Posted on 12/25/2020 4:25:26 PM PST by Blood of Tyrants
In the past during normal times, to raise money for the federal government, the Treasury would sell government bonds. However, in recent years, they have abandoned any pretense of selling bonds and have instead just printed more money. Which raises the following question)s); 1. If the fedres is just printing money, is the US actually borrowing it? And can we just print more money to pay it back?
And the scary thing is that once the government discovers that when it needs more money it can just print it, it eventually does. The problem is runaway inflation which will destroy your life;s savings unless you have it invested in hard assets like gold, real estate, brass casings and copper jacketed lead, etc.
“We can always print money to do that” - Alan Greenspan
it gets it right off the printing press...
Are you implying the Feed gets enough money to deficit finance the goobermint out of Falsie’s ass? No wonder he’s so grumpy.
Increase in National Debt from 2019 Q3 to 2020 Q3 $3.3T
(26.5T - 23.2T)
https://fred.stlouisfed.org/series/GFDEBTN
Increase in Federal Reserve holdings of National Debt from 2019 Q3 to 2020 Q3 $2.5T
(4.9& - 2.4T)
https://fred.stlouisfed.org/series/FDHBFRBN
2.5T/3.3T = 76% (I said 80% without the benefit of calculation)
Comment: I would prefer to use 12 month changes ending 4Q but they’re not in the handy dandy FRED database. My numerator (upstairs figure) is close to yours. Our denominators (downstairs figures) differ as I use national debt and you use national debt held by the public. The increase is the national debt reflects the deficit on a unified budget basis.
The national debt held by the public has risen by more than the national debt has risen because agencies and trust funds of the federal government have been running down their holdings (as was foreseen a long time ago, with the baby boomers having reached retirement age). We’re supposed to be running surpluses on the operations side of the federal government to off-set (essentially, to redeem) the sale of these holdings. But, no, we are instead running a deficit that’s a larger percentage of GDP than we did during WWII. (I say this without benefit of calculation.)
Any decent economist would recognize the risk of inflation we are taking, and not minimize this risk. But, the truth is, there’s no stopping the madness. Only a handful of people in Washington are even concerned about the deficit.
All people who are still capable of rational thinking can do is take prudent steps to protect themselves from this inflation. Again, look at your portfolio, move out of fixed income securities and into equities, equity REITs and (for the squeamish) the CPI-indexed bond.
The converse is: now (and I mean right now) is a good time to buy a home with a fixed-rate mortgage and to refi an existing mortgage with a fixed-rate.
Merry Christmas bros & sis!
We talk about this roaming depression about to befall the world soon a lot.
One thing that I keep reading about and thinking about.
Luke 17:28-29 (normalcy then destruction)
Matthew 24:38-39 (same thing)
If we get hit with a massive depression nothing will be normal and it will probably take a decades to get back to “normal”.
I truly believe the staying hand of the Holy Spirit is keeping all evil restrained and will continue to do until The Lord says ‘it’s time’.
I pay you have a wonderful time with family & friends.
Love to you all!
“They create it out of thin air...”
That is correct; I should have specified that in my post.
The average American thinks the Fed is part of the Federal government.
The Fed created the Great Depression by withdrawing too much money out of circulation. The Fed chairman finally admitted that some years back. When I was a kid I remember an old man saying, “There just wasn’t any damn money!!” And the chairman said the Fed would be running printing presses next time. There would have been a depression, but not the carnage it created.
You said this year. Why go back before COVID and before the Fed ramped up printing again in March?
I would prefer to use 12 month changes ending 4Q but they're not in the handy dandy FRED database.
I used daily for debt and weekly for the Fed Balance Sheet.
https://www.federalreserve.gov/releases/h41/current/h41.htm
https://www.federalreserve.gov/releases/h41/20200102/
Our denominators (downstairs figures) differ as I use national debt and you use national debt held by the public.
Only a $61 billion difference. $4.35 trillion instead of my $4.29 trillion.
The national debt held by the public has risen by more than the national debt has risen because agencies and trust funds of the federal government have been running down their holdings
Not yet. Intragovernmental holdings were $6.007 trillion on 1/2/2020 and $6.068 trillion on 12/22/2020
I was looking at the Fed balance sheet, Treasury holdings only, the St Louis Fred chart you used differed:
"Public issues held by the Federal Reserve banks have been revised to include Ginnie Mae and exclude the following Government-Sponsored Enterprises: Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and the Federal Home Loan Bank System"
Only because it is.
“Only because it is”
Nope, the Fed is NOT a part of the Federal government. Congress appoints the head of the Fed, etc., but the Fed itself is a group of private bankers.
If you will recall, Reagan would routinely remind the American people in speeches that the Fed was “a private institution not in control of the executive branch.”
And who gets the profits?
Who gets the profits? The Fed, of course (banks). The Fed has never been audited in its entire history.
Reagan was all set to get rid of the Fed and he was almost murdered. JFK was all set to get rid of the Fed; he had already started printing greenbacks to avoid interest payments and he was murdered. He was killed on a Friday, the following Monday the Fed began withdrawing his competing greenbacks from circulation. Lincoln did an end run around the bankers and printed greenbacks to avoid interest payments and he was murdered. These bankers have been killing leaders who opposed their control of the money for centuries.
The Fed had net income of $55.5 billion in 2019. Who got the profit?
The Fed has never been audited in its entire history.
Here is a link to their 2018 and 2019 audits.
https://www.federalreserve.gov/aboutthefed/audited-annual-financial-statements.htm
Reagan was all set to get rid of the Fed
I don't believe you.
JFK was all set to get rid of the Fed; he had already started printing greenbacks to avoid interest payments and he was murdered.
That's weird, he ended $1 and $5 silver certificates and gave the Fed the power to print $1 and $5 FRNs. That made the Fed more powerful, that wasn't ending the Fed.
Who do you pay interest to for your FRNs?
He was killed on a Friday, the following Monday the Fed began withdrawing his competing greenbacks from circulation.
Dude! US Notes were issued until 1971.
Dude, JFK was printing his own government dollars. And they were all withdrawn immediately upon his death. They were not Federal Reserve Notes. We went from silver certificates to Federal Reserve Notes.
You are too ignorant to discuss the issues. You should contact Rand Paul and inform him that the Fed has been audited. It might ease his mind.
3 1/2 hours?
They're called United States Notes.
And they were all withdrawn immediately upon his death.
They were issued until 1971. Not withdrawn.
Check out the date on these $100s.
You should contact Rand Paul and inform him that the Fed has been audited.
If he posts here on FR, I'll be happy to give him the audit link.
The Fed made $55.5 billion in 2019. They didn't keep the profit. Who did they give it to?
Maybe Rand can help you?
As per the college professor told us, the banks making up the Fed are audited but the Fed organization itself has not.
You continue to focus on numbers. This is a mere thread on Free Republic. When I originally said 80 / 20 (80 percent of this year’s deficit is financed by new money and 20 percent by sale of of securities to the public), I hadn’t looked anything up. I used a convenient source because this is a mere thread on Free Republic.
As for your insistence that Fed agencies and trust funds hold only $61B, if you knew what you were talking about, you’d know that was a ridiculous number. Check this out.
https://fred.stlouisfed.org/series/FDHBATN
So, anyway, what is you point? Are you o.k. with the deficit?
That's the growth since Jan 2, 2020.
You also missed what I said here.....
"Not yet. Intragovernmental holdings were $6.007 trillion on 1/2/2020 and $6.068 trillion on 12/22/2020
So, anyway, what is you point?
Purchases by the Fed this year have finance a bit over 50% of the deficit.
Are you o.k. with the deficit?
No.
What part of the Fed is there to audit, besides the Federal Reserve Banks?
You never said who the Fed gave the $55.5 billion in 2019 earnings.......
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