They haven't been high during past similar circumstances, unless you only mean relatively (2% federal funds rate versus 0%). It's 0% today because nothing else was working to achieve the effects they wanted.
Their expenses aren't very substantial. The treasury gets the vast majority of the money generated.
I guess you just misunderstood, because that was exactly my point. You're trying to argue that all money in the Federal Reserve System is based on debt. My point was that the central bank can circulate currency reflecting existing value by monetizing debt. The treasury can pay obligations in fiat currency that must be accepted in place of or alongside the gold currency, because it's legal tender. This money was never lent out for interest and need not even be repaid--it's just created. Alternatively, if you have paper notes denominated in dollars that are redeemable for gold, the government can transform them into fiat currency by refusing the conversion. The notes still exist and still reflect the exactly the same value they did before (immediately after they're transformed into fiat currency), and they form a substantial deposit base for banks. None of those notes are based on debt either.
They actually don't have to spend a penny on any of those programs. All they'd need to do is amend the statute, and then the obligation disappears. I don't see how this is any different from Congress having to pass an appropriation to spend money on the military.
I certainly don't know the answer, but out current debt level obviously isn't problematic (not yet).
When the people making monetary policy decisions aren't bankers and aren't paid based on the Fed's profits, they certainly are irrelevant. I'm constantly asking the question: why would the Board of Governors care? Why would the federal reserve banks care? They have no financial stake in the system's profits.
The question was about the interest payment due on the initial loan.
When was it devised and what were they using for money at the time? I think the same thing, interest was not frowned upon as usury once ppl accepted the risk of loss involved in lending. Ideally I think though assumes that men with create and manage unlimited sums of money will never follow through with temptations to take advantage of skimming off of those large sums for personal benefit without getting caught.............But Ideally, yes; it is my limited understanding it would generate value where no motivation to do so previously existed.
What do you mean "they can earn 10 times the risk free rate with....25% interest on fed reserve account deposit overages"?
The Fed's QE program wouldn't have purchased all of the government's borrowing a few years ago. It's only true now because the amount of government borrowing has been substantially reduced, with the deficit now expected to be less than $700 billion. Theoretically the government can borrow an unlimited amount of money; practically, they're actually borrowing a lot less, and since there's huge demand for treasuries regardless of the Fed's purchases, the Fed's actions have no impact on the government's borrowing ability.
Interest is just a share of value created. It's not endlessly increasing. If I borrow $100 at 5% to plant crops that will be worth $200, I have a $95 profit, $5 interest payment, and $100 return of principal to the bank. The bank got $5, but I got $95.
Since I just described ways the central bank can create money--expressly using the word "created" twice--you must be retarded.
You're assuming that every dollar in existence began life as a loan from the central bank to a bank. As I just explained, there was value in existence before fiat currency came to be; the central bank and the government can circulate currency without ever having to lend it to anyone. When your gold certificate is no longer convertible into gold but instead only convertible into Federal Reserve Notes, you get currency for value from the treasury without it ever being borrowed (since the treasury can sell a bond to the Fed without ever having to repay it). This existing value is a deposit base for the banking system.
At least you think you do.I derped, they obviously don't make it at a low interest rate, they make it and loan it to the commercial bank at a really low interest rate.
Least I know how it works tho
If the treasury borrows 100 from the central bank, it doesn't pay anything. The interest payments go back to the treasury; the principal balance goes back to the treasury. The treasury never actually has to repay anything. Thus there really is no loan.
If it doesn't matter then why print it on the note??? Why have a lawful two party signature and the word "note" and the bank it is drawn on adorning the front accordingly with statutes of commerce??
Lol regime...interesting word choice.......so we all elected those people in "The Creature from Jekyll Island" and voted for Nixon?? "We" certainly did not. Taken seriously lol.tokeprep said:
The sad thing is all your ass had to do is keep repeating that dollars are not losing value to inflation and eventually it will be true just because it was repeated so much..............even though it is completely false.......I literally just heard Mr. Obama say "our democracy" just now on ABC news.........as if everyone is not aware that a Constitutional Republic is our form of government and Mr. Obama is a Constitutional Scholar..........tokeprep said:
They were always raised in recessions and depressions in the past, even during the Great Depression the Fed kept them high to avoid going off the gold standard like Britain did.......the "effects" they wanted then was to correct the problem by rewarding savings and pulling money from the supply....the "effect" today is merely to avoid default.
Are you aware they are a private company? Their expenses are what they want them to be.tokeprep said:
Statutory requirement? Historical significance? Arbitrary choice? If it doesn't functionally matter, the answer is really irrelevant. If no one has a clue what the language means, it must not be very important to them.
We elected the Congress and the president who signed the bill, certainly. We also elected Nixon.
I couldn't possibly have repeated that because I never said it in the first place.
Using precious metals is gambling too. In the 1800s, what happened when they discovered massive silver deposits? What if another huge deposit of something were discovered? What if they start mining metals off of asteroids? What if people invent new means of recycling or recovering very minute amounts of metals that aggregate to a lot? The fact that you're betting against all of this happening doesn't mean that you aren't betting.
Then what''s the point?? Does this not seem like going around your elbow to get to your ass? The treasury sells a bond to the bank....the bank can collect on the bond.
Another example from the more distant past? I seem to recall the Great Depression dragging along for a very long time--maybe they concluded from data that the policy didn't work very well?
The central bank's collection on the bond is irrelevant. If our government issues a 100 bond to the central bank, it has 100 to spend. If the central bank holds the bond until maturity and the treasury repays the 100, that 100 is profit of the Fed, which is transferred to the treasury. The treasury now has 100 without any offsetting obligation. The federal government can effectively create an unlimited amount of money with no corresponding debt.
Iirc they used coins, promissory notes and letters of credit/draft. cn
Looked up "functionally matter" in Black's Law Dictionary and didn't find a thing. The terms note, payee....contract....bond...all were there. The fact most people haven't a clue is what facilitates this foolishness to continue to compound.....and allow silly things like "multipliers" to be created in a vain attempt to convince the masses everything balances out.
The Federal Reserve Act was passed on Christmas holiday, most Congress members were home.......there is no basis for a suit is my point....must mean the book is accurate and factually correct. I know if someone wrote a book about me full of "quackery" I would certainly correct the situation with a Libel or Slander lawsuit.tokeprep said:
twostrokenut said:
sooooo by this....tokeprep said:
This statement is not an attempt to show how the Federal Reserve Note(dollar) retained its "real purchasing power" vs the silver dollar I said was the one not floating??? As if to lose value is not literally the exact opposite of retaining value.tokeprep said:
I never said investing in silver or gold wasn't a gamble, certainly was no risk before 1964.. and lots of people knew this...had "insider information" as to the future market and upcoming legislation...or just a gut feeling if you were a janitor or clerk......and that's why they were removed from circulation as the metal was needed to pay bills...they (Treasury) literally could not and cannot afford to produce the coin anymore.....just like the copper penny and even the penny we have today only containing a thin copper shell around cheap zinc cost more than 1cent to produce ...some morons are still holding silver certificates to this day thinking they can cash them in for metal because they are ignorant of Legal Tender laws...............but they're not morons just because they're not lawyers......they are not supposed to have to worry about shit like having a contract in their hand (silver certificate, herein called ss; federal reserve note, herein called frn) that isn't worth the paper its printed on because the government reneged in legalese they cannot understand with a bank who's ass they are kissing to take care of their special interests.........tokeprep said:
Don't forget what your claim was: "I am thinking because notes are debt instruments, a promise to pay. It's existence represents a debt, does it not? It only seemed there was no debt in the introduction." You were saying it must represent a debt because it's legally an obligation of the government. But since Federal Reserve Notes can be circulated without creating debt, that assertion is false. That's why I said the legal fiction is irrelevant. Functionally, the note represents value and people are willing to trade for it.
Have you been listening to Ed Griffin without confirmation? House: 298 yes, 60 no, 76 not voting; Senate: 43 yes, 25 no, 27 not voting. If every absent member in the House had been there, no effect; to kill the bill in the Senate, 23 of 27 not voting would have needed to vote against it.
This is what you said: "The sad thing is all your ass had to do is keep repeating that dollars are not losing value to inflation..." This is the statement you quoted: "Inflation is irrelevant because wages have kept pace with it." I didn't say that individual dollars weren't losing value to inflation, I said the purchasing power lost to inflation had been exceeded by growth in wages. This doesn't mean that it inflation doesn't exist, only that it had no real impact on purchasing power, since people have more dollars to spend.
The higher the price, the more incentive people have to search. Look at what $100 oil did for oil exploration! A group of billionaires recently founded an asteroid mining venture that's trying to develop the technology to do it. I wouldn't expect any success with that for a couple of decades, at least, but I definitely think it's the future, especially if metals continued to appreciate astronomically.
Point is for the first 150 years the Federal Government did not get involved during recessions...including the newely formed Fed....and they all corrected themselves.... Here's another one.....the Fed left interest rates like 6-7 during recession under Harding....unemployment went from 11.7% his first year to 6.7 next year and 2.4 the next....and the recession fixed itself....new concepts like holding interest rates low and introducing such weirdness as quantitative easing to cover up for lack of capital are strange things to do given a proven track record of what actually works like high savings incentives.....
