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The Occurrence of Debt, or what I would do with $7 Trillion - MASSIVE Read

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posted on Jan, 10 2011 @ 05:37 PM
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Yes I know, another thread on the Fed. I would like to apologize upfront for the somewhat jumpy nature of this post. This has been a work in progress for over a few months and due to the wealth of information it is difficult to maintain one big storyline. However, I hope this information can be a starting point for many more threads by other contributors. Also, some of the numbers may be a little old, but accurate within 3-4 months. I welcome any constructive criticism and correction of any errors i may have made.

The Occurrence of Debt



“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up, will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. “
Thomas Jefferson


Purpose


The following are the purposes of this document:
Understand what we could do with $7 Trillion and why would we ask that?????
• Understand the idea of usury (debt)
• To understand how money is created
• Understand the idea of modern banking (fractional reserve banking)
• Understand the idea of central banks and the Federal Reserve
• Understand the relationship between fiat currency and coined currency
• To understand why our current system needs to be changed

With this article I intend to help people understand how our current economic system works and the implications it means for us. In this day and age, it is virtually impossible, even for foreign countries, to not be effected by, and somewhat dependent on the US economy. With a better understanding of our banking system it is my hope that we can start making positive change towards a system that is a more conducive environment for progressive action. People should understand this system, what it can do legally, and what legal power we have as citizens. I will be discussing the concept of Central Banks and our current one, the Federal Reserve. I will be discussing Fractional Reserve Banking, how it works, how it can be a tool for great profit, but also great loss to banks. The topic of fiat currency will also be addressed and how it different from real currency with intrinsic value. I will also go over how fiat currency can hurt us, and makes corruption easier. And at the end I will go over our options of what we can do, to create a better economy.


“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.”

-President Abraham Lincoln

Central Banks and the Federal Reserve


The idea of Central Banking originated in England, where the first central bank, The Bank of England, was established in 1694 . The bank was created to help King William III out of his government’s financial crisis. At the time, banks could print their own money, which resulted in a number of different currencies being printed. With their current technology, it was difficult to maintain the stability of the money system, due to each currency type being worth different values. The idea of the central bank was to have one institution printing uniform currency, in which the entire nation and populace would honor. In the beginning, central banks were typically limited to this type of activity, however, as we will see, this class of people continued to pursue more power. The current definition, as offered by Google, a Central Bank Is defined as:

“A central bank, reserve bank, or monetary authority is a banking institution granted the exclusive privilege to lend a government its currency”
– google.com
This definition deserves close scrutiny if one wishes to fully understand how this system works. In the definition it says a central bank has “the exclusive privilege to lend a government its currency”. From this we can extrapolate that A central bank(Federal Reserve), has the exclusive right to loan(read interest) our government its money supply. One has to wonder how you would get the exclusive right to loan a government its currency? And why exactly would a government need to be loaned currency, Couldn’t they just print their own?

Loan : The act of lending, giving permission to use, lending money with interest.

Credit : Is the provision of resources by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, but instead arranges either to repay or return those resources at a later date.

Usury: The charging of interest on loans; this included charging a fee for the use of money or currency.

Money: Any money declared by a government to be legal tender, State-issued money which is neither legally convertible to any other thing, nor fixed in value in terms of any objective standard. Coins and paper money that do not have metal value or are not backed up by metal value. (Faith Based Money)

So does the United States have a Central Bank? The answer unsurprisingly is yes, our central bank is called the Federal Reserve. The Federal Reserve was written into law in 1913 with the Federal Reserve Act signed by President Woodrow Wilson. The Federal Reserve System is composed of the presidentially appointed Board of Governors, the Federal Open Market Committee, twelve regional Federal Reserve Banks located in major cities throughout the nation, numerous other private U.S. member banks and various advisory councils. The Federal Reserve is in charge of creating our currency which it loans to our government, and charges a usury fee to use it. Despite its name, the Federal Reserve is not a Federal organization. The Federal Reserve is actually a private for profit banking corporation. As noted within the Federal Reserve’s website, they pay a 6 percent dividend to member banks and investors. This 6 percent dividend comes from the interest paid on the debt we owe the Federal Reserve and pay through our income tax.

"The regional Federal Reserve banks are not government agencies. ...but are independent,
privately owned and locally controlled corporations." Lewis vs. United States, 680 F. 2d 1239
9th Circuit 1982


The History of Central Banking in the US


The US has had a long history of experimenting with Central Banks. The first U.S. institution with central banking responsibilities was the First Bank of the United States, chartered by Congress and signed into law by President George Washington on February 25, 1791. This was done despite strong opposition from Thomas Jefferson and James Madison. The charter was for twenty years and expired in 1811 under President James Madison, because Congress refused to renew it. In 1816, however, Madison revived it in the form of the Second Bank of the United States. Early renewal of the bank's charter became the primary issue in the reelection of President Andrew Jackson. After Jackson, who was opposed to the central bank, was reelected, he pulled the government's funds out of the bank. Nicholas Biddle, President of the Second Bank of the United States, responded by contracting the money supply to pressure Jackson to renew the bank's charter forcing the country into a recession, which the bank blamed on Jackson's policies.LINK

"From now on, depressions will be scientifically created." Congressman Charles A.
Lindbergh Sr. , 1913


The last line is highlighted to show the significance of this action. Rather than submit to the will of the people, the central bankers would rather use their institution as an economic weapon, to persuade the course of the country. These are not the actions of a benevolent institution, but rather the actions of a predatory institution, which uses it power and influence to pursue their own interest instead of the people they are to help. The following article and research puts this into perspective.

Politicians share personality traits with serial killers: Study

“Kouri notes… criminals are psychologically capable of committing their dirty deeds free of any concern for social, moral or legal consequences and with absolutely no remorse. This allows them to do what they want, whenever they want”. "Ironically, these same traits exist in men and women who are drawn to high-profile and powerful positions in society including political officeholders. "



"Give me control of a nation's money and I care not who makes the laws." -Mayer Amschel Rothschild

Our current Central Bank is called the Federal Reserve. It was created in 1913, through the Federal Reserve Act, which was championed by then Senator Nelson Aldrich. But where did the idea originate to go back to a Central Bank? A concept that had already failed twice in the US! In the book The Creature from Jekyll Island, by Edward Griffen, we can see a glimpse of where this system originated. This act was put forth at a private meeting on Jekyll Island, a meeting place for the rich and affluent, by roughly seven people.
1. Nelson W. Aldrich, Republican "whip" in the Senate, Chairman of the National Monetary Commission.
2. Frank A. Vanderlip, president of the National City Bank of New York, representing William Rockefeller and the international investment banking house of Kuhn, Loeb & Company.
3. Abraham Piatt Andrew, Assistant Secretary of the United States Treasury.
4. Henry P. Davison, senior partner of the J.P. Morgan Company.
5. Charles D. Norton, president of J.P. Morgan's First National Bank of New York.
6. Benjamin Strong, head of J.P. Morgan's Bankers Trust Company.
7. Paul M. Warburg, a partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty
in England and France, and brother to Max Warburg who was head of the Warburg banking consortium in Germany and the Netherlands.


However, Aldrich's bill met much opposition from politicians and critics who were suspicious of the idea of a central bank. Furthermore, Aldrich was accused of being biased due to his close ties to wealthy bankers such as J. P. Morgan and John D. Rockefeller Jr, his son-in-law.



The Federal Reserve Members will be returning to Jekyll Island to celebrate and honor 100 years of existence. www.businessinsider.com...


What does it mean that our current economic system was written by bankers and championed by their relatives in the government? Can we trust these people to create a system that is fair and operates under the auspices of being a benefit for everyone? Do we have any reason not to trust these people? Here is something interesting to consider when asking these questions.

“Wall Street firms aren't the only banks that had a banner year. The Federal Reserve made record profits in 2009, as its unconventional efforts to prop up the economy created a windfall…Much of the higher earnings came about because of the Fed's aggressive program of buying bonds, aiming to push interest rates down across the economy and thus stimulate growth. By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. This shows that central banking is a great business to be in, especially in a crisis, said Vincent Reinhart, a resident scholar at the American Enterprise Institute and a former Fed official.” Vincent Reinhart



Now, during what is considered the worst depression since the Great Depression, why is the Federal Reserve posting “record profits”? What this shows, and is important to understand is that, whether the economy does good or bad, the Federal Reserve will still generate a profit. And even though a portion of this profit goes to the US treasury, this money is still spent on paying off interest on bonds and treasury notes. As of late, it almost seems that the worse our economy gets, the higher the profits of this system.

If you find this interesting, I would recommend reading “The Shock Doctrine” by Naomi Klein. This is an interesting expose on the economic policies of Milton Friedman, who some call the godfather of economics and the aptly named idea of Disaster Capitalism: “using the public’s disorientation following massive collective shocks – wars, terrorist attacks, or natural disasters -- to achieve control by imposing economic shock therapy.”


Only a crisis, real or perceived, produces real change.-Milton Friedman


How is money and debt created?


For this, I will use a real life example that we all witnessed recently. In 2009 the US went through a series of Tax payer funded bailouts that were designed, some argued, to save the US/World economy. The two bailouts I will talk about is the $700 Billion Bank bailout, and the $400 Billion Bailout of Fannie Mae and Freddie Mac. To keep this simple, we will say $1 Trillion instead of $1.1 Trillion. In reality, the fed has promised up to $12 Trillion in total bailouts which would bring us past our current debt limit of $14.3 Trillion. Obama Admin confident Congress will raise debt limit



1. The US Treasury prints off $1 Trillion worth of Treasury Bonds.
These Bonds are considered an investment, as they pay out interest, on top of the actual initial value of the bond. So these $1 Trillion in bonds are actually worth $1.05 – $1.1 Trillion over the following years(depends on rate and term).
2. The US treasury contacts the Federal Reserve and tells them we need $1 Trillion more dollars.
3. The Federal Reserve prints off $1 Trillion worth of Reserve Notes.
4. The Federal Reserve then buys the $1 Trillion in Bonds with the newly printed $1 Trillion in Reserve Notes.
5. The US Government/Treasury can now utilize this money. In this case, $700 B went into Bank of America and $400 B went into Fannie and Freddie.
6. The US Treasury and US taxpayers are now liable to pay off the money owed by these Bonds. The only problem is, we only borrowed $1 Trillion, but we owe more due to the interest. So how could we possibly pay it off? Well under our current system, we just go back to step 1 and borrow more money.
When we walk through the steps “necessary” for money to be created, it is easy to realize just how the scam works. No matter how much money we borrow from the Federal Reserve, WE WILL ALWAYS OWE THEM MORE, due to interest. If you do the research, you will see that nearly every country on this planet is in debt.
Countries by Debt - Public
List of countries by Debt - External
But why are we in debt, and to whom? Doesn't it seem strange countries do not print their own debt free money?


While researching I also found something new which I was unaware of called seigniorage. To give some history, during the civil war, President Lincoln issued a new type of currency called the United States Notes or Greenbacks that was not linked to the central banks and was interest free for the benefit of the citizens. There is some speculation that he was assassinated for this.
"The difference between a United States Note and a Federal Reserve Note is that a United States Note represented a "bill of credit" and was inserted by the Treasury directly into circulation free of interest. Federal Reserve Notes are backed by debt purchased by the Federal Reserve, and thus generate seigniorage for the Federal Reserve System, which serves as a lending intermediary between the Treasury and the public."

"Ordinarily seigniorageis only an interest-free loan (for instance of gold) to the issuer of the coin or paper money. When the currency is worn out, the issuer buys it back at face value, thereby balancing exactly the revenue received when it was put into circulation, without any additional amount for the interest value of what the issuer received. Currently, under the rules governing monetary operations of major central banks (including the central bank of the USA), seigniorage on bank notes is simply defined as the interest payments received by central banks on the total amount of currency issued. This usually takes the form of interest payments on treasury bonds purchased by central banks, putting more dollars into circulation. However, if the currency is collected, or is otherwise taken permanently out of circulation, the back end of the deal never occurs (that is, the currency is never returned to the central bank). Thus the issuer of the currency keeps the whole seigniorage profit, by not having to buy worn out issued currency back at face value."


"The Federal Reserve bank buys government bonds without one penny."-Congressman Wright Patman, Congressional Record, Sept 30, 1941



Fractional Reserve Banking


Another interesting thing our bank can do is called Fractional Reserve Banking which is really just funny math. In simple terms, for every single physical dollar a bank has deposited within it, that bank can then loan out up to $10 from that single Dollar. When the Government infused $700 Billion into BoA, they were given the ability to loan out up to $7 Trillion AT PROFIT thanks to the tax-payer bailout. However, even though we bailed them out, we still have to pay them profit to borrow our money back. What was most important is that these lending institutions were able to continue loaning out money, generating profit, and expanding the economy. In fact, there is a reason why we always here so much about the economy and whether or not it is growing. When the economy grows, the effects arent as bad as when the economy shrinks. However we cannot continue to grow forever in this current form.

Fiat Wealth Vs Real Wealth


In order to get a loan, especially for a mortgage, one must offer up collateral. This is something you offer to the lender, in the chance you cannot repay the loan. Almost every type of loan will require some form of collateral.
Say you experienced hard economic times and were unable to repay the loan. The bank would then require reimbursement or what you offered up as collateral. And this is what people need to understand. By giving out a loan, the bank is essentially creating money out of thin air(Fractional Reserve Banking), there is no real value to it. However, if you fail to repay that loan back, the bank will get to keep your REAL assets (vehicles, jewelry, property), the rest of the loan, and any interest you paid them as well. These Assets have an intrinsic value associated with them.Think – All profit, no responsibility.
Foreclosure Rates


The National Debt Clock - Important Link


I inserted a few of the trackable items below that I believe were important to point out

Notice the Unfunded Liabilities at the bottom. $111 TRILLION. The unfunded liabilities are securities the government has promised and is projected to owe into the future. That means each taxpayer will have to pay slightly more than $1 million in taxes over their life time to sustain this. Have fun at work tomorrow!

The national debt is credit or money owed by the US. This occurs when the government runs on a deficit, which means the government spends more than it brings in, through revenue. In order to make up for the shortfall, the government prints bonds and securities and auctions them off. When not enough money is raised at these auctions to cover the difference, the government will then in turn ask for help from the Federal Reserve.

How Much Do We Owe?

As it stands, our national debt stand roughly at 13.7 trillion dollars, which equates to 44k per person, or 124k per tax payer. The current total interest owed on this debt is 3.2 trillion, or 10.5k per person. The current amount of currency in circulation is 8.6 trillion. Total future known US liabilities is valued at roughly 111.2 trillion dollars, or 1 million per taxpayer.
So a current tax-payer is estimated to owe roughly 140k. If we add up the known future liabilities the government has “promised”, each tax payer can look forward to owing more than $1 Million over your life to sustain this system.
Credit Derivative- Stated in plain language, a credit derivative is a wager, similar to placing a bet at the racetrack, where the person placing the bet does not own the horse or the track or have anything else to do with the race. The person buying the credit derivative doesn't necessarily own the object of the wager. He simply believes that there is a good chance that the entity in question will go to zero value. The cost might be as low as 1% per year. If the buyer of the derivative believes the underlying bond will go bust within a year the buyer stands to reap a 100 fold profit. A small handful of investors anticipated the credit crunch of 2007/8 and made billions placing "bets" via this method. What does it mean if we allow people to bet that a company will go down? Would that ever lead to people intentionally try and destroy a business?



(Pre-Obama) Republican have put us in more debt than Democrats by almost double.

Who Do We Owe It Too?





The left side represents the top 10 entities we owe money to. The right side shows the total amount and proportion of debt owed to the public, the FR, and foreign entities.

Other News of Interest


CNN Link




35 foreign banks bailed out by the Fed


Bloombergfears the US rescue may reach $24 Trillion

Mathematically impossible to pay off US debt?
Can we even pay off the debt? M2(the current money supply in existance) is estimated at only between $8-$9 Trillion. However our National Debt is almost $14 Trillion. Meaning if the US took every single physical dollar bill we had, it would still not cover the entire cost of our debt. And the only way to get more money, would be to borrow it from the fed, thus creating even more debt. It is now a MATHEMATICAL impossibility to pay off our debt with physical cash.

Treasury Auction Bombs- Lender of last resort The Fed buys up Debt




When the Fed infuses Cash into the economy-^ we experience inflation. Basically the new money must borrow its value from existing money. Since the Federal Reserve Note was created it has lost over 98% of its value.

money.cnn.com...


In fact, when we count for inflation, the "average" American family is losing a battle when we consider Real wage gain versus inflation. The buying power of the dollar is being eroded every day, at a rate faster than wages have been rising. The following is a graph from Stanford University - Link

As you can see, even though the current dollar value has been steadily increasing(blue), when adjusted for inflation is has basically remained stagnant. It is unfortunate that graph stops at 2000 as im sure the picture gets much worse after 2001.



Through the Treasury, Census, and other websites, the government provides a wealth of information if you wish to do some research of your own.

Be sure to check out these websites. They are the best resources and information contained in this post
www.usinflationcalculator.com...
A very easy tool to chart the value of money from 1913-today based on inflation.

Census.gov Historical Median Income Data 1967-2009
PDF

As you can see, the rich have been getting richer, and the poor are getting poorer.



At this point, I want to thank anyone that has made it this far. I have been slowly working up to my finale that I hope will have the most impact on you.

Interest paid on the National Debt


So how much are we paying to sustain our deficit spending? I will warn you that is it very grim indeed.

Treasury.gov




So within the last 23 years, we have spent almost $8 Trillion dollars just on paying off the interest on the national debt. Just to make things clear, this IS NOT paying off the National Debt, but merely paying off the interest generated by it. As it stand we are roughly $14 Trillion in debt and within the last 23 years we have spent roughly half of that, just paying the interest.

What could we have done with that $7 Trillion dollars?
source 1
NY Times source 2

I put this image together, based on the above statistics, to show what we could have done with that money.


These statistics are based off of the current world population, and would not cover people born after necessarily.
However, the facts speak for themselves. I think if the US had invested this much internally and abroad, it would be hard to find people who would still consider us enemies.


What can we do?


Although the debt outlook seems very gloomy now, there is still much we can do to improve our current system. For your typical citizen, just staying out of debt is help enough, but what can we do on a fundamental level to fix this problem at the root? Here are a few ideas.

1. Stop running a deficit
2. Return to hard currency, or a hybrid of what we currently use.
Our current form of currency is called fiat currency. Which means it is paper money or legal tender. It is not backed by physical goods, which are typically precious metals. The reason humans used coins made of precious metals for thousands of years, is due to the fact one could melt their coin, and have a purified ore or mineral, which could then be used to make tools such as an arrow head. The point being, the coin itself had physical value, in that it was a precious metal. When a country uses a fiat currency, corruption and crimes are easier to commit, as it is much easier to manipulate the value of something on paper with tricky math, than to manipulate the value of a physical object. But what do I mean by tricky math?
3. Eliminate or reduce the proportion of Fractional Reserve Banking.
Fractional reserve banking is one of the tricky math abilities banks have to generate profit.
Basically, for every 1 physical dollar someone has saved/invested in a bank, that bank can then loan out 9 dollars, at interest, to the public or other entities. So if a bank has a total of $10 Million in cash reserves, that bank can loan out $100 Million dollars, and charge a usury fee for it. This is another example of banks just creating money, out of thin air, and generating profit for in essence, doing nothing but tricky math on paper.
4. Remove funds from FR connected banks into community banks.
While fractional reserve banking is a powerful system that generates a lot of wealth, it is also their potential downfall. If the people wanted to get the attention of these institutions, all we have to do is remove our money from these banks, and deposit them in Local Community Banks.
Not only do community banks typically offer better interest rates, but their profits are more local. On top of that, FR connected banks would be unable to loan 10X the amount of money we take out.
5. Move to a central banking system that does not charge a usury fee or interest.
This is the critical part of the deception. There is NO need to use a central bank that charges interest. Congress, the government, and the people all technically have the right to coin money.
During the civil war, Lincoln printed interest free money called greenback, for the benefit of our citizens. On June 4, 1963 JFK signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. There are also many other “alternative currencies” in circulation in the US that are legal.
Alternative Currencies - wiki
Ithaca Hours - Alternative Currency - Ithaca, New York - Important link

 Does anyone have anything they can argue in support of the Fed? I'm interested in hearing your thoughts regardless.




posted on Jan, 10 2011 @ 06:23 PM
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Most of your ideas are fine and dandy, but one of them caught my eye as being a huge mistake.

1 Trillion on a mere 1.7million habitat for humanity houses? That's so wasteful I would call it Government style waste.

How about let's just give that 1 Trillion back to the taxpayers, and let them pay rent themselves. Thx.


Also, instead of just buying water for the 3rd world, why not buy water for ourselves too? Unless you like being thirsty all the time that is!



posted on Jan, 10 2011 @ 06:26 PM
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No now that I think about it, I dislike all of these plans.

It's all so ultra wasteful.

Maybe we should just return the entire sum to the taxpayers and let them sort it out themselves. If they think it should go to charity they can pick their favorite ones.

Yeah, I'm liking that return the money idea...



posted on Jan, 10 2011 @ 06:30 PM
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reply to post by muzzleflash
 


Thanks for posting. And im not necessarily arguing that we have to spend that money doing that. I am however trying to point out how much money it is, and what you could accomplish with that much money. These were the only statistics I found that I liked, so i did the math to make them work out to the necessary 7 trillion.

But yes, I wouldn't mind having my portion of that either. Regardless, the money would still be better spent on something other than interest.



posted on Jan, 10 2011 @ 06:59 PM
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reply to post by muzzleflash
 


You call it wasteful, but have you ever thought about investing in our mutual future? As i tried to point out, it would be hard for anyone, group, or country to hate us, if we had invested this into the world for the good of humanity. One things for sure, we cant maintain this system forever. We need to get off this planet eventually which i feel is impossible if we don't unite as one species. What would you do with that money then?



posted on Jan, 10 2011 @ 07:14 PM
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Oh, just give very person a million currency units, deduct no taxes, let them do with it as they will. Tell them that's it, there will be no more and sit back to see what happens!

Once every person has received their share, use the change to keep the infrastructure ticking over.



posted on Jan, 10 2011 @ 07:15 PM
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Now that you understand that the Fed creates money out of thin air and debt, it is time to move on to the next step. The government doesn't have to pay anything back. The governments real power is the control of resources. It does this through the use of armies and police forces. Money is the problem. It is just a median to trade in resources. People are the real value and they are the ones who assign a value to any resources. The government can assign resource units to its people. No more inflation.



posted on Jan, 10 2011 @ 07:31 PM
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And why exactly would a government need to be loaned currency, Couldn’t they just print their own?


To try and uphold a separation of politics and economics.


Despite its name, the Federal Reserve is not a Federal organization.


The Board of Governors of the Federal Reserve System run the federal reserve, and it is indeed a federal agency.

They have a dot.gov site which you can find the correct information about some of your claims


Who owns the Federal Reserve?

The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

...Therefore, the Federal Reserve can be more accurately described as "independent within the government."


Who owns the Federal Reserve


The Federal Reserve is actually a private for profit banking corporation


It's not, please check their annual reports to see where their money actually goes.


This 6 percent dividend comes from the interest paid on the debt we owe the Federal Reserve and pay through our income tax.


No, it's paid with any money the government has, income taxes have no relevance here.

To quote from one of my previous posts, ironically about incomes taxes:


86th Annual Report of the Board of Governors of the Federal Reserve

On page 335, you can clearly see their total interest income was (in millions) 28,452, their total operating expense was 2,878, and the "payments to the US treasury as interest on federal reserve notes" is 25,409.

So again, the federal reserve basically pays back any 'debt' the government created by borrowing money, there's no massive debt to be payed back, and if there was, it's the governments fault, not the federal reserves.

Quoted for clarity:

1999 Combined Statements of Income of the Federal Reserve Banks (in millions)

Interest income Interest on U.S. government securities 28,216
Interest on foreign securities 225
Interest on loans to depository institutions 11
Other income 688
-------
Total operating income 29,140

Operating expenses Salaries and benefits 1,446
Occupancy expense 189
Assessments by Board of Governors 699
Equipment expense 242
Other 302
-------
Total operating expenses 2,878

Net Income Prior to Distribution 26,262
Distribution of Net Income Dividends paid to member banks 374
Transferred to surplus 479
Payments to U.S. Treasury 25,409
-------
Total distribution 26,262


So the government does indeed pay interest on the money they borrow, however, the Federal Reserve then gives it to the US treasury, BACK into government.


"The regional Federal Reserve banks are not government agencies. ...but are independent,
privately owned and locally controlled corporations." Lewis vs. United States, 680 F. 2d 1239
9th Circuit 1982


Quite a misrepresentation, the actual document, - here - is about a lawsuit from a man being hit by a truck owned by the Federal Reserve Bank of San Francisco, and: "Lewis brought this action in district court alleging jurisdiction under the Federal Tort Claims Act" Obviously, the member banks are not government institutions, and the court affirmed this in their decision.

The key point your missing here is the member banks are controlled by the board of governors, a federal agency. You, like many others confuse the two.


Politicians share personality traits with serial killers: Study


Then we should continue to keep an amount of separation between economics and politics.


In the book “The Creature from Jekyll Island”...


A horrible source...

I'll skip this 'connect the dots' part just based from the source, it's also irrelevant to any point I was trying to make here.


What does it mean that our current economic system was written by bankers and championed by their relatives in the government?


That they know more about economics and business than a politician?



Now, during what is considered the worst depression since the Great Depression, why is the Federal Reserve posting “record profits”?


Well, once you realize they get their "profit" from the government, I think you can safely conclude that the government may be borrowing and spending too much. Also funny considering basically all of their "profit" is then deposited back into the US treasury once repaid.


What this shows, and is important to understand is that, whether the economy does good or bad, the Federal Reserve will still generate a profit.


What that chart shows is that the government is borrowing too much. Seriously, read the title of the chart, what do you think "Federal Reserve earnings paid to the US treasury" means?


And even though a portion of this profit goes to the US treasury, this money is still spent on paying off interest on bonds and treasury notes


Anything not paid to sustain itself and the dividends it's obligated to pay is not "a portion", it's nearly ALL of it.


almost seems that the worse our economy gets, the higher the profits of this system.


AKA - government not doing too good managing its money.


So how could we possibly pay it off? Well under our current system, we just go back to step 1 and borrow more money.[/quote[

Or cutting spending + taxes...?

I don't have have time to respond to the rest of the OP, it's rather large, so I have to end it here, sadly.



posted on Jan, 10 2011 @ 07:56 PM
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reply to post by Whyhi
 


If you believe there is a separation between economics and politics, then you must be ignorant.
Something which you even acknowledge with your retort and politicians and their relative bankster's knowing more about the economy.

and great, the Fed has a .gov website. It would be impossible otherwise right?




-"The Federal Reserve is actually a private for profit banking corporation"-

It's not, please check their annual reports to see where their money actually goes.

-"This 6 percent dividend comes from the interest paid on the debt we owe the Federal Reserve and pay through our income tax".-

No, it's paid with any money the government has, income taxes have no relevance here.



So you acknowledge that the member banks receive a 6% dividend. How is that not a profit? And where does this 6% dividend come from? Money from the government you say. And does the government not collect money through income taxes?





So the government does indeed pay interest on the money they borrow, however, the Federal Reserve then gives it to the US treasury, BACK into government.


Minus 6% dividends. And that money then gets pumped back into the gov, who has to make payments on debts interest, some of that going back to the fed, which then pays out a 6% dividend again to its member banks. its a continuous cycle LIKE YOU POINTED OUT, yes. HOWEVER every time that cycle happens, 6% is syphoned off.



Politicians share personality traits with serial killers: Study

Then we should continue to keep an amount of separation between economics and politics.

If you had read carefully, you will notice that the article states that these type of people are drawn to "High profile, high power jobs" LIKE politics for example. But that is only 1 category of high powered positions.

What you fail to see is this is a backdoor to destroying our country through uncontrollable debt.
To be honest, when we compare the amount of work and links provided in my OP to what you posted, Its not worth my time to continue arguing past this point.



posted on Jan, 11 2011 @ 10:27 AM
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reply to post by teapot
 


Giving every american a million dollars would be the equivalent of 300 trillion. Not to mention a massive amount of inflation would occur



posted on Jan, 11 2011 @ 02:51 PM
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Originally posted by VonDoomen
reply to post by teapot
 


Giving every american a million dollars would be the equivalent of 300 trillion. Not to mention a massive amount of inflation would occur


Equivalent of $3T because of interest?

Not just Americans, The global population, every man woman child, one million US$ or whatever globally agreed equitable currency that governments then print and pay out. No more to come, no interest payable.

How would inflation occur if the money mongerers were put out of business?



posted on Jan, 11 2011 @ 05:30 PM
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reply to post by teapot
 


If you gave all +300 million americans 1 million dollards it would be 300 Trillion.
If you gave all 7 billlion humans that much money, then it would be worthless.

Inflation would happen due to the massive increase in money supply.

Suddenly you have more money chasing the same amount of products. Prices go up when demand goes up.



posted on Jan, 11 2011 @ 05:30 PM
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reply to post by teapot
 


If you gave all +300 million americans 1 million dollards it would be 300 Trillion.
If you gave all 7 billlion humans that much money, then it would be worthless.

Inflation would happen due to the massive increase in money supply.

Suddenly you have more money chasing the same amount of products. Prices go up when demand goes up.



posted on Jan, 11 2011 @ 06:16 PM
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Did you say worthless? Cash would become worthless? What about financial 'products'? Would they become worthless?

If money had no value, how would inflation work?



posted on Jan, 11 2011 @ 08:30 PM
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reply to post by teapot
 


This is all very basic economics.

Read up on Inflation in the Weimar Republic - Link

and hyper-inflation link

"A vicious circle is created in which more and more inflation is created with each iteration of the ever increasing money printing cycle.

Hyperinflation becomes visible when there is an unchecked increase in the money supply"

There is a finite amount of resources on this planet. If there was more money chasing all of these same resources, then the prices will go up and the value of money will go down. Inflation.



posted on Jan, 12 2011 @ 02:09 PM
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reply to post by VonDoomen
 


Printing a load more fake stuff would make the fake stuff worthless, deny the application of the basic rules and eventually break the banking matrix that controls the world. Too simple?

Thanks for trying to educate me, I'm sure the links are worthy but my understanding of 'money' means I carry no debt, pay no interest and understand that I am not shackled in the same way as my peers (I still pay taxes, in much of the world, only the uber rich get away with tax evasion). I cannot convince them either! The very idea seems to confuse some. I've even had someone attempt to try to help me understand why an overdraft was something to aspire to! And she was deadly serious, no irony there!

Tweek the current system, let it drift or swing within the left-right paradigm, take it to the moon and it won't disenslave natural freeborn human beings from a life of toil to service debt anymore than it will negate greed or the lust for power and control.



posted on Jan, 14 2011 @ 01:59 PM
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reply to post by teapot
 


I dont think dismantling the US economy with your "collapse" method is the best method. The system needs to be changed. But you dont just pull the rug out from underneath it. And there is more to this problem than just the underlying institutions. Its a problem of consciousness. Greed and the need to have more than you need.



posted on Jan, 20 2011 @ 03:52 PM
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Here is a relevant news article people may enjoy
Class war launched by americas wealthiest is getting more savage.

some stats from the article.




TextAt the same time, income for the richest soared. In 1979 the richest 1 percent of Americans earned 9 percent of all U.S. income. Now they earn 24 percent of all U.S. income. One percent of Americans earn nearly one-fourth of all the income in the country. Then came the crashes of 2001 and 2008 and the recessions that followed. The crash hasn’t changed anything. Things have become worse. From 1990 to 2005, adjusted for inflation -- the minimum wage is down 9 percent, production workers’ pay is up only over 15 years 4.3 percent. At the same time, the rich get richer: Corporate profits are up 106.7 percent. The S&P 500 is still up 141.4 percent since 1990. CEO compensation is up 282 percent. Call it transfer of wealth. Or call it class warfare.



posted on Jan, 21 2012 @ 10:24 PM
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reply to post by VonDoomen
 


Great post.

thanks for the added understanding it gives me.

I'm still curious, however,

what would YOU PERSONALLY do with $7 TRILLION?



posted on Jan, 22 2012 @ 07:54 PM
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reply to post by BO XIAN
 


Thanks for the praise! i was rather disapointed this thread didnt spark more conversation


But, what would I do with the $7-8 Trillion?

I would put it towards R&D of becoming a stellar species, instead of one just trapped here on earth



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