Debates Forum

Debates Forum

  1. Joined
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    12 Nov '18 11:20
    The link below claims "Nobody actually owns the Federal Reserve, just as nobody actually owns the U.S. Congress or the U.S. Department of Justice."

    That is like saying nobody owns Apple Corporation. The share holders own it.

    Since there is so much misinformation about the FRS I thought I would create this thread to help us all understand more about the FRS and other central banks around the world.

    Why does the FRS earn money from U.S. government securities it owns through everyday market transactions? Since they claim to be a non-profit organization why don't they just send the government a bill?

    If you live in a country other than the USA, does your country's central bank operate in the same way? If not, how is it different than the Federal Reserve System?

    https://www.thestreet.com/markets/what-is-federal-reserve-purpose-14723711
  2. Subscriberno1marauder
    Humble and Kind
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    12 Nov '18 11:36
    @metal-brain said
    The link below claims "Nobody actually owns the Federal Reserve, just as nobody actually owns the U.S. Congress or the U.S. Department of Justice."

    That is like saying nobody owns Apple Corporation. The share holders own it.

    Since there is so much misinformation about the FRS I thought I would create this thread to help us all understand more about the FRS and other ...[text shortened]... ederal Reserve System?

    https://www.thestreet.com/markets/what-is-federal-reserve-purpose-14723711
    he Fed earns interest on the interest-bearing government securities it holds in its portfolio and sells financial services to banks. This amount is reported each year in its annual report. The Fed’s earnings typically far exceed its expenses. However, unlike for profit corporations, the Fed distributes any profit (after costs) to the U.S. Treasury. In 2002, the Fed’s operating revenues were $26.7 billion, expenses total $2.2 billion, and $24.5 billion was paid to the treasury as “interest on Federal Reserve Notes.” The graph below displays the flow of the Fed’s annual payments to the U.S. Treasury for the past five years.

    https://www.frbsf.org/education/publications/doctor-econ/2003/september/private-public-corporation/
  3. Joined
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    12 Nov '18 14:10
    @no1marauder said
    he Fed earns interest on the interest-bearing government securities it holds in its portfolio and sells financial services to banks. This amount is reported each year in its annual report. The Fed’s earnings typically far exceed its expenses. However, unlike for profit corporations, the Fed distributes any profit (after costs) to the U.S. Treasury. In 2002, the Fed ...[text shortened]...
    https://www.frbsf.org/education/publications/doctor-econ/2003/september/private-public-corporation/
    Why?
    When people hire contractors to do a service they are usually paid after the job is done. Have you ever handed a contractor a wad of money and told him to pay you back after he did the job?
  4. Behind the scenes
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    12 Nov '18 14:57
    @metal-brain said
    Why?
    When people hire contractors to do a service they are usually paid after the job is done. Have you ever handed a contractor a wad of money and told him to pay you back after he did the job?
    When people hire contractors to do a service they are usually paid after the job is done.

    The structure of many parts of our Federal Government were not designed function the same way as for profit businesses do, in addition, the word capitalism does not appear in our Constitution.
  5. Standard membersh76
    Civis Americanus Sum
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    12 Nov '18 15:321 edit
    @metal-brain said
    The link below claims "Nobody actually owns the Federal Reserve, just as nobody actually owns the U.S. Congress or the U.S. Department of Justice."

    That is like saying nobody owns Apple Corporation. The share holders own it.

    Since there is so much misinformation about the FRS I thought I would create this thread to help us all understand more about the FRS and other ...[text shortened]... ederal Reserve System?

    https://www.thestreet.com/markets/what-is-federal-reserve-purpose-14723711
    While on the subject, could you please explain to me why the "don't tread on me" crowd has such a hard-on for the Federal Reserve?

    What in particular is it about this fairly routine institution that has the super-libertarians' panties in a twist?

    Do you guys just not believe the federal government should have the power to run a bank? The question was litigated back in 1819 (McCulloch v. Maryland), but something tells me this is more than just a constitutional law issue to you fellas.
  6. Joined
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    12 Nov '18 18:03
    @sh76 said
    While on the subject, could you please explain to me why the "don't tread on me" crowd has such a hard-on for the Federal Reserve?

    What in particular is it about this fairly routine institution that has the super-libertarians' panties in a twist?

    Do you guys just not believe the federal government should have the power to run a bank? The question was litigated back in 1819 ...[text shortened]... . Maryland), but something tells me this is more than just a constitutional law issue to you fellas.
    The FRS is privately owned by shareholders. The names of those shareholders are a closely guarded secret. Since for all you know the shareholders could be the owners of the big banks that were bailed out, it is time to know who they are.

    https://www.cnbc.com/id/45674390

    29 trillion is more than the national debt! The FRS created all that inflation and we still are burdened with all of this debt? Perhaps the 29 trillion estimate is overstated, but doesn't that show that the FRS could have paid off the national debt?

    The whole purpose of bailing out the big banks was to give them the money to lend out again. That was important to prevent deflation, but they didn't lend. They sat on the money and the money supply contracted anyway. That led to quantitative easing to increase the money supply to prevent deflation since the banks would not lend.

    It was all for nothing. Letting the banks fail would have resulted in the same thing, no lending. QE would have been necessary to prevent deflation, but the bailout would not have been necessary at all!

    It was the biggest heist in world history. If the shareholders are not the same people that own the big banks I will eat my dick. It is time for their names to be revealed!
  7. Joined
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    12 Nov '18 18:06
    @mchill said
    When people hire contractors to do a service they are usually paid after the job is done.

    The structure of many parts of our Federal Government were not designed function the same way as for profit businesses do, in addition, the word capitalism does not appear in our Constitution.
    I take that to mean you are saying they don't have the money because they are non-profit (claim to be anyway). Where does the FRS get the money to buy the Treasury bonds?
  8. Germany
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    12 Nov '18 18:14
    @metal-brain said
    The FRS is privately owned by shareholders. The names of those shareholders are a closely guarded secret. Since for all you know the shareholders could be the owners of the big banks that were bailed out, it is time to know who they are.

    https://www.cnbc.com/id/45674390

    29 trillion is more than the national debt! The FRS created all that inflation and we still are b ...[text shortened]... he same people that own the big banks I will eat my dick. It is time for their names to be revealed!
    The purpose of the bailouts was to alleviate the immediate liquidity issues of certain banks and other financial institutions to stabilize the financial markets. It worked.
  9. Standard membersh76
    Civis Americanus Sum
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    12 Nov '18 18:161 edit
    @metal-brain said
    The FRS is privately owned by shareholders. The names of those shareholders are a closely guarded secret. Since for all you know the shareholders could be the owners of the big banks that were bailed out, it is time to know who they are.

    https://www.cnbc.com/id/45674390

    29 trillion is more than the national debt! The FRS created all that inflation and we still are b ...[text shortened]... he same people that own the big banks I will eat my dick. It is time for their names to be revealed!
    The Federal Reserve predated TARP by almost 100 years and TARP was passed by Congress, not the Fed.

    I still don't understand why you and Ron Paul are so angry at the Fed.
  10. Germany
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    12 Nov '18 18:19
    @sh76 said
    The Federal Reserve predated TARP by almost 100 years and it was passed by Congress, not the Fed.

    I still don't understand why you and Ron Paul are so angry at the Fed.
    All libertarians are uneducated. You should not expect them to have rational objections to economic policy.
  11. Standard membersh76
    Civis Americanus Sum
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    12 Nov '18 18:24
    @metal-brain said
    The FRS created all that inflation and we still are burdened with all of this debt?
    By the way, inflation has been historically very low since TARP was passed.

    https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093
  12. Joined
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    12 Nov '18 18:29
    @kazetnagorra said
    The purpose of the bailouts was to alleviate the immediate liquidity issues of certain banks and other financial institutions to stabilize the financial markets. It worked.
    .....so it would increase lending and prevent inflation. It didn't and failed.

    Where did you get your revisionist history from? Ben Bernanke?
  13. Joined
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    12 Nov '18 18:30
    @sh76 said
    The Federal Reserve predated TARP by almost 100 years and TARP was passed by Congress, not the Fed.

    I still don't understand why you and Ron Paul are so angry at the Fed.
    Where does the FRS get the money to buy treasury bonds?
  14. Joined
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    12 Nov '18 18:33
    @kazetnagorra said
    All libertarians are uneducated. You should not expect them to have rational objections to economic policy.
    That ranks up there with some of the most ignorant statements you have made. Apparently all Dutch people who don't live in the Netherlands are ignorant snobs.
  15. Germany
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    12 Nov '18 19:01
    @metal-brain said
    .....so it would increase lending and prevent inflation. It didn't and failed.

    Where did you get your revisionist history from? Ben Bernanke?
    As sh76 pointed out already, inflation has been at a steady, low rate for decades.
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