07 Nov 10
Originally posted by Eladarthe question I'm getting to is could the US ever slip into the position Germany found itself circa 1920?
I have no idea how the Fed gets it money. As far as I'm concerned it is simply a ponzi scheme where the rich are given money that doesn't exist to lend to the poor.
Originally posted by EladarThe lack of economic knowledge by right wingers on this site is truly astonishing.
I have no idea how the Fed gets it money. As far as I'm concerned it is simply a ponzi scheme where the rich are given money that doesn't exist to lend to the poor.
Maybe this will help: http://www.ustreas.gov/education/faq/currency/legal-tender.shtml
07 Nov 10
Originally posted by EladarFederal Reserve Banks obtain the notes from our Bureau of Engraving and Printing (BEP). It pays the BEP for the cost of producing the notes, which then become liabilities of the Federal Reserve Banks, and obligations of the United States Government.
Perhaps you can explain where the Fed gets its money.
Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (liabilities). This would meet the requirements of Section 411, but the government would also take over the assets, which would be of equal value. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them.
From the site in my last post (edited during your reply apparently).
07 Nov 10
Originally posted by EladarA quick google search found this: http://www.calculatedriskblog.com/2008/12/federal-reserve-assets.html
I'm not talking about the bills, I'm talking about the numbers in the computers. Where does the Fed get the money?
The Fed is thinking about buy a 600 million in Treasuries. Where does the Fed get this 600 million? They aren't doing it with dollar bills.
which says the Fed had $2.3 TRILLION in assets in late 2008.
07 Nov 10
Originally posted by no1marauderIs the Fed powerful enough to be a ballast against bad economic activity?
Federal Reserve Banks obtain the notes from our Bureau of Engraving and Printing (BEP). It pays the BEP for the cost of producing the notes, which then become liabilities of the Federal Reserve Banks, and obligations of the United States Government.
What would the worse case scenario have to consist of for the US to resemble Germany in 1922?
Does anyone know of the limits to the elasticity of the system?
07 Nov 10
1 edit
Originally posted by kmax87If anything, monetary policy of the scope proposed may well be too weak to be an effective stimulus in an economy with as much underutilized capacity as the US has now. Relatively small changes in the velocity of money could virtually wipe out any expansionary effects.
Is the Fed powerful enough to be a ballast against bad economic activity?
What would the worse case scenario have to consist of for the US to resemble Germany in 1922?
Does anyone know of the limits to the elasticity of the system?