Looks close.
Posted on 02/13/2013 5:38:26 PM PST by george76
The euro may well be on the road to a chaotic collapse, taking some of the world’s biggest banks with it. A currency war may break out between Japan, the U.S. and Europe. Printing money has run out of steam, but there is still little sign of the global economy returning to the kind of growth rates it saw before the credit crunch.
But in the long term what they should perhaps be most worried about is losing their monopoly on issuing money. A new breed of virtual currencies are starting to emerge — and some of the giants of the web industry such as Amazon... are edging into the market.
...
Of course, governments and central banks will try to stop it. They won’t give up their monopoly over money without a struggle. A virtual currency will never be legal tender. But the online universe is very hard to regulate. Governments haven’t managed to stop spam, or pornography, or terror chat rooms, or any of the other online activities they don’t like. There is little reason to imagine they can prevent virtual currencies circulating either.
(Excerpt) Read more at marketwatch.com ...
The Fed does not charge the Treasury directly.
The largest cost to the Treasury is interest on its debt. That was $220 billion in a recent year.
The Fed is a mechanism put in place as the brainchild of the banking syndicate. The banking syndicate cares not if it makes a penny off the Fed’s operations directly; the syndicate has its own operations, that, as you saw above, have the ultimate enhancement as primary dealers in Federal debt.
The Treasury ceded its right to create dollars to the Fed.
The banking syndicate has a few other advantages: it is the sole provider of lending to the government (it has a monopoly on government borrowing). Government bonds represent a claim on taxes, the most powerful form of debt collection. As the sole lenders to government, the syndicate has considerable political influence. The syndicate extends beyond banking into foreign policy. It also extends into the foundation system. It has a monopoly on the capital markets that is enforced by the SEC. The list goes on...
The $77 billion is like cash back on your Discover Card.
Ah, the Fed also sets government benchmark interest rates; rather nice tool for a banking syndicate.
Neither does any other holder of government debt.
The largest cost to the Treasury is interest on its debt. That was $220 billion in a recent year.
How recent? Last year the interest was just under $360 billion.
The Treasury ceded its right to create dollars to the Fed.
Just under 100 years ago.
The banking syndicate has a few other advantages: it is the sole provider of lending to the government (it has a monopoly on government borrowing).
That's not true. You can go here, http://www.treasurydirect.gov/govt/apps/apps.htm and lend to the government anytime you'd like.
The $77 billion is like cash back on your Discover Card.
Yeah, free money.
Only overnight rates.
rather nice tool for a banking syndicate.
Syndicate? What do you mean?
If you're talking about members of the Fed, there are hundreds. Not sure why you'd call them a syndicate.
Yeah, free money.
Hardly, if you look at the whole picture, instead of looking at the Fed by itself, the government is in debt over $16,000,000,000,000.
What does the whole picture have to do with the Fed. The Fed doesn't force the Treasury to borrow. The Fed did allow the Treasury to borrow $77 billion less last year than they would have otherwise. About $300 billion less since the crisis.
I don't know where you're going with this discussion, seems like you are in favor of increases to Federal government debt.
I don't know where you got that idea.
I'm in favor of cutting government spending, a lot.
Privatizing Social Security. Eliminating farm subsidies, sugar subsidies and ethanol mandates. Sealing the border and booting 10 million illegals, to start. Drilling in ANWR and off California and Florida. I can give you more, if you're still confused about where I'm coming from.
I can't think of a single case where the overnight rate is used as a benchmark. You have any examples?
Don’t you think that folks who set the prime rate use the Fed funds rate as a benchmark to a large extent ?
Looks close.
Since Fed 2008, the debt held by the public jumped by $6.5 trillion. Over the same period, the Fed's Treasury holdings increased by $1 trillion. The 10 year yields 2.01%. None of that indicates the private sector doesn't want to buy government debt.
The Fed doesn't force the Treasury to borrow.
But let's be serious, that's like saying the dealer doesn't force the addict to shoot up.
No, it's like saying the Fed doesn't force the Treasury to borrow. The Fed doesn't force the Treasury to spend. The Fed actually causes them to borrow less, as I've said.
Schmucks working and paying taxes and hundreds of billions of it goes to interest on debt
About $300 billion less, since the crisis.
I mean, that guy I mentioned above from J P Morgan - he's telling everyone in that annual report that Treasury Securities are a fantastic business for JPM
Not every Primary Dealer does that well. Some firms have even stopped being Primary Dealers. It's not a guarantee of profit.
If the Treasury created its own money instead of borrowing there would be no Treasuries market.
Sure. What could go wrong?
Unless we have a central bank with adequate control of credit resources, this country is going to undergo the most severe and far reaching money panic in its history, right ?
You're right, there were no panics when we had no central bank.
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