A Little Something to Re-educate Fed Conspiracy Theorists --

[piezoe]

jem, After re-reading what I wrote above, I rather like it. Having a little distance from my explanation above of what happens when the U.S. Treasury overspends (spends in deficit) has allowed me to recognize that what I wrote above is one of the clearest explanations of such that I have yet written. I hope all ET participants will read it, comment, add to it, and attempt to pick it apart with facts and substantive additions.

Politicians have for years either innocently misled the pubic or deliberating lied to them regarding the need for a "debt limit" and the dangers of the National Debt being visited on our progeny. Now, having recognized that there really is no National Debt, we must not, however, draw the false conclusion that any spending, no matter what on and no matter how much, is OK. Far from it! Irresponsible spending could lead to ruin. That's one of the few aspects of the Government's financing that mirrors personal financing risk.

Deficit spending on investments such as education and infrastructure, so long as it is well thought out, is the right thing to do and any politician that says we cannot afford it is spewing hot air. But the pace of spending is important. If it is too fast, it will lead to avoidable inflation; if too slow, it will hold back development and cause the U.S. to trail development in our sister nation's economies.

In the final analysis, spending must remain not to far away from a balance with productivity or we can get into trouble in either of two directions. If the pace of spending gets too far ahead of the pace of productivity increases, we will experience unacceptable inflation. On the other hand, if the pace of productivity growth gets too far ahead of the pace of spending, which is quite unlikely but nevertheless possible, we will experience deflation.* Deflation is very bad in any economy, such as ours, that depends on fractional reserve banking to grow. Our fiat money, whether we acknowledge it or not, is de facto backed by our productivity. Our Government issued money is on a "Productivity Standard!"

________________
*It is perhaps interesting to note that any serious, misguided attempt to pay off a fictitious "National Debt" by running repeated surpluses would cause this. As the economy would soon enough becomes starved for savings and investment money.

 

[jem]

Piezoe spewing lies to cover his lies and detritus.

jem, After re-reading what I wrote above, I rather like it. Having a little distance from my explanation above of what happens when the U.S. Treasury overspends (spends in deficit) has allowed me to recognize that what I wrote above is one of the clearest explanations of such that I have yet written. I hope all ET participants will read it, comment, add to it, and attempt to pick it apart with facts and substantive additions.

Politicians have for years either innocently misled the pubic or deliberating lied to them regarding the need for a "debt limit" and the dangers of the National Debt being visited on our progeny. Now, having recognized that there really is no National Debt, we must not, however, draw the false conclusion that any spending, no matter what on and no matter how much, is OK. Far from it! Irresponsible spending could lead to ruin. That's one of the few aspects of the Government's financing that mirrors personal financing risk.

Deficit spending on investments such as education and infrastructure, so long as it is well thought out, is the right thing to do and any politician that says we cannot afford it is spewing hot air. But the pace of spending is important. If it is too fast, it will lead to avoidable inflation; if too slow, it will hold back development and cause the U.S. to trail development in our sister nation's economies.

In the final analysis, spending must remain not to far away from a balance with productivity or we can get into trouble in either of two directions. If the pace of spending gets too far ahead of the pace of productivity increases, we will experience unacceptable inflation. On the other hand, if the pace of productivity growth gets too far ahead of the pace of spending, which is quite unlikely but nevertheless possible, we will experience deflation.* Deflation is very bad in any economy, such as ours, that depends on fractional reserve banking to grow. Our fiat money, whether we acknowledge it or not, is de facto backed by our productivity. Our Government issued money is on a "Productivity Standard!"

________________
*It is perhaps interesting to note that any serious, misguided attempt to pay off a fictitious "National Debt" by running repeated surpluses would cause this. As the economy would soon enough becomes starved for savings and investment money.

 

[jem]

The following are facts. No argument you make can change these facts... because they are true... and I have proven it to you multiple times.


a. The Federal Reserve Banks are not a part of the federal government


b. Federal Reserve Banks are set up like private corporations.
Member banks hold stock in the Federal Reserve Banks and earn dividends.



So Piezoe... are the Federal Reserve banks Owned by the U.S. Govt.

Yes or no?

 

[piezoe]

The following are facts. No argument you make can change these facts... because they are true... and I have proven it to you multiple times.


a. The Federal Reserve Banks are not a part of the federal government


b. Federal Reserve Banks are set up like private corporations.
Member banks hold stock in the Federal Reserve Banks and earn dividends.



So Piezoe... are the Federal Reserve banks Owned by the U.S. Govt.

Yes or no?

You have a question, and I have a question: "Why am I so nice to you?"
Have you heard it said? : "When your in a hole , quit digging!"

(from last years Federal Court Case)
Wells Fargo v. United States:

Congress has transferred functional ownership and control of the FRBs [Federal Reserve Banks]
to the Treasury and to the [Federal Reserve] Board [...] Further, we are not moved, as the district court was, by the fact that private banks serve as the FRBs’ nominal shareholders [...] Today, the United States, not the nominal shareholders, are the economic owners of the FRBs. Among other things, Congress has provided that the net earnings of the FRBs be “recorded as revenue by the Department of the Treasury,” FRB Amici at 17, and the FRBs are required to remit all their excess earnings to the United States Treasury [...] Thus, the “capital” contributions made by member banks function as debt interests owned by the member banks, not equity interest [...] money created for the Term Auction Facility or the Discount Window is as much a product of the “public fisc” as money that is distributed by the Treasury Department

To summarize, the “shares” chartered banks own of Regional Federal Reserve Banks are really debt contracts, net profits from the Federal Reserve System are delivered to the U.S. Treasury and the Federal Reserve Board jointly owns and controls the Regional Federal Reserve Banks along with the U.S. Treasury.

No need to thank me, jem. You're Welcome. It's been my pleasure.

 

[jem]

I knew you were an ignorant fool. I am not claiming the Federal Reserve system does not sometimes function as an agent of the U.S.
We know part of its duties are to serve the Treasury. But the Federal Reserve system also act on its behalf quite frequently.

You really do not comprehend legal decisions well do you?

I quoted the St Louis Fed..you fool. Federal Reserve Board Banks themselves state they are not part of the Federal Govt and are set up like Private Corps.

Who Owns the Federal Reserve Banks | In Plain English | St. Louis Fed (stlouisfed.org)

The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So is the Fed private or public?

The answer is both. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. Holding this stock does not carry with it the control and financial interest given to holders of common stock in for-profit organizations. The stock may not be sold or pledged as collateral for loans. Member banks also appoint six of the nine members of each Bank's board of directors.

You have a question, and I have a question: "Why am I so nice to you?"
Have you heard it said? : "When your in a hole , quit digging!"

(from last years Federal Court Case)
Wells Fargo v. United States:

Congress has transferred functional ownership and control of the FRBs [Federal Reserve Banks]
to the Treasury and to the [Federal Reserve] Board [...] Further, we are not moved, as the district court was, by the fact that private banks serve as the FRBs’ nominal shareholders [...] Today, the United States, not the nominal shareholders, are the economic owners of the FRBs. Among other things, Congress has provided that the net earnings of the FRBs be “recorded as revenue by the Department of the Treasury,” FRB Amici at 17, and the FRBs are required to remit all their excess earnings to the United States Treasury [...] Thus, the “capital” contributions made by member banks function as debt interests owned by the member banks, not equity interest [...] money created for the Term Auction Facility or the Discount Window is as much a product of the “public fisc” as money that is distributed by the Treasury Department

To summarize, the “shares” chartered banks own of Regional Federal Reserve Banks are really debt contracts, net profits from the Federal Reserve System are delivered to the U.S. Treasury and the Federal Reserve Board jointly owns and controls the Regional Federal Reserve Banks along with the U.S. Treasury.

No need to thank me, jem. You're Welcome. It's been my pleasure.

 

[piezoe]

I knew you were an ignorant imbecile... ...
I quoted the St Louis Fed..

you idiot.

Who Owns the Federal Reserve Banks | In Plain English | St. Louis Fed (stlouisfed.org)

The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So is the Fed private or public?

The answer is both. While the Board of Governors is an independent government agency, the , "Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. Holding this stock does not carry with it the control and financial interest given to holders of common stock in for-profit organizations. The stock may not be sold or pledged as collateral for loans. Member banks also appoint six of the nine members of each Bank's board of directors.[/QUOT]

Jem, although you are trying my patience a wee bit, I am still going to be nice. You are a lawyer, so you should be capable of careful reading. But to be especially nice, I am going to call your attention to the exact wording of the St. Louis Fed, which is, overall, NOT in conflict with the Federal Court.

Where the Court would disagree with the St. Louis Fed, is the St. Louis' statement that: "...Federal Reserve Banks are not a part of the Federal Government." The Court, last year, emphatically disagreed with this, and rest assured, that the reserve banks will fall in line with the Court and in due time modify heir websites to be not in conflict with the Court. Everything the St. Louis Fed said about the "stock" that regional Fed member banks are required to purchase is correct. But did you also read this?: " Holding this stock does not carry with it the control and financial interest given to holders of common stock in for-profit organizations." and that too is correct. In fact this stock does not represent ownership but a "debt contract." Similarly, when your bank loans you money, the bond (er... "stock", cough, cough) you give the bank is a debt contract!, the Bank does not own you! Furthermore the St. Louis Fed correctly said, "Federal Reserve Banks are set up LIKE private corporations." They did NOT say, Federal Reserve Banks ARE private corporations. (emphasis mine).

The difficulty the Court found with the Reserve Bank position on ownership is that it leaves the Reserve banks answerable to no one, as according to them, no one owns them. The Court merely set the record straight and correctly pointed out that although the Reserve Banks are non profit organizations they are neither private nor "ownerless." The court said , and the Court was very clear on this point, the Baramch banks are an integral part of the overall Federal reserve system - Treasury system,

jem, here I'm going to have to be just a little nasty. Had I been your law school professor, I'd have had to flunk you on your reading of the St. Louis Fed statement.

In the end, jem, as a lawyer, or at least someone with legal training, you'll have to bow to the Federal Court. If you don't, jem, you'll be in contempt, and if you persist. even your license to practice law could be at stake!. You're too nice of a guy, and too good a sport-- you didn't even bitch much when I called you "jem, Honey," -- to let that happen to you.

 

[piezoe]

I knew you were an ignorant imbecile... ...
I quoted the St Louis Fed..

you idiot.

Who Owns the Federal Reserve Banks | In Plain English | St. Louis Fed (stlouisfed.org)

The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So is the Fed private or public?

The answer is both. While the Board of Governors is an independent government agency, the , "Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. Holding this stock does not carry with it the control and financial interest given to holders of common stock in for-profit organizations. The stock may not be sold or pledged as collateral for loans. Member banks also appoint six of the nine members of each Bank's board of directors.[/QUOT]

Jem, although you are trying my patience a wee bit, I am still going to be nice. You are a lawyer, so you should be capable of careful reading. But to be especially nice, I am going to call your attention to the exact wording of the St. Louis Fed, which is, overall, NOT in conflict with the Federal Court.

Where the Court would disagree with the St. Louis Fed, is the St. Louis' statement that: "...Federal Reserve Banks are not a part of the Federal Government." The Court, last year, emphatically disagreed with this, and rest assured, that the reserve banks will fall in line with the Court and in due time modify heir websites to be not in conflict with the Court. Everything the St. Louis Fed said about the "stock" that regional Fed member banks are required to purchase is correct. But did you also read this?: " Holding this stock does not carry with it the control and financial interest given to holders of common stock in for-profit organizations." and that too is correct. In fact this stock does not represent ownership but a "debt contract." Similarly, when your bank loans you money, the bond (er... "stock", cough, cough) you give the bank is a debt contract!, the Bank does not own you! Furthermore the St. Louis Fed correctly said, "Federal Reserve Banks are set up LIKE private corporations." They did NOT say, Federal Reserve Banks ARE private corporations. (emphasis mine).

The difficulty the Court found with the Reserve Bank position on ownership is that it leaves the Reserve banks un-owned and answerable to no one. The Court merely set the record straight and correctly pointed out that the Reserve Banks are neither private nor "ownerless." The court said , and the Court was very clear on this point, the Federal Reserve Board jointly owns and controls the Regional Federal Reserve Banks along with the U.S. Treasury. In other words, the American people own the Federal Reserve Banks.

jem, here I'm going to have to be just a little nasty. Had I been your law school professor, I'd have had to flunk you on your reading of the St. Louis Fed statement.

In the end, jem, as a lawyer, or at least someone with legal training, you'll have to bow to the Federal Court. If you don't, jem, you'll be in contempt, and if you persist. even your license to practice law could be at stake!. You're too nice of a guy, and too good a sport-- you didn't even bitch much when I called you "jem, Honey," -- to let that happen to you.

 

[jem]

This is step 1 to your understanding.
The Federal Reserve Banks... are privately owned.



https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks

a. The Federal Reserve Banks are not a part of the federal government....


b. Federal Reserve Banks are set up like private corporations.
Member banks hold stock in the Federal Reserve Banks and earn dividends.....



The above are facts printed on the St Louis Federal Reserve website.

The Federal Reserve Banks are privately owned. For morons like piezoe that means... not owned by the Govt.

 

[jem]

Step 2 for your understanding.

The most important part of being a privately owned central banking system is that you get to create Federal Reserve / US Dollars at will.

Here we see the FED owns 8 trillion in assets. These are assets held by the FED not the treasury. The FED created the money to buy these assets.




8 trillon on the feds books...

https://images.app.goo.gl/Z86WG1DsPp79xJNc6

 

[jem]

Step 3... even more money creation..


https://www.investopedia.com/articl...tanding-how-federal-reserve-creates-money.asp

The Credit Market Funnel
Suppose the U.S. Treasury prints $10 billion in new bills, and the Federal Reserve credits an additional $90 billion in readily liquefiable accounts. At first, it might seem like the economy just received a monetary influx of $100 billion, but that is only a very small percentage of the actual money creation.


This is because of the role of banks and other lending institutions that receive new money. Nearly all of that extra $100 billion enters banking reserves. Banks don't just sit on all of that money, even though the Fed now pays them 0.25% interest to just park the money with the Fed Bank.2 Most of it is loaned out to governments, businesses, and private individuals.


The credit markets have become a funnel for money distribution. However, in a fractional reserve banking system, new loans actually create even more new money. With a legally required reserve ratio of 10%, the new $100 billion in bank reserves could potentially result in a nominal monetary increase of $1 trillion.4


Fractional Reserve Banking and the Money Multiplier
In the modern banking system, the central bank creates monetary reserves and sends those to commercial banks. Banks can then lend much of that money, up to a certain limit known as the reserve requirement—which has been around 10% in the U.S.4


So, if the Fed issues $1 billion in reserves to a bank, it can then lend $900 million to borrowers. These borrowers will then ultimately deposit those funds back to the banking systems (either directly or indirectly from people paid with the loaned money), which can then be loaned out at 90%—so if that $900 million is deposited, an additional $810 million may be deposited. Ultimately, through this money multiplier effect, the $1 billion in reserves will turn into $10 billion in new credit money in the economy.