$2T in Debt for the Fed Reserve

[mike.redd1266]

As of Aug. 14 the Federal Reserve debt was approximately $2,001,093,000,000.

Washing DC is known for having some of the smartest minds in the world, but with a debt that high, it is making me question that statement. With Detroit declaring filing for bankruptcy it makes me wonder will America have to do the same?

Sources Rare.us & CNSnew.com
Fed watch: Federal Reserve now owns over $2T in U.S. debt

 

[Mad Scientist]

That's a little misleading. The Privately Owned Federal Reserve has 2 Trillion worth of debt on their balance sheet. That doesn't mean it's their debt, it means it's the Tax Payers Debt.

The Fed printed all that money to give low interest rates to Banks that play the Stock Market AND used it to buy as much Distressed Mortgaged Properties they could, which in America is most everything.

So yeah, they ran the Credit Card up, but they're not on the hook to pay it off. The American Taxpayers are.

Pretty good deal if you can get it huh?

 

[dilloduck]

That's a little misleading. The Privately Owned Federal Reserve has 2 Trillion worth of debt on their balance sheet. That doesn't mean it's their debt, it means it's the Tax Payers Debt.

The Fed printed all that money to give low interest rates to Banks that play the Stock Market AND used it to buy as much Distressed Mortgaged Properties they could, which in America is most everything.

So yeah, they ran the Credit Card up, but they're not on the hook to pay it off. The American Taxpayers are.

Pretty good deal if you can get it huh?

I would be willing to run up America's debt and charge America less for doing it. I'm a patriotic kinda guy.

 

[BillyV]

As of Aug. 14 the Federal Reserve debt was approximately $2,001,093,000,000.

Washing DC is known for having some of the smartest minds in the world, but with a debt that high, it is making me question that statement. With Detroit declaring filing for bankruptcy it makes me wonder will America have to do the same?

Sources Rare.us & CNSnew.com
Fed watch: Federal Reserve now owns over $2T in U.S. debt

How would that work? I'm not sure it's possible to have a debt crisis in your own currency; just print more. Additional borrowing would certainly dry up immediately, and inflation would surely go throught the roof, but you can always print enough to cover debts already incurred, right?

”[A] government cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit.” - Alan Greenspan

 

[AmazonTania]

Um, they own $2 Trillion worth in US Securities. That's actually a financial asset...

http://www.federalreserve.gov/releases/h41/current/

 

[Avorysuds]

That's a little misleading. The Privately Owned Federal Reserve has 2 Trillion worth of debt on their balance sheet. That doesn't mean it's their debt, it means it's the Tax Payers Debt.

The Fed printed all that money to give low interest rates to Banks that play the Stock Market AND used it to buy as much Distressed Mortgaged Properties they could, which in America is most everything.

So yeah, they ran the Credit Card up, but they're not on the hook to pay it off. The American Taxpayers are.

Pretty good deal if you can get it huh?

More or less Obama was able to slightly bring down the deficit (near 1 trillion this year) by having the FED-R put the debt on their books. In fact, Obama is the biggest spender in US history, not only in amount by by growth per year. Like Clinton who raided SS to fake a surplus while in fact building massive debt, Obama is doing it though the FED-R it would seem.

80 billion a month from the FED-R to bankers to make the markers look good... Obama gets the credit of a booming market but not the accountability of how that false market/boom was created, as per always with Obama...

 

[Avorysuds]

Um, they own $2 Trillion worth in US Securities. That's actually a financial asset...

FRB: H.4.1 Release--Factors Affecting Reserve Balances--August 15, 2013

Unless the debt can't be paid... Then it's a gamble on debt being paid back by US tax payers most of whom don't want to pay the bill. Tax payers didn't even create the debt, politicians did by creating unconstitutional programs like SS, medicare and many other welfare programs that have sunk this country.

 

[oldfart]

How would that work? I'm not sure it's possible to have a debt crisis in your own currency; ....”[A] government cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit.” - Alan Greenspan

Correct. It isn't possible.

 

[oldfart]

Um, they own $2 Trillion worth in US Securities. That's actually a financial asset...

FRB: H.4.1 Release--Factors Affecting Reserve Balances--August 15, 2013

Unless the debt can't be paid... Then it's a gamble on debt being paid back by US tax payers most of whom don't want to pay the bill. Tax payers didn't even create the debt, politicians did by creating unconstitutional programs like SS, medicare and many other welfare programs that have sunk this country.

Well, the US Treasury pays interest on that $2 trillion of securities to the Fed, and what does the Fed do with it? Transfer all net gain to the US Treasury. Works for me.

If the Fed decided to cancel 90% of that $2 trillion, there would be virtually no economic impact. You do have to leave enough to conduct OMO with though.

And why do you think Social Security is involved? The trust funds hold special issue Treasuries that the Fed cannot buy in OMO. At least get your facts straight.

No, I have it on reliable authority that every dime of that $2 trillion was spent on B-2 bombers and aircraft carriers specially ordered by Ronald Reagan personally, which is why they put his name on one. [/tongue in cheek]

 

[AmazonTania]

There is a possibility that the Fed will tell the Treasury that their debt is forgiven, which will ultimately be an admission that they've created inflation which can never be undone.

 

[mudwhistle]

That's a little misleading. The Privately Owned Federal Reserve has 2 Trillion worth of debt on their balance sheet. That doesn't mean it's their debt, it means it's the Tax Payers Debt.

The Fed printed all that money to give low interest rates to Banks that play the Stock Market AND used it to buy as much Distressed Mortgaged Properties they could, which in America is most everything.

So yeah, they ran the Credit Card up, but they're not on the hook to pay it off. The American Taxpayers are.

Pretty good deal if you can get it huh?

That's pretty much what most of the debt is anyway. Whatever the federal government has borrowed.

 

[dilloduck]

There is a possibility that the Fed will tell the Treasury that their debt is forgiven, which will ultimately be an admission that they've created inflation which can never be undone.

Whether they admit it or not isn't that exactly what they have done ?

 

[AmazonTania]

There is a possibility that the Fed will tell the Treasury that their debt is forgiven, which will ultimately be an admission that they've created inflation which can never be undone.

Whether they admit it or not isn't that exactly what they have done ?

Technically, yes. They've expanded the money supply, which is inflation. The degree in which inflation exist will always be debatable.

 

[Rshermr]

Um, they own $2 Trillion worth in US Securities. That's actually a financial asset...

FRB: H.4.1 Release--Factors Affecting Reserve Balances--August 15, 2013

Unless the debt can't be paid... Then it's a gamble on debt being paid back by US tax payers most of whom don't want to pay the bill. Tax payers didn't even create the debt, politicians did by creating unconstitutional programs like SS, medicare and many other welfare programs that have sunk this country.

Well, the US Treasury pays interest on that $2 trillion of securities to the Fed, and what does the Fed do with it? Transfer all net gain to the US Treasury. Works for me.

If the Fed decided to cancel 90% of that $2 trillion, there would be virtually no economic impact. You do have to leave enough to conduct OMO with though.

And why do you think Social Security is involved? The trust funds hold special issue Treasuries that the Fed cannot buy in OMO. At least get your facts straight.

No, I have it on reliable authority that every dime of that $2 trillion was spent on B-2 bombers and aircraft carriers specially ordered by Ronald Reagan personally, which is why they put his name on one. [/tongue in cheek]

Great post, except for that final "tongue in cheek" comment. I am sure it was true.