Posted on 01/23/2011 7:21:37 AM PST by FromLori
It is not independent, it is an arm of Treasury.
Everything you were told was a scam and a lie - yet another time for
But the new rules have slowly begun to catch the attention of market analysts. Many are at once surprised that the Fed can set its own guidelines, and also relieved that the remote but dangerous possibility that the world's most powerful central bank might need to ask the U.S. Treasury or its member banks for money is now more likely to be averted.
The change essentially allows the Fed to denote losses by the various regional reserve banks that make up the Fed system as a liability to the Treasury rather than a hit to its capital. It would then simply direct future profits from Fed operations toward that liability.
Got it?
Independent monetary authority my ass.
Function follows form. Anyone who believes that The Fed is independent after this charade, which incidentally it did on its own (and that, by itself, is cute - The Fed's "balance sheets" would never have passed examination under GAAP) has rocks in their head.
The simple fact of the matter is this - The Fed is out of bullets and they know it. They've driven rates to zero but still can't get beyond the premium demanded for loans, and the fact that cash flow is insufficient to meet service requirements. This is why the shift has taken place to the Government, which (thus far) has been able to keep borrowing and borrowing, since nobody is (yet) questioning whether the government will be able to meet the cash flow.
The key there is "yet."
Treasury, for its part, is worried too. They should be.
In his January 6, 2011 letter urging that Congress act to protect America’s creditworthiness by increasing the statutory debt limit, Secretary Geithner made clear that any default on legal debt obligations of the U.S. would be unthinkable. In response, Members of Congress of both parties have indicated agreement that the United States must honor its obligations. However, Treasury disagrees with suggestions by some that Congress could somehow evade this responsibility by passing legislation to “prioritize” payments on the national debt above other legal obligations of the United States.
Uh huh.
Guess what Timmy? Most of what The United States spends money on is not a legal obligation.
Oh sure, some of it is. Salaries for our servicemembers, for example. They worked, they're owed. Legally. That's a legal obligation. Debt service (interest) is a legal obligation.
Social Security and Medicare are not. Nor are farm subsidies, Department of Education meddling, and, incidentally, while your salary Timmy is for work you've already done, Congress can de-fund your position and reduce your salary for future work to one penny.
If they did, you'd be overpaid.
The simple solution to the "Debt Ceiling" is to spend only what you take in via taxes.
That means no more debt is required.
And yes, I'm well-aware that it also means a 43% (roughly) immediate cut in Federal Spending.
I assert that such a cut can be made without impinging on one dollar of actual legal obligation of The United States.
Stop lying Neal, and tell your boss Timmy that we know he's lying too.
Related thread
Accounting Tweak Could Save Fed From Losses
http://www.freerepublic.com/focus/f-news/2661476/posts
Related story
Treasury: Proposals to “Prioritize” Payments on U.S. Debt Not Workable; Would Not Prevent Default
Related comment
“Negative interest owed to Treasury” means losses owed to FED by Joe Taxpayer. Thank you Hanky Panky Bernanke!”
It's not privately owned? LOL!
It's an excellent solution.
I’m sure they’ll get right on it!
Get right on what?
This was written before this news came out.
Prescient.
“The theme here is simple enough: If and whenever the circumstances justify a major response, existing rules will be changed, altered, bent, or broken.”
http://www.chrismartenson.com/blog/dont-worry-theyll-just-change-rules/50568
We have entered an Age of Lawlessness.
Bailouts for them, major losses for all the rest of us. Period.
But big banks? They get a free pass to go along with free money
Free money? The TARP wasn't free. Neither are loans from the Fed.
I would absolutely love the opportunity to borrow money from the government at a low rate and lend it back to the government at a higher rate, but that program is not available to me.
Which program do you (or Chris) imagine allows a bank to do that?
Small, regional banks without access to unlimited and essentially free capital from the Fed are now forced to compete with big national banks that have been granted an unlimited backstop by the Fed.
Free capital from the Fed? I think he's a bit confused about what capital means.
Oh, the pro bank troll.
Let’s see. You ask questions, nit pick the answers and then you LOL.
Here is my question to you, before I will even pretend to answer your questions.
Do you deny that the tax payers are going to pay for TARP?
It's true, when I see nonsensical claims, I try to get the claims clarified. When the poster can't or won't answer and squeals about it, I often have to laugh at them.
Do you deny that the tax payers are going to pay for TARP?
The TARP is a Treasury program. The funds used were borrowed. If the TARP is not fully repaid, the losses will have to be covered by the tax payers.
And what if the "future profits" fail to equal the liability? How many seats are left in this game of musical chairs? Look in the mirror to see who pays.
They keep allocating profits until it does.
“The funds used were borrowed.”
BUT those funds were borrowed under fraudulent lies.
AND taxpayers WILL be expected to pay for it.
The FED is changing the rules for themselves and others to profit from this whole scheme.
The rest of us and our children will be paying for it.
There will be trouble when the sheeple wake up.
As to your questions you posted, I only posted a link.
I am not going to play that game with you.
What is the time frame? The probability is that they never catch up. I hope your point is the same as mine - never.
“And what if the “future profits” fail to equal the liability? How many seats are left in this game of musical chairs?”
The FED is going to win at the cost of the rest of us. Period. Laws, rules and rule of law be damned.
“Look in the mirror to see who pays.”
You have got that right.
The laws of physics don’t apply anymore, Scottie. /s
Really?
AND taxpayers WILL be expected to pay for it.
Yes, if the TARP isn't repaid, taxpayers are on the hook.
As to your questions you posted, I only posted a link.
Yes and I only posted some of the things the author was wrong or confused about.
I am not going to play that game with you.
I didn't expect you to contribute to the discussion.
Explain why it matters.
The probability is that they never catch up.
Catch up to what?
“I didn’t expect you to contribute to the discussion.”
Hahahahahaha!
And neither did you.
More "privatize any profits, socialize any losses". I can't wait to see these Central Bankers dancing at the end of ropes.
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