Posted on 10/01/2013 9:38:18 AM PDT by george76
In 64 A.D., in a naïve attempt to deceive the populace, Nero decreased the silver content in the coins and made silver and gold coins slightly smaller ... central planners have been clipping coins and devaluing the The People’s hard-earned currency for at least two thousand years. The Roman Emperor Nero of course devalued the Roman currency for the first time in the Empire’s history. What was it that gave both the Roman and Ottoman Empires the audacity to plunder the purchasing power of their people?
After 200 years of operating as an independent bank, what made the British Empire so soft that it felt the need to socialize (nationalize) the Bank of England in 1946? What was the US “Free-Market” Empire and why have we empowered the Fed to change it?
If you disregard the vacuum of history in which Ben Bernanke thinks (the 1930s) and contextualize the moment his Fed currently occupies (within the construct of long-term history, which will ultimately judge Bernanke when he’s long gone), it’s getting scary again. But you probably already knew that. The sad thing is that some of his Fed heads do too.
On Monday, Dallas Fed Head Richard Fisher basically admitted two key things:
1.) The current White House Administration has politicized the US Federal Reserve.
2.) By not doing what they led the market to believe they would do (taper), the Fed is losing credibility
(Excerpt) Read more at forbes.com ...
Can I buy stock in any of those government agencies? No...but I can buy stock in the FRB although I would have to own a bank to do so.
People that work for these independent agencies of the Executive branch are federal employees and their paychecks and terms of service are all administered (just like the military, federal judges, the FBI, etc.) by the Office of Personnel Management --another independent agency.
I've provided links from a Federal reserve bank stating very clearly that employees of the federal reserve bank are not government employees. I've also provided links that federal courts have ruled that the FRB is not a government agency and people employed by them are not government employees. Not to mention that I've also linked an OPM document that lists all federal government agencies and the FRB is absent. I don't know what else to tell you.
BTW The FRB employees are not paid through the OPM but directly by the FRB out of “operating costs”.
Of course they do. Any stock holding member bank derives a percentage seignorage, it's one of the primary ways they make money.
That's silly. My local member bank neither mints nor prints money.
That's a bad link.
On a side note have you ever wondered how a non profit organization ends up with more than 2 trillion dollars in assets?
In this case, not at all.
The assets don't come from the profits.
What's so great about Fed stock?
The united states treasury prints and mints money, not the FRB. Regardless it's silly to think that a bank like citibank or chase manhatten that own more than 5% of multiple Federal Reserve banks are not getting a cut of the seigniorage. They don't have to actually have to manufacture the money if they are getting a better deal on the money than everyone else.
It doesn’t matter if the stock is good or bad.
I’m not sure why a direct link isn’t working.
http://research.stlouisfed.org/publications/review/92/03/Seigniorage_Mar_Apr1992.pdf
You claimed they did it (Profits coming through the privileged money creation process mainly occurs at the member bank level of operation), not the FRB, and it was the majority of their earnings. Total bank dividends last year were $1.6 billion. A tiny fraction of bank earnings. And a far cry from "Educated estimates put this between $100-200 billion per year".
And banks would get that even if the Fed never put a new FRB into circulation ever again.
They don't have to actually have to manufacture the money if they are getting a better deal on the money than everyone else.
Really? What deal are they getting?
They should never have called it stock, they should have called it a bond. It gives people the impression that member banks get some ownership in the Fed’s balance sheet or in their profits. Or that they get to vote on the Fed Funds rate.
That one works. I was going to post that one to you yesterday.
Let's get clear on the difference between the Federal Reserve System where Bernanke works, and the district banks that --
...operate under the general supervision of the Board of Governors in Washington. Each Bank has a nine-member Board of Directors that oversees its operations.
Federal Reserve Banks generate their own income, primarily from interest earned on government securities that are acquired in the course of Federal Reserve monetary policy actions. A secondary source of income is derived from the provision of priced services to depository institutions, as required by the Monetary Control Act of 1980...
The article's about the Federal Reserve System, not the banks. In Washington DC there are about a thousand federal government employees that don't work for district banks. There's no private stock ownership of the Federal Reserve System that we're talking about. This is why you may want to reconsider what you said in your post #3.
I have clearly stated how the Federal Reserve works in other posts in this thread.
The article's about the Federal Reserve System, not the banks.
Separating the board of the Federal Reserve from the Banks of the Federal reserve seems a little like sophistry don't you think? The Board of Governors only implement policy (at the will of congress) that the Federal Reserve Banks carry out. Other than congress being able to determine how the system operates via legislation, this is just like the board of directors of a corporation. As the federal reserve banks are owned by shareholders the Federal Reserve is in fact owned by shareholders regardless of the Board of Governors being appointed by the President.
The money creation process and the Printing and Minting of money are very different things. Actual cash money represents only a fraction of the Treasury. Again this isn't a conspiracy just the way the FRB says that it works. Total bank dividends last year were $1.6 billion. A tiny fraction of bank earnings. And a far cry from "Educated estimates put this between $100-200 billion per year"
Dividends from stock the FRB are not what I was referring too when talking about the privileged money creation process. And banks would get that even if the Fed never put a new FRB into circulation ever again.
Sure they would get dividends on the stock they had purchased as that is part of the deal when purchasing stock...I'm not sure what your point is here.
Really? What deal are they getting?
That is a really good question. If that were known people wouldn't have to make estimates.
I know.
That is, the net earnings from the member banks seigniorage privilege are not turned over to our government but kept by the private member banks. Educated estimates put this between $100-200 billion per year.
So what is this seigniorage privilege that member banks have?
Dividends from stock the FRB are not what I was referring too when talking about the privileged money creation process.
Privileged money creation process? What's that?
If that were known people wouldn't have to make estimates.
You don't know the deal they're getting? But you know "they are getting a better deal on the money than everyone else"?
We'll understand that the ownership does not represent fee simple possession "in which the owner has the right to control, use, and transfer the property at will." As you stated in post 14 "If you were to argue that they aren't a corporation I would be forced to concede your point. As a corporation is a legal term of art and they don't actually meet the criteria..."
In that same post "Profits coming through the privileged money creation process mainly occurs at the member bank level of operation, and those profits are not turned over to the Treasury." That seems to differ with (from here): Federal Reserve Banks are not, however, operated for a profit, and each year they return to the U.S. Treasury all earnings in excess of Federal Reserve operating and other expenses.
I'm not exactly sure what you are getting at here. Are you suggesting that those banks which own the shares of the federal reserve don't actually own anything?
In that same post "Profits coming through the privileged money creation process mainly occurs at the member bank level of operation, and those profits are not turned over to the Treasury." That seems to differ with (from here): Federal Reserve Banks are not, however, operated for a profit, and each year they return to the U.S. Treasury all earnings in excess of Federal Reserve operating and other expenses.
I don't see how that differs except the Fed is failing to mention the profit of member banks.
I don't think you do.
So what is this seigniorage privilege that member banks have?
Really?
Privileged money creation process? What's that?
Really?
You don't know the deal they're getting? But you know "they are getting a better deal on the money than everyone else"?
Really?
This conversation has become cyclical and pointless.
Really?
You made the claim. You can't explain? Really?
Privileged money creation process? What's that?
Really?
If you mean borrowing and lending, don't be such a drama queen.
This conversation has become cyclical and pointless.
You're right about that. You make silly claims, I ask you for proof, you can't provide it.
If you ever start to use the real definition of seigniorage, feel free to show how member banks use it to earn "between $100-200 billion per year".
They own a bond which pays 6% per year.
I don't see how that differs except the Fed is failing to mention the profit of member banks.
Why would they? If you need to know the earnings, many excellent annual reports are available.
We're talking about the shares that member banks buy from District banks; let's look at the law.
Banks buy shares at "$100 each" (from FRA Section 5). Now, when most people buy stock shares in a private company they may want to control or own the company and sometimes it's for capital gains or dividends. FRA Section 5 specifically forbids these goals by flat out saying that "Shares of the capital stock of Federal reserve banks owned by member banks shall not be transferred or hypothecated" and the fact that Congress even retains control of management.
The only reason banks buy shares (re- FRA Section 4) is so they can "avail themselves of the advantages of this Act." OK, so it's not much compared to what can be had with other kinds of shares, but there are a lot of banks happy enough with the deal.
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