5 votes

"The Fed remits all of its earnings to the Treasury..." HUH?

How can the journalist make this claim in the following article: http://www.ft.com/cms/s/0/9b245cd6-79e1-11e2-b377-00144feabd... .

The Fed has shareholders right? Is this claim by the author of the above piece a blatant lie, or is there a technical truth here? Does the Fed in fact really remit "all of its earnings" to the Treasury?

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It is the money the FED LOSES that is the problem.

The banks who control the fed do not profit from them directly. Rather, it is done by one of three shell games....

ONE is the sale and repurchase of US and other paper. The Fed creates a bond out of thin air and sells it to a primary dealer. Six months (or more like six days recently) they buy it back from the primary dealer for more money than they got for it. The difference represents a potentially infinite amount of risk-free money. The banks don't have to loan to the real economy to generate returns, it just goes in a closed loop from Fed to bankster with the banks skimming a bit on each iteration.

TWO is that the Fed buys (or loans for as long as it takes) all the big mistakes of the big banks that own the fed. And we don't get to see how big a haircut the banks have to take when the FED buys that off them for US Currency. Probably none. Imagine buying lottery tickets that, if they were winners the banks keep the loot, and if they were losers the bank can take them back to the lotto commission who either buys them back or allows loans with the losing ticket as "collateral" to go buy more tickets. This serves no useful function in the greater economy, it is just a moral hazard to keep gambling for the TBTF banks.

THREE is that the Fed artificially lowers the price of capital, especially for the big banks. They get access to mountains of money at near zero interest rates and then invest it for returns. A retarded Chimpanzee could make money off of that business plan.

For more information about what the FED has done to us, why it must be ended, and what we must do to protect ourselves from them and every other fiat central bank in the world, I suggest you read "Localism, a Philosophy of Government"

For the Kindle e-reader http://www.amazon.com/Localism-A-Philosophy-Government-ebook...

For Nook/ Barnes and Noble/ Others http://www.barnesandnoble.com/w/localism-a-philosophy-of-gov...

Localism is for people who can still sleep at night even though somebody they don't know in a city they have never been is doing things differently. ("Localism, A Philosophy of Government" on Amazon for Kindle or Barnes and Noble ebook websites)

And since the fed

has what the book calls "a magic money machine" they can hide their losses (the taxpayer's losses ultimately) for a long time. They can buy the bad paper and keep it on the books as good paper. Fraud is an interesting crime because for a while both the criminal and the victim think they have the money. For a while everyone is happy. Someday the American people will find out that the FED is the bag holder for the big banks bad bets, and that what is "backing" our currency is a lot of worthless paper.

Localism is for people who can still sleep at night even though somebody they don't know in a city they have never been is doing things differently. ("Localism, A Philosophy of Government" on Amazon for Kindle or Barnes and Noble ebook websites)

Yes it's true. This whole

Yes it's true.

This whole "the fed is PRIVATE!!!!" line is first of all technically untrue and second of all causes us to lose focus of the real reason why the fed is evil.

I highly recommend Rothbard's "The Case Against the Fed"... it's about 100 pages. And you can leave it in your bathroom and have it read after a few visits.

It's very frustruating repeatedly trying to argue into the wind and have a rational conversation with people who are just intent on believing "THE FED IS TEH EVIL BECAUSE ITS PRIVATE LIKE FEDEX!!!" despite any facts to the contrary.

Its true, the Fed has a fixed

Its true, the Fed has a fixed percentage of guaranteed return(must be nice) but remits the rest to the Treasury.

Ventura 2012

Remit! I say. Remit! You rapscallions! Remit! Be gone.

Definition of Remit ~ Webster's 1913 Edition

v. t. 1. To send back; to give up; to surrender; to resign.
"In the case the law remits him to his ancient and more certain right."
- Blackstone.
"In grevious and inhuman crimes, offenders should be remitted to their prince."
- Hayward.
"The prisoner was remitted to the guard."
- Dryden.

2. To restore.
The archbishop was . . . remitted to his liberty.
- Hayward.
3. (Com.) To transmit or send, esp. to a distance, as money in payment of a demand, account, draft, etc.; as, he remitted the amount by mail.
4. To send off or away; hence: (a) To refer or direct (one) for information, guidance, help, etc. "Remitting them . . . to the works of Galen." Sir T. Elyot. (b) To submit, refer, or leave (something) for judgment or decision.
5. To relax in intensity; to make less violent; to abate.
"So willingly doth God remit his ire."
- Milton.
6. To forgive; to pardon; to remove.
"Whose soever sins ye remit, they are remitted unto them.
- John xx. 23.
7. To refrain from exacting or enforcing; as, to remit the performance of an obligation.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Remit: to desist; to let slacken; to release from guilt (of sin)

REMIT ~ Merriam-Webster's Definition, 2013
a : to lay aside (a mood or disposition) partly or wholly
b : to desist from (an activity)
c : to let (as attention or diligence) slacken : relax
a : to release from the guilt or penalty of {remit sins}
b : to refrain from exacting {remit a tax}
c : to cancel or refrain from inflicting {remit the penalty}
d : to give relief from (suffering)
Federal Reserve Act, 1913. Description & citation of amendmets.http://www.federalreserve.gov/aboutthefed/fract.htm

Federal Reserve Act, Section 7: Division of Earnings

Dividends and Surplus Fund of Reserve Banks
(a) After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders of the bank shall be entitled to receive an annual dividend of 6 percent [ 6*% ] on paid-in capital stock.

The entitlement to dividends under subparagraph (A) shall be cumulative. That portion of net earnings of each Federal reserve bank which remains after dividend claims under subparagraph (1)(A) have been fully met shall be deposited in the surplus fund of the bank.

(b) Transfer for fiscal year 2000.

The Federal reserve banks shall transfer from the surplus funds of such banks to the Board of Governors of the Federal Reserve System for transfer to the Secretary of the Treasury for deposit in the general fund of the Treasury, a total amount of $3,752,000,000 in fiscal year 2000.

Of the total amount required to be paid by the Federal reserve banks under paragraph (1) for fiscal year 2000, the Board shall determine the amount each such bank shall pay in such fiscal year. During fiscal year 2000, no Federal reserve bank may replenish such bank's surplus fund by the amount of any transfer by such bank under paragraph (1).

[12 USC 289. As amended by acts of March 3, 1919 (40 Stat. 1314); June 16, 1933 (48 Stat. 163); Aug. 10, 1993 (107 Stat. 337); Sept. 23, 1994 (108 Stat. 2291); and Nov. 29, 1999 (113 Stat. 1501A-304), which added this subsection (b) but failed to redesignate existing subsection (b) (12 USC 290).]

Use of Earnings Transferred to the Treasury
(b) The net earnings derived by the United States from Federal reserve banks shall, in the discretion of the Secretary, be used to supplement the gold reserve held against outstanding United States notes, or shall be applied to the reduction of the outstanding bonded indebtedness of the United States under regulations to be prescribed by the Secretary of the Treasury. Should a Federal reserve bank be dissolved or go into liquidation, any surplus remaining, after the payment of all debts, dividend requirements as hereinbefore provided, and the par value of the stock, shall be paid to and become the property of the United States and shall be similarly applied.

[12 USC 290. Part of original Federal Reserve Act; not amended. Designated subsection (b) by act of Aug. 10, 1993 (107 Stat. 337).]

Exemption from Taxation
(c) Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

[12 USC 531. Part of original Federal Reserve Act; but see 31 USC 3124(a), which reads as follows:

"(a) Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax, except--

(1) a nondiscriminatory franchise tax or another nonproperty tax instead of a franchise tax, imposed on a corporation; and

(2) an estate or inheritance tax."

[Designated subsection (c) by act of Aug. 10, 1993 (107 Stat. 338).]

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

I just wrote a blog post about this very topic!

This article, including the links, should answer your questions:


Outstanding! A real stocking shocking!

Opening paragraph:

What Happens when Uncle Sam’s Sugar Daddy Runs out of Canes?

The Wall Street Journal’s Real Time Economics Blog recently reported that, according to new CBO projections, the Federal Reserve will cease its annual “payments” to the US government by 2018.

    You’re probably wondering two things: 1. Why the heck would the Fed be funding the government—shouldn’t it be the other way ‘round? 2. How the heck could a fiat money central bank of issue ever run out of money?

Well, as I explained in some detail in this post, the Fed does indeed remit some of its earnings on its large portfolio — traditionally mostly comprising US treasuries, but now also including over $1 trillion in mortgage-backed securities and mortgage-linked agency debt—to the US Treasury. Prior to the financial crisis these sums were small and insignificant, as the Fed used the vast bulk of these earnings to fund its own operations. With the explosion in the Fed’s balance sheet starting in October 2008, however, the Fed has been remitting much larger and growing sums to the government—a record $89 billion last year. Yes, interest rates are at historic lows, but when you hold $2.7 trillion in government and mortgage-backed bonds, you can’t help but rake in some serious payments. The Fed only managed to spend about $4 billion of it on its own operating expenses, hence the huge remittance to the government. ....

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

According to the Federal

According to the Federal Reserve, the Reserve Banks remitted about $77B of about $80B in earnings to Treasury (http://www.federalreserve.gov/newsevents/press/other/2012011...).

This information could be true without diminishing the power of the Federal Reserve. The Federal Reserve is owned by banks that can go to the Federal Reserve and get loans at nearly 0% interest.

But even if the Federal Reserve started charging more interest on loans, the real power of the Federal Reserve is in its ability to do economic engineering. Ron Paul can roughly predict the impact of Federal Reserve moves and so can the bankers, plus the bankers know what these moves will be in advance. It’s like Biff Tannen getting the sports almanac from the future and getting rich on betting in the Back to the Future movies.

"From now on, depressions will be scientifically created."

The Federal Reserve holds this power because people continue to borrow from banks and transact in Federal Reserve Notes. If we are victims then we are victims of our own greed and ignorance.

This is half true. The FR

This is half true. The FR pays its excess earnings to treasury AFTER it has paid out a hansome dividend to it's shareholding banks. The Real ripoff, however, isn't that the FR makes obscene profits, but that it acts as a money cartel by fixing the 'price' of money in favor of the large shareholding banks (this is similar to OPEC which fixes the price of oil). The obscene profits of the banks are enabled and facilitated by the FR.

The owners are member banks. It is a bank association.

The Fed munerates members 6% return on capital invested. Remits the alleged profit to the US Treasury. This payment is prescribed in the Federal Reserve Act, 1913.
~ Webster's 1913 Dictionary ~

Mu´ner`ate v. t.
To remunerate.
Re`mu´ner`ate v. t.
To pay an equivalent to for any service, loss, expense, or other sacrifice; to recompense; to requite; as, to remunerate men for labor.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

To the person who downvoted

To the person who downvoted my post: why? I find it bizarre that when somneone asks a question, a downvote appears. I wasn't saying I agreed with the quote. Care to explain your downvote?

robot999's picture

There is a lot of that going

on here lately. Our enemies are out - probably no point in stressing over it. I had a post down voted as well recently (OathKeepers Not Welcome). Heck, even some flaming liberals wouldn't down vote that, but evidently some people have no courage or conviction.

"Government is the entertainment division of the military-industrial complex". - Frank Zappa