gonegolfin
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- #21
While this is the type of verbage that you see around the internet, the Fed is not printing paper nor is it adding to the money supply here. It is creating bank reserves. A chief operation of the Fed is to add and/or drain reserves from the banking system (manage bank reserve levels). That is what is happening here. The Fed does purchase assets by crediting bank reserves in the form of electronic credits to member institution reserve accounts. This has the potential to increase the money supply (depending on the course of action by the commercial banks). But the operation in and of itself does not increase the money supply. It only increases the monetary base as it increases bank reserves.Hi Gone:
Maybe you will teach me a thing or two about what the illegal FED is doing here . . .
The significant Fed monetization of government debt that I have been expecting and writing about for several years is now upon us. Today, the Federal Reserve announced that late next week a program of purchasing $300 billion of longer dated treasury debt will commence.
In other words, you are talking about the privately-owned FED printing up more paper to purchase Treasury Debt, when the U.S. Government is broke and the U.S. Treasury (chart) says the US Debt exceeds 65.5 Trillion Dollars (story).
The following article I wrote, which was also published on Gary North's website may help.
http://www.usmessageboard.com/econo...y-supply-money-velocity-and-monetization.html
This is not real debt. This is potential debt that depends on all outstanding future obligations being honored. And again, the Fed creation of money (increasing bank reserves) does not devalue the Dollar in and of itself. It creates the potential to devalue the Dollar. The Dollar is not devalued if those reserves are not used to lend or invest money into the economy. Finally, creating new money does not create more debt. The Treasury auctioning treasuries creates more debt.However, the real story is that the USA was 99.2 Trillion Dollars in debt as of August 11, 2008 of last year (story); and the real Debt is obviously higher than 100 Trillion Dollars as we speak. The illegal FED is not ‘buying’ anything at all, because printing money only creates more DEBT and devalues all the dollars in our pockets. Ron Paul knows what is really going on:
Additionally, purchases of Agency debt have been retargeted to $200 billion from $100 billion. The combination of the purchases of long term Treasury debt along with signification subsidzation of the mortgage securitization market will result in artifically low mortgage lending rates for a period of time and an artificial floor under housing prices.
I do not know what you are disagreeing with here. Everything that I stated in the above paragraph is accurate.I disagree 100 percent. The biggest problem we have in the USA right now is most people are focusing on the ‘symptoms’ and not the real cause of the Mortgage/Foreclosure Crisis; which in reality has nothing to do with the banks at all
And as for root cause (which I did not mention above), you should search this forum for past articles I have written ... especially concerning root cause.
Brian
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