So are they going to replace the AIG on Manchester United's jersey with "FEDGOV"?
Posted on 09/16/2008 4:49:39 PM PDT by BGHater
I have done so. In reply, Scoobie says:
Arf! Arrrf-arf! Arrf! Arrr-ruff! Ruff! Rrrrrrruff! Arrr-ruff! Arrf! Arrf! Arrrf-arf! Arrr-ruff! Arrrf-arf! Arrf!
Ruff! Ruff!
You have to enter "who owns the fed" at your nearest Google.com web page.
For example, at Who Owns the Fed?, you will read:
In the 1982 case, Lewis v. United States (see "The Lewis Decision"), the Ninth Circuit Federal Court of Appeals opined, "Federal reserve banks are not federal instrumentalities for purposes of a Federal Torts Claims Act, but are independent, privately owned and locally controlled corporations."Other sites will provide a variety of conflicting statements as to owns or controls the Federal Reserve. The Federal Reserve site itself claims that it is not "owned" by anyone. Good for it ;).
It must be huge, right?
The Fed could make trillions a year, they just create money out of thin air. Must be some huge profit center for the owners, don't you think?
ping
“The Bureau of Engraving prints notes.”
That is a subdepartmment of the Treasury, no?
“The Fed buys Treasury Securities from Primary Dealers using newly created money.”
So primary dealers are like middle-men between the Treasury and the Fed? Is there some law on the books that says the Fed can’t purchase securities on the open market by themselves?
They got big by firing all their ethical underwriters and booking every app that came in the door. They wrote junk, on junk, and now WE'RE going to bail them out. New Rule, We the people will only bail out a private enterprise if the entire Board of Directors does a MANDATORY 5 to 10 Maximum Security time.
The difference is that AIG’s debt will be honored, unlike Lehman, where the creditors will have to wait for the BK process and take their chances with recovery.
No tsunami is a good thing.
I expect both Lehmans and AIG’s officers and boards will be diligently sued by their stockholders or lawyers (allegedly) working on their behalf.
That's one why AIG was not allowed to fail. Lehman was.
So are they going to replace the AIG on Manchester United's jersey with "FEDGOV"?
They create debt out of thin air; debt on the good faith and credit of us folks. Us tax paying Americans get to pay that debt, with interest.
They can only create as much debt as we let them. In the events of the last few weeks they have shown that if they scare us enough, we'll let them create a lot of debt.
Yes.
So primary dealers are like middle-men between the Treasury and the Fed?
They're like really big banks and securities firms.
Is there some law on the books that says the Fed can’t purchase securities on the open market by themselves?
I don't think so, but they have to be careful to not unnecessarily cause turbulence in the markets.
That is a subdepartmment of the Treasury, no?
Not exactly.
They create debt out of thin air;
Help me out here. The Fed buys something from a Primary Dealer. They credit the Primary Dealer's account at the Fed. Where was the debt created? Take your time.
debt on the good faith and credit of us folks. Us tax paying Americans get to pay that debt, with interest.
The Fed could buy, for instance, GE or IBM bonds to boost the money supply. How would that in any way cost American taxpayers a dime?
“The Fed could buy, for instance, GE or IBM bonds to boost the money supply. How would that in any way cost American taxpayers a dime?”
Are you asking how boosting the money supply costs taxpayers? It’s called inflation.
I'm asking how creating money can be confused with creating debt. Maybe you could answer?
“I’m asking how creating money can be confused with creating debt. Maybe you could answer?”
Well, as far as I know, the Federal Reserve doesn’t create debt. Debt is created when the federal government spends more than it takes in. This debt can be “monetized,” as they say, which involves the Federal Reserve crediting the U.S. government so it can pay its bills. In the process, the Federal Reserve expands the money supply, which taxes everyone through devalued currency. Perhaps this is what the previous poster was refering to.
When the Fed accepts newly created Treasury notes, from the United States Treasury, in exchange for Federal Reserve Checks given to the Treasury, which the Treasury can deposit in bank accounts as money, the Fed and the Treasury, working together, are creating new debt out of thin air against the "good faith and credit" (and future income) of the American tax payer.
When the Fed sends such Treasury Notes to the mint, it gets in return newly printed money and coins, for dispersing to its member banks, for dispensing to customers withdrawing money as cash.
The Fed doesn't buy securities from the Treasury.
the Fed and the Treasury, working together, are creating new debt out of thin air
When the government spends more than they receive in tax payments, they sell debt. The Fed has nothing to do with that. Sorry.
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.