Page 4 of 4 FirstFirst ... 234
Results 31 to 40 of 40

Thread: Federal Reserve Plans to Buy Government Debt

  1. #31
    Reactor Janitor
    Joby's Avatar
    Join Date
    Jun 2006
    Location
    Olympic Peninsula
    Last Seen
    10-24-17 @ 12:52 AM
    Gender
    Lean
    Progressive
    Posts
    2,276

    Re: Federal Reserve Plans to Buy Government Debt

    I don't think we're falling apart (well, our roads are but that's another story), but I do believe this crisis may have a great long-term effect: A generation which got the living **** scared out of it.
    down for you is up

  2. #32
    Sexual Deviant
    GottaHurt's Avatar
    Join Date
    Jun 2005
    Location
    Florida
    Last Seen
    05-07-09 @ 04:58 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    2,899

    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by talloulou View Post
    Right.

    Why would we sell our government debt to the fed reserve? If we're in debt then we're in debt. So the feds buy some of the debt and do they give the money to our government? Then the government presumably uses the money to pay off debt?

    How does the fed buying government debt flood the economy with money?
    They're robbing Peter to pay Paul.

    They did this with Social Security. In 2018 Social Security will no longer be able to sustain itself, it'll be operating in the red.

    9 years isn't that far off, so you might not be counting on collecting SS, but you're sure going to be paying a lot more for it.

    Pretty depressing when you start to realize the amount of debt being aquired today, coupled with the amount that SS will be bringing.

    Social Security's Problems Haven't Gone Away

    Social Security Reform Center - Problem

    The real depressing news, is that the people "leading" us down this path are the ones who are pushing for universal healthcare. A complete failure in itself.

    Look at Mass. healthcare reform is failing us - The Boston Globe.

    Obama's "plan" calls for a $600+ billion down payment.

    We're witnessing madness.
    Pain can be such a beautiful thing

  3. #33
    I'm not-low all the time
    Kushinator's Avatar
    Join Date
    Jan 2006
    Location
    West Loop
    Last Seen
    Today @ 01:09 AM
    Gender
    Lean
    Independent
    Posts
    16,254

    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by talloulou View Post
    This is true if all the share holders, profiteers, etc are American. But maybe not so much if they're foreign, right?
    There are a strict set of rules to become part of the Board of Governors, as they are appointed by the President for 14 year terms, while the Chairman is appointed to 4 year terms, of which they will preceded back to the board after their term is up, and reappointment is confirmed.

    I just think their power is perhaps too big and unchecked. If they can "fix" the economy they can also purposely "break" the economy if there was some incentive to do so. If there is no foreign interests or shareholders tied to the federal reserve then there's not as much reason to worry, but do we know if there are foreign interests involved?
    Again, they do what is in their best interest. When inflation is the main concern, the Fed has the power to induce recessions via the pull back of the monetary base through FOMC activity (Federal Open Market Committee).

    Maybe not but it's dangerous to just "take orders," and allow a virtually private bank to own our government debt.
    They are not taking orders though. The Fed is a quasi-private institution that looks out for its best interests; as they are the central bank of the US, their best interest is a strong economy without high levels of price stability.

    It seems like all the financial folks are surprised which is why it's worrisome.
    They are most likely pleased. The US, in the past two years, has face a wealth evaporation of $20-$30 trillion. Re-inflating the economy is crucial to avoiding an ever scarier depression.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

  4. #34
    I'm not-low all the time
    Kushinator's Avatar
    Join Date
    Jan 2006
    Location
    West Loop
    Last Seen
    Today @ 01:09 AM
    Gender
    Lean
    Independent
    Posts
    16,254

    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by talloulou View Post
    Right.

    Why would we sell our government debt to the fed reserve? If we're in debt then we're in debt. So the feds buy some of the debt and do they give the money to our government? Then the government presumably uses the money to pay off debt? I do in fact believe this is the first time they have announced the purchase of 10-30 year securities.


    How does the fed buying government debt flood the economy with money?
    That is not really the case. Through open market operations, the Fed will in effect, be purchasing long term treasuries. They have since their beginning purchased short term debt (specifically treasuries) as a way of pumping the system full of liquidity.

    Japan eventually went this way in the beginning of the century, and the Bank of England has recently followed suit (as can be seen by the strengthening of the dollar only one month ago).


    Here is how it works. Say the board of governors believes more money (m2) is needed to facilitate growth. The FOMC, through open market operations purchases with dollars, assets from banks and other lending institutions. As the purchase is complete, the Fed credits the accounts of these banks, which are on record at the Federal Reserve, with dollar denominations. This fills the banks balance sheets with "cash", although it is in digital format.

    Banks can then lend out their reserves up until a certain point (10% of total loans must be held as reserves). As the fed feels prices are beginning to increase, they then will sell back their assets, previously purchased from banks, in open market operations. This action will pull the excess liquidity from the system.
    Last edited by Kushinator; 03-19-09 at 05:13 PM.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

  5. #35
    Girthless
    RightinNYC's Avatar
    Join Date
    Mar 2005
    Location
    New York, NY
    Last Seen
    01-23-11 @ 11:56 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    25,894

    Re: Federal Reserve Plans to Buy Government Debt

    There's so much alarmism here. It's honestly not the end of the world.

    Quote Originally Posted by Goldenboy219 View Post
    Yes, the Fed does provide profits for shareholders.
    What?

    The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

    As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

    The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year
    FRB: FAQs: Federal Reserve System

    Quote Originally Posted by Goldenboy219 View Post
    That is not really the case. Through open market operations, the Fed will in effect, be purchasing long term treasuries. They have since their beginning purchased short term debt (specifically treasuries) as a way of pumping the system full of liquidity.
    This is not the first time they've purchased long term treasuries.

    The Fed said it will will purchase $300 billion of long-dated Treasuries over the next six months, its first large-scale purchases of government debt since the early 1960s
    Business Feed Article | Business | guardian.co.uk

    World didn't end then, it's not going to end now.
    People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

  6. #36
    Sexual Deviant
    GottaHurt's Avatar
    Join Date
    Jun 2005
    Location
    Florida
    Last Seen
    05-07-09 @ 04:58 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    2,899

    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by RightinNYC View Post

    World didn't end then, it's not going to end now.
    You're absolutely correct.

    We're merely travelling down the path of stupidity, racking up needless deficits.
    Pain can be such a beautiful thing

  7. #37
    Advisor hackster's Avatar
    Join Date
    Nov 2007
    Last Seen
    10-26-10 @ 12:20 PM
    Gender
    Lean
    Independent
    Posts
    388

    Re: Federal Reserve Plans to Buy Government Debt

    print our way out of this mess...

    goodbye dollar, hello zimbabwe.

  8. #38
    Banned
    Join Date
    Feb 2006
    Location
    Tiamat's better half
    Last Seen
    10-28-11 @ 01:41 AM
    Gender
    Lean
    Conservative
    Posts
    15,998

    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by RightinNYC View Post
    There's so much alarmism here. It's honestly not the end of the world.



    What?



    FRB: FAQs: Federal Reserve System



    This is not the first time they've purchased long term treasuries.



    Business Feed Article | Business | guardian.co.uk

    World didn't end then, it's not going to end now.
    I guess it doesn't really matter since the Annuniki are returning in 2012 anyway.

  9. #39
    Educator BulletWounD's Avatar
    Join Date
    Mar 2009
    Last Seen
    02-17-11 @ 09:06 PM
    Lean
    Undisclosed
    Posts
    984

    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by talloulou View Post
    I guess it doesn't really matter since the Annuniki are returning in 2012 anyway.
    They're already here. Haven't you read any David Icke? The politicians are shapeshifting man/reptilian hybrids. Crazy people have even seen Hillary shapeshift before their eyes.

  10. #40
    I'm not-low all the time
    Kushinator's Avatar
    Join Date
    Jan 2006
    Location
    West Loop
    Last Seen
    Today @ 01:09 AM
    Gender
    Lean
    Independent
    Posts
    16,254

    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by RightinNYC View Post


    This is not the first time they've purchased long term treasuries.



    Business Feed Article | Business | guardian.co.uk

    World didn't end then, it's not going to end now.
    My bad for not being more specific. Operation Twist was a mortgage tool, where as the long term buying in these conditions is full board quantitative easing. Rates are @ 0%-.25% (although in theory they are negative). In the 60's the were from 1.7 -3.0 (During Kennedy).

    I should have said, they have never truly eased before
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

Page 4 of 4 FirstFirst ... 234

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •