Posted on 12/16/2010 1:30:14 PM PST by speciallybland
Rep. Ron Paul, (R-Texas), who will head a subcommittee overseeing the Federal Reserve in the new Congress, called the central bank a “cartel” and said it had “monopoly control” over the US dollar. “I think we should start ending the Fed by allowing competition. I don’t like the idea that they have monopoly control. It’s a cartel: They get to print the money,” said Paul, who wrote a book called End the Fed.
Paul said that he wanted to “legalize competition,” so that Americans can use gold and silver as legal tender.
(Excerpt) Read more at cnbc.com ...
Everyone talks about how the FR lent money to banks at near 0% so they could recapitalize. Meaning make up for all their failed MBS monkey business. If you want to explain that go right ahead
If they say 0% instead of 0.75%, they're wrong.
Once the panic ended, the run off of their loan portfolios and the new capital they raised was enough to recapitalize.
If you want to explain that go right ahead
It sounds better, sells more newsletter subscriptions and generates more web traffic if you breathlessly shout that banks got money for 0% and bought Treasuries with it.
If that was such a good trade, maybe you could explain why banks are borrowing a massive $22 million, million not billion or trillion, at the Discount Window?
As far as the idea of financing a long term bond portfolio with overnight loans, Lehman and Bear Stearns did that. How'd it work for them?
Thanks. I appreciate that. I’ll have to read more on it and maybe I’ll have something to throw at you as far as the Fed lending money for next to nothing to banks...So they could get back on their feet.
So what the Fed charged was never lower than 0.75%? You are sure about that? As far as banks taking .75% money and buying 10 year Treasuries being a bad idea. The are risk takers these days and figure they can dump them at a rate rise
I saw Thomas Friedman on CNBC yesterday at 8AM. He started talking about how we borrow from China to pay for consumer indulgences such as 62” flat screen TVs. This is sloppy and inaccurate and maybe that’s how I was phrasing things. Many people do/
The USG borrows money from the ChiComs via them buying Treasuries. The US consumer is not borrowing from China. The company that brings in the big LCD TVs is not borrowing from China nor is BestBuy.
Running a huge trade deficit ruins your currency and will ruin the dollar. Huge Federal deficits will hurt the US Dollar. But all this is not as simple as “We borrow from the Chinese to buy their stuff” Which is not true.
The rate was 0.5% from December 2008 until February 2010 when it rose to 0.75%.
The are risk takers these days and figure they can dump them at a rate rise
As long as you don't claim it's a risk free, guaranteed profitable, trade.
Excellent!
Running a huge trade deficit ruins your currency and will ruin the dollar.
Except for those periods when we run a huge trade deficit and the dollar strengthens.
Huge Federal deficits will hurt the US Dollar.
They'll hurt the economy.
I agree. I'm no fan of Ron Paul's and think he leans more to the left than to the right (and that's on a good day), but I think this is the right job for him.
You may be right he may be crazy oooh, but it just might be a looonatic we're lookin' for!
Appropos. LOL
Let me re-try that... lost my line breaks
You may be right...
he may be crazy...
oooh, but it just might be a looonatic we’re lookin’ for!
The rate was 0.5% from December 2008 until February 2010 when it rose to 0.75%.
There is such a thing as speaking colloquially. Just on Squawk Box one guy said the banks are getting money at 0% and getting 4% return on it. Where are they getting that 4%. Credit cards?
#2---Speaking colloquially, which is what I was doing when I said we borrow from the Chinese to buy their stuff. This must we why you kept on saying I was confusing trade deficits and USG Federal deficit?
As long as you don't claim it's a risk free, guaranteed profitable, trade.
I said it was idiot proof but there are people stupider than idiots
You must admit some banks are taking that .75% Fed Reserve money and buying 10 year Treasuries and making easy money. Banks do this all the time such as buying 10 years and granting 30 year mortgages. That's risky but US banks have done this forever
There is also lying and just being wrong. Also hyping your website, column, TV show.
Just on Squawk Box one guy said the banks are getting money at 0% and getting 4% return on it. Where are they getting that 4%.
I have no idea where they're getting 4%, I do know they're not getting money at 0% from the Fed.
This must we why you kept on saying I was confusing trade deficits and USG Federal deficit?
I'm pretty sure you were saying one causes the other. That a trade deficit causes our budget deficit.
You must admit some banks are taking that .75% Fed Reserve money and buying 10 year Treasuries and making easy money.
You'd have to admit that if it was easy money, banks would be borrowing more than $22 million at the Discount Window.
I’m pretty sure you were saying one causes the other. That a trade deficit causes our budget deficit. >>>>>>>>
Not quite. A huge trade deficit means you are a loser nation that is too stupid to put up tariffs. It also means we need to free up industry to produce more and export more. Meaning less EPA, OSHA and other onerous Gov’t regulations
Japan has a high yen but always runs a trade surplus
Or it means you have things other people want to buy more than your products. Equity, debt, land, etc....
It also means we need to free up industry to produce more and export more. Meaning less EPA, OSHA and other onerous Gov’t regulations
I agree. Having the highest corporate tax rate in the world is stupid beyond measure. If you want companies to thrive here.....
Japan has a high yen but always runs a trade surplus
Japan also has a huge government debt. Didn't seem to destroy their currency.
Yes, but the good banks, the smart banks, don't fund those loans with overnight money. The bad ones, the dumb ones, like Bears Stearns and Lehman Brothers used overnight money. Until that overnight money disappeared. And so did they.
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