Calling all Zeitgeisters

My conspiracy fundamentals have been rudely wakened bby the fresh air of truth (facts mainly)

I still am reeling, but I still can't find evidence beyond a shadow to confirm or deny. The weight of conspiracy thumping out there suggests

a) The Government wants money
b) It calls up Treasury
c) Treasury calls up the Fed
d) In exchange for printing costs (4 cents on the dollar)
e) The Fed receives bonds to the value of monies printed
f) The Government ie; the people now owe the Fed that value of money plus interest
g)this is a vicious cycle that ushers in the NEW WORLD ORDER and ultimate servitude

OR

The Fed by its FOMC (Federal Open Market Committee) decides
a) it needs to regulate the money supply by increasing it.
b) it does this by buying Treasury bonds on the open market
c) it releases that value of money as credit to those member banks it purchased the bonds from
d) the Fed as the bearer of those bonds earns interest which it pays back to Treasury
e) Each year apart from operating costs and profits (up to 6% by LAW) all of its other profits are channeled back into Treasury.
f) The Fed only holds a small (less than 10% ) of all Government Bonds, which still means a money flow to the Government not away from it.


Question? How can these two diametrically opposed visions of who and what the FED does exist, and is it just a monumnetal case of simple minded people unable to work through complex arrangements that all the conspiracies exist?

Here are 11 reasons to play with.

http://www.activistpost.com/2013/05/11-reasons-why-federal-reserve-should.html

Originally posted by Metal Brain
Here are 11 reasons to play with.

http://www.activistpost.com/2013/05/11-reasons-why-federal-reserve-should.html

Which of the points of debate does your link affirm?

Originally posted by kmax87
Which of the points of debate does your link affirm?

Two questions
If the irs collects money only to pay off debt and all other money is created at 100% debt, then why is there only 85 trillion dollars in total debt. Surely actual debt would be multiples more given the cost of defence spending etc over the past 100 years.

I have studied the Federal Reserve System extensively and have come to the conclusion that nobody knows nuthin' about nuthin' and it cannot possibly be understood.

Originally posted by KilgoreTrout15
I have studied the Federal Reserve System extensively and have come to the conclusion that nobody knows nuthin' about nuthin' and it cannot possibly be understood.

Could the US have become the all powerful nation it is today without the Federal Reserve System?

Originally posted by kmax87
Could the US have become the all powerful nation it is today without the Federal Reserve System?

#1 The Greatest Period Of Economic Growth In The History Of The United States Happened When There Was No Central Bank

Did you know that the greatest period of economic growth in U.S. history was between the Civil War and 1913? And guess what? That was a period when there was no central bank in the United States at all. The following is from Wikipedia...

The Gilded Age saw the greatest period of economic growth in American history. After the short-lived panic of 1873, the economy recovered with the advent of hard money policies and industrialization. From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873. The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled.

So if our greatest period of economic prosperity was during a time when there was no Federal Reserve, then why shouldn't we try such a system again?

Originally posted by Metal Brain
#1 The Greatest Period Of Economic Growth In The History Of The United States Happened When There Was No Central Bank

Did you know that the greatest period of economic growth in U.S. history was between the Civil War and 1913? And guess what? That was a period when there was no central bank in the United States at all. The following is from Wikiped ...[text shortened]... during a time when there was no Federal Reserve, then why shouldn't we try such a system again?

Do you really think America was more prosperous in the 19th Century than now?

Originally posted by Metal Brain
#1 The Greatest Period Of Economic Growth In The History Of The United States Happened When There Was No Central Bank

I thought the banking system was very unstable during that post civil war pre-ww1 period, with runs on banks common, and investor panic a prevalent feature?

EDIT: I also thought it was that very instability that helped put forward the case for a centralized bank.

Originally posted by Metal Brain
Here are 11 reasons to play with.

http://www.activistpost.com/2013/05/11-reasons-why-federal-reserve-should.html

At the heartof every Anti-Fed blog is this claim

So what does the Federal Reserve do with those Treasury bonds? I went on to explain what happens...

The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system.

But wait.

There is a problem.

Because the U.S. government must pay interest on the Treasury bonds, the amount of debt that has been created by this transaction is greater than the amount of money that has been created.

So where will the U.S. government get the money to pay that debt?

In the real world it is the Fed that decides whether or not more money should be put into circulation and it does this in the following way

The Fed through its FOMC (Federal Open Market Committee) buys up Treasury bonds on the open market releasing that value of money as credit to those member banks it purchased the bonds from
It is the Fed as the bearer of those bonds that earns the interest which it pays back to the United States Treasury. Eah year it pays back tens of billions to Treasury.

For its trouble it can earn up to 6% profit on its transactions, the rest goes back to Government.

Originally posted by kmax87
At the heartof every Anti-Fed blog is this claim
[quote]... The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system..

This from Investopedia explaining the way that the FED uses securities to increase or decrease the money supply
http://www.investopedia.com/ask/answers/06/openmarketoperations.asp

To increase the money supply in the market, the FOMC will purchase securities from banks. The funds that the banks acquire from the sale can be used as loans to individuals and businesses. The more money that is available in the market for lending, the lower the rates on these loans become, which causes more borrowers to access cheaper capital. This easier access to capital leads to greater investment and will often stimulate the overall economy.

To decrease the money supply, the FOMC will sell securities to banks, which leads to money being taken out of the banks and kept in FOMC reserves. The decrease in money available in the economy leads to a decrease in investment and spending as the availability of capital decreases and it becomes more expensive to obtain. This limiting of access to capital slows down economic growth as investment decreases.

The real argument for or against a Federal Reserve System (Central Banks for the rest of us), is whether or not you would want your Congress (which would be hard pressed to organise a beer in a brewery) to determine the way in which money flows in America, and hence the world, or whether you would want a privately run bank, with an inordinate amount of Government oversight, to do the job, free of the politicised ebbs and flows of political ideological dogma.

Given the recent fiscal cliff scenarios and moral hazard lock-ups of recent past, I for one as a citizen of this planet much prefer the latter.

Originally posted by kmax87
I thought the banking system was very unstable during that post civil war pre-ww1 period, with runs on banks common, and investor panic a prevalent feature?

EDIT: I also thought it was that very instability that helped put forward the case for a centralized bank.

Define stable. Is stable a system where failure is propped up at the expense of the tax payer? Then yes, it was unstable back then.

The greatest period of economic downturn occurred during the Great Depression and was overseen by the Fed. Before then, you would have bumps in the road, but then, that is how a healthy economy functions. It is akin to us having bumps in the road and downturns in our lives. It beats medicating ourselves to the point that we can't feel any down turns. If we did, we would end up killing ourselves, much like the nation seems to have done to itself fiscally.

What you hear in the media is largely group think progressivism. Any deviation from it will cause instant ridicule and derision.

Originally posted by whodey
Define stable. Is stable a system where failure is propped up at the expense of the tax payer? Then yes, it was unstable back then.

The greatest period of economic downturn occurred during the Great Depression and was overseen by the Fed. Before then, you would have bumps in the road, but then, that is how a healthy economy functions. It is akin to us ...[text shortened]... ely group think progressivism. Any deviation from it will cause instant ridicule and derision.

The Fed is also a work in progress getting more refined with every minute in its knowledge of providing a platform for maximum jobs and stable growth. The lessons of the Great Depression were put into action during the GFC which had a much greater potential to disrupt life as we knew it than the Great Depression ever had.

Originally posted by whodey
Define stable. Is stable a system where failure is propped up at the expense of the tax payer?

Any action that helps to produce equity between two or more groups which without any external intervention would allow some to gain an incomparable advantage in society can be desribed as an action propped up by taxation. The nature of taxation is to collect money that will reflow into infrastructural and public works that produces a common benefit. I know libertarians don't like the idea of taxes, putting it on the same line as being forcibly robbed and another surefire sign of tyranny, but in the real world we all get to where we are going by utilising the commonwealth of our nations, which is still a taking in of taxes and working out how to spend it for the maximum public good. That it does not always work this way is not a good enough reason to claim it does not work.