80% of US debt purchased by the Fed in 2009?!

[Optional]

Excellent 'debate'...

Hey Martinghoul -

An argument I hear quite often is "Things have gone well with the Fed, so why change? Sure, they do some bad things here and there, they create the business cycle, and perpetuate it to the extreme. But look at our standard of living! Look at our position in the world! It all happened with the Fed controlling monetary policy lo these past 100 years"...

Don't you think, even for the slightest moment, that this country became so great IN SPITE OF the Fed, rather than because of it?
And that changing it, if not for the possibility of success' sake, but for the Constitution's sake, could be in our long term interests?

 

[Anaconda]

Quote from Martinghoul:

As I keep saying, there's no point in arguing with someone who is not willing to listen to what you're saying.

Ahhh..the irony.

I did listen to you. You're the expert and I'm clueless. And that is just fine. Time will tell all. I shall now take my clueless self and crawl back to my cave.

 

[Martinghoul]

Quote from Optional:


Don't you think, even for the slightest moment, that this country became so great IN SPITE OF the Fed, rather than because of it?
And that changing it, if not for the possibility of success' sake, but for the Constitution's sake, could be in our long term interests?

Maybe America became so great in spite of the Fed, maybe not... I have absolutely no factual basis upon which I can form a judgement about whether the Fed is good or bad for modern US society. A lot of people who are far far smarter than me have created a whole body of research that tries to answer this question. It's my understanding that a majority of these people (mainstream economists) believe that the current system is, on balance, adequate and has contributed positively to growth and prosperity. You may agree or disagree with them, but consider it as a data point.

As to changing the system, I completely agree, as I have said a number of times. The glaring flaws and shortcomings of the current setup that became obvious during the crisis absolutely have to be fixed, in spite of the dysfunctional global political process.

However, I also believe that the basic monetary/financial concepts that have evolved throughout the majority of the developed world exist for a reason. Specifically, like democracy and capitalism (and public-key cryptography), the economic model we have works, on balance. I also appreciate its complexity and its strengths. Replacing it with an alternative theory that a) might not be viable, and b) we will have a hard time agreeing on, is just bad risk/reward, in my view.

I should mention that my opinions are very much formed by my personal experiences. I am a product of a legacy, socialist regime, so I know first hand what it feels like for a society to operate with a completely incompatible economic setup. Moreover, I also know what it feels like to survive the transitional period, when the economic model is "upgraded". I wouldn't wish it on anybody, which is why I absolutely hate the idea of "let's just throw everything away and start from scratch". To me it sounds too much like the lyrics of the Internationale, the official Communist/Socialist anthem.

 

[zdreg]

 

[zdreg]

 

[Martinghoul]

Quote from Anaconda:

Ahhh..the irony.

I did listen to you. You're the expert and I'm clueless. And that is just fine. Time will tell all. I shall now take my clueless self and crawl back to my cave.

I don't think I said you were clueless. If I did, I have apologized already and would be happy to apologize again. I lost patience for no good reason.

What I did say was that you're not willing to listen to what I am saying. This implies that, regardless of our respective levels of intelligence/ignorance, our discussion is simply pointless. I think you have a view that's motivated primarily by your politics, while you probably think I am just a minion of the current corrupt regime. So we're simply never going to be able to speak the same language. So be it.

 

[Random.Capital]

Quote from Optional:

Don't you think, even for the slightest moment, that this country became so great IN SPITE OF the Fed, rather than because of it?

That's very possible.

However, it's just a complicated way of saying the Fed simply isn't very relevant.

 

[jficquette]

Quote from Martinghoul:

Right, this is not exactly specific, but I think you're looking for information on the Fed's balance sheet and the mkt interaction that FRBNY engages in on behalf of the FR system (OMOs etc). You also think that it's falls into one of the areas that currently are not accessible to the GAO.

Let me reiterate what I have said before. You will find this information here:
http://www.federalreserve.gov/releases/h41/current/
If you want to see externally audited financial statements, you'll have to wait for the 2009 Combined Financial Statements of the Federal Reserve Banks.

Moreover, as a representative of the mkt (you may not like me, but looks like I'm the only one you got), I am telling you that the mkt collectively knows the UST holdings of the Fed, by individual ISIN. The total corresponds to what the Fed publishes in the weekly H.4.1 release.

I have a feeling that you still don't believe me... So here's my question:
Do you believe that there's a conspiracy by the Fed to cook its books or, alternatively, run a second, secret and unaudited set of books that contains the real information about the Fed's acitivities? If you believe the above is true and the secret had remained so remarkably well-hidden, in spite of the scrutiny and the various audits that have been conducted, what makes you think that another GAO review will actually reveal the truth?

Moreover, if you believe that the Federal Reserve System is all one big fraud, why then not believe that an alien in Britney Spears's body is actually pulling all the strings?

You still don't get it. I want the monetary policy revealed. Open and transparent.

BTW, do you work for a government? You have too much time on your hands to have a real job.

 

[jficquette]

Quote from Anaconda:

You don't realize it's a self audit, do you?
If you bothered to read the standard into letter of the audits, as well as the accompanying notations, you would know that the guidelines for the financial statements (which are in turn "independently" audited) are set by the BoD of the Federal Reserve. In other words, you will only know what they want you to know.




You're essentially being told by an institution that is in full charge of monetary policy that they will not disclose everything and that is the law. Being that our tax paying ability is essentially collateral for the whole system, I think we have a right to know what exactly is going on. The analogy holds correct, an investor wants to know where his money is going and an audit where it's blatantly stated where certain financial dealings will not be disclosed would be laughed at.




Kindergarden economics stuff is understanding that P+I cannot equal to P. Maybe that part is too complicated for you. The fact is that all currency under the Fed comes with interest attached. Feel free to look at what we call a dollar bill anytime, it does not say "dollar bill", it's a federal reserve note. All money creation is through debt, that is how the Federal Reserve Banking act is devised, for a reason.
Try actually researching the history of the Fed and central banking in general. The design is genius and has thousands of years of history behind it. All that you see happening now is by design, not by accident.

^^Get's it^^^^

 

[jficquette]

Quote from krazykarl:

I admittedly haven't read much of this thread, but there are many ways to create money/wealth outside of debt. Debt is just the easiest. For the obvious you just need to look to basic macroeconomics: how does the economy grow when a new worker is born? It's not via taking a loan on that new worker's lifetime salary...

Its impossible to create a asset without increasing debt. That basic Accounting 101.