WSJ: Fed Buying 61 Percent of US Debt

reply to post by User8911


So is working in a field harvesting crops for 10 hours the same as performing neurosurgery for 10 hours?

Originally posted by Xcathdra
reply to post by User8911

 

So is working in a field harvesting crops for 10 hours the same as performing neurosurgery for 10 hours?

You make an interesting point, but such deliberations of value are not directly germane to the situation where the Fed is sweeping up all the debt it created as currency and manipulating its' value.

It seems that if we reduce the argument to one of valuation of labor, goods, and services, we will digress into social issues that the establishment has confabulated and codified into the morass of garbage we deal with today.

I wanted to add that when we talk about the Fed, or the Euro Zone, or the central banks of other nations... or even the "global" banking system; I personally subscribe to the notion that there is no separation between them.

The need for a 'coordinated' monetary manipulation scheme is simply further proof (again, to me) that we are suffering under a single supranational monetary authority that has no allegiances beyond it's own "board members" and "stake holders."

Rockefeller would be proud.

And by the way, I also think it's "the proof in the pudding" so to speak that monopolies are "bad" - especially "legislated" monopolies....

Originally posted by Xcathdra

Originally posted by Apollumi

Originally posted by Xcathdra
reply to post by ModernAcademia

 

This is nothing new... While people like to constantly parrot the "China holds the most US debt" it simply is not the case. The US government is the largest holder of US debt.

edit on 28-3-2012 by Xcathdra because: (no reason given)

Didn't know the Fed was the US government? Well, maybe they are. Maybe they are...

Second.

The White House recently added a section called We the People, which allows individuals to submit a petition on whatever topic. If the petition gains enough signatures, the White House stated they would review it and go forward with it or decline to an issue a reason for declining.

do you realize what a joke that site is? i have voted for and seen many petitions put forth from that site only to see every one of them given either no attention or the standard political response. if anyone is interested in checking that site out, do so knowing nothing you vote for will mean a hill of beans and you're wasting your time.

Originally posted by Rockpuck
reply to post by Maxmars

 

As inflation and deflation are essentially "controlled" by the monetary policy makers, how do they manage to conceal the net effect of moving the wealth to one side or the other of the equation?

Works like this (it's magical mind you...)

The USA has a budget deficit of $100 dollars. They can one of two things

A.) They can raise taxes via payroll, income, anything, by $100 to cover the gap. People grumble grumble grumble and politicians look bad.

B.) They can print $100 dollars and cause an additional 2% inflation ontop of CPI inflation (which are two entirely different things) By depreciating the value of a Dollar they kill two birds with one stone. They lower the over all value of ALL outstanding debt and they cover their own new expenses through the simple process of inflation.

When the Feds boost inflation through the process called Monetization (buying your own debt with new Dollars you pull from thin air) or through Quantitative Easing (printing money and throwing it at banks and tell them to buy the debt) they lower the value of all Dollars in circulation. If it occurs at a time when other Central Banks are not monetizing there is a phenomenon that creates a disjointed relation of our currency as compared to other currencies. Since our Monetization and QE is very high (60+% of our debt) the US Dollar is disjointed from other markets.

(This causes the price of oil to rise. It causes the price of bread to rise. It causes the cost of electricity to rise. It essentially causes everything to rise that isn't included in the CPI inflation report)

People know things get more expensive and then get cheaper, then get expensive, then get cheaper. They know it happens. They have no idea how or why. It all goes back to Federally controlled inflation methods used to create short term taxes to cover the cost of government. But not calling it a tax. Because that makes people grumble. And it's much better to have average joe grumbling about oil companies and banks than it is to grumble about the Federal Reserve. Which about 2% of the population even understands.

There are numerous methods to create inflation and deflation, it's not always the obvious buying of debt, interest rates as well can effect the inflation rates. It all depends on what's needed in the economy.

The point of the matter though is simply this: When the US Government through the Federal Reserve print billions of new Dollars it costs them........ Nothing.

But it will cost YOU an extra $10 to fill your car.

That's a tax.

(I should add how they conceal it is very simple: First and foremost, never talk about it. Second, make it so complicated that even when you do talk about within 30 seconds the average person's eyes glaze over. )

edit on 3/28/2012 by Rockpuck because: (no reason given)

This is true when the economy already has the optimal amount of money. However since all our money has been offset by debt for the last 100 years, most all new money just goes to extinguish existing debt and never makes it's way into the new economy where it can cause inflation. And since this has been going the amount of real money in the economy has only declined. Thus I assert that we can keep printing money in this fashion and it will not be inflationary.

I would however prefer that we just print the money we need with no debt attached.

reply to post by sligtlyskeptical

most all new money just goes to extinguish existing debt and never makes it's way into the new economy where it can cause inflation.

There are two main types of inflation.

Monetary Inflation where the monetary base is inflated through the increase in the total outstanding number of a currency in circulation. This includes real Dollars. Digital Dollars. Debt. Credit. Anything, everything.

When the Fed is engaged in this practice, even if they are printing money and throwing it into a blackhole to cover the gaping holes left by the derivative explosion of 08' it still causes a measure of inflation. It comes down the margin of void and real, how many Dollars are printed to cover the turnover of debt, the coverage of reserves and or derivatives as compared to how many Dollars will be left with a new job to fill. Like increased government expenditures.

In our system it's relatively easy to distinguish the two areas a Dollar fills. If the Fed spends it, it fills a hole somewhere and doesn't necessarily create inflation, usually it's aimed to stop deflation.

If the Fed's Subsidiaries buys it (called Bad Banks) It covers the depreciating value of a liability and therefore creates inflation by artificially boosting the value of a depreciated products and therefore increasing the total over all level of Dollars in circulation.

If the Government spends it, it's directly inflation. For Government debt the notion of "new Dollars cover other debts and interest" is false because for every Dollar the Fed buys in Treasuries another buyer saves their Dollar by not buying. And thus an increase in the monetary base.

The second type of inflation is Wage inflation, this is the amount of money increased in the hands of the consumer. Which in this economy has not and probably will not happen anytime soon. This is the only method in which you can see "hyper inflation".

Type one causes inflation simply through the devaluing of all Dollars in circulation.
Type two causes inflation by devaluing Dollars while increasing availability for consumption, thus pushing prices across the entire economy higher.

(It's interesting that inflation through monetary devaluation through programs like Monetization or QE can, if wages do not keep pace, cause a Deflationary Spiral.)

Fed Buying 61 Percent of US Debt... WITH WHAT???

reply to post by ModernAcademia


The only man who's fighting this???? Ron Paul baby and ME. I fight this everyday but so few people listen. there are 2 friends who are starting to see the light... little by little people will wake up.

we need to correlate the price of gas to this debt we have so the common person knows it is not the gas stations fault but it is Washington's fault.

Both party's are responsible for destroying America! Our debt will kill us!

If I remember from reading the original Federal Reserve Act,

I don't think there ever was a specific charter time line (like the 100 year charter).

I don't think congress ever made any amendments to that effect either.

I believe the Fed can be revoked anytime by Congress.

Federal Reserve Act

The Federal Reserve Act (ch. 6, 38 Stat. 251, enacted December 23, 1913, 12 U.S.C. ch.3) is an Act of Congress that created and set up the Federal Reserve System, the central banking system of the United States of America, and granted it the legal authority to issue Federal Reserve Notes (now commonly known as the U.S. Dollar) and Federal Reserve Bank Notes as legal tender. The Act was signed into law by President Woodrow Wilson.
1913

Losing money only effects people with money to lose.

I've haven't got any, don't want any, and am purposefully "under employed" as to not make any.

"America's chickens are coming home to roost."

Personally, I am excited for the day that I see $20+ a gallon for gasoline. THAT is when our country will start to change for the better.

reply to post by xuenchen


I'm fairly certain the charter was renewed fairly recently - and unless I am remembering incorrectly, it was after 14 years. I could be wrong though, and I don't have time right now to get to the facts. Hopefully, someone can add to this.

Ultimately though, the Fed exists essentially as a private banking contractor doing what Congress is convinced they can't be trusted to do themselves.

And who convinced them of that? Bankers.

Originally posted by ModernAcademia


This is unbelieavable
Imagine a bunch of ants and a balloon that will inevitably pop in front of them blowing some of the away.

Smart thing would let the balloon pop, but colonial ant politicans put bandages on the balloon so that it keeps getting pumped with more and more air
And because of this when the balloon finally pops a tremendously larger number of ants will fly away instead of much less of them if they would just let it pop a long time ago.

LOL Great analogy. But what's the difference in debt whether one government department is holding it or another?

This is really interesting, considering the debt isn't real and is a complete scam. There is no national debt. We don't owe anyone anything.

Originally posted by Maxmars
reply to post by xuenchen

 

I'm fairly certain the charter was renewed fairly recently - and unless I am remembering incorrectly, it was after 14 years. I could be wrong though, and I don't have time right now to get to the facts. Hopefully, someone can add to this.

Ultimately though, the Fed exists essentially as a private banking contractor doing what Congress is convinced they can't be trusted to do themselves.

And who convinced them of that? Bankers.

This looks like they have an "indefinite" succession !!
(since 1927)

from Cornell Law:

12 USC § 341 - General enumeration of powers

Upon the filing of the organization certificate with the Comptroller of the Currency a Federal reserve bank shall become a body corporate and as such, and in the name designated in such organization certificate, shall have power—

First. To adopt and use a corporate seal.

[color=limegreen]Second. To have succession after February 25, 1927, until dissolved by Act of Congress or until forfeiture of franchise for violation of law. .....

Cornell Law - Fed reserve

So it appears Congress can dissolve the Fed any time ?

About a year ago I attended a live interview with Paul Krugman of the New York Times. Before the interview, the audience was asked to submit questions. Mine was chosen (to my surprise) and my question was how is the US to continue on a path where it's own central bank is now the largest holder of US debt? Krugman responded that it is this "mythology" that blurs the debate. He completely avoided the question and shoved it off as being a conspiracy theory!! I WAS FURIOUS.

The problem is the people who pull the strings in the financial world will never admit there is a problem until it is too late and they have made all the money on the upside AND the downside. This will all end at some point and it will cause so much pain.

Originally posted by Xcathdra

Originally posted by Fitch303
The people responsible for this should hang. After the crash happens the entire country will be looking for them.

You do understand that the people to blame are the ones posting in this thread... Are the ones who failed to vote / take an interest in government at all levels, etc etc etc.

The American people allowed it to happen... We watched it happen.... We knew it was happening... and yet we didn't feel the need to do anything to correct it. Apparently its more important for political parties to slam each other instead of doing their jobs.

We watched and failed to do our job.

When was it up for a vote? If the government ever asked to sell bonds to other countries I would've voted NO. But, it never came up. Should earnings over 1 mil a year be taxed 50%? Hell ya! Should we use our own oil instead of having anything to do with the Middle East? YES! But these items don't come up for a vote.

I don't give a wit for the economies of other countries, or competing with other countries for business, so instead of having 'Fair Trade' (which has never been fair to us) I would vote for EQUAL trade. But, that hasn't come up for a vote either.

If an American company moves out of the country, I would vote to say, 'Fine, go ahead, but don't sell your stuff here. As soon as you're gone we'll be making your product on American soil."

Originally posted by CaptChaos
This is not important. Don't worry about it. Economic "experts" are on top of it. It's too complicated for you to understand. They could explain it, but it would just confuse you, so don't worry, nobody's stealing anything from you, let the experts take care of it. The economy is in a mess due to circumstances you just can't understand, but they do. All this crazy conspiracy theory talk about how they are doing it on purpose is nonsense. They just made a few hundred WHOPPING BIG "mistakes". Then they "misspoke" about it. It's over your head, only Harvard educated "economists" can understand why it's just an accident, no one is thieving, it's just the economy, stupid. Inflation is just like a force of nature, it just happens.

ZIMMERMAN is much more important! GAY MARRIAGE will cause society to crumble! STEM CELL RESEARCH will end life as we know it! There is no way the Fed is enslaving you, that's just crazy conspiracy theory talk. LOOK AT KIM KARDASHIAN!

WHEW! Thanks. I feel so much better. Can I go back to my porn now?

Originally posted by Xcathdra
reply to post by User8911

 

So is working in a field harvesting crops for 10 hours the same as performing neurosurgery for 10 hours?

You didn't quote whoever it is you're responding to. So, I'll just respond to your statement. Working in the field is more important. Just ask the neurosurgeon when he finds he has nothing to eat.

reply to post by jiggerj


Every single time we have an election we have a vote. Being we dont live in a democracy and being we DO live in a a Representative Republic, we can hold our elected officals accoutnible for voting in a manner that is inconsistent with the will of the people.

They just need to get out of the mindset that I have seen by other members in this thrad who just give up because of this or its always been like that etc etc etc etc etc.

Again it occurs because we allowed it to occur.

Originally posted by jiggerj

Originally posted by Xcathdra
reply to post by User8911

 

So is working in a field harvesting crops for 10 hours the same as performing neurosurgery for 10 hours?

You didn't quote whoever it is you're responding to. So, I'll just respond to your statement. Working in the field is more important. Just ask the neurosurgeon when he finds he has nothing to eat.

Uhm... At the top it states I was responding to User8911.... Its fine though people are more than welcome to respond.

Thats my point.. My comment is in responde to the argument that a capitalist system designed on success and failure, profits and bankruptcy are a much better solution than communism or communal ideology. Reason being is you are going to have people, regardless of the system in place, who will do as little as they can while having no issues reaping the rewards by leaching off the hard work of others.

10 hours in the field is not the same as 10 hours in neurosurgery is not the same as 10 hours on police patrol.

The term is called veil of ignorance and it deals specifically with the premium society places on a certain job. People cannot be screened from birth to decide where they will end up in life, and to propose a system that relies on that fallacy is not going to do any better than the system we have now.

I dont mind changes / alternatives however going from a system with flaws to one that has completely failed makes no sense.

Originally posted by Aliensun

Originally posted by xuenchen
Does this mean that there is less "demand" for U.S. Treasury bonds and notes on open markets ?

If so, an interest rate hike may be in the works.

But that creates a catch-22 I think.

BTW, where does "The Federal Reserve" get the money ?
:puz

The printing company

The printed money comes from the printed company.

However, the value that this money represents comes from each and every person who holds a dollar as its purchasing value is lowered.

Printing money is essentially stealing. That's why it is a crime (for anybody except the fed)


-rrr