Dominionist Governor Rick Perry Acknowledges Abuse of Power Allowing Austin to Secede from Texas

[Gary Anderson]

I understand what you are saying, but the churn and the bubble was orchestrated by the lenders not the borrower. And it was against the law, according to eh 1989 FIRREA Act, which Bush never enforced. Don't vote me down on the disagree to deflect blame. Some say the Madoff investors should have know better, but they had no criminal liability, or even civil liability. Same with the housing bubble. The fault was with the creators of the system, the lenders. and their Fed handlers.

I believe you are mixing blame and pointing fingers.

It's the job of the lenders to sell their instruments, high and low risk. It's the job of the government to make sure the instruments are not being mixed, by calling high risk bond investments low risk bond investments.

Congress was in charge of financial institution regulatory enforcement not the president.

Like I said, Bush didn't enforce the law, the 1989 FIRREA Act. It is not the job of the lenders to rape the American people. The FIRREA Act said you cannot loan to someone who cannot reasonably pay it back. All the liar loans for the masses were in violation of that law. But the lenders have a duty to try to follow the law and they did not.

 

[RKMBrown]

I understand what you are saying, but the churn and the bubble was orchestrated by the lenders not the borrower. And it was against the law, according to eh 1989 FIRREA Act, which Bush never enforced. Don't vote me down on the disagree to deflect blame. Some say the Madoff investors should have know better, but they had no criminal liability, or even civil liability. Same with the housing bubble. The fault was with the creators of the system, the lenders. and their Fed handlers.

I believe you are mixing blame and pointing fingers.

It's the job of the lenders to sell their instruments, high and low risk. It's the job of the government to make sure the instruments are not being mixed, by calling high risk bond investments low risk bond investments.

Congress was in charge of financial institution regulatory enforcement not the president.

Like I said, Bush didn't enforce the law, the 1989 FIRREA Act. It is not the job of the lenders to rape the American people. The FIRREA Act said you cannot loan to someone who cannot reasonably pay it back. All the liar loans for the masses were in violation of that law. But the lenders have a duty to try to follow the law and they did not.

Clearly it is the job of the borrower to manage his risk.

Clearly it is the job of the lenders to sell their instruments, high and low risk and manage those.

Still more clearly, it is the job of the government to make sure instruments are not being mixed illegally, by calling high risk bond investments low risk bond investments.

Congress was in charge of financial institution regulatory enforcement not the president.

Still more particularly on NUMEROUS OCCASIONS Barney Frank scoffed at republicans and blocked them from enforcing the regulations. IT WAS BARNEY FRANK A DEMOCRAT who was in charge of the congressional committee charged with said regulatory enforcement. NOT THE PRESIDENT

 

[Toro]

They get 6% which is why they love the Federal Gov't getting into more debt, and they love loaning out Trillions of Green backs.............

They get 6% of Treasury bonds when we are selling the hell out of them when we are borrowing a Trillion a year................

That's how they make a fortune with that low rate............

Then they can now borrow money at .25% and loan it out, even back to the Gov't at a higher interest rate....Guarantees Profits every year.................

But they do it for free if we listen to Todd..........

Me and him have been round and round on this before.

They are Private Stock Holders and aren't Federal.

The do NOT get 6% Treasury bonds. They receive a 6% dividend from equity they are required to purchase if they wish to be apart of the Federal Reserve System. The investment is equity, not debt. A 6% return on equity is well below what they have typically earned, which has usually been between 10% and 20%. Banks generally do not like tying up their equity earning 6%.

 

[Toro]

BTW...............(c) Exemption From Taxation. Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

Should have posted that with the other link.......Profits are TAX FREE FOR THEM................................

Damn. They got a good gig going..............

That's because almost all of their profits are returned back to the Treasury. The dividends that are distributed back to the member banks are taxed IIRC.

 

[Toro]

6 percent of a gazillion dollars is a lot of money.

No it is not. 6% ROE is 6% ROE. It's a low return, not a high return.

 

[Gary Anderson]

I understand what you are saying, but the churn and the bubble was orchestrated by the lenders not the borrower. And it was against the law, according to eh 1989 FIRREA Act, which Bush never enforced. Don't vote me down on the disagree to deflect blame. Some say the Madoff investors should have know better, but they had no criminal liability, or even civil liability. Same with the housing bubble. The fault was with the creators of the system, the lenders. and their Fed handlers.

I believe you are mixing blame and pointing fingers.

It's the job of the lenders to sell their instruments, high and low risk. It's the job of the government to make sure the instruments are not being mixed, by calling high risk bond investments low risk bond investments.

Congress was in charge of financial institution regulatory enforcement not the president.

Like I said, Bush didn't enforce the law, the 1989 FIRREA Act. It is not the job of the lenders to rape the American people. The FIRREA Act said you cannot loan to someone who cannot reasonably pay it back. All the liar loans for the masses were in violation of that law. But the lenders have a duty to try to follow the law and they did not.

Clearly it is the job of the borrower to manage his risk.

Clearly it is the job of the lenders to sell their instruments, high and low risk and manage those.

Still more clearly, it is the job of the government to make sure instruments are not being mixed illegally, by calling high risk bond investments low risk bond investments.

Congress was in charge of financial institution regulatory enforcement not the president.

Still more particularly on NUMEROUS OCCASIONS Barney Frank scoffed at republicans and blocked them from enforcing the regulations. IT WAS BARNEY FRANK A DEMOCRAT who was in charge of the congressional committee charged with said regulatory enforcement. NOT THE PRESIDENT

Congress is not in charge of the banks. The SEC, an administrative agency and the Fed, a private bank, are in charge. You don't understand. The housing bubble was over many nations. The private banks were in on it. And the public CRA was only a blip on the radar. Look at this chart, the most important chart of the housing bubble. Look at what happened Circa 2003 and the private sector took the bubble over and made it worse. This is a Fed chart: Examples of Globalization Housing Bubble s Most Important Chart

Barney Frank didn't make the bulk of the housing bubble, which was not based on public pools of money, as the chart shows. The bulk of the housing bubble was based on private money. And based on bogus AAA ratings.

 

[Gary Anderson]

BTW...............(c) Exemption From Taxation. Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

Should have posted that with the other link.......Profits are TAX FREE FOR THEM................................

Damn. They got a good gig going..............

That's because almost all of their profits are returned back to the Treasury. The dividends that are distributed back to the member banks are taxed IIRC.

Not always. Stephen Abrahams said:

The possibility of suspending remittances and carrying unrealized losses could complicate the Fed’s relationships with the rest of Washington and the public. While remittances help the federal government pay down debt, any shortfall in operating income leading to a suspension of remittances would require the Fed to borrow from Treasury.

And while unrealized losses have no effect on Fed operations because of the way government accounts for them, they would leave a private company technically insolvent. It is unclear how Washington and the public might react to these circumstances and whether the Fed’s independence might be challenged.


Read more: Fed Remittances To Treasury To Decline - Business Insider

And I believe this has happened in the past, with the Fed failing to deliver most of the profit.

 

[Gary Anderson]

And since the Fed is private, it would be insolvent. He is using government speak, but the point of his statement is that the Fed may not be able to return profit to the Treasury.

 

[Gary Anderson]

The Federal Reserve Law does not require the Fed to remit interest to the Treasury! Fed internal law governs how much the Fed remits: Would Congress care if the Federal Reserve lost money A lesson from history The Monkey Cage Ultimately, much uncertainty pervades projections about potential Fed losses in coming years, as suggested recently by Fed economists. And overall, economic growth stemming from the Fed’s unconventional policies would presumably increase tax revenues flowing into Treasury’s coffers, offsetting losses from the Fed. Still, as one former Fed governor said at Friday’s conference, “Politicians have very short memories…They’re going to focus very much on the fact that the Fed is no longer pulling its weight in terms of producing remittances for the federal government.” If Fed profits plummet, lawmakers’ myopic eyesight reduces the chances that Congress will see the big picture.

A commenter said: P.S. — Republicans Ron/Rand Paul did not pioneer the Audit-the-Fed movement in Congress. In 1993, Democratic Chairman of the House Banking Committee, Texan Henry B. Gonzalez, introduced a bill (co-sponsored by Democrat BARNEY FRANK) requiring full independent audits of the Fed’s operations, videotaping the meetings of the Fed’s policy-making committee with detailed minutes released within a week, and selection of the 12 presidents of regional Federal Reserve Banks by the President of the United States rather than by the commercial banks. That bill failed with strong opposition from Alan Greenspan and President Clinton.

 

[Toro]

BTW...............(c) Exemption From Taxation. Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

Should have posted that with the other link.......Profits are TAX FREE FOR THEM................................

Damn. They got a good gig going..............

That's because almost all of their profits are returned back to the Treasury. The dividends that are distributed back to the member banks are taxed IIRC.

Not always. Stephen Abrahams said:

The possibility of suspending remittances and carrying unrealized losses could complicate the Fed’s relationships with the rest of Washington and the public. While remittances help the federal government pay down debt, any shortfall in operating income leading to a suspension of remittances would require the Fed to borrow from Treasury.

And while unrealized losses have no effect on Fed operations because of the way government accounts for them, they would leave a private company technically insolvent. It is unclear how Washington and the public might react to these circumstances and whether the Fed’s independence might be challenged.


Read more: Fed Remittances To Treasury To Decline - Business Insider

And I believe this has happened in the past, with the Fed failing to deliver most of the profit.

The article you reference discusses what would happen if the Fed experienced losses, not profits. By definition, if the Fed has losses, it can't distribute profits because there are none. If the Federal Reserves is insolvent, those losses revert back to the Treasury. It also discusses what would happen if profits in the future were less than the past few years.

The only profits that banks are legally entitled to are the dividends on their stock in their regional Federal Reserve bank. All other profits are swept back to the Treasury.

 

[Toro]

And since the Fed is private, it would be insolvent. He is using government speak, but the point of his statement is that the Fed may not be able to return profit to the Treasury.

The Federal Reserve cannot be insolvent. Losses are covered by the Treasury.

That a truly private bank would be insolvent is irrelevant because the Federal Reserve banks are not truly private banks.

 

[Gary Anderson]

And since the Fed is private, it would be insolvent. He is using government speak, but the point of his statement is that the Fed may not be able to return profit to the Treasury.

The Federal Reserve cannot be insolvent. Losses are covered by the Treasury.

That a truly private bank would be insolvent is irrelevant because the Federal Reserve banks are not truly private banks.

They are as private as the GSE's. Just because the Fed won't let a bank fail doesn't mean it is public.

 

[Gary Anderson]

Why would the Fed be afraid of an audit if it was public?

 

[Toddsterpatriot]

They get 6% which is why they love the Federal Gov't getting into more debt, and they love loaning out Trillions of Green backs.............

They get 6% of Treasury bonds when we are selling the hell out of them when we are borrowing a Trillion a year................

That's how they make a fortune with that low rate............

Then they can now borrow money at .25% and loan it out, even back to the Gov't at a higher interest rate....Guarantees Profits every year.................

But they do it for free if we listen to Todd..........

Me and him have been round and round on this before.

They are Private Stock Holders and aren't Federal.

They get 6% of Treasury bonds when we are selling the hell out of them when we are borrowing a Trillion a year................

The Fed gets 6% interest on all US debt? LOL!

Then they can now borrow money at .25% and loan it out, even back to the Gov't at a higher interest rate....Guarantees Profits every year.................

The Fed can borrow money at 0.25%? Who do they borrow from?

Me and him have been round and round on this before.

Yes, your idiocy is amusing.

 

[Toddsterpatriot]

BTW...............(c) Exemption From Taxation. Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

Should have posted that with the other link.......Profits are TAX FREE FOR THEM................................

Damn. They got a good gig going..............

Profits are TAX FREE FOR THEM

No taxes.....but then they give 95% of their profits to the Treasury. Good gig. LOL!

 

[Toddsterpatriot]

From the above article: The Fed has transferred at least some profit to the Treasury every year since 1934.

That is not all of the profit by any means. The Fed is a private, for profit, bank.

Not all, just 95% plus the last few years. Not very private, for profit behavior.

6 percent of a gazillion dollars is a lot of money. And, the Fed tips the banks. It works for changes in interest rates, etc, which allows the banks to profit even more. The interest rate swap scam is much bigger than the MBS scam that melted the money markets and caused the financial crash of 2008. Banks make money taking the floating low rate of the swap and the fixed higher rate is assumed by the counterparties. The scam is in the fact that if the floating LIBOR exceeds the fixed rates, the banks become insolvent as happened in 2008, and must be bailed out or depositor money has to be taken in a bail in. Or both.

6 percent of a gazillion dollars is a lot of money.

95% of a gazillion is a lot more.

The interest rate swap scam

You never explained your swap theory.
A business borrows $1 million at 5% for 2 years. Fixed rate.
What does this imaginary swap agreement say?

 

[eagle1462010]

Does the Federal Reserve Pay Taxes - Wealth Cycles Blog

Home / Blogs
Does the Fed Pay Taxes?
Nov212011

The WealthCycles Staff
A fairly logical question came into our email box today from Sylvia, who asked:

“Since the Federal Reserve is a Private organization that lends to the USA, do they pay business taxes like all other businesses?”
The Federal Reserve gives all the answers on its website. However their answers are fairly confusing for even the most sophisticated readers.

Officially, the Federal Reserve is not geared to make a profit. From the Fed’s website:

“Federal Reserve Banks are not, however, operated for a profit, and each year they return to the U.S. Treasury all earnings in excess of Federal Reserve operating and other expenses.”
So if the Fed just happens to make a profit, the money is returned to the United States Government. Of course, this is minus the Federal Reserve’s expenses. Also from the Federal Reserve’s website: “(The Federal Reserve) is not ‘owned’ by anyone and is not a private, profit-making institution.”

These answers would make it seem as if the Federal Reserve is a part of the government. However, then we read:

“The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to 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.”
So, to answer Sylvia’s question: From a business point of view, the Federal Reserve does send money to the U.S. government; however, that remittance is not called taxes. The Fed also has non-voting shareholders that receive a 6%dividend that is included in overall expenses before taxes. After the shareholders are paid, the Federal Reserve is ‘taxed’ at 100%.

 

[eagle1462010]

They aren't doing this chit for free. They make money at it or they wouldn't do it at all.

You keep saying they don't pocket the money, and that they give it all back anyway so why charge a 6% fee at all if they are going to give it back. They don't. They keep that profit unless you believe they are so nice that they just return it all and say to the Treasury they are just keeping it safe for the Fed................

So, according to the last site listed they include the payments as an expense of doing business.........So they keep the 6%..........

 

[eagle1462010]

FAQs

Here is the trick. Take, for example, a year like this year in which the government runs a $400 billion dollar deficit. The Treasury Department has to sell $400 billion in US Treasury bills, bonds and notes (government IOUs) to buyers at a rate of interest sufficient to attract their money (and beat the interest competition of other banks’ CDs and other governments’ bills, bonds and notes). To avoid a credit squeeze, the Federal Reserve System Open Market Committee in Washington directs the NY Federal Reserve Bank to purchase roughly 10% of that total (or $40 billion in our example) in existing US bills, bonds, and notes from the current holders. To pay for them it creates the $40 billion out of nothing, merely with keystrokes on a computer. Through more keystrokes, this new $40 billion is deposited into the banks of the various bill, bond, and note sellers, thereby increasing the reserves of those banks by $40 billion.

Pursuant to the Federal Reserve Act of 1913 those banks must keep only 10% of those new deposits on “reserve.” (Because these banks do not have to keep 100% on reserve, this banking system is called a “fractional reserve” system.). So of the $40 billion deposited, the banks must keep 10% on reserve ($4 billion) and may loan out $36 billion (90%), for business loans, mortgages, credit card loans, to purchase government bonds – for whatever borrowers want. Those loans (and payments) are in turn deposited in banks (very few folks put their money in mattresses). So of the $36 billion loaned out and then re-deposited, the banks receiving the new deposits can then loan out 90% or $32.4 billion, retaining 10% or $3.6 billion as reserves.

Banks repeat this redeposit-reloan process, reduced 10% each time, until the 10% reserves retained have reduced the funds available for loan to zero. This cunning process allows the banks to create out of nothing nine times the original $40 billion in new deposits received from the Federal Reserve (the “Fed”), or $360 billion dollars. This total is concealed from the public by the only partial expansion of the loan total at each repetitive step.

We can easily see that even by the second re-loan step mentioned above, the banks have loaned out $68.4 billion based on the original $40 billion deposited. The end result of the process is that the banks receiving the deposits and re-deposits collectively have loaned out $360 billion dollars, which they created out of nothing, and have retained $40 billion in reserve. The Fed created the first $40 billion, the banks $360 billion, equaling $400 billion dollars. Thus the credit markets are stabilized even though the US government has borrowed $400 billion.

But notice, the Fed only created the initial 10% ($40 billion). Privately owned banks created 90% ($360 billion) out of nothing, and loaned it out at interest. At even 6% that is $21.6 billion dollars per year in interest. Some of this profit goes to the private stockholders of the banks. However, the banks conceal much of this vast profit from the public as undistributed or retained earnings. Five banks hold over 50% of all deposits in the United States. This means that in a year with a $400 billion deficit (such as FY 2007-2008), those five banks will receive over 50% of approximately 6% interest on the newly created $360 billion: over $10 billion per year, from now on, for creating money out of nothing. This is profoundly unjust, and dangerous to any government, especially in a country that prides itself on being a democracy.

 

[Toddsterpatriot]

They aren't doing this chit for free. They make money at it or they wouldn't do it at all.

You keep saying they don't pocket the money, and that they give it all back anyway so why charge a 6% fee at all if they are going to give it back. They don't. They keep that profit unless you believe they are so nice that they just return it all and say to the Treasury they are just keeping it safe for the Fed................

So, according to the last site listed they include the payments as an expense of doing business.........So they keep the 6%..........

They aren't doing this chit for free. They make money at it or they wouldn't do it at all.

Does the FBI make a profit? Then why do they do it at all?

so why charge a 6% fee at all if they are going to give it back.

Where do you think the Fed charges a 6% fee?