Questions about the Fed, and a proposed solution

I feel like I may have stumbled upon a stroke of genius on how to avert the impending disaster, but it could just be a misunderstanding of how the Fed works.

So first off, I have a couple of questions about the Federal Reserve. If you choose to answer please let me know how confident you are in your answer. In other words are you someone who studies this stuff or are you speculating? Either type of answer is welcome but I would like to know the degree of confidence.

So here goes.

The first question is, do I have the correct understanding of the Federal Reserve problem? Basically, it works like this. They print all money circulating in the United States. However, they only print money when asked to, and then they only do it via loans at interest. So, hypothetically, if the government needed 10 bucks, the Fed would print 10 bucks, but then the government at some later date would need to pay them back, say, 12 bucks. Of course there is not 12 bucks, only 10 bucks, because that's all that was printed. So the debt can never be repaid; it is mathematically impossible from the get-go. The amount of money owed to the Federal Reserve is always greater than the total amount of money in circulation and this difference only gets bigger with time. And of course it goes without saying that the system is obviously designed this way (read: a conspiracy) because there is no way somebody would be stupid enough to design in good faith a system this ridiculous.

So my first question is, is my understanding of the Fed as expressed in the above paragraph correct?

If not, we might not need to go any further. Assuming it is correct or close to correct, I will continue.

My second question: What percentage of the US national debt is owed to the Federal Reserve? Is it most of it?

If both of the above are true, then the answer to the problem facing our country, a solution that does not necessarily have to involve total collapse of everything, is one word: balls.

In more than one word, the federal government needs to do the following:

1.) Declare a new currency (for now I'll call it dollar2) and declare the Federal Reserve dollar to be null and void.
2.) Provide a time frame, perhaps one year, during which people may exchange dollars for dollar2s. For each dollar given to the government, the government prints a dollar2 and gives it back. The dollar is then burned (or deleted, as the case may be). After this time frame dollars can no longer be exchanged and are thereafter worthless.
3.) Dissolve the Fed. Send them packing. Tell them not to let the door hit them on the way out.

There you have it. Prevent the impending currency crisis and eliminate most of the national debt in one fell swoop. We can then proceed to restore sanity.

(Of course, in my opinion this would only be the first step. Next would be tying this currency to gold, and finally relinquishing fiat money altogether and returning to free banking. But for now I'd be happy just to be rid of the Fed.)

reply to post by NewlyAwakened


Good plan.

Here's the problem.

All the other countries also work off a fiat currency, you have to get them to recognize your new currency in global trading. It's not going to happen considering bankers have centralized power within the EU.

Secondly, the currency has to be based on something or it's just another fiat currency. A natural product like Gold or Silver.

I'm gonna take a wild guess and say that US doesn't have 14 trillion dollars worth of gold, nor do they have even 1 trillion dollars of gold to offer your Chinese friends who loaned you all that money.

~Keeper

Originally posted by tothetenthpower
Secondly, the currency has to be based on something or it's just another fiat currency. A natural product like Gold or Silver.

I'm gonna take a wild guess and say that US doesn't have 14 trillion dollars worth of gold, nor do they have even 1 trillion dollars of gold to offer your Chinese friends who loaned you all that money.

That's why I'm saying we start with just another fiat currency. We tackle the problems one at a time. First we tackle the Fed conspiracy, and we can deal with the fiat issue once that's done, as I mention in the parentheses at the end.

reply to post by tothetenthpower

Now the global trade issue could be a killer, since we aren't anything close to self-sufficient anymore. The hope is that they need us as much as we need them, and we have the balls to go through with this with that in mind, so all the other countries play ball and exchange their dollars for dollar2s in the same way a US citizen would.

If that doesn't work, well, then, meltdown! But it's worth a shot.

Originally posted by NewlyAwakened
reply to post by tothetenthpower

 

Now the global trade issue could be a killer, since we aren't anything close to self-sufficient anymore. The hope is that they need us as much as we need them, and we have the balls to go through with this with that in mind, so all the other countries play ball and exchange their dollars for dollar2s in the same way a US citizen would.

If that doesn't work, well, then, meltdown! But it's worth a shot.

It's probably better to actually tear down the whole system and start from scratch. WIthout international support in our "global" economy, the US would be in worse shape.

And you can bet that countries who wish to be super powers like China and India would take advantage, probably start a war or two.

~Keeper

Well this was done a couple times.. The fact that Andrew Jackson and Julius Caesar eradicated the "Money Changers" and the idea did well..

Rome became prosperous and The US became very wealthy on things they did. When Wilson enacted the Federal Reserve Act is when the quality of life in America started dropping..

How to fix the problem is the same as these 2 guys did. you get rid of it, then we would become very rich and prosperous in efforts we do. We would be able to achieve alot of things. But today is today and people are blind and really do not want to see anything in their lives.. so we wait and ponder on what can... Ron Paul is trying to get this done but he is running a marathon on a steep hill. Soon he will be dead(old age, That is what i am talking about here.) and someone else will have to take over. So i don't know.. I don't see things working out for the good for the people..

ya, it's a crazy system where the government ie you, through your taxes has to pay back the federal reserve, ie the private banking cartels, for its own currency, when it can just print it itself and pay back no one.

getting rid of the reserve would save billions if not trillions of dollars in the future in interest payments.

america must be the only country in the world that doesn't control its own currency and economic policy.

i think the problem is in the constitution itself, since it declares that congress is responsible for the printing and coining of money. so it took it upon itself to contract it out to private bankers. the only way that could have happened was through corruption down the line.

there should be a senate commitee that oversees this and not a commitee that oversees what someone else is doing on their behalf.

it'll never change unless america is ready to withstand a hard economic storm because this parasite, the federal reserve, has itself so entrenched in the economy that removing it would be catastrophic. the federal reserve made sure of that.

its a conspiracy in itself created so the powers that be are in control of the future and quality of life of america's citizens. it's an extortion racket. listen to us and follow our agenda or else we'll create depressions and recessions and cut off your piggy bank.

it is completely criminal and goes against the foundation and spirit of democracy.

Just move the federal reserve and IRS out of private ownership back into government ownership. This is the cleanest solution I can see. Will be some technical issues but not as bad as removing and replacing a currency, that gets real messy.

reply to post by NewlyAwakened


The amount owed to the Fed is actual money, though it is printed but not really printed (never made to cash anyways) .. it's actual money because it's in the form of Tbills..

Technically it's entirely possible to pay back the principle on all of our debt, because it's the original amount given (naturally this assumes we don't spend and or waste it)

However the Fed, as a whole, does not own the majority of US debt, insurance companies, banks and other countries, combined, own more of it.

Since the Fed rolls interest back into the Treasury it's the easiest to pay off, but in order to pay all of our debt we would need a very large surplus of income, which in America is frankly impossible.. we currently pay our debt with debt.