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WSJ: FED Buying 61 percent of US debt

  • Attention Libtards. This is not good. We know you don't understand why, but this is definitely not good. You may now return to putting your head back in the sand.

    WSJ: Fed Buying 61 Percent of US Debt

    WSJ: Fed Buying 61 Percent of US Debt

    www.moneynews.com

    Compound 2

  • well this cant be good.

    Duke Silver ●

  • Seems to upset the fASScists a lot more than others.

    WWLD

    GRR Spartan

  • I think this a house of cards built on shifting sands. I wish I knew when the day of reckoning is going to be. Some think it will be triggered by a failed Treasury auction.

    spartanwill

  • Madhatter536

  • Madhatter536 said...

    I suppose time will tell whether I'm chicken little or you are the ostrich. I simply don't see how we can continue down this fiscal path. I haven't seen anyone, especially the president, even talking about this issue.

    spartanwill

  • we gone

    Walter_Sanchez

  • And who gets the profits the Fed generates? That would be the member banks to some precentage with anything over that going to the US Treasury...

    BTW this has little to do with the money supply itself...

    Lurking on tRCMB since 1996

    TrapperGus

  • Guess someone hasn't been paying attention for their whole life.

    The US Fed has always owned a majority of US debt.

    GRR Spartan

  • GRR Spartan said...

    Guess someone hasn't been paying attention for their whole life.

    The US Fed has always owned a majority of US debt.

    Well for a long time the single largest owner was the IGHs...

    Lurking on tRCMB since 1996

    TrapperGus

  • TrapperGus said...

    And who gets the profits the Fed generates? That would be the member banks to some precentage with anything over that going to the US Treasury...

    BTW this has little to do with the money supply itself...

    Trapper. Honestly, you quite simply tire me out with your nonsense.

    The FED PRINTS MONEY. Then they take the money they just printed and "buy" the debt from the Treasury. The "profit" that they make is not real "profit". It is a confiscation (through inflation) of the current money supply. They are simply transferring wealth from anyone who has dollars in their pocket to the Treasury. I can't believe you really think the FED makes a profit. Do you just believe anything some propaganda article tells you? Try to at least understand what is actually happening before you parrot the viewpoint that a PRIVATE BANKING CARTEL tells you. I mean, it's just amazing that you believe these people.

    The Federal Reserve Creates A Profit - Wealth Cycles Blog

    The Fed is about to write another near $80 billion check to the U.S. Treasury creating a profit literally out of thin air.

    wealthcycles.com

    Compound 2

  • Compound 2 said...

    Trapper. Honestly, you quite simply tire me out with your nonsense.

    The FED PRINTS MONEY. Then they take the money they just printed and "buy" the debt from the Treasury. The "profit" that they make is not real "profit". It is a confiscation (through inflation) of the current money supply. They are simply transferring wealth from anyone who has dollars in their pocket to the Treasury. I can't believe you really think the FED makes a profit. Do you just believe anything some propaganda article tells you? Try to at least understand what is actually happening before you parrot the viewpoint that a PRIVATE BANKING CARTEL tells you. I mean, it's just amazing that you believe these people.

    Well I do understand your point of view on this as you have made it clear that you believe that any increase in the M2 is by the way you define it Inflation...however that was not the point I was trying to make, or rather I was not trying to start a dispute about that. If you want to call the profits the Fed reports as inflation that is fine, although of course don't expect others to follow your beliefs...

    Whatever these moneys are, inflation, profit, both or neither the Fed pays something back the the US government...that is the only point I was making here...

    Fed Returns $77 Billion in Profits to Treasury - NYTimes.com

    The Federal Reserve said it transferred $76.9 billion in profits to the Treasury Department last year, slightly less than its 2010 transfer but much more than in any other previous year.

    www.nytimes.com

    Lurking on tRCMB since 1996

    TrapperGus

  • I don't really understand how this is possible. The FED just prints more US currency with which to purchase US debt? How does anyone think that is functional, logical, or sustainable? I'm not much of a debt/deficit hawk, but it seems like this all has to blow up at some point.

    http://www.aip.org/history/einstein/essay.htm

    iCameron

  • iCameron said...

    I don't really understand how this is possible. The FED just prints more US currency with which to purchase US debt? How does anyone think that is functional, logical, or sustainable? I'm not much of a debt/deficit hawk, but it seems like this all has to blow up at some point.

    If all they did was that then I think you may be correct, however it probably is much more complex than that...

    Really the Federal Reserve is not creating the money which is the promise by the government to honor Treasury Bonds. What the Fed does is create Federal Reserve Notes to buy the bonds with....

    How Does the Federal Reserve Create Money? - Yahoo! Voices - voices.yahoo.com

    A brief look at how the U.S. central bank creates money.

    voices.yahoo.com

    Lurking on tRCMB since 1996

    TrapperGus

  • TrapperGus said...

    Well I do understand your point of view on this as you have made it clear that you believe that any increase in the M2 is by the way you define it Inflation...however that was not the point I was trying to make, or rather I was not trying to start a dispute about that. If you want to call the profits the Fed reports as inflation that is fine, although of course don't expect others to follow your beliefs...

    Whatever these moneys are, inflation, profit, both or neither the Fed pays something back the the US government...that is the only point I was making here...

    Trapper, even if you don't want to define it as "inflation", they are expanding the money supply and then investing that money. The new money they created is a transfer of wealth from those who hold the dollars to those who get the newly created currency. It's not a real profit.

    Compound 2

  • iCameron said...

    I don't really understand how this is possible. The FED just prints more US currency with which to purchase US debt? How does anyone think that is functional, logical, or sustainable? I'm not much of a debt/deficit hawk, BUT IT SEEMS LIKE THIS ALL HAS TO BLOW UP AT SOME POINT

    Bingo sir

    Compound 2

  • TrapperGus said...

    If all they did was that then I think you may be correct, however it probably is much more complex than that...

    Really the Federal Reserve is not creating the money which is the promise by the government to honor Treasury Bonds. What the Fed does is create Federal Reserve Notes to buy the bonds with....

    Trapper. Why do you assume it is more complex than that? Oh, our leaders are so smart. They are doing everything right, just trust them.

    This is how it works. The federal reserve creates brand new "federal reserve notes" created out of thin air. The treasury issues new bonds (also created out of thin air). The FED buys the new treasury bonds with new money. BAM.....that's money printing. I don't know why you insist on believing that things are so complicated that ordinary mortals can not possibly understand it.

    Compound 2

  • Compound 2 said...

    Trapper, even if you don't want to define it as "inflation", they are expanding the money supply and then investing that money. The new money they created is a transfer of wealth from those who hold the dollars to those who get the newly created currency. It's not a real profit.

    Well tthe more this is talked about the less I understand...however without considering volocity are you really seeing a clear picture of what is happening?

    Lurking on tRCMB since 1996

    TrapperGus

  • TrapperGus said...

    Well tthe more this is talked about the less I understand...however without considering volocity are you really seeing a clear picture of what is happening?

    I understand velocity of money just fine. Not that velocity of money has a single thing in the world to do with the FED buying 61% of our debt and whether or not that is a good thing or not.

    Compound 2

  • Compound 2 said...

    Trapper. Honestly, you quite simply tire me out with your nonsense.

    The FED PRINTS MONEY. Then they take the money they just printed and "buy" the debt from the Treasury. The "profit" that they make is not real "profit". It is a confiscation (through inflation) of the current money supply. They are simply transferring wealth from anyone who has dollars in their pocket to the Treasury. I can't believe you really think the FED makes a profit. Do you just believe anything some propaganda article tells you? Try to at least understand what is actually happening before you parrot the viewpoint that a PRIVATE BANKING CARTEL tells you. I mean, it's just amazing that you believe these people.

    Unless your economy stops producing assets how will you avoid deflation (which is just as dangerous as inflation btw) if you don't increase the money supply?

    007Spartan

  • 007Spartan said...

    Unless your economy stops producing assets how will you avoid deflation (which is just as dangerous as inflation btw) if you don't increase the money supply?

    It depends. Are you defining deflation as money supply deflation or price deflation?

    This post was edited by Compound 2 on 4/1/2012 at 11:42 AM

    Compound 2

  • Compound 2 said...

    I understand velocity of money just fine. Not that velocity of money has a single thing in the world to do with the FED buying 61% of our debt and whether or not that is a good thing or not.

    So explain your understanding of volocity to me.

    Lurking on tRCMB since 1996

    TrapperGus

  • TrapperGus said...

    So explain your understanding of volocity to me.

    For example, if the FED prints 10 trillion dollars but parks it at JP Morgan where it just sits idle, it does not impact price inflation. Only when it starts to be used to purchase goods and services does the velocity of money increase and the price of those goods and services go up as well.

    So it would be inflation in the Austrian school of economics, but not inflation in the Keynesian school.

    Compound 2

  • Compound 2 said...

    For example, if the FED prints 10 trillion dollars but parks it at JP Morgan where it just sits idle, it does not impact price inflation. Only when it starts to be used to purchase goods and services does the velocity of money increase and the price of those goods and services go up as well.

    So it would be inflation in the Austrian school of economics, but not inflation in the Keynesian school.

    Are you certain that Keyesians would not considered price inflation as inflation?

    And don't Austrians consider the money supply regardless of if it is used as inflation?

    Lurking on tRCMB since 1996

    TrapperGus

  • TrapperGus said...

    Are you certain that Keyesians would not considered price inflation as inflation?

    And don't Austrians consider the money supply regardless of if it is used as inflation?

    That's what I just said Trapper. Fed prints ten trillion. Austrians would consider it inflation, Kenysians would not (unless it starts to impact prices). Am I in the twilight zone?

    Compound 2

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