks can’t literally print their own money in a system with a central bank, they can increase the money supply. In a system of fiat currency, banks’ monetary base (i.e., what is actually in the “vaults”) is made up of money backed by the central bank. However, when banks make loans above their reserve (which is pretty much always), it adds to the money supply, specifically what economists call “M2” and “M3” (depending on the type of loan), which are considered less “liquid” than the monetary base. Thus, lending can (but not necessarily will) cause inflation.
********* wrong Todd
Yes, when banks loan out a fraction of deposits, they increase the money supply.
You should probably read that, you might be less confused.
So you new negative cause is misrepresenting fractional reserve banking
Same cause, correcting your errors.
I got raped the other way around... I was a Wachovia Bank shareholder... when the mortgage crisis hit, Wachovia was in decent shape as it didn’t have the exposure to the fiasco of mortgage backed instruments. Wachovia refused to take TARP money it didn’t want. For some reason I can not understand the scumbags on the board at Wachovia got in bed with Wells Fargo and soon enough Wells Fargo bought up Wachovia for 10 cents on the dollar. I lost 90% of a really good sized chunk of holdings that I had inheireted as First Union Stock back in the 1990s... it just sat in a DRIP... and First Union was going up and up and up and the dividend was going up and up and up... it was growing exponentially... then Wachovia and First Union joined up. Then the market tanked.
the Federal Reserve is NOT part of our government
its just some bank
some BIG bank
and a scam
bkmk
bkmk
Sure it is.
its just some bank some BIG bank
Yup, a big Central Bank.
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