Question about bad Fed debt
Posted March 27th, 2008 by mcmurph9
output
Still pretty new to this... but if the Fed is privately owned, and they take on Bear Stearns bad debt, and let JPMorgan buy the good debt, how are the taxpayers on the hook if the Fed takes on that bad debt? Wouldn't the private owners be the ones responsible for it, not the taxpayers? How do we get hooked into the bail out?
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The Fed..
.. prints money at will. Printing money reduces the value of the dollars you have in your pocket.
It's a stealth way of taxing us and making YOU and I (the peasants) pay for the Bear Stearns "rescue" and their billion dollars of bonuses Bear Stearns upper management received six-weeks prior to the "buyout".
Pissed off yet? In past days the Bear Stearns management would have been stung up in the trees by the peasants. Americans don't have those kinds of guts anymore though. We worry about being called names by the Old Media...
Not quite
Federal Reserve does not print money at will.
Federal Reserve prints money... liabilities to them, but must take on assets to balance the books.
The assets are US government treasuries that are backed-up by US taxpayers.
The Federal Reserve can only print as much money as there are US Treasuries to buy... which is essentially indefinite.
Yes..
.. I meant "print" in the same euphemistic way Ron Paul uses it. I didn't mean actual physical printing of paper bills.
Because while the Federal Reserve is private
it is backed up by the full faith and credit of the United States via the dollars secured through the income tax. The income tax doesn't go to pay for purchases made by the government, it goes to the operating expenses of the Fed, and to pay the interest on the securities sold by the Fed.
Let's see if I got this
The Fed has to mark-to-market those bad securities and take the loss, then as that's their operating cost, they are reimbursed by the govt.
Is that right?
No..
they print the money and reimburse themselves which devalues my money and your money. In other words, they steal from us so they can gather all the wealth and property to themselves.
Just like they have been printing money to "rescue" the mortgage crisis. The trick is THEY end up with the properties and we get paper that is worth less-and-less everytime they print money.
Neat trick, huh?
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THIS IS EXACTLY WHAT THE FED IS DOING:
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"If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations that will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
Thomas Jefferson
"I believe that banking institutions are more dangerous to our liberties than standing armies."
Thomas Jefferson
"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."
Abraham Lincoln
;)
Thanks!
A neat trick indeed! No wonder David Rockefeller says something to the effect that "getting rid of the Fed is not one of the great, pressing issues of our time"
:-)
Yup..
.. he'd have to come up with some other scam to keep a stream of wealth flowing into his pockets.
(=