View in: Desktop
Copyright @2024 TigerDroppings.com. All rights reserved.
- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Posted by
Message
For those of you who like to criticise the Fed ...
Posted by Altair76 on 10/21/18 at 10:12 am432
The fact is that these trillion-dollar deficits we're running have to be paid for by selling treasury bonds, and those require an ACTUAL BUYER. Some real-life nation, individual, corporation or whatever who decides that they want to loan us money. The problem is, irrespective of what the Fed does, those bond customers need to be paid a higher interest rate to encourage them to buy our bonds when they see we're running huge deficits. That's why when the huge tax cut was passed, the Treasury immediately had trouble finding customers for all the bonds it was having to issue, and so of course it had to offer a more generous interest rate to encourage them to buy. These rising interest rates directly affect other long-term rates like mortgages.
Now the truth is that, long term, we're all going to pay for the huge deficits. Maybe not if you are going to die in the next 10 years or so, but certainly if you plan to be drawing social security and medicare in the coming decades.
There's two possibilities for how you will pay. Either Congress will say in 15 years or whatever "oops, we can no longer even sell bonds to finance these social security payments" so we will have to give you, say, a 30% haircut on your social security payment, raise the retirement age, or whatever. Or they can just print money and use it to pay the social security checks. But even if they do that, you will still pay, because that printing money will cause inflation as surely as night follows day. So your social security check or savings simply won't buy as much as they did yesterday.
The Fed is currently doing what it was CREATED to do, namely to be a non-political entity that, by raising short term interest rates, provides a check on the inflationary tendencies caused by these reckless fiscal policies. Now if you just care about your life right now, like Trump does, then I guess it makes sense to just put another bottle of vodka in the punch bowl, borrow some more money for our kids, and hope it will work out ok.
But the Fed is being the adult in the room here. Whether you Fed-haters realize it or not.
And incidentally, regardless of what the Fed does, the reckoning for our fiscal irresponsibility is coming. I strongly recommend you plan for your retirement accordingly- save a lot more than it seems now you might need.
Now the truth is that, long term, we're all going to pay for the huge deficits. Maybe not if you are going to die in the next 10 years or so, but certainly if you plan to be drawing social security and medicare in the coming decades.
There's two possibilities for how you will pay. Either Congress will say in 15 years or whatever "oops, we can no longer even sell bonds to finance these social security payments" so we will have to give you, say, a 30% haircut on your social security payment, raise the retirement age, or whatever. Or they can just print money and use it to pay the social security checks. But even if they do that, you will still pay, because that printing money will cause inflation as surely as night follows day. So your social security check or savings simply won't buy as much as they did yesterday.
The Fed is currently doing what it was CREATED to do, namely to be a non-political entity that, by raising short term interest rates, provides a check on the inflationary tendencies caused by these reckless fiscal policies. Now if you just care about your life right now, like Trump does, then I guess it makes sense to just put another bottle of vodka in the punch bowl, borrow some more money for our kids, and hope it will work out ok.
But the Fed is being the adult in the room here. Whether you Fed-haters realize it or not.
And incidentally, regardless of what the Fed does, the reckoning for our fiscal irresponsibility is coming. I strongly recommend you plan for your retirement accordingly- save a lot more than it seems now you might need.
This post was edited on 10/21 at 10:14 am
re: For those of you who like to criticise the Fed ...Posted by Aubie Spr96 on 10/21/18 at 10:20 am to Altair76
Can you show me in the Constitution where the gov’t has the power/right to create an all powerful central bank? I’ll wait.
re: For those of you who like to criticise the Fed ...Posted by reggierayreb on 10/21/18 at 10:23 am to Altair76
I do not agree but I respect your opinion , Mr. Greenspan.
re: For those of you who like to criticise the Fed ...Posted by jimmy the leg on 10/21/18 at 10:26 am to Altair76
quote:
The Fed is currently doing what it was CREATED to do, namely to be a non-political entity
You serious Clark?
quote:
The Fed is currently doing what it was CREATED to do, namely to be a non-political entity that, by raising short term interest rates, provides a check on the inflationary tendencies caused by these reckless fiscal policies.
So it was totally non-political when they kept the rates at historic lows during the entire 8 years of Obama?
re: For those of you who like to criticise the Fed ...Posted by WizardSleeve on 10/21/18 at 10:30 am to Altair76
quote:
Now the truth is that, long term, we're all going to pay for the huge deficits. Maybe not if you are going to die in the next 10 years or so, but certainly if you plan to be drawing social security and medicare in the coming decades.
This is a common misconception spread by people in government and media who LOVE the Fed. They love the Fed because it facilitates deficit spending and deficit spending enables them to stay in power.
Where did the dollars come from to buy bonds and fund the deficit? This is important.
Dollars were either created as printed money by the Fed or were generated as issued debt from fractional reserve banking practices, both of which increase the money supply and thus inflation. The Fed is the reason both types of money supply increase can exist. And you are paying for the deficit by loss in purchasing power of the dollar.
re: For those of you who like to criticise the Fed ...Posted by TenWheelsForJesus on 10/21/18 at 10:34 am to Altair76
We could not pay the owners of the private Fed to print our own money. That would be a good start.
re: For those of you who like to criticise the Fed ...Posted by Sid in Lakeshore on 10/21/18 at 10:42 am to Altair76
One of the reasons that the US government is able to sell debt is the FED. Investors across the globe see OUR DEBT as MUCH MORE secure than other country's debt (like Greece, Italy, etc....). By and large our debt is secured by our national wealth, our military and our stable financial system. The FED is acting as one of the adults in the room as Congress acts as a spoiled child. An INDEPENDANT FED is a bedrock of our existence.
re: For those of you who like to criticise the Fed ...Posted by LSURussian on 10/21/18 at 10:58 am to Altair76
quote:
That's why when the huge tax cut was passed, the Treasury immediately had trouble finding customers for all the bonds it was having to issue, and so of course it had to offer a more generous interest rate to encourage them to buy.
I guess you want to ignore the FACT that tax revenues collected since the tax cuts went into effect are the MOST in our history.
quote:LINK
Even so, net receipts are up by $29.6 billion for the current fiscal year — a 2.4% increase — compared with the same period last year. That's also a record high.
TD SponsorTD Fan
USA
Member since 2001
USA
Member since 2001
Thank you for supporting our sponsors Posted by Site Sponsor to Everyone
Advertisement
re: For those of you who like to criticise the Fed ...Posted by Corch Urban Myers on 10/21/18 at 11:00 am to Altair76
Whose altair are you?
re: For those of you who like to criticise the Fed ...Posted by TigerDeBaiter on 10/21/18 at 11:47 am to Altair76
You post started out somewhat reasonable and then you insert this ridiculousness.
And then you don’t even address this ridiculous statement at all.
quote:
That's why when the huge tax cut was passed, the Treasury immediately had trouble finding customers for all the bonds it was having to issue, and so of course it had to offer a more generous interest rate to encourage them to buy.
And then you don’t even address this ridiculous statement at all.
And you left out the part, where the fed is required to pay back to the treasury any interest collected that did not go to operating expenses. Because they are not run as a profitable organization
Now ask yourself, why isn't the fed audited?
That's why I criticize the fed
Now ask yourself, why isn't the fed audited?
That's why I criticize the fed
re: For those of you who like to criticise the Fed ...Posted by LSURussian on 10/21/18 at 11:53 am to RobbBobb
quote:The FED IS audited annually by both an outside, independent accounting firm and by the Congressional Budget Office.
Now ask yourself, why isn't the fed audited?
Both audits are publicly available on the internet.
ETA: Correction: It's the Office of Inspector General (OIG) not the CBO that audits the Fed annually.
This post was edited on 10/21 at 3:04 pm
re: For those of you who like to criticise the Fed ...Posted by RobbBobb on 10/21/18 at 12:04 pm to LSURussian
quote:
The FED IS audited annually by both an outside, independent accounting firm and by the Congressional Budget Office.
Hmmmm, really? So how did the Federal Reserve provide more than $16 trillion in financial assistance to some of the largest financial institutions and corporations in the world. It took a separate act of Congress to gather that info
And I wonder where that original $16T came from? American taxpayers?
re: For those of you who like to criticise the Fed ...Posted by LSURussian on 10/21/18 at 12:21 pm to RobbBobb
quote:Those transactions were disclosed.
So how did the Federal Reserve provide more than $16 trillion in financial assistance to some of the largest financial institutions and corporations in the world.
And none of those transactions resulted in a loss for the Fed.
The $16 trillion figure you gave (which I've never seen before in any credible media) includes dollar currency swaps which is NOT "financial assistance."
When the credit markets froze up at the start of the financial crisis other countries central banks needed dollars to distribute to their banks for their banks to lend to their customers who were making loans in U.S. dollars. Without dollars to make loans in other countries, U.S. companies would not have been able to sell as much of their goods abroad.
The Fed unfroze the dollar market by exchanging dollars for other currencies. As soon as the credit markets started functioning again, the Fed reversed the swaps and even made a profit on them.
If the Fed had announced which countries it was arranging currency swaps with it could have created a "run" on other countries' currencies, thereby making the crisis even worse.
It would be like a commercial bank announcing it was making emergency loans to a corporation because the customer was experiencing liquidity problems. That would make that corporation's situation worse.
All of the transactions involved have since been disclosed and it didn't take a law to do it.
ETA: I just noticed your last line....
quote:Nope. The Fed does not use taxpayer money because it is not on the Federal budget. In fact, the Fed does not borrow from the U.S. government. It's the other way around. The Fed loans money TO the U.S. government by buying Treasury debt.
And I wonder where that original $16T came from? American taxpayers?
I know that blew your mind but it's a just a fact.....
Besides, a currency swap is not a loan in the amount of the nominal value of the swap. The actual amount of funds "loaned" is a tiny fraction of the nominal value usually in the range of .1-.2% of the nominal value of the contract.
I'm not being critical but your question shows a great deal of ignorance about how the Federal Reserve operates. I've often said it's fear stemming from ignorance of the Fed that fuels the critics' slogans against the Federal Reserve.
This post was edited on 10/21 at 2:20 pm
re: For those of you who like to criticise the Fed ...Posted by RobbBobb on 10/21/18 at 12:26 pm to LSURussian
quote:
The $16 trillion figure you gave (which I've never seen before in any credible media) includes dollar currency swaps which is NOT "financial assistance."
well, don't know about you, but I've always considered Forbes credible
quote:
It is the first audit of the Fed in United States history since its beginnings in 1913. The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis.
re: For those of you who like to criticise the Fed ...Posted by LSURussian on 10/21/18 at 12:31 pm to RobbBobb
quote:Could you provide a link to the Forbes quote you posted?
I've always considered Forbes credible
I'd like to see if it actually explained what the "$16 trillion" figure includes.
ETA:
quote:LINK
The Board's financial statements, and its compliance with laws and regulations affecting those statements, are audited annually by an outside auditor retained by the independent Office of Inspector General (OIG). The results of this independent audit are released to the Congress and the public.
I misspoke earlier when I said it was the CBO which audited the Fed. It's the OIG that performs an annual audit for congress.
This post was edited on 10/21 at 12:38 pm
Back to top
Follow TigerDroppings for LSU Football News