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Fed Weighs Its Options in Easing Crunch (FED wants to Issue it's own debt)

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posted on Apr, 8 2008 @ 09:38 PM
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Fed Weighs Its Options in Easing Crunch


online.wsj.com

Among the options: Having the Treasury borrow more money than it needs to fund the government and leave the proceeds on deposit at the Fed, which would issue debt under its own name rather than the Treasury's; and asking Congress for immediate authority for the Fed to pay interest on commercial-bank reserves instead of waiting until a previously enacted law permits it in 2011.
The Issue: The Fed has sold or committed a lot of its Treasury portfolio to support markets. Some worry it will soon run out of room to do more.
• The News: The Fed is considering several contingency plans for getting more lending capacity so that won't happen.
• The Bottom Line: The Fed has lots of firepower left before it has to turn to these contingencies.No moves are imminent because the Fed has plenty of maneuvering room. The internal discussions are part of a continuing effort at the Fed, similar to what is under way at foreign central banks, to determine its options if the credit crunch becomes even more severe. Fed officials believe the plans largely eliminate the risk that the Fed will exhaust its stockpile of Treasury bonds and thus lose its ability to backstop the financial system, as some on Wall Street fear.


(visit the link for the full news article)



Related AboveTopSecret.com Discussion Threads:
In Bankers We Trust -or- Financial Socialism for Dummies
Federal Reserve DISASTER

[edit on 8-4-2008 by jefwane]

[edit on 8-4-2008 by jefwane]




posted on Apr, 8 2008 @ 09:38 PM
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OK, so the Fed is thinking that they don't have time for our Congress critters to be steered into the policy decisions that would instigate a bond market/deflationary credit collapse. This type of action by the FED would be like throwing gas on a fire as far as instigating a Depression.

online.wsj.com
(visit the link for the full news article)



posted on Apr, 8 2008 @ 11:17 PM
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Geeze... you know when some body holds all the cards...The game is OVER!!!



posted on Apr, 9 2008 @ 03:36 AM
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So let me get this straight...

The banks can't cover their current debts, so they're thinking of having the FED "make more money from nothing" to supply those institutions that have debts?

I'm sorry, but this spells certain doom to our economy if it goes through. We're already in debt some $10 trillion though; what's another $5T??

TheBorg



posted on Apr, 9 2008 @ 10:42 AM
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Originally posted by jefwane

Fed Weighs Its Options in Easing Crunch


online.wsj.com




The Issue: The Fed has sold or committed a lot of its Treasury portfolio to support markets. Some worry it will soon run out of room to do more.
• The News: The Fed is considering several contingency plans for getting more lending capacity so that won't happen.
• The Bottom Line: ... the risk that the Fed will exhaust its stockpile of Treasury bonds and thus lose its ability to backstop the financial system, as some on Wall Street fear.





watch as the US Fed. siphons funds from the Swiss, the EU, Japan's, London's, NewZealand & Australia Central Banks..

who were all foolish enough to join in a mutual lending agreement with the US Federal Reserve several weeks ago.



posted on Apr, 9 2008 @ 10:55 AM
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...asking Congress for immediate authority for the Fed to pay interest on commercial-bank reserves instead of waiting until a previously enacted law permits it in 2011.


Great another power grab for the Cartel, except it looks like this one was scheduled for 2011 and is being moved up. This essentially take a major aspect of control over the economy away from the Treasury and places it in the hands of the FED.

Who knew about the 2011 thing?

I get the sense that things are progressing much faster than anticipated. Funny thing about leverage, it's negative effects seems to happen faster and stronger than it's positive effects.


Originally posted by St Udio
...who were all foolish enough to join in a mutual lending agreement with the US Federal Reserve several weeks ago.


Amazing isn't it?

The US will take us all down with them and that's the plan IMO. It's the only way to push through either the planned regional currencies (Amero and ASEAN currency) or a one world currency as a solution to all our problems.
.



posted on Apr, 9 2008 @ 11:10 AM
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Originally posted by Gools
The US will take us all down with them and that's the plan IMO. It's the only way to push through either the planned regional currencies (Amero and ASEAN currency) or a one world currency as a solution to all our problems.
.


Bingo


There are rumours about developing regional currencies that are basically all linked together (dry run for a single world currency). World Bank and the IMF are going to be reformed within the year, France and Britain have called for it, expect a powerful world central bank.



posted on Apr, 9 2008 @ 11:45 AM
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Check it out!

This is another link to the story that doesn't require registration and contains more information:



Fed plotting how to achieve infinite money

So the Fed is seeking ways to expand its balance sheet without causing the federal funds rate to drop.


They recognize that it's not good for the rates to go too low yet they keep cutting them.



The likeliest option, one the Fed and Treasury have discussed, is for the Treasury to issue more debt than it needs to fund government operations.

Treasury's principal constraint is the statutory limit debt. Treasury debt was $453 billion below the limit Monday. In the past, Congress always has responded to administration requests to raise the limit, sometimes only after political theatrics.


You get that?

The plan is to allow the Treasury to issue more debt than the statutory debt limit to be used by the FED to create a new class of debt instruments. They are trying to circumvent what little congressional control still exists on the issuance of money and spending limits.


The Fed would use the cash to purchase an offsetting amount of Treasurys in the open market; for legal reasons, it generally cannot buy them directly from Treasury.

It has never done so; the legality is unclear.


No Kidding!!!


Another possibility is seeking congressional approval to pay interest on banks' reserves immediately instead of waiting until a 2006 law permits that in 2011. If the Fed paid, say, 2% interest on reserves, banks would have no incentive to lend out excess reserves once the federal funds rate fell to that level.

Congress put off the effective date because paying interest on reserves reduces the Fed profits that are turned over to the Treasury each year, widening the budget deficit.


Great another way to increase the deficit. These people are brilliant!



Although preliminary explorations suggest Congress would be open to accelerating the date, the Fed is leery of depending on action by Congress.


No kidding!!!

Unbelievable! :shk:
.



posted on Apr, 9 2008 @ 11:46 AM
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Please, for the love of all that is common in humanity - do NOT equate this action with "America".

Americans NEVER willingly participated in this scheme of the money-lenders to consolidate global control of the market - that was done DESPITE American desires. Just because these same fascists managed to install a junta of cronies into our legislative, judicial, and administration bodies doesn't make this an 'American' endeavor.

They took advantage of a naive trust, that's all. And many (MANY) other governments are no less compromised.

However, there is a glimmer of hope in this message, the fact that these financial 'super geniuses' have been compelled to reconsider their time-line shows that they finally see the weakness in their plan. A potential 'flaw' which could cost them the game. They must destroy the world economy much sooner, if there to gain total control, and some inconvenient 'facts' have surfaced about such undertakings. If a popular understanding of what is truly happening begins to coalesce, despite their near-total domination of Global MSM, ambitious world 'leaders' may be able to create a consensus regarding the 'Central Bank' ground rules and their unapologetic profiteering from the pain and suffering of gigantic swaths of humanity.

The Central Bankers are, for the first time I can recall, responding to a situation as if they 'fear' - not for 'us' - but for themselves and their enterprise. If their plans fail - we will all suffer badly (they will see to it) - but it WILL be temporary. If they succeed, we will all be their property - permanently.

Watch the 'talking heads' of media closely now, the comedy is about to begin.



posted on Apr, 10 2008 @ 11:36 AM
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Here is some commentary from a well known economist.



The Fed Is Terrified

The Fed is effectively in a position of not to being able to print money to buy Treasuries from banks, because of restrictions mentioned in the WSJ article and also because the banks are insolvent. Simply put, banks do not have the cash to accumulate Treasuries on their books to sell to the Fed this time around. And more writedowns ... are coming. This will require still more capital raising efforts.

The Fed has already sponsored 3 new lending facilities, yet is having still more discussions on what to do next.

Recap Of Fed Sponsored Facilities

* The TAF (Term Auction Facility) failed to restore liquidity.
* The TSLF (Term Securities Lending Facility) failed to restore liquidity....
* The PDCF (Primary Dealer Credit Facility) will be the next "facility" to fail.

The Fed's ongoing discussions shows deep concern that the above facilities will not be sufficient.

The Fed is now considering borrowing from the Treasury (US taxpayers). Were the Fed to have to do this to remain whole, i.e., have the Treasury underwrite the Fed's balance sheet, the US central bank would be de facto insolvent, having insufficient assets to carry out its mandate.

The perceived invincibility of the Fed's ability to reflate is now clearly in question. The Fed's own discussions prove it.


This guy is on the "deflationist" side of the argument about what type of depression we are heading into (deflationary v. inflationary). I'm on the other side, by I respect his opinion and take comfort when all sides in an argument can see the same problem even if they differ on what it means or the potential outcome.

It's starting to look like the US Central Bank is heading for real trouble. If it fails , this will be the third time in US history. Considering the type of economy the US now has (based on credit and "services") this one's gonna hurt.
.

[edit on 4/10/2008 by Gools]



posted on Apr, 10 2008 @ 11:45 AM
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I rarely call for ATS folks to enjoin some 'movement' but I would love to encourage anyone so inclined to get behind a 'constant reminder campaign' to let all of our representatives in legislature know and be unable to ignore that we, the American people, demand they - DO NOT RENEW THE CENTRAL BANK'S CHARTER.

The Central Bank (the Fed) has demonstrated its complete lack of control over the economic system it foisted on the American people. It single-handedly set this nation back - again and again - while 'promoting - and protecting' it's own profitability over that of the nation.

We must accept there will never be a reckoning nor justice regarding the numerous ways this corporate entity violated the American trust - BUT THAT DOES NOT MEAN WE HAVE TO KEEP LETTING THEM DO IT.

[end rant]



posted on Apr, 10 2008 @ 12:05 PM
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What the fed is doing is stealing wealth from the American people, if any of us were to use a printing machine to print money at will, we will end up in jail for counterfeiting, and that is exactly what the fed is doing.

While they print their money to bail out the banks at the expenses of the tax payer, our salaries are stagnate and our cost of living keeps rising.

But alas we the people are sitting comfortably at home and letting them steal us blind, while allowing our (elected by the people officials) represent us and hope that they do what is good, but hey we all know who they work for.



posted on Apr, 10 2008 @ 01:01 PM
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Originally posted by marg6043
What the fed is doing is stealing wealth from the American people, if any of us were to use a printing machine to print money at will, we will end up in jail for counterfeiting, and that is exactly what the fed is doing.

While they print their money to bail out the banks at the expenses of the tax payer, our salaries are stagnate and our cost of living keeps rising.

But alas we the people are sitting comfortably at home and letting them steal us blind, while allowing our (elected by the people officials) represent us and hope that they do what is good, but hey we all know who they work for.


It really does seem ridiculous doesn't it? Did you know (you probably do) that the Fed is the only fiscal entity in the US that has been granted ( legally) the right to break a contract and simply refuse to pay a debt? I'm not sure who they got to slip that into their 'mandate' but it was an amazingly blatant indication of where the 'people's rights' fit into to the big picture....,

"Give us our money!"... "Nope, not gonna happen." ... "We'll sue!" ... "Uh huh, go for it!" - Case dismissed.



[edit on 10-4-2008 by Maxmars]



posted on Apr, 10 2008 @ 01:09 PM
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Originally posted by Maxmars
I'm not sure who they got to slip that into their 'mandate' but it was an amazingly blatant indication of where the 'people's rights' fit into to the big picture....,


That one is easy to answer, the crocks in the financial business that put together the fed, made sure that they will be an entity in their own rights, as far away from the regular citizens constitutional ones.

I always wonder if the desirable outcome through the years and in a near future after the fed creation was to be able to take over the nation and the peoples right of self government.

I guess I am ranting now.



posted on Apr, 10 2008 @ 01:14 PM
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reply to post by marg6043
 


Be my guest - rant away - this is perhaps one of the few thread where you wont find many detractors. It seems like many of us are 'keepers of the secret history" - I can't more than one out of fifty or so people who have even the slightest notion of exactly what the Fed is.

But what can I say, we're competing with talking heads that attract 'viewers' with Paris Hilton, WWE, shiny new cars and game shows.



[edit on 10-4-2008 by Maxmars]



posted on Apr, 10 2008 @ 01:29 PM
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reply to post by Maxmars
 


I agree, I see you are new here, I like your line of thinking and so far your posts in this thread are very interesting you called my attention right away.


I know people don't like to get into historical accounts specially when it has to do with our nation, many people like to take what is spoon fed to them through the bias corporate media and our government.

One of the things I love about ATS is that historical facts can be used for the enjoyment of those that wants to learn the truth.

We are right now watching a historical event in this nation that is going to reshape how we see and perceive the fed.

This entity is taking center stage and cementing its control.



posted on Apr, 10 2008 @ 01:57 PM
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Marg good to see you back or at least I havent seen ya around. Yea they want to keep giving the FED more and more power. They now want the FED to control our economy with the new law they want to pass. I mean the same FED that got us into this mess we are going to give them more power.



posted on Apr, 10 2008 @ 02:08 PM
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Thanks, mybigunit, I took a littler brake, you know spring cleaning and lost of things to do around the house, I will be in and out for the next few weeks.

I can not see why in the heck the Fed needs anymore power, obviously they so far has done on their own pretty good without any laws they make their own.

One thing that bothers me is that the powers behind the fed are the ones seeking this increase in powers protected by law.

So far the only bail out they have done is for their own interest all at the expenses of the tax payer that is in trouble from the inflation the fed has created, I really don't like what Is going on.



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