Warren and Cruz are both HUGE hypocrites

[MisterBeale]

See, this is why that "FED Audit Bill" needed to be passed.

Folks like you and Toddsterpatriot are happier living in denial and ignorance. You think your financial knowledge, or that of your advisers is good enough.


Who cares if the minutes of these meeting came off of the "internet?"


Does it make the knowledge any less valuable? The fact is, a massive deception was undertaken. I seriously doubt either one of you bothered to view that video, either that, or you just didn't like what you saw, so you just blocked it out.


If the folks on main-street, and the independent press knew what was going on, then there would have been a revolution before dawn.

Fuck your IRA's and your 401k's you greedy bitches. When the bank bail-in's come, I hope you are the first to be hit.

CHAIRMAN BERNANKE. Thank you. President Stern.

MR. STERN. Thank you, Mr. Chairman. In thinking about the three issues you raised, I start from the presumption that we don’t need to convince market participants at this stage that we will do what it takes to, if possible, restore stability and to encourage financial and economic health. I think we need to convince them that we have an exit strategy and that we are prepared to execute it in a timely way.
http://www.federalreserve.gov/monetarypolicy/files/FOMC20090624meeting.pdf

Now, I submit to you, they STILL don't have a way to unwind these assets. Those toxic assets still are being held, with no way to be unwound. There IS no exit strategy, there are no loans for small businesses, and the economy still stagnates because of these toxic assets.

If all this were known back then, things would have been entirely different.


And still the rich treat Wall-street like their Casino.

Now, I submit to you, they STILL don't have a way to unwind these assets. Those toxic assets still are being held, with no way to be unwound.

They don't have any toxic assets.

The Fed bought all the MBS. Watch the video noob. Yes they do.

All the MBS? How much would that have been?

AT what point in time?

JHC! I was right, you didn't watch the video. Why are we even having this conversation? We are talking past each other.


This is an interactive graph. You can pick any point in time, up to and including today.

https://research.stlouisfed.org/images/fredgraph-logo-2x.png

AT what point in time?

You made the claim, you tell me.

I was right, you didn't watch the video.

Which moronic video makes that idiotic claim?

Why are we even having this conversation?

Because you're an idiot making silly claims that you won't back up.

This is an interactive graph. You can pick any point in time, up to and including today.

Great, use it to tell me when the Fed "bought all the MBS". Durr.

 

[Toddsterpatriot]

Now, I submit to you, they STILL don't have a way to unwind these assets. Those toxic assets still are being held, with no way to be unwound.

They don't have any toxic assets.

The Fed bought all the MBS. Watch the video noob. Yes they do.

All the MBS? How much would that have been?

AT what point in time?

JHC! I was right, you didn't watch the video. Why are we even having this conversation? We are talking past each other.


This is an interactive graph. You can pick any point in time, up to and including today.

https://research.stlouisfed.org/images/fredgraph-logo-2x.png

AT what point in time?

You made the claim, you tell me.

I was right, you didn't watch the video.

Which moronic video makes that idiotic claim?

Why are we even having this conversation?

Because you're an idiot making silly claims that you won't back up.

This is an interactive graph. You can pick any point in time, up to and including today.

Great, use it to tell me when the Fed "bought all the MBS". Durr.

 

[westwall]

Auditing the FED is a horrible idea. Her "excuse" is a valid reason.

Why? You don't care to know how badly they are screwing us?

 

[Dovahkiin]

Auditing the FED is a horrible idea. Her "excuse" is a valid reason.

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

 

[westwall]

Auditing the FED is a horrible idea. Her "excuse" is a valid reason.

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

 

[MisterBeale]

The Fed bought all the MBS. Watch the video noob. Yes they do.

All the MBS? How much would that have been?

AT what point in time?

JHC! I was right, you didn't watch the video. Why are we even having this conversation? We are talking past each other.


This is an interactive graph. You can pick any point in time, up to and including today.

https://research.stlouisfed.org/images/fredgraph-logo-2x.png

AT what point in time?

You made the claim, you tell me.

I was right, you didn't watch the video.

Which moronic video makes that idiotic claim?

Why are we even having this conversation?

Because you're an idiot making silly claims that you won't back up.

This is an interactive graph. You can pick any point in time, up to and including today.

Great, use it to tell me when the Fed "bought all the MBS". Durr.

The information you want is at this link. I'm not downloading it.
System Open Market Account Holdings - Federal Reserve Bank of New York

This is that chart, image captured at a blog. The current estimate is at $1.5 trillion.

When the housing market is owned by Fed banks: Federal Reserve went from holding zero in mortgage-backed securities to over $1.5 trillion.

The Fed went from owning zero in MBS all the way to the current $1.5 trillion. The Fed is a massive portion of the market and is buying up nearly 100 percent of all issued MBS. This has also caused massive volatility in the bond market. Yet the end result is that homeownership overall is actually down for Americans because a large portion of the buying is going to Wall Street and big banks.


You can even see this on the private side with MBS issuances:

What need is there to grow this portion of the market if the Fed is dominating it so dramatically? There is little incentive to make this more competitive when banks instead of helping American homeowners are actually buying up massive amounts of homes with the corporate financial welfare of the Fed. Driving up prices with no subsequent growth in incomes is not a healthy policy.

Since the Fed has intervened we have seen roughly 30 percent of all home purchase going to investors:

“(NAR) All-cash sales comprised 32 percent of transactions in December, unchanged from November; they were 29 percent in December 2012. Individual investors, who account for many cash sales, purchased 21 percent of homes in December, up from 19 percent in November, but are unchanged from December 2012.”

This has created a new form of a Gilded Age society because inequality continues to rise and home prices rising with no real substantive growth in income is not useful. What does it matter if a regular home buyer has access to a mortgage at a 4 percent interest rate when connected banks can leverage debt at close to zero percent?

 

[Toddsterpatriot]

Auditing the FED is a horrible idea. Her "excuse" is a valid reason.

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

 

[Dovahkiin]

Auditing the FED is a horrible idea. Her "excuse" is a valid reason.

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

I don't understand why people want congress auditing the fed. RAND PAUL wants this. It doesn't make sense, given what he says about the government..

 

[Toddsterpatriot]

All the MBS? How much would that have been?

AT what point in time?

JHC! I was right, you didn't watch the video. Why are we even having this conversation? We are talking past each other.


This is an interactive graph. You can pick any point in time, up to and including today.

https://research.stlouisfed.org/images/fredgraph-logo-2x.png

AT what point in time?

You made the claim, you tell me.

I was right, you didn't watch the video.

Which moronic video makes that idiotic claim?

Why are we even having this conversation?

Because you're an idiot making silly claims that you won't back up.

This is an interactive graph. You can pick any point in time, up to and including today.

Great, use it to tell me when the Fed "bought all the MBS". Durr.

The information you want is at this link. I'm not downloading it.
System Open Market Account Holdings - Federal Reserve Bank of New York

This is that chart, image captured at a blog. The current estimate is at $1.5 trillion.

When the housing market is owned by Fed banks: Federal Reserve went from holding zero in mortgage-backed securities to over $1.5 trillion.

The Fed went from owning zero in MBS all the way to the current $1.5 trillion. The Fed is a massive portion of the market and is buying up nearly 100 percent of all issued MBS. This has also caused massive volatility in the bond market. Yet the end result is that homeownership overall is actually down for Americans because a large portion of the buying is going to Wall Street and big banks.


You can even see this on the private side with MBS issuances:

What need is there to grow this portion of the market if the Fed is dominating it so dramatically? There is little incentive to make this more competitive when banks instead of helping American homeowners are actually buying up massive amounts of homes with the corporate financial welfare of the Fed. Driving up prices with no subsequent growth in incomes is not a healthy policy.

Since the Fed has intervened we have seen roughly 30 percent of all home purchase going to investors:

“(NAR) All-cash sales comprised 32 percent of transactions in December, unchanged from November; they were 29 percent in December 2012. Individual investors, who account for many cash sales, purchased 21 percent of homes in December, up from 19 percent in November, but are unchanged from December 2012.”

This has created a new form of a Gilded Age society because inequality continues to rise and home prices rising with no real substantive growth in income is not useful. What does it matter if a regular home buyer has access to a mortgage at a 4 percent interest rate when connected banks can leverage debt at close to zero percent?

The Fed went from owning zero in MBS all the way to the current $1.5 trillion.

Thank God you finally posted some real info.


http://www.sifma.org/uploadedfiles/...iles/sf-us-mortgage-related-sifma.xls?n=02400

This nifty site shows about $7.2 trillion agency MBS outstanding, in addition to $1.4 trillion non-agency MBS.

So your 100% claim was just a bit off.

Let me know if there's anything else you're confused about, I'm always glad to help.

 

[Toddsterpatriot]

Auditing the FED is a horrible idea. Her "excuse" is a valid reason.

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

I don't understand why people want congress auditing the fed. RAND PAUL wants this. It doesn't make sense, given what he says about the government..

Because people are convinced it's a private bank and they're doing something shady. Stealing from us all.

They're just government bureaucrats. Some smart, some stupid.
Like most parts of government, they tend to fuck things up.

 

[Dovahkiin]

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

I don't understand why people want congress auditing the fed. RAND PAUL wants this. It doesn't make sense, given what he says about the government..

Because people are convinced it's a private bank and they're doing something shady. Stealing from us all.

They're just government bureaucrats. Some smart, some stupid.
Like most parts of government, they tend to fuck things up.

These are the same people who believe that we need to "HOLD THE LINE!" On the debt.. I tend to ignore them. They don't really fuck things up, historically, the fuck ups have stemmed from attempting to reduce the debt/deficit reduction at the worst times.

 

[MisterBeale]

Auditing the FED is a horrible idea. Her "excuse" is a valid reason.

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

They have complete control over the money supply by controlling the interest rates. Stop playing dumb.


And we aren't talking about a real, "Audit." Those of us who are educated have conceded that. That isn't what this is about. It is essentially making the Fed as completely transparent as any government agency, and as timely and open to any requests of information as any federal agency.

IOW, they would have to respond to an FOIA request. The minutes of their meetings would no longer be concealed for up to five years.

The loans they give to the IMF would not be opaque. EVERYTHING THAT THEY DO AND SAY would be open to the press, the public, and our representatives, so that this outrageous wealth gap could be addressed effectively.


If folks want to call that political? Okay, I'm fine with that.

However, their decisions have been made in the dark for the past century, and for the first time in a century, the population is actually considering the immorality of nominating a re-distributive socialist.

If the nation knew that the reason the poor and middle class have no purchasing power to their money and more was because of the policies of the central bank, they would not even think about destroying the greatest economy the world has ever seen. Instead they would want a Christ like figure to route out the thieves and vipers, or a president like Andrew Jackson. They would know WHY the poor and middle class have been screwed so bad.

And now, more private investors are getting the homes than the poor and middle class Americans. Hmmm. . . . seems I remember a famous American making that prediction, don't you?

It's either this, or we just get rid of the Fed and let the Congress issue it's own commodity, labor and resource backed currency. You know, like that constitution says should be doing.


But. . . I'm sure you're against that. It would bring the casino like nature of Wall-street to an end. The dishonest lying and thieving folks that depend on that to get richer and richer would think that is a terrible idea. Better to sit back and get rich of the chattel and the slaves, eh?

 

[MisterBeale]

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

I don't understand why people want congress auditing the fed. RAND PAUL wants this. It doesn't make sense, given what he says about the government..

Because people are convinced it's a private bank and they're doing something shady. Stealing from us all.

They're just government bureaucrats. Some smart, some stupid.
Like most parts of government, they tend to fuck things up.

Wow, I don't know if you are ignorant, or a liar.

Not Private and Not for Profit?


The Fed’s website insists that it is not a private corporation, is not operated for profit, and is not funded by Congress. But is that true? The Federal Reserve was set up in 1913 as a “lender of last resort” to backstop bank runs, following a particularly bad bank panic in 1907. The Fed’s mandate was then and continues to be to keep the private banking system intact; and that means keeping intact the system’s most valuable asset, a monopoly on creating the national money supply. Except for coins, every dollar in circulation is now created privately as a debt to the Federal Reserve or the banking system it heads.4 The Fed’s website attempts to gloss over its role as chief defender and protector of this private banking club, but let’s take a closer look. The website states:


* “The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”


* “[The Federal Reserve] is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.”


* “The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. . . . After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.”5


So let’s review:


1. The Fed is privately owned.


Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.


2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”


Here is how it works: When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off. When the Fed wants to “expand the money supply” (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen. These maneuvers are called “open market operations” because the Fed buys the bonds on the “open market” from the bond dealers. The bonds then become the “reserves” that the banking establishment uses to back its loans. In another bit of sleight of hand known as “fractional reserve” lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan. It was this money-creating process that prompted Wright Patman, Chairman of the House Banking and Currency Committee in the 1960s, to call the Federal Reserve “a total money-making machine.” He wrote:


“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”


3. The Fed generates profits for its shareholders.


The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.


In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their “reserves.” The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in “reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.


The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.


Time to Change the Statute?


According to the Fed’s website, the control Congress has over the Federal Reserve is limited to this:


“[T]he Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute.”


As we know from watching the business news, “oversight” basically means that Congress gets to see the results when it’s over. The Fed periodically reports to Congress, but the Fed doesn’t ask; it tells. The only real leverage Congress has over the Fed is that it “can alter its responsibilities by statute.” It is time for Congress to exercise that leverage and make the Federal Reserve a truly federal agency, acting by and for the people through their elected representatives. If the Fed can demand AIG’s stock in return for an $85 billion loan to the mega-insurer, we can demand the Fed’s stock in return for the trillion-or-so dollars we’ll be advancing to bail out the private banking system from its follies.


If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves. Among other benefits to the taxpayers. a truly “federal” Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades.
Who Owns The Federal Reserve?

 

[MisterBeale]

AT what point in time?

JHC! I was right, you didn't watch the video. Why are we even having this conversation? We are talking past each other.


This is an interactive graph. You can pick any point in time, up to and including today.

https://research.stlouisfed.org/images/fredgraph-logo-2x.png

AT what point in time?

You made the claim, you tell me.

I was right, you didn't watch the video.

Which moronic video makes that idiotic claim?

Why are we even having this conversation?

Because you're an idiot making silly claims that you won't back up.

This is an interactive graph. You can pick any point in time, up to and including today.

Great, use it to tell me when the Fed "bought all the MBS". Durr.

The information you want is at this link. I'm not downloading it.
System Open Market Account Holdings - Federal Reserve Bank of New York

This is that chart, image captured at a blog. The current estimate is at $1.5 trillion.

When the housing market is owned by Fed banks: Federal Reserve went from holding zero in mortgage-backed securities to over $1.5 trillion.

The Fed went from owning zero in MBS all the way to the current $1.5 trillion. The Fed is a massive portion of the market and is buying up nearly 100 percent of all issued MBS. This has also caused massive volatility in the bond market. Yet the end result is that homeownership overall is actually down for Americans because a large portion of the buying is going to Wall Street and big banks.


You can even see this on the private side with MBS issuances:

What need is there to grow this portion of the market if the Fed is dominating it so dramatically? There is little incentive to make this more competitive when banks instead of helping American homeowners are actually buying up massive amounts of homes with the corporate financial welfare of the Fed. Driving up prices with no subsequent growth in incomes is not a healthy policy.

Since the Fed has intervened we have seen roughly 30 percent of all home purchase going to investors:

“(NAR) All-cash sales comprised 32 percent of transactions in December, unchanged from November; they were 29 percent in December 2012. Individual investors, who account for many cash sales, purchased 21 percent of homes in December, up from 19 percent in November, but are unchanged from December 2012.”

This has created a new form of a Gilded Age society because inequality continues to rise and home prices rising with no real substantive growth in income is not useful. What does it matter if a regular home buyer has access to a mortgage at a 4 percent interest rate when connected banks can leverage debt at close to zero percent?

The Fed went from owning zero in MBS all the way to the current $1.5 trillion.

Thank God you finally posted some real info.


http://www.sifma.org/uploadedfiles/...iles/sf-us-mortgage-related-sifma.xls?n=02400

This nifty site shows about $7.2 trillion agency MBS outstanding, in addition to $1.4 trillion non-agency MBS.

So your 100% claim was just a bit off.

Let me know if there's anything else you're confused about, I'm always glad to help.

Yes, there is something else you can help with. I post for others that come to review our debates, folks that aren't necessarily members. They will hit your link and see that they need to download something and ignore it and assume that I am right and you are a liar.

I would please like you to link to something that observers could see as evidence proving me wrong. Otherwise, we will have to assume you are full of crap.

 

[Toddsterpatriot]

Auditing the FED is a horrible idea. Her "excuse" is a valid reason.

Why? You don't care to know how badly they are screwing us?

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

They have complete control over the money supply by controlling the interest rates. Stop playing dumb.


And we aren't talking about a real, "Audit." Those of us who are educated have conceded that. That isn't what this is about. It is essentially making the Fed as completely transparent as any government agency, and as timely and open to any requests of information as any federal agency.

IOW, they would have to respond to an FOIA request. The minutes of their meetings would no longer be concealed for up to five years.

The loans they give to the IMF would not be opaque. EVERYTHING THAT THEY DO AND SAY would be open to the press, the public, and our representatives, so that this outrageous wealth gap could be addressed effectively.


If folks want to call that political? Okay, I'm fine with that.

However, their decisions have been made in the dark for the past century, and for the first time in a century, the population is actually considering the immorality of nominating a re-distributive socialist.

If the nation knew that the reason the poor and middle class have no purchasing power to their money and more was because of the policies of the central bank, they would not even think about destroying the greatest economy the world has ever seen. Instead they would want a Christ like figure to route out the thieves and vipers, or a president like Andrew Jackson. They would know WHY the poor and middle class have been screwed so bad.

And now, more private investors are getting the homes than the poor and middle class Americans. Hmmm. . . . seems I remember a famous American making that prediction, don't you?

It's either this, or we just get rid of the Fed and let the Congress issue it's own commodity, labor and resource backed currency. You know, like that constitution says should be doing.


But. . . I'm sure you're against that. It would bring the casino like nature of Wall-street to an end. The dishonest lying and thieving folks that depend on that to get richer and richer would think that is a terrible idea. Better to sit back and get rich of the chattel and the slaves, eh?

They have complete control over the money supply by controlling the interest rates.

They don't control interest rates and they don't have complete control over the money supply.

Stop playing dumb.

Irony is ironic.

And we aren't talking about a real, "Audit."

Then stop saying they've never been audited.

That's a very nice fake quote by Jefferson there. Durr.

It would bring the casino like nature of Wall-street to an end.

How would ending the Fed fix Wall Street? Be specific.

EVERYTHING THAT THEY DO AND SAY would be open to the press, the public, and our representatives, so that this outrageous wealth gap could be addressed effectively.

Pretend their every meeting, every discussion, was broadcast live, what would that do about the wealth gap?

 

[Toddsterpatriot]

The fed isn't screwing anybody, I don't want congress, you know, the corrupt politicians who know virtually nothing about economics (the morons who stir up fear over the deficit) having any power over the fed,

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

I don't understand why people want congress auditing the fed. RAND PAUL wants this. It doesn't make sense, given what he says about the government..

Because people are convinced it's a private bank and they're doing something shady. Stealing from us all.

They're just government bureaucrats. Some smart, some stupid.
Like most parts of government, they tend to fuck things up.

Wow, I don't know if you are ignorant, or a liar.

Not Private and Not for Profit?


The Fed’s website insists that it is not a private corporation, is not operated for profit, and is not funded by Congress. But is that true? The Federal Reserve was set up in 1913 as a “lender of last resort” to backstop bank runs, following a particularly bad bank panic in 1907. The Fed’s mandate was then and continues to be to keep the private banking system intact; and that means keeping intact the system’s most valuable asset, a monopoly on creating the national money supply. Except for coins, every dollar in circulation is now created privately as a debt to the Federal Reserve or the banking system it heads.4 The Fed’s website attempts to gloss over its role as chief defender and protector of this private banking club, but let’s take a closer look. The website states:


* “The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”


* “[The Federal Reserve] is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.”


* “The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. . . . After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.”5


So let’s review:


1. The Fed is privately owned.


Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.


2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”


Here is how it works: When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off. When the Fed wants to “expand the money supply” (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen. These maneuvers are called “open market operations” because the Fed buys the bonds on the “open market” from the bond dealers. The bonds then become the “reserves” that the banking establishment uses to back its loans. In another bit of sleight of hand known as “fractional reserve” lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan. It was this money-creating process that prompted Wright Patman, Chairman of the House Banking and Currency Committee in the 1960s, to call the Federal Reserve “a total money-making machine.” He wrote:


“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”


3. The Fed generates profits for its shareholders.


The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.


In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their “reserves.” The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in “reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.


The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.


Time to Change the Statute?


According to the Fed’s website, the control Congress has over the Federal Reserve is limited to this:


“[T]he Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute.”


As we know from watching the business news, “oversight” basically means that Congress gets to see the results when it’s over. The Fed periodically reports to Congress, but the Fed doesn’t ask; it tells. The only real leverage Congress has over the Fed is that it “can alter its responsibilities by statute.” It is time for Congress to exercise that leverage and make the Federal Reserve a truly federal agency, acting by and for the people through their elected representatives. If the Fed can demand AIG’s stock in return for an $85 billion loan to the mega-insurer, we can demand the Fed’s stock in return for the trillion-or-so dollars we’ll be advancing to bail out the private banking system from its follies.


If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves. Among other benefits to the taxpayers. a truly “federal” Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades.
Who Owns The Federal Reserve?

1. The Fed is privately owned.

Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.

How much of the Fed's profit last year go to the "private owners"? How much to the US Treasury.

2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”

Wrong. It means it gets no money from Congress.

“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”

Yes, banks and the Fed can create money. That's why it's silly to claim the Fed controls the money supply.

most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.

The claim was "they are not operated for profit", not that they are unprofitable.
A Central Bank would be a useful tool, even if it broke even or cost money to operate.
The fact that it makes money should not be a surprise.

Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually

They need to update their info. System wide reserve requirements are much less than 10%.
Since the crisis, and QE, reserves are much higher than $700 billion.

The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders.

More old info. They just changed the return.

Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks.

Ooooooooh. Borrowing overnight to finance a bond that matures in 30 years. What could go wrong? LOL!

 

[Toddsterpatriot]

AT what point in time?

You made the claim, you tell me.

I was right, you didn't watch the video.

Which moronic video makes that idiotic claim?

Why are we even having this conversation?

Because you're an idiot making silly claims that you won't back up.

This is an interactive graph. You can pick any point in time, up to and including today.

Great, use it to tell me when the Fed "bought all the MBS". Durr.

The information you want is at this link. I'm not downloading it.
System Open Market Account Holdings - Federal Reserve Bank of New York

This is that chart, image captured at a blog. The current estimate is at $1.5 trillion.

When the housing market is owned by Fed banks: Federal Reserve went from holding zero in mortgage-backed securities to over $1.5 trillion.

The Fed went from owning zero in MBS all the way to the current $1.5 trillion. The Fed is a massive portion of the market and is buying up nearly 100 percent of all issued MBS. This has also caused massive volatility in the bond market. Yet the end result is that homeownership overall is actually down for Americans because a large portion of the buying is going to Wall Street and big banks.


You can even see this on the private side with MBS issuances:

What need is there to grow this portion of the market if the Fed is dominating it so dramatically? There is little incentive to make this more competitive when banks instead of helping American homeowners are actually buying up massive amounts of homes with the corporate financial welfare of the Fed. Driving up prices with no subsequent growth in incomes is not a healthy policy.

Since the Fed has intervened we have seen roughly 30 percent of all home purchase going to investors:

“(NAR) All-cash sales comprised 32 percent of transactions in December, unchanged from November; they were 29 percent in December 2012. Individual investors, who account for many cash sales, purchased 21 percent of homes in December, up from 19 percent in November, but are unchanged from December 2012.”

This has created a new form of a Gilded Age society because inequality continues to rise and home prices rising with no real substantive growth in income is not useful. What does it matter if a regular home buyer has access to a mortgage at a 4 percent interest rate when connected banks can leverage debt at close to zero percent?

The Fed went from owning zero in MBS all the way to the current $1.5 trillion.

Thank God you finally posted some real info.


http://www.sifma.org/uploadedfiles/...iles/sf-us-mortgage-related-sifma.xls?n=02400

This nifty site shows about $7.2 trillion agency MBS outstanding, in addition to $1.4 trillion non-agency MBS.

So your 100% claim was just a bit off.

Let me know if there's anything else you're confused about, I'm always glad to help.

Yes, there is something else you can help with. I post for others that come to review our debates, folks that aren't necessarily members. They will hit your link and see that they need to download something and ignore it and assume that I am right and you are a liar.

I would please like you to link to something that observers could see as evidence proving me wrong. Otherwise, we will have to assume you are full of crap.

They will hit your link and see that they need to download something and ignore it and assume that I am right and you are a liar.

Like you, they'd be wrong. Clicking the link gives you an Excel file.
It has the proof your 100% claim was wrong. The opposite of right.
You're free to not click and continue to spread your error.

 

[MisterBeale]

Yes, they are. They control the monetary supply of this country and the thought that they haven't been audited in years is simply ridiculous.

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

I don't understand why people want congress auditing the fed. RAND PAUL wants this. It doesn't make sense, given what he says about the government..

Because people are convinced it's a private bank and they're doing something shady. Stealing from us all.

They're just government bureaucrats. Some smart, some stupid.
Like most parts of government, they tend to fuck things up.

Wow, I don't know if you are ignorant, or a liar.

Not Private and Not for Profit?


The Fed’s website insists that it is not a private corporation, is not operated for profit, and is not funded by Congress. But is that true? The Federal Reserve was set up in 1913 as a “lender of last resort” to backstop bank runs, following a particularly bad bank panic in 1907. The Fed’s mandate was then and continues to be to keep the private banking system intact; and that means keeping intact the system’s most valuable asset, a monopoly on creating the national money supply. Except for coins, every dollar in circulation is now created privately as a debt to the Federal Reserve or the banking system it heads.4 The Fed’s website attempts to gloss over its role as chief defender and protector of this private banking club, but let’s take a closer look. The website states:


* “The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”


* “[The Federal Reserve] is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.”


* “The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. . . . After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.”5


So let’s review:


1. The Fed is privately owned.


Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.


2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”


Here is how it works: When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off. When the Fed wants to “expand the money supply” (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen. These maneuvers are called “open market operations” because the Fed buys the bonds on the “open market” from the bond dealers. The bonds then become the “reserves” that the banking establishment uses to back its loans. In another bit of sleight of hand known as “fractional reserve” lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan. It was this money-creating process that prompted Wright Patman, Chairman of the House Banking and Currency Committee in the 1960s, to call the Federal Reserve “a total money-making machine.” He wrote:


“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”


3. The Fed generates profits for its shareholders.


The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.


In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their “reserves.” The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in “reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.


The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.


Time to Change the Statute?


According to the Fed’s website, the control Congress has over the Federal Reserve is limited to this:


“[T]he Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute.”


As we know from watching the business news, “oversight” basically means that Congress gets to see the results when it’s over. The Fed periodically reports to Congress, but the Fed doesn’t ask; it tells. The only real leverage Congress has over the Fed is that it “can alter its responsibilities by statute.” It is time for Congress to exercise that leverage and make the Federal Reserve a truly federal agency, acting by and for the people through their elected representatives. If the Fed can demand AIG’s stock in return for an $85 billion loan to the mega-insurer, we can demand the Fed’s stock in return for the trillion-or-so dollars we’ll be advancing to bail out the private banking system from its follies.


If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves. Among other benefits to the taxpayers. a truly “federal” Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades.
Who Owns The Federal Reserve?

1. The Fed is privately owned.

Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.

How much of the Fed's profit last year go to the "private owners"? How much to the US Treasury.

2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”

Wrong. It means it gets no money from Congress.

“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”

Yes, banks and the Fed can create money. That's why it's silly to claim the Fed controls the money supply.

most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.

The claim was "they are not operated for profit", not that they are unprofitable.
A Central Bank would be a useful tool, even if it broke even or cost money to operate.
The fact that it makes money should not be a surprise.

Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually

They need to update their info. System wide reserve requirements are much less than 10%.
Since the crisis, and QE, reserves are much higher than $700 billion.

The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders.

More old info. They just changed the return.

Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks.

Ooooooooh. Borrowing overnight to finance a bond that matures in 30 years. What could go wrong? LOL!

I can read the article just fine. I don't need you to put your partisan spin on it thank you.

The point is, the Fed is owned by private banks in the interest of the elites, and it is not run by "government" employees for the interest of the nation. Thanks for your useless commentary though.


The fact that return rates and reserve requirements have changed alters nothing. . . .

And either the Fed gets its' authority to create money from Congress, or it is unconstitutional. So the article is not wrong. It is only your perception of it that is wrong.


I love how you state in one breath that the Fed creates money, and in the next, they don't control the money supply. That's rich.

Let's fact it, you can't get around this. . . . . and you never will.

 

[MisterBeale]

The information you want is at this link. I'm not downloading it.
System Open Market Account Holdings - Federal Reserve Bank of New York

This is that chart, image captured at a blog. The current estimate is at $1.5 trillion.

When the housing market is owned by Fed banks: Federal Reserve went from holding zero in mortgage-backed securities to over $1.5 trillion.

The Fed went from owning zero in MBS all the way to the current $1.5 trillion. The Fed is a massive portion of the market and is buying up nearly 100 percent of all issued MBS. This has also caused massive volatility in the bond market. Yet the end result is that homeownership overall is actually down for Americans because a large portion of the buying is going to Wall Street and big banks.


You can even see this on the private side with MBS issuances:

What need is there to grow this portion of the market if the Fed is dominating it so dramatically? There is little incentive to make this more competitive when banks instead of helping American homeowners are actually buying up massive amounts of homes with the corporate financial welfare of the Fed. Driving up prices with no subsequent growth in incomes is not a healthy policy.

Since the Fed has intervened we have seen roughly 30 percent of all home purchase going to investors:

“(NAR) All-cash sales comprised 32 percent of transactions in December, unchanged from November; they were 29 percent in December 2012. Individual investors, who account for many cash sales, purchased 21 percent of homes in December, up from 19 percent in November, but are unchanged from December 2012.”

This has created a new form of a Gilded Age society because inequality continues to rise and home prices rising with no real substantive growth in income is not useful. What does it matter if a regular home buyer has access to a mortgage at a 4 percent interest rate when connected banks can leverage debt at close to zero percent?

The Fed went from owning zero in MBS all the way to the current $1.5 trillion.

Thank God you finally posted some real info.


http://www.sifma.org/uploadedfiles/...iles/sf-us-mortgage-related-sifma.xls?n=02400

This nifty site shows about $7.2 trillion agency MBS outstanding, in addition to $1.4 trillion non-agency MBS.

So your 100% claim was just a bit off.

Let me know if there's anything else you're confused about, I'm always glad to help.

Yes, there is something else you can help with. I post for others that come to review our debates, folks that aren't necessarily members. They will hit your link and see that they need to download something and ignore it and assume that I am right and you are a liar.

I would please like you to link to something that observers could see as evidence proving me wrong. Otherwise, we will have to assume you are full of crap.

They will hit your link and see that they need to download something and ignore it and assume that I am right and you are a liar.

Like you, they'd be wrong. Clicking the link gives you an Excel file.
It has the proof your 100% claim was wrong. The opposite of right.
You're free to not click and continue to spread your error.

IOW, you don't have any proof to the casual viewer of this site. Nice. I have offered up several sources and you offer up nothing.

 

[Toddsterpatriot]

The Fed influences but cannot control the money supply.
And they're audited every year. Currently by Deloitte.

I don't understand why people want congress auditing the fed. RAND PAUL wants this. It doesn't make sense, given what he says about the government..

Because people are convinced it's a private bank and they're doing something shady. Stealing from us all.

They're just government bureaucrats. Some smart, some stupid.
Like most parts of government, they tend to fuck things up.

Wow, I don't know if you are ignorant, or a liar.

Not Private and Not for Profit?


The Fed’s website insists that it is not a private corporation, is not operated for profit, and is not funded by Congress. But is that true? The Federal Reserve was set up in 1913 as a “lender of last resort” to backstop bank runs, following a particularly bad bank panic in 1907. The Fed’s mandate was then and continues to be to keep the private banking system intact; and that means keeping intact the system’s most valuable asset, a monopoly on creating the national money supply. Except for coins, every dollar in circulation is now created privately as a debt to the Federal Reserve or the banking system it heads.4 The Fed’s website attempts to gloss over its role as chief defender and protector of this private banking club, but let’s take a closer look. The website states:


* “The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”


* “[The Federal Reserve] is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.”


* “The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. . . . After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.”5


So let’s review:


1. The Fed is privately owned.


Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.


2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”


Here is how it works: When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off. When the Fed wants to “expand the money supply” (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen. These maneuvers are called “open market operations” because the Fed buys the bonds on the “open market” from the bond dealers. The bonds then become the “reserves” that the banking establishment uses to back its loans. In another bit of sleight of hand known as “fractional reserve” lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan. It was this money-creating process that prompted Wright Patman, Chairman of the House Banking and Currency Committee in the 1960s, to call the Federal Reserve “a total money-making machine.” He wrote:


“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”


3. The Fed generates profits for its shareholders.


The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.


In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their “reserves.” The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in “reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.


The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.


Time to Change the Statute?


According to the Fed’s website, the control Congress has over the Federal Reserve is limited to this:


“[T]he Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute.”


As we know from watching the business news, “oversight” basically means that Congress gets to see the results when it’s over. The Fed periodically reports to Congress, but the Fed doesn’t ask; it tells. The only real leverage Congress has over the Fed is that it “can alter its responsibilities by statute.” It is time for Congress to exercise that leverage and make the Federal Reserve a truly federal agency, acting by and for the people through their elected representatives. If the Fed can demand AIG’s stock in return for an $85 billion loan to the mega-insurer, we can demand the Fed’s stock in return for the trillion-or-so dollars we’ll be advancing to bail out the private banking system from its follies.


If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves. Among other benefits to the taxpayers. a truly “federal” Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades.
Who Owns The Federal Reserve?

1. The Fed is privately owned.

Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.

How much of the Fed's profit last year go to the "private owners"? How much to the US Treasury.

2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”

Wrong. It means it gets no money from Congress.

“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”

Yes, banks and the Fed can create money. That's why it's silly to claim the Fed controls the money supply.

most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.

The claim was "they are not operated for profit", not that they are unprofitable.
A Central Bank would be a useful tool, even if it broke even or cost money to operate.
The fact that it makes money should not be a surprise.

Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually

They need to update their info. System wide reserve requirements are much less than 10%.
Since the crisis, and QE, reserves are much higher than $700 billion.

The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders.

More old info. They just changed the return.

Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks.

Ooooooooh. Borrowing overnight to finance a bond that matures in 30 years. What could go wrong? LOL!

I can read the article just fine. I don't need you to put your partisan spin on it thank you.

The point is, the Fed is owned by private banks in the interest of the elites, and it is not run by "government" employees for the interest of the nation. Thanks for your useless commentary though.


The fact that return rates and reserve requirements have changed alters nothing. . . .

And either the Fed gets its' authority to create money from Congress, or it is unconstitutional. So the article is not wrong. It is only your perception of it that is wrong.


I love how you state in one breath that the Fed creates money, and in the next, they don't control the money supply. That's rich.

Let's fact it, you can't get around this. . . . . and you never will.

The point is, the Fed is owned by private banks

The private owners received dividends of $1.7 billion.
The US Treasury received $100 billion.
If I was the owner and the government received 60 times the earnings I did, I'd suspect the government was the real owner.

And either the Fed gets its' authority to create money from Congress, or it is unconstitutional.

That's where they get their authority. Did you have a point?

I love how you state in one breath that the Fed creates money, and in the next, they don't control the money supply.

They do create money. So do all banks. That's why the Fed doesn't control the money supply, they aren't the sole source.

Thanks for the chart. What do you feel it proves?