I understand that most folks "think" The Federal Reserve (FED), the Central Bank of the US, is a governmental entity.
- Why Congress is even debating the reappointment of Ben Bernanke to another term as FED Head, right?
WRONG.
While cleverly named, the FED is a private bank owned by private individuals and is just as "Federal" as Federal Express or my box of Federal shotgun shells....in a word, it's NOT.
- Those pretty green slips of paper in your wallet commonly known as US Dollars are Federal Reserve Notes. Bank scrip. The FED can print as much of it as it wants or needs to.
With this in mind, consider that fully eighty percent (80%) of US Treasuries [read: US government debt] sold in 2009 were bought by the FED because there were no other willing buyers.
- So, printing money to finance unsellable governmental debt is just like using a credit card to pay off a credit card. It is a scam, a PONZI scheme. Like all such schemes it cannot go on indefinitely, but has to end. This will end badly.
And Congress has just raised their 'credit line' to about 14 trillion dollars...
- They borrow & spend it, and you pay it back with interest. Nice gig, just not for the likes of us kulaks.
Tuesday 26 January 2010
P.O.N.Z.I.................from Rico
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3 comments:
Ditto UK Quantative Easing and Gilts
Ok, I'll bite. If the Fed (and the BoE I guess) really is privately owned, who are the owners/shareholders?
From the Federal Reserve website:
The seven members of the Board of Governors of the Federal Reserve System are nominated by the President and confirmed by the Senate. A full term is fourteen years. One term begins every two years, on February 1 of even-numbered years. A member who serves a full term may not be reappointed. A member who completes an unexpired portion of a term may be reappointed. All terms end on their statutory date regardless of the date on which the member is sworn into office.
The Chairman and the Vice Chairman of the Board are named by the President from among the members and are confirmed by the Senate. They serve a term of four years. A member's term on the Board is not affected by his or her status as Chairman or Vice Chairman.
Does the president appoint and the senate confirm any members of FedEx's board? Oh, and why is that the website of the Fed ends in dot-gov?
The reason the Fed can exist is that it issues bits of paper with "The United States of America" in big letters at the top, and a smaller text that says "This note is legal tender for all debts public and private." Whether it's in paper form or long strings of zeroes on the Fed's account books, the official currency of the United States comes from the Federal Reserve, which as much as part of the government as Fannie Mae was.
The contrivance of Fed independence is just that. It's an arm of the government, but it's not directly accountable because it's executives are appointed by the government rather than elected independently. Claiming that it's a private entity is just to fall for the legalist legere-de main.
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