The GENIUS OF THE FEDERAL RESERVE!

Discussion in 'Economy' started by Neubarth, Mar 27, 2010.

  1. Neubarth
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    Neubarth At the Ballpark July 30th

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    Because I have never studied economics, I am not compelled to support any economic school of theory, all of which seem crazy to me. They babble and quibble and banter their arguments all over the place, and one would think that supposedly genius level people would all agree on fundamentals of their science. The only problem is, it is all THEORY! There is no science to it.

    Now, knowing that all of those geniuses all say the other side is crazy or worse I ask this.

    Since it has been established that we can borrow from our mythical bank (The Fed) at ZERO interest and have been doing so for almost a hundred years, why in the hell are we borrowing from Japan and China. We have to pay those countries (and private investors in those countries) interest on our notes!

    We go through the token gesture of paying the interest to the FED, and the FED puts the money directly in the US Treasury. (i.e. We give it to them and they give it right back.) All of our debt should be financed by the FED. Considering that it costs us absolutely nothing to borrow, our debt can be astronomical and it would not matter.

    Some economist the other day was trying to say that when the FED cashed in those bonds and notes, that would put too much money into the system and the dollar would inflate. Again, he was babbling and quibbling and bantering all over the place when I stated that, "The FED does not have to cash in those bonds! They could hold them as security forever while we borrowed endlessly. That is what we have been doing with most of our FED held debt for decades now."

    He went away mumbling to himself.

    How come it is so easy for me to see it and all of those economic educated geniuses can not understand?

    We have proven that my "theory" works for almost a century now. I suppose we should be prudent, but in reality, we have unlimited cash to spend. Right?:razz:
     
  2. georgephillip
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    georgephillip Gold Member Supporting Member

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    Do you think it's accurate to say our National Debt comes from paying interest on the money we borrow from the Federal Reserve?

    Why can't the US Treasury spend new money into today's economy the way Lincoln spent Greenbacks to win the First American Civil War?
     
  3. Neubarth
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    Neubarth At the Ballpark July 30th

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    Totally wrong.

    The Treasury prints our money and mints our coins. If they print too much money, we have inflation. That is not too bad if it is four percent a year. IF it gets above six percent a year we start having problems. .
     
  4. Mr.Fitnah
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    Mr.Fitnah Dreamcrusher

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    Not all of it ,the Government does pay the fed to use its money , This is why we were warned against a central bank.
     
  5. georgephillip
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    georgephillip Gold Member Supporting Member

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    Neubarth:

    The Treasury mints coins and issues interest bearing debt instruments which the Fed "buys" with "money" created from thin air.

    If it's true the US dollar has lost 95% of it value to inflation since 1913, why not merge the Fed and Treasury and SPEND new money directly into circulation?

    Treasury and Fed working like the two hemispheres in our brains.
    Treasury holds the capital or what we now call the "reserves" currently held by the Fed.
    Fed/Central Bank does business as usual with no requirement for capital reserves.
    Treasury can issue dollar$ that are debt free--just like the Bank of North Dakota.
    Treasury doesn't compete with commercial banks but is there to help like the BND.
     
  6. Neubarth
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    Neubarth At the Ballpark July 30th

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    Total insanity! Remember the whole purpose of the FED is to create the illusion of a Bank that we can borrow from if we can not borrow elsewhere. As it is, we are using the FED quite effectively right now. Not to have it would mean total economic collapse.

    Ron Paul and his idiot crowd are too fucking stupid to understand how the FED has kept the United States going for the last seventy years. If we were on the Gold standard, we would have totally collapsed years ago.

    Money out of thin air is essentially overspending by Congress. That is the creation of the need for spending cash. As the song Chantilly Lace by the Big Bopper goes, "I ain't got no money, honey." That is the reality for Congress. Thus we need the FED. The FED does not create the debt, our congress does, often at the request of the President. The debt is a product of Congress, not the FED.

    The whole purpose of the FED is to create that money out of thin air when we do not have the tax revenue to match our spending. That way we can fund emergency spending as is now the case, or as was the case in the 1930's.

    THAT is a good thing. With that money out of thin air, the FED can buy our debt when nobody else will, as is happening now.

    The greatest advantage of the mythical FED is that they do not need the interest payments that the foreign countries expect from our bonds and notes. I say stop selling the bonds and notes to foreign countries and their citizens and start selling exclusively to the FED.

    The system will work as long as we want it to. The Treasury prints the money. The Fed has another purpose and that is to keep the country running. Praise God for the FED!
     
    Last edited: Mar 28, 2010
  7. Neubarth
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    Neubarth At the Ballpark July 30th

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    When I have gone around the country speaking, I have pointed out that the FED has made it possible to build our fantastic national infrastructure. Our highways, our entire way of life is the result of government being able to spend more than they take in from tax revenue. The FED made it all possible.

    Now that the FED is a solvent reality in the eyes of the country, we can continue to borrow from them to fund all future expenditures. It is a never ending free source of money as long as they do not ask for interest on our loans. Of course they won't, because we created them.

    Only total complete flaming idiots would dare attack the system. The FED is our money tree.
     
  8. Baruch Menachem
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    Baruch Menachem '

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    They can't do the job they were made for well, so they keep on running around doing other things.

    Milton Friedman believes it was deliberate incompetence on the part of the Fed that took the mild recession of 1929 and turned it into the great depression. And since then we have added several other agencies to backstop it because it keeps goofing off or goofing up.
     
  9. Neubarth
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    Neubarth At the Ballpark July 30th

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    Milton is another one of those economic shit heads who does not have a clue. Remember as far as controlling the economy, the only input that the Fed has directly is controlling the interest rate that they lend money to the banks. The FED does not set government regulations. Idiots like Friedman seem to think that the FED can legislate. What a damn stupid buffoon he is.

    The FED can set interest rates and that is usually at the request of the government in power. If money was too tight, the printing of money by the Treasury would be the issue, not the interest rate the FED charges banks for the overnight rate.

    I can not believe that people are so stupid as to believe the crap that Friedman puts out. It is about as crazy as the crap that Ron Paul puts out. Somebody needs to tie a toe tag on that stupid son of a bitch.
     
  10. georgephillip
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    georgephillip Gold Member Supporting Member

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    Why do the words at the top of the $20 bill in front of me read:

    FEDERAL RESERVE NOTE?

    Instead of: TREASURY NOTE??
     

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