Ron Paulites - please explain - how do we end the fed?
In particular, what happens to the Fed's assets and liabilities?
All assets and liabilities attained by the Federal Reserve were gained through the manipulation of currency and rightfully belong the American people.
This was demonstrated very well during the last debt ceiling debate. Ron Paul argued that around $1,000,000,000,000 of US debt, treasury bonds, were owned by the Federal Reserve and could simply be wiped out. The quantitative easing programs allowed a private entity, the FED, to simply create money and purchase US T-bills that the American people would pay interest on.
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If the Fed hadn't bought those bonds, and there were few takers, then the US would have to pay much much higher interest rates to foreign investors. That should be understandable. What if interest rates went from 2% now to 6% or higher? You can make that calculation. Just the present $200B goes to $600B or higher.
If there wasn't deficit spending there would be no need for quantitative easing, and it wouldn't happen. President Reagan, the the first thing he was in office, convinced Fed Chmn Volker to quit with the QE, and let interest rates seek their own levels. We saw PRIME Interest rates as high as 19.5% in 1981. That would translate to almost $-two trillion annually in interest on just our present debt alone, not the debt that is being produced and added to that.
If there were no Fed and congress and the president had their hands on the QE throttle, then one can only imagine the consequences.
If Fed obligations were merely cancelled by an act of congress, investors would see our debt as a very risky buy, and interest rates on bonds could go as high as I stated.
How high did the Greece's bond rates go this last year?
EDIT; Here's your answer:
[35%]
Greek bond rates as of 2012 Chart
And
Europe Update: Greek Bond Yields Surge
by CalculatedRisk on 8/24/2011 10:31:00 AM
The Greek bailout deal is under pressure ... and the Greek 2 year yield increased to 44% and the 10 year yield increased to 18% this morning.
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