Instead of where all this money is going how about debating where it is coming from??

[gsvol]

How do we get more money to begin with??

 

[GAVol]

The U.S. Treasury just prints it . . . then in a year or two when inflation hits, everybody will act like they don't know what happened.

 

[TennTradition]

The U.S. Treasury just prints it . . . then in a year or two when inflation hits, everybody will act like they don't know what happened.

Are we not borrowing any of this from someone? Which, may essentially be printing it - but then we would owe interest on it...

 

[GAVol]

Are we not borrowing any of this from someone? Which, may essentially be printing it - but then we would owe interest on it...

I was being half sarcastic. You are right.

 

[gsvol]

The U.S. Treasury just prints it . . . then in a year or two when inflation hits, everybody will act like they don't know what happened.

How do treasury bonds play into the equation???

Our founding fathers were well aware of the problem, that's why they gave us the constitution which carefully spells out how we are to handle this.

Unfortunately we have been violating that constitution for nearly a century and that is why we do not control our own fortunes.

How much is a $100,000,000,000,000 Zimbabwen bank note worth these days???

Happy camper with enough money to buy a loaf of bread.

Robbery is a thing of the past, it takes forty pounds of cash to buy a sack of groceries, that sounds like too much work.

Are we not borrowing any of this from someone? Which, may essentially be printing it - but then we would owe interest on it...

Could I ask in what field you are doing your graduate work?

I used to drive professors (and others) crazy with the question; "how do we get new money?"

They would always say; "well they take the old money and burn it and print new money and distribute it through the banks."

Then I would ask; "ok, if we had x amount of dollars when George Washington was president and now have xxx amount of dollars now, where did the xx come from??"

Some would get really upset with me, but none seemed to even have a clue about how it worked and I don't remember even one who was willing to even allow me to explain how it works.

The mandrake mechanism: an overview

The entire function of this machine is to convert debt into money. It's just that simple. First, the Fed takes all the government bonds which the public does not buy and writes a check to Congress in exchange for them. (It acquires other debt obligations as well, but government bonds comprise most of its inventory.)

There is no money to back up this check. These fiat dollars are created on the spot for that purpose. By calling those bonds "reserves," the Fed then uses them as the base for creating 9 additional dollars for every dollar created for the bonds themselves.

The money created for the bonds is spent by the government, whereas the money created on top of those bonds is the source of all the bank loans made to the nation's businesses and individuals.

The result of this process is the same as creating money on a printing press, but the illusion is based on an accounting trick rather than a printing trick.

The bottom line is that Congress and the banking cartel have entered into a partnership in which the cartel has the privilege of collecting interest on money which it creates out of nothing, a perpetual override on every American dollar that exists in the world.

Congress, on the other hand, has access to unlimited funding without having to tell the voters their taxes are being raised through the process of inflation.

If you understand this paragraph, you understand the Federal Reserve System.

THE OPEN MARKET OPERATION

The most important method used by the Federal Reserve for the creation of fiat money is the purchase and sale of securities on the open market. But, before jumping into this, a word of warning. Don't expect what follows to make any sense. Just be prepared to know that this is how they do it.

The trick lies in the use of words and phrases which have technical meanings quite different from what they imply to the average citizen. So keep your eye on the words. They are not meant to explain but to deceive. In spite of first appearances, the process is not complicated.

It is just absurd.

How many posters do you expect will actually read the whole page?????

We can predict several posters who surely won't and they will be the ones who claim intellectual superiority and cast aspersions on the intelligence and knowledge of persons such as myself and others who don't buy into their skewed world view, especially when it comes to politics.

 

[TennTradition]

Could I ask in what field you are doing your graduate work?

Chemical Engineering

And...it's no fault of yours, but I must admit that I still don't really understand the description after reading the fed portion. Maybe I should read some more about it...because I don't quite get it.

 

[GAVol]

How many posters do you expect will actually read the whole page?????

Wasn't it really just a long way of saying that the money comes from bonds, t-bills and the fact that the government says that the money is there?

 

[utvolpj]

Oops, with gsvol's pics I thought this was a bammer recruiting thread.

 

[Dustin4Vols]

someone told me the money was coming from china................::shrugs::

 

[volinbham]

I think it's a bit of both but I was under the impression that it is primarily borrowing rather than new money creation. I believe the CBO estimated interest payments for the House bill would total $300 million over 10 years.

Given there is a limited amount of investment capital and somebody has to buy the securities to fund the spending, I wonder how this impacts the cost of capital to private entities.

 

[gsvol]

Chemical Engineering

And...it's no fault of yours, but I must admit that I still don't really understand the description after reading the fed portion. Maybe I should read some more about it...because I don't quite get it.

"When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money."
-- Putting it simply, Boston Federal Reserve Bank

How is that for simplicity??

Next step up the ladder is the BIS.



"The few who can understand the system will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class, while on the other hand, the great body of the people, mentally incapable of comprehending the tremendous advantages that capital derives from the system, will bear its burdens without complaint and perhaps without even suspecting that the system is inimical to their interests."
John Sherman, a protege of the Rothschild banking family, in support of the National Banking Act, wrote in a letter in 1863:

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States."
-- Sen. Barry Goldwater (Rep. AR)

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
-- Henry Ford

"Some [Most] people think the Federal Reserve Banks are the United States government's institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers."[B/]
-- Congressional Record 12595-12603 — Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill."
-- Charles A. Lindbergh, Sr. , 1913

The wealth of the country flees the land
Like cottonseed on a wind
Blown by the fetid breath
Of money-pimps in Bedlam
Pursuing the creed of masters
Who worship a market freed
Of all restraints on greed -
While politicians posture
And feed on delusions of power

 

[gsvol]

Wasn't it really just a long way of saying that the money comes from bonds, t-bills and the fact that the government says that the money is there?

Well that's a good start but it's a bit deeper than that.

It easier to understand if you hold both hands in the air.

"The depression was the calculated 'shearing' of the public by the World Money powers, triggered by the planned sudden shortage of supply of call money in the New York money market.... The One World Government leaders and their ever close bankers have now acquired full control of the money and credit machinery of the U.S. via the creation of the privately owned Federal Reserve Bank."
-- Curtis Dall, FDR's son-in-law as quoted in his book, My Exploited Father-in-Law

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and the corporations which grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."
-- Thomas Jefferson

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance."
-- James Madison

"The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity."
-- Abraham Lincoln

"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it."
-- Congressman Louis T. McFadden in 1932 (Rep. Pa)

"By this means government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft."
-- British Lord John Maynard Keynes (the father of 'Keynesian Economics' which our nation now endures) in his book "THE ECONOMIC CONSEQUENCES OF THE PEACE" (1920).

"When the roll is called in Congress and the Senate now, they don't know whether to answer here or guilty!"
Theodore Roosevelt.

"You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out."
Andrew Jackson

"The bold effort the present (central) bank had made to control the government ... are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it."
Andrew Jackson

"I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."
Andrew Jackson

(Two attempts were made on Jackson's life)

"The money power preys upon the nation in times of peace & conspires against it in times of war. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who even question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me & the financial institutions at the rear, the latter is my greatest foe."
- President Abraham Lincoln


"The government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government’s greatest creative opportunity. The financing of all public enterprise, and the conduct of the treasury will become matters of practical administration. Money will cease to be master and will then become servant of humanity."
Abraham Lincoln

"(we) gave the people of this Republic the greatest blessing they have ever had - their own paper money to pay their own debts..."
Abraham Lincoln

The Treasury notes were printed with green ink on the back, so the people called them "Greenbacks".

Lincoln printed 400 million dollars worth of Greenbacks (the exact amount being $449,338,902), money that he delegated to be created, a debt-free and interest-free money to finance the War. It served as legal tender for all debts, public and private. He printed it, paid it to the soldiers, to the U.S. Civil Service employees, and bought supplies for war.
(The US Treasury reported that this saved the republic about $4 billion in interest.)


"The London Times" printed the following:

"if that mischievous financial policy, which had its origin in the North American Republic, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without a debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and the wealth of all countries will go to North America. That government must be destroyed, or it will destroy every monarchy on the globe."

(A bit of duplicity there, they cared not for any monarch, the Tsar of Russia sent naval forces to the aid of Lincoln and the American Republic, thus sealing the fate of the Romanov family though the 'revolution' only forty years later, funded and supported by the central banks. See; ("Wall Street and the Bolshevik Revolution, Sutton)

After Lincoln's untimely death, Congress revoked the Greenback Law and enacted, in its place, the National Banking Act. The national banks were to be privately owned and the national bank notes they issued were to be interest-bearing. The Act also provided that the Greenbacks should be retired from circulation as soon as they came back to the Treasury in payment of taxes.

No one dared buck the system until JFK. On June 4th, 1963, President Kennedy signed a presidential document, called Executive Order 11110, which further amended Executive order 10289 of September 19th, 1951.

This gave Kennedy, as President of the United States, legal clearance to create his own money to run the country, money that would belong to the people, an interest and debt-free money. He had United States Notes printed, completely ignoring the Federal Reserve Notes from the private banks of the Federal Reserve.

Records show that Kennedy issued $4,292,893,825 in silver certificates backed by silver dollars or bullion in reserve. It was perfectly obvious that Kennedy was out to undermine the Federal Reserve System of the United States whose money is backed by nothing.

By November of 1963 JFK was dead. President Kennedy must have had it in mind to repeal the Federal Reserve Act of 1913, and return back to the United States Congress the power to create its own money which is so clearly stated in the US Constitution as the legal way for us to handle monetary policy.

It is interesting to note that, only one day after Kennedy's assassination, all the United States notes which Kennedy had issued were called out of circulation.

Was this through an executive order of the newly-installed president, Lyndon B. Johnson or by order of the Federal Reserve? At any rate, all of the money President Kennedy had created was destroyed. And not a word was said to the American people.

 

[gsvol]

Oops, with gsvol's pics I thought this was a bammer recruiting thread.

O'Bama supporters?

I think it's a bit of both but I was under the impression that it is primarily borrowing rather than new money creation. I believe the CBO estimated interest payments for the House bill would total $300 million over 10 years.

That depends on who buys the bonds, if the federal reserve (or probably any other of the central banks of the international money system) buy the bonds, that is creating new money.

If they are purchased by anyone else then they must already have the money with which they are purchasing the bonds but even then those financial institutions may be funded by debt to central banking who in turn created that money to begin with.

I'm not sure whether central banks can legally purchase the bonds second or third hand by creating more new money but would guess so.

"When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money."
-- Putting it simply, Boston Federal Reserve Bank

Given there is a limited amount of investment capital and somebody has to buy the securities to fund the spending, I wonder how this impacts the cost of capital to private entities.

It is estimated the central banking system of the world already owns 95% of the world's total assets.

In the 95 year history of the Federal Reserve, there has never been a public audit.

I'm pretty sure congressman McDonald was the last to introduce legislation to force an audit of the Fed.

 

[droski]

the 10 year treasury is at 2.7%. that is about as close as borrowing for free as it gets.

 

[lawgator1]

Why is it that inflation is inevitable when the recession ends, based solely on the increased money supply? I understand the premise: that if there are 2 trilllion dollars where before there was only 1 trillion, then each dollar is "worth" less.

But I do not understand why that is. If the guy who makes and sells widgets can spend a dollar and makes more dollars when the economy improves, then isn't it the increased demand that is causing the inflation, not the increased supply of dollars to the economy as a whole?

And when we had ridonculous inlfation in the 80's, wasn't inlfation a function of escalating oil prices at the same time the rest of the economy was in overdrive with investment more than too many dollars in the system?

 

[droski]

inflation expectations and employment demand drive inflation. in the 80s inflation expectations were very very high.

 

[BigPapaVol]

Why is it that inflation is inevitable when the recession ends, based solely on the increased money supply? I understand the premise: that if there are 2 trilllion dollars where before there was only 1 trillion, then each dollar is "worth" less.

But I do not understand why that is. If the guy who makes and sells widgets can spend a dollar and makes more dollars when the economy improves, then isn't it the increased demand that is causing the inflation, not the increased supply of dollars to the economy as a whole?

And when we had ridonculous inlfation in the 80's, wasn't inlfation a function of escalating oil prices at the same time the rest of the economy was in overdrive with investment more than too many dollars in the system?

many more dollars chasing same basket of goods makes for artificially inflated demand.

Your second paragraph is not correct. The dollars dude makes come from somewhere.

Don't want to get into hardcore MacroEcon, but the ridonkulous inflation of the late 70s was essentially our treasury poorly managing the inevitable. They were avoiding recession instead of managing the tools they have to manipulate the economy properly. Reagan rolled in, clamped down on the money supply, induced recession and fixed the problem.

 

[gsvol]

the 10 year treasury is at 2.7%. that is about as close as borrowing for free as it gets.

Treasury Bond interest rates aren't what we are talking about droopski, what we are talking about is how the overall system works!!

OK, let's say I'm the Federal Reserve and you are the US government.

You need money, you print treasury bonds and federal reserve notes in equal amounts at your own expense.

Then you sell those bonds to me, I sign a piece of paper that says I now own those bonds and you give them to me and I put then in a vault on deposit and call them assets and you can now spend the money you printed.

I did nothing but sign a paper that says you can spend your money and that you will someday give me back that amount of money with interest. (which dictates that the process will repeat itself on down the road, only in greater numbers.)

Not only that, for every dollar's worth of bonds in my vault, I can loan out nine more dollars to whomever I choose, I call that 'fractional banking.'

How much leverage is that in world markets????

Andrew Jackson ended the central bank (that creates it's own money to buy the bonds which we have to buy back with interest) and paid off the national debt within three years and he didn't even have the IRS.

Abraham Lincoln managed to keep the country out of big debt while in the midst of a huge war.

Woodrow Wilson sold us back into slavery to finance WWI (which he promised to keep us out of) and we then had to pay it back with the great depression and WWII we still have the overly burdensome IRS he created. (Wilson also spurned Ho Chi Mihn who wanted to be our ally but I'm trying to keep this as simple enough that maybe even LG can understand)

What we are now doing is absolutely insane and we are creating our own self destruction.

 

[droski]

as a % of debt to gdp we are still on the lower end of first world countries. if we were really creating our own self destruction treasuries would be yielding 4 times what they currently are.

 

[gsvol]

as a % of debt to gdp we are still on the lower end of first world countries. if we were really creating our own self destruction treasuries would be yielding 4 times what they currently are.

What I said was completely wasted one you, my bad.:ermm:

Someday you have to pay the piper.

 

[lawgator1]

Boy gsvol, why do you your waste your time with us dolts? It appears that anyone that disagrees with you is simply an idiot. And since you seem hell bent on alienating all of us as unworthy of your own self-described lofty intellect, it would seem no one is ever going to be capable of understanding your point or 100% accepting of your opinion of the world.

I mean, as hopelessly stupid as the rest of us apparently are, what's the point of wasitng your time like this?

 

[IPorange]

as a % of debt to gdp we are still on the lower end of first world countries. if we were really creating our own self destruction treasuries would be yielding 4 times what they currently are.

Just echoing you really, but as a % of debt to gdp the US is actually quite far below where it has been at other times in the last 60 or 70 years. I saw a graph depicting this recently, if I find it I will stick in this post.

EDIT:

 

[gsvol]

Boy gsvol, why do you your waste your time with us dolts? It appears that anyone that disagrees with you is simply an idiot. And since you seem hell bent on alienating all of us as unworthy of your own self-described lofty intellect, it would seem no one is ever going to be capable of understanding your point or 100% accepting of your opinion of the world.

I mean, as hopelessly stupid as the rest of us apparently are, what's the point of wasitng your time like this?

Do you understand how the Federal Reserve (ie; central banking) works???

Do you understand how detrimental to the average American citizen's best interest this system is???

Do you understand we must make a fundamental change or keep on going through boom/bust cycles??

Do you understand what we are doing places our grandchildren in virtual slavery. (Not that we aren't already there.)

Maybe I enjoy wasiting my time.

Maybe not everyone disagrees with me.

Oh, and I meant to ask, what sort of business do you own, a lemonade stand??

 

[droski]

Do you understand how the Federal Reserve (ie; central banking) works???

Do you understand how detrimental to the average American citizen's best interest this system is???

Do you understand we must make a fundamental change or keep on going through boom/bust cycles??

Do you understand what we are doing places our grandchildren in virtual slavery. (Not that we aren't already there.)

Maybe I enjoy wasiting my time.

Maybe not everyone disagrees with me.

Oh, and I meant to ask, what sort of business do you own, a lemonade stand??

you are off base. this is the greatest system for economic growth and prosperity EVER created. our booms and busts (which by the way are normal for ANY economy) have had the longest booms and shortest busts in the history of any economy anywhere over the past 27 years. the whole "china owns this country" thing is complete and utter bs rhetoric. without our economy and consumers china would have a revolution within 5 years. they aren't going to screw with the golden goose. and even if they wanted to they really couldn't do anything really except raise long term treasury rates. the horror!

 

[gsvol]

you are off base. this is the greatest system for economic growth and prosperity EVER created.

True, however the central banking system bleeds off most of the real profits and prosperity.

our booms and busts (which by the way are normal for ANY economy) have had the longest booms and shortest busts in the history of any economy anywhere over the past 27 years.

Booms and busts have been created by central banking for centuries, so have wars been created.

What happened 80 years ago??

the whole "china owns this country" thing is complete and utter bs rhetoric. without our economy and consumers china would have a revolution within 5 years.

I havn't made any claim that China owns this country but at one time Japan owned eight of the top ten non fed banks in the US and that happened because of a bubble created in Japan that made a square block of property in downtown Tokyo worth more than the whole state of Wyoming. That's also one of the reasons we have so many Japanese manufacturing plants in the USA.

they aren't going to screw with the golden goose. and even if they wanted to they really couldn't do anything really except raise long term treasury rates. the horror!

Treasury note rates have little if anything to do with I'm talking about.