Should the Federal Reserve be abolished?

[itfitzme]

http://www.sanders.senate.gov/imo/media/doc/GAO Fed Investigation.pdf

page 144 Only after a Supreme Court Ruling to force disclosure. Yeah, it was all about TARP.....the same as pigs flying............

Uh, I'm sure you think there is some point you're making..

Todd asked for some data on the Trillions so I posted the GAO report on the back door loans after the crash which totaled 16.1 Trillion Dollars. The Fed refused to disclose this data and it took a Supreme Court Ruling to force disclosure.

All the Govt and the Media talked about was TARP. Then you hear them saying, look the loans on TARP are paid off. Which is all BS as they took FIAT Currency out the back door of the Federal Reserve and then paid off the BS of TARP.

Why wasn't that in the news showing the actual depth of the Too Big To Fail Bailout..............................

Other articles were to show how they are buying the bonds through places like Belgium.

They didn't show the explosion of Derivatives after the Graham Leahy Act decided that the too big to fail would be self regulated. They didn't show the mountain of Derivatives created in 6 years as a result, and then imploded.

Face it. They opened up pandora's box in 2000 and the banks fucked the world by flooding it with Fiat currency, aka Derivative dept to the next damn universe. And the bail outs including the immediate loans, with the QE's are at a minimum of 22 TRILLION NOW.

http://www.sanders.senate.gov/imo/media/doc/GAO Fed Investigation.pdf

page 144 Only after a Supreme Court Ruling to force disclosure. Yeah, it was all about TARP.....the same as pigs flying............

Uh, I'm sure you think there is some point you're making..

Todd asked for some data on the Trillions so I posted the GAO report on the back door loans after the crash which totaled 16.1 Trillion Dollars. The Fed refused to disclose this data and it took a Supreme Court Ruling to force disclosure.

All the Govt and the Media talked about was TARP. Then you hear them saying, look the loans on TARP are paid off. Which is all BS as they took FIAT Currency out the back door of the Federal Reserve and then paid off the BS of TARP.

Why wasn't that in the news showing the actual depth of the Too Big To Fail Bailout..............................

Other articles were to show how they are buying the bonds through places like Belgium.

They didn't show the explosion of Derivatives after the Graham Leahy Act decided that the too big to fail would be self regulated. They didn't show the mountain of Derivatives created in 6 years as a result, and then imploded.

Face it. They opened up pandora's box in 2000 and the banks fucked the world by flooding it with Fiat currency, aka Derivative dept to the next damn universe. And the bail outs including the immediate loans, with the QE's are at a minimum of 22 TRILLION NOW.

Well, the one that doesn't take two days to read makes no point what so ever than to point out that Belgium, or at least some company in Belgium, purchased Treasury bills. Oh, it's a mystery. So?

And it repeats a rhetorical question as if that makes some point. Yeah, there is a shitload of money moving around the financial markets., so? Compare inflation adjusted per capita growth of M1 to M2. It's a shitload of money growth into the financial markets while the per cap real dollar has been pretty much just flat.

Hey, I'm no fan of the capital markets. Sure, at a basic level the help move capital to where it is useful. And where it is direct investment in capitol equipment, it makes sense. On the other hand, the majority of the capitol markets are just so much smoke and mirrors, money shuffling back and forth based on the fad of the day.

But "What's going on in Belgium?" isn't an answer, it's a rhetorical question.

I'll get back to ya next week on the other but so far, a quick skim suggested it's point was that there was room for improvement in how the bank bailouts went.

Yeah, they are really big numbers, except really big is relative.

 

[Votto]

Should the Federal Reserve be abolished?

The FED (Federal Reserve Bank) is a Commercial Privately Owned Bank

WHY THE FED SHOULD BE ABOLISHED

1. The US Congress has the option to buy back the FED at $450 millions (per Congressional Records). When the Congress does this, it will own back the billions of US Government Bonds held by the FED. The US Government will actually PROFIT by buying back the FED! Also, the US government no longer has to pay interests to the FED owners on those bonds.

2. Through their ownerships in the FED, FOREIGN POWERS CAN and WILL influence the US economy. By controlling our interest rates and money supply, they can actually create economic disaster in the US , should the US disagree with them.

3. Although the FED directors must be confirmed by the Senate, the awesome lobbying power of the FED owners makes this process meaningless. The owners of the FED can and will put whoever they wish in the position.

4. Abolishing the FED will lead to lower inflation. At this moment, the FED prints as much money as needed to buy the US Government Bonds. Since the FED prints this MONEY out of THIN AIR, this leads to an INCREASE of MONEY SUPPLY, WITHOUT increase in GOODS/SERVICES. This, as all of us know it, leads to INFLATION.

If the general public buy those bonds with money that they EARNED by providing GOODS/SERVICES, the money supply level is contant in relation to the goods/services level. Thus, there is no inflationary pressure from selling these bonds. 5. Abolishing the FED will reduce the national debt level. By buying back the FED at $450 millions, the US Government will buy back the billions of dollars of bonds held by the FED. Thus, the net effect is a reduction in national debt. After buying back the FED, the US Government does not have to pay interest on those bonds it buys back, further reducing the national debt.

6. Abolishing the FED will lead to eventual balance budget. Today, even if the US Economy only grows by a meager 2% per year, the US Government should be able to put 2% of US-GDP dollars into circulation WITHOUT INFLATION.

Consider, if the goods/services grow by 2% and the money supply grows by 2%, the ratio of goods/services vs. money supply remains constant. Thus, no inflation is created.

The government can use this extra money supply to fund its project without raising taxes.
As long as the government does not print money more than the goods and services available in the US , there will be no inflationary pressures.
This had in fact been done with Executive Order 11110 of President Kennedy. Kennedy ordered the Treasury Dept. to print a US GOVERNMENT NOTES (vs. FEDERAL RESERVE NOTES). In effect, Kennedy bypassed the FED by making the Treasury Department printed REAL US MONEY, instead of selling bonds to the FED for almost free.

The sad fact is, the US Government does not do this anymore. Instead, the US Government sell bonds to the FED, which buys those bonds using money they don't earn. Thus, the US Government must now pay interest on those money that it "borrows" from the FED.

7. By point (6) above, the US Government can actually reduce taxes on everybody since it has more interest free money to spent in the amount equal to the growth of the US GDP. KEEP IN MIND, THIS MONEY WILL NOT CAUSE INFLATION, since the money is printed along with the growth of the goods and services.

What you can do to save the United States of AmericaThe FED should either be AUDITTED every year, or be abolished. I have done my part providing this information. It is up to you to decide the future of the US economy. Please do the followings:

Asking if the Fed should be abolished is like asking if the SS or KGB should be abolished.

Sure, you and whose army?

Just ask JFK if a President should ever hint at abolishing it.

 

[Toddsterpatriot]

Todd asked for some data on the Trillions so I posted the GAO report on the back door loans after the crash which totaled 16.1 Trillion Dollars. The Fed refused to disclose this data and it took a Supreme Court Ruling to force disclosure.

All the Govt and the Media talked about was TARP. Then you hear them saying, look the loans on TARP are paid off. Which is all BS as they took FIAT Currency out the back door of the Federal Reserve and then paid off the BS of TARP.

Why wasn't that in the news showing the actual depth of the Too Big To Fail Bailout..............................

Other articles were to show how they are buying the bonds through places like Belgium.

They didn't show the explosion of Derivatives after the Graham Leahy Act decided that the too big to fail would be self regulated. They didn't show the mountain of Derivatives created in 6 years as a result, and then imploded.

Face it. They opened up pandora's box in 2000 and the banks fucked the world by flooding it with Fiat currency, aka Derivative dept to the next damn universe. And the bail outs including the immediate loans, with the QE's are at a minimum of 22 TRILLION NOW.

Then you hear them saying, look the loans on TARP are paid off.

The TARP loans to banks were paid off. The Treasury made billions.

they took FIAT Currency out the back door of the Federal Reserve and then paid off the BS of TARP.

The banks paid back the loans from the Fed, even before they paid back TARP.

flooding it with Fiat currency, aka Derivative dept to the next damn universe.

Why are you confusing currency with derivatives? Do you know the difference?

And how much currency was issued to do this. How much more in circulation.........They borrowed from the Back door, and paid off at the Treasury. They borrowed at roughly 0% to a .25 percent rate........Have they paid those loans back. The 16.1 Trillion right after the crash. Show me that data and I'll be impressed, and if you do please show me that they didn't get another loan to pay that as well.

What happens when we increase or currency supply...........Nothing or do we lose value on the purchasing power of our currency.................

I'm not going to post the graph, but since we came off the Gold Standard under Nixon, how has our currency fared on purchasing power or value.............We are destroying that value.

Do I know the deference.............Yes I do, but how did all those derivative debts come from ...........thin air with no means to pay for it. Borrowing to pay margin in the Casino of the Markets. Derivatives are DEBT. Currency creation by borrowing large sums is DEBT.
And that Margin debt was higher than 2000 and now we are setting new highs in 2014.

Either way, you know damned well the Fed is manipulating the system and it caused massive failures. In 2000, Margin debt hit record levels, and stocks went down......Same as the Great Recession and implosion of 2008..........
Margin Debt and betting with nothing to back it up helped cause the Great Depression. As I've said on other threads it's a Grand Illusion.

And how much currency was issued to do this.

The banks didn't issue any currency to pay back their TARP loans. You know why?
Banks aren't allowed to issue currency.

They borrowed from the Back door, and paid off at the Treasury.

Nope. They paid back the Fed before they paid back TARP.

They borrowed at roughly 0% to a .25 percent rate........Have they paid those loans back.

The discount rate dropped from 1.25% to 0.5% in December 2008. They couldn't borrow at 0%. And yes, all those overnight loans were paid back long ago.

The 16.1 Trillion right after the crash.

There was never that much loaned out at one time. Not even close.

Show me that data and I'll be impressed

FRB: H.4.1 Release--Factors Affecting Reserve Balances--July 3, 2014

Look at PRIMARY CREDIT

Do I know the deference.............Yes I do, but how did all those derivative debts come from .

What is a "derivative debt"?

 

[eagle1462010]

Then you hear them saying, look the loans on TARP are paid off.

The TARP loans to banks were paid off. The Treasury made billions.

they took FIAT Currency out the back door of the Federal Reserve and then paid off the BS of TARP.

The banks paid back the loans from the Fed, even before they paid back TARP.

flooding it with Fiat currency, aka Derivative dept to the next damn universe.

Why are you confusing currency with derivatives? Do you know the difference?

And how much currency was issued to do this. How much more in circulation.........They borrowed from the Back door, and paid off at the Treasury. They borrowed at roughly 0% to a .25 percent rate........Have they paid those loans back. The 16.1 Trillion right after the crash. Show me that data and I'll be impressed, and if you do please show me that they didn't get another loan to pay that as well.

What happens when we increase or currency supply...........Nothing or do we lose value on the purchasing power of our currency.................

I'm not going to post the graph, but since we came off the Gold Standard under Nixon, how has our currency fared on purchasing power or value.............We are destroying that value.

Do I know the deference.............Yes I do, but how did all those derivative debts come from ...........thin air with no means to pay for it. Borrowing to pay margin in the Casino of the Markets. Derivatives are DEBT. Currency creation by borrowing large sums is DEBT.
And that Margin debt was higher than 2000 and now we are setting new highs in 2014.

Either way, you know damned well the Fed is manipulating the system and it caused massive failures. In 2000, Margin debt hit record levels, and stocks went down......Same as the Great Recession and implosion of 2008..........
Margin Debt and betting with nothing to back it up helped cause the Great Depression. As I've said on other threads it's a Grand Illusion.

And how much currency was issued to do this.

The banks didn't issue any currency to pay back their TARP loans. You know why?
Banks aren't allowed to issue currency.

They borrowed from the Back door, and paid off at the Treasury.

Nope. They paid back the Fed before they paid back TARP.

They borrowed at roughly 0% to a .25 percent rate........Have they paid those loans back.

The discount rate dropped from 1.25% to 0.5% in December 2008. They couldn't borrow at 0%. And yes, all those overnight loans were paid back long ago.

The 16.1 Trillion right after the crash.

There was never that much loaned out at one time. Not even close.

Show me that data and I'll be impressed

FRB: H.4.1 Release--Factors Affecting Reserve Balances--July 3, 2014

Look at PRIMARY CREDIT

Do I know the deference.............Yes I do, but how did all those derivative debts come from .

What is a "derivative debt"?

Banks aren't allowed to issue currency.......

They create currency via Fractional banking.

That large of sum wasn't issued out. go to page 144 of the GAO report. It's spells it out for you. Required by the Freedom of Information Act via a Supreme Court Ruling. I can post that ruling for you if I must.

 

[eagle1462010]

Bloomberg L.P. v. Board of Governors of the Federal Reserve System - Wikipedia, the free encyclopedia

Bloomberg L.P. v. Board of Governors of the Federal Reserve System, 1:2008cv09595,[1][2] was a lawsuit by Bloomberg L.P. against the Board of Governors of the Federal Reserve System for disclosure of information about banks and other financial institutions that had borrowed from the Federal Reserve discount window during the United States housing bubble and ensuing financial crisis.
During the financial crisis, the U.S. Congress, Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation, developed the Emergency Economic Stabilization Act of 2008 to shore up financial institutions by purchasing mortgage-backed securities, and loaning cash directly to banks and bank holding companies. Unfortunately, many of the distressed banks would not come forward to accept such loans publicly for fear of a bank run and loss of investors. As a result, the Federal Reserve developed a program for those banks and financial institutions to access the discount window which is not normally subject to publication.
As part of investigative reporting conducted by journalists Mark Pittman and Bob Ivry, Bloomberg L.P. was denied a request to the Federal Reserve, under the Freedom of Information Act, for disclosure of borrower banks and their collateral. Subsequently, a lawsuit was filed with United States District Court for the Southern District of New York on November 7, 2008 in order to force disclosure.
On August 24, 2009, Chief U.S. District Judge Loretta Preska ruled that the Federal Reserve had until September 14 to disclose the information. Later, on August 27, the court agreed to the Fed's request to delay implementation of a ruling until the Court of Appeals acts on its appeal. It was given until no later than September 30, 2009 to obtain an appeals authorization. The case was successfully appealed to the United States Court of Appeals for the Second Circuit.[3][4]
March 19, 2010, a unanimous three judge panel of the appeals court ruled the Federal Reserve Board must release the documents. May 4, 2010, the Federal Reserve Board and The Clearing House Association L.L.C. appealed for a rehearing however, August 20, 2010, the United States Court of Appeals for the Second Circuit denied both requests.[5][6] August 26, 2010, the Board filed a request to stay the judgement for appeal to the U.S. Supreme Court. On August 26, 2010, the court agreed to delay implementation of the ruling until October 19 so that the Fed may appeal to the Supreme Court.[4][7]

 

[Toddsterpatriot]

Global Derivatives Market at $1,200 Trillion Dollars | Prepare and Prosper

A Clear and Present Danger to the World Economy


The size of the derivatives market is a significant threat to the global economy. It is complex, unregulated, and it ought to be of concern to world leaders. Even the U.S. Treasury can’t bail out banks to the tune of $1.2 quadrillion, or even $600 trillion, if that more conservative number makes better sense.

How big is the risk to the world economy from these derivatives? According to Wilmott, it’s impossible to know unless you understand the details of the derivatives contracts. But since they’re unregulated and likely to remain so, it is hard to gauge the risk.

Another kind of market conduct that makes markets volatile is what Wilmott calls positive and negative feedback loops. These relatively bland-sounding terms mask some really scary behavior for investors who are not clued into it.

Wilmott argues that a positive feedback loop contributed to the 22.6 percent crash in the Dow back in October 1987.

The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in write downs that lead to the collapse of Lehman Brothers in September 2008.

Credit default swaps were largely responsible for bringing down Bear Stearns, AIG, Washington Mutual and other mammoth corporations.

Unexpected changes in interest rates could cause a major bloodbath in interest rate derivatives.

There have not been any reforms or attempts to rein in derivatives. The highly touted Dodd-Frank financial legislation didn’t really change anything to do with derivatives. The fundamental problem is that derivatives trading is hugely profitable for banks and insurance companies. It is a profit source they are not willing to give up easily.

The big banks claim that the huge amounts of derivatives themselves is unimportant because these are only “notional” values, and – after netting – the notional values are deflated to much more modest numbers.

The problem with netting is that it is based on one massively flawed assumption, namely that in an orderly collapse all derivative contracts will be honored by the issuing bank. The best example of how the flaw behind netting almost destroyed the system is AIG. The insurance company was hours away from making trillions of derivative contracts worthless. The U.S. Treasury stepped in with hundreds of billions of dollars to shore up the market.

I bolded Todd's normal response. It's notional...............No big deal.........

Only when they fart and crash economies are they a big deal.

In 2000 the derivatives were only at about 70 Trillion. Naw, derivatives didn't have a dang thing to do with anything. And they are only notional now.........Trade on dude...............

And it crashes again...........coming soon.

I bet $10 on the Cubs game. My "derivative" bet was over $1 billion. Notional was $10.

Am I in trouble if they lose?

The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in write downs that lead to the collapse of Lehman Brothers in September 2008.

Nope. It was the home loans failing, not derivative products tied to home loans.

Credit default swaps were largely responsible for bringing down Bear Stearns, AIG, Washington Mutual and other mammoth corporations.

They had nothing to do with Bear Stearns, Washington Mutual or "other mammoth corporations".

Unexpected changes in interest rates could cause a major bloodbath in interest rate derivatives.

Only if major bloodbath means some banks will make a few billion while at the same time other banks will lose a few billion.

 

[Toddsterpatriot]

The Glass-Steagall Act Explained

2. Separation of Commercial and Investment Banking

As important as the FDIC’s creation was, the term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits. If a bank took deposits, it could not trade in anything other than government bonds; if it underwrote securities or engaged in market-making, it could not take deposits.

The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.

Five provisions of the Banking Act pertained to this separation:

Section 19: Federally chartered banks could not buy or sell securities, unless they were investment securities, government bonds or trades made on behalf of a customer.
Section 5(c): Glass-Steagall would also apply to state-chartered banks.
Section 20: Banks could not be affiliated with firms whose primary purpose was trading securities.
Section 21: If a bank did trade securities, it could not take deposits.
Section 32: Officers and directors of commercial banks (banks part of the Federal Reserve System) were barred from holding advisory positions in companies whose primary purpose was trading securities.

The Banks should have never been let off the leash. They understood clearly why the Great Depression happened and created this to prevent it from happening again. As soon as we let them off the leash they screwed the entire nation.

But it's only NOTIONAL.

The Banks should have never been let off the leash.

Exactly!!! Under Glass Steagall, banks can only own safe stuff, like home mortgages.
If only those limits had been in place in 2008.

 

[Toddsterpatriot]

And how much currency was issued to do this. How much more in circulation.........They borrowed from the Back door, and paid off at the Treasury. They borrowed at roughly 0% to a .25 percent rate........Have they paid those loans back. The 16.1 Trillion right after the crash. Show me that data and I'll be impressed, and if you do please show me that they didn't get another loan to pay that as well.

What happens when we increase or currency supply...........Nothing or do we lose value on the purchasing power of our currency.................

I'm not going to post the graph, but since we came off the Gold Standard under Nixon, how has our currency fared on purchasing power or value.............We are destroying that value.

Do I know the deference.............Yes I do, but how did all those derivative debts come from ...........thin air with no means to pay for it. Borrowing to pay margin in the Casino of the Markets. Derivatives are DEBT. Currency creation by borrowing large sums is DEBT.
And that Margin debt was higher than 2000 and now we are setting new highs in 2014.

Either way, you know damned well the Fed is manipulating the system and it caused massive failures. In 2000, Margin debt hit record levels, and stocks went down......Same as the Great Recession and implosion of 2008..........
Margin Debt and betting with nothing to back it up helped cause the Great Depression. As I've said on other threads it's a Grand Illusion.

And how much currency was issued to do this.

The banks didn't issue any currency to pay back their TARP loans. You know why?
Banks aren't allowed to issue currency.

They borrowed from the Back door, and paid off at the Treasury.

Nope. They paid back the Fed before they paid back TARP.

They borrowed at roughly 0% to a .25 percent rate........Have they paid those loans back.

The discount rate dropped from 1.25% to 0.5% in December 2008. They couldn't borrow at 0%. And yes, all those overnight loans were paid back long ago.

The 16.1 Trillion right after the crash.

There was never that much loaned out at one time. Not even close.

Show me that data and I'll be impressed

FRB: H.4.1 Release--Factors Affecting Reserve Balances--July 3, 2014

Look at PRIMARY CREDIT

Do I know the deference.............Yes I do, but how did all those derivative debts come from .

What is a "derivative debt"?

Banks aren't allowed to issue currency.......

They create currency via Fractional banking.

That large of sum wasn't issued out. go to page 144 of the GAO report. It's spells it out for you. Required by the Freedom of Information Act via a Supreme Court Ruling. I can post that ruling for you if I must.

They create currency via Fractional banking.

No, banks do not create currency.

What is a "derivative debt"?

 

[eagle1462010]

The Glass-Steagall Act Explained

2. Separation of Commercial and Investment Banking

As important as the FDIC’s creation was, the term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits. If a bank took deposits, it could not trade in anything other than government bonds; if it underwrote securities or engaged in market-making, it could not take deposits.

The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.

Five provisions of the Banking Act pertained to this separation:

Section 19: Federally chartered banks could not buy or sell securities, unless they were investment securities, government bonds or trades made on behalf of a customer.
Section 5(c): Glass-Steagall would also apply to state-chartered banks.
Section 20: Banks could not be affiliated with firms whose primary purpose was trading securities.
Section 21: If a bank did trade securities, it could not take deposits.
Section 32: Officers and directors of commercial banks (banks part of the Federal Reserve System) were barred from holding advisory positions in companies whose primary purpose was trading securities.

The Banks should have never been let off the leash. They understood clearly why the Great Depression happened and created this to prevent it from happening again. As soon as we let them off the leash they screwed the entire nation.

But it's only NOTIONAL.

The Banks should have never been let off the leash.

Exactly!!! Under Glass Steagall, banks can only own safe stuff, like home mortgages.
If only those limits had been in place in 2008.

Under Glass Steagall they couldn't drive up the notional values because they weren't allowed to play with other people's money, or Fiat Currency.

 

[Toddsterpatriot]

The Banks should have never been let off the leash. They understood clearly why the Great Depression happened and created this to prevent it from happening again. As soon as we let them off the leash they screwed the entire nation.

But it's only NOTIONAL.

The Banks should have never been let off the leash.

Exactly!!! Under Glass Steagall, banks can only own safe stuff, like home mortgages.
If only those limits had been in place in 2008.

Under Glass Steagall they couldn't drive up the notional values because they weren't allowed to play with other people's money, or Fiat Currency.

Under Glass Steagall they could write mortgages. If by other people's money, you mean deposits, of course they could use deposits to write mortgages.
Glass Steagall has nothing to do with Fiat Currency.
You're making even less sense as the thread goes on.

 

[itfitzme]

The Glass-Steagall Act Explained

2. Separation of Commercial and Investment Banking

As important as the FDIC’s creations was, the term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits. If a bank took deposits, it could not trade in anything other than government bonds; if it underwrote securities or engaged in market-making, it could not take deposits.

The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.

Five provisions of the Banking Act pertained to this separation:

Section 19: Federally chartered banks could not buy or sell securities, unless they were investment securities, government bonds or trades made on behalf of a customer.
Section 5(c): Glass-Steagall would also apply to state-chartered banks.
Section 20: Banks could not be affiliated with firms whose primary purpose was trading securities.
Section 21: If a bank did trade securities, it could not take deposits.
Section 32: Officers and directors of commercial banks (banks part of the Federal Reserve System) were barred from holding advisory positions in companies whose primary purpose was trading securities.

The Banks should have never been let off the leash. They understood clearly why the Great Depression happened and created this to prevent it from happening again. As soon as we let them off the leash they screwed the entire nation.

But it's only NOTIONAL.

The stupidest idea I have heard floated is the privatization of Social Security. Thwnkfully it got no play because 2009 proved it was a bad idea. I was reading some where that pension funds have been historically salivated over by some as qn opportunity to reap big dividends by taking excessive risk with others retirement funds.

I'm in agreement. I was reading "Money , Finance and Banking by Mishkin. It make the point that is just basic in finance, adverse selection and moral hazard. Basically, the people that most want to borrow most are the ones that are the worse risks. And worse yet, once they have gotten their hands on the money, nothing is to stop them from doing what the lender never agreed to.

Seems to me that Money, Finance and Banking 101 makes Glass-Seagal obvious, freshman year stuff.

But t-bills has nothing to do with it. The economy tanked on a speculative bubble in mortgages and mortgage derivatives. They manage to take the most stable of long term investments, property, and turn into the very problem with financial markets, the problem of adverse selection and moral hazard.

 

[eagle1462010]

And how much currency was issued to do this.

The banks didn't issue any currency to pay back their TARP loans. You know why?
Banks aren't allowed to issue currency.

They borrowed from the Back door, and paid off at the Treasury.

Nope. They paid back the Fed before they paid back TARP.

They borrowed at roughly 0% to a .25 percent rate........Have they paid those loans back.

The discount rate dropped from 1.25% to 0.5% in December 2008. They couldn't borrow at 0%. And yes, all those overnight loans were paid back long ago.

The 16.1 Trillion right after the crash.

There was never that much loaned out at one time. Not even close.

Show me that data and I'll be impressed

FRB: H.4.1 Release--Factors Affecting Reserve Balances--July 3, 2014

Look at PRIMARY CREDIT

Do I know the deference.............Yes I do, but how did all those derivative debts come from .

What is a "derivative debt"?

Banks aren't allowed to issue currency.......

They create currency via Fractional banking.

That large of sum wasn't issued out. go to page 144 of the GAO report. It's spells it out for you. Required by the Freedom of Information Act via a Supreme Court Ruling. I can post that ruling for you if I must.

They create currency via Fractional banking.

No, banks do not create currency.

What is a "derivative debt"?

They make loans off of fiction...........Only keeping a fraction in reserve turning buck into 10 bucks.........Hell that's a lot of deer meat.............out of only one deer.

Magically created debt to over 1200 Trillion in some estimates..........worthless paper............with nothing to back up that paper, as there is no standard of value or collateral to back it up.............

In other words it's BS.

 

[Toddsterpatriot]

Banks aren't allowed to issue currency.......

They create currency via Fractional banking.

That large of sum wasn't issued out. go to page 144 of the GAO report. It's spells it out for you. Required by the Freedom of Information Act via a Supreme Court Ruling. I can post that ruling for you if I must.

They create currency via Fractional banking.

No, banks do not create currency.

What is a "derivative debt"?

They make loans off of fiction...........Only keeping a fraction in reserve turning buck into 10 bucks.........Hell that's a lot of deer meat.............out of only one deer.

Magically created debt to over 1200 Trillion in some estimates..........worthless paper............with nothing to back up that paper, as there is no standard of value or collateral to back it up.............

In other words it's BS.

Derivatives are not debt.

In other words it's BS.

Yes, most of your posts have been BS.

 

[eagle1462010]

They create currency via Fractional banking.

No, banks do not create currency.

What is a "derivative debt"?

They make loans off of fiction...........Only keeping a fraction in reserve turning buck into 10 bucks.........Hell that's a lot of deer meat.............out of only one deer.

Magically created debt to over 1200 Trillion in some estimates..........worthless paper............with nothing to back up that paper, as there is no standard of value or collateral to back it up.............

In other words it's BS.

Derivatives are not debt.

In other words it's BS.

Yes, most of your posts have been BS.

Look. Me and you are never going to agree here. EVER..........We've been round and round on this.

The Great Depression was caused by the same shit that hit the fan in 2008. They put a leash on the banks who are Stock Holders in the Reserve. aka Glass Steagall, out of lessons learned from what caused the great depression. Because they Margin'd the hell out of trading and everyone played the markets to the moon. Then it crashed because it was all BS........aka Derivatives and the same stuff that has been causing the recessions and the Great Recession. Bubbles from S and L, Dot com, Y2k, housing. Face it, the banks have been gambling with Fiat currency and Derivatives and when they go bust someone wants their dang money.

If Derivatives aren't a real debt, then why did all these too big to fail types go belly up and have to bailed out...........If it wasn't debt, then it shouldn't have been a problem right. They bundled garbage, and made it look like gold and then pulled the rug out.

That is what the Markets do, and the Fed and our Gov't have allowed this. By allowing them to go unregulated and allowing the banks to speculate their butts off.

The same now, and it will bust. With nothing to back up currency, they will generate money out of thin air to Pluto and they have, and the people of this country and the world will pay when they bust. As always.

 

[eagle1462010]

How the Artificial Boom of 1914-1929 Caused the Great Depression :: The Mises Economics Blog: The Circle Bastiat

The Original Sub-Prime: Wall Street’s 1920s Foreign Bond Mania

As is well known, much economic carnage resulted from the Great Crash of 1929. But what is less well understood is that the great stock market bubble also spawned a parallel boom in foreign bonds—-a specie of Wall Street paper that soon proved to be the sub-prime of its day. Indeed, Bubbles Ben 1.0 triggered a veritable cascade of speculative borrowing that soon spread to the far corners of the globe, including places like municipality of Rio de Janeiro, the Kingdom of Denmark and the free city of Danzig, among countless others.
It seems that the margin debt fueled stock market drove equity prices so high that big American corporations with no needs for cash were impelled to sell bundles of new stock anyway in order to feed the insatiable appetites of retail speculators. They then used the proceeds to buy Wall Street’s high yielding “foreign bonds”, thereby goosing their own reported earnings, levitating their stock prices even higher and causing the cycle to be repeated again and again.

Which is exactly what happened again, and again, and again.

 

[itfitzme]

Here we go, I can copy it..

"The presence of transaction costs in financial markets explains in part why financial intermediaries and indirect finance play such an important role in financial markets (puzzle 3). To understand financial structure more fully, however, we turn to the role of information in financial markets.2 Asymmetric information—one party’s insufficient knowledge about the other party involved in a transaction to make accurate decisions—is an important aspect of financial markets. For example, managers of a corporation know whether they are honest or have better information about how well their business is doing than the stockholders do. The presence of asymmetric information leads to adverse selection and moral hazard problems, which were introduced in Chapter 2. Adverse selection is an asymmetric information problem that occurs before the transaction occurs: Potential bad credit risks are the ones who most actively seek out loans. Thus the parties who are the most likely to produce an undesirable outcome are the ones most likely to want to engage in the transaction. For example, big risk takers or outright crooks might be the most eager to take out a loan because they know that they are unlikely to pay it back. Because adverse selection increases the chances that a loan might be made to a bad credit risk, lenders might decide not to make any loans, even though there are good credit risks in the marketplace. Moral hazard arises after the transaction occurs: The lender runs the risk that the borrower will engage in activities that are undesirable from the lender’s point of view because they make it less likely that the loan will be paid back. For example, once borrowers have obtained a loan, they may take on big risks (which have possible high returns but also run a greater risk of default) because they are playing with someone else’s money. Because moral hazard lowers the probability that the loan will be repaid, lenders may decide that they would rather not make a loan."

 

[itfitzme]

Banks aren't allowed to issue currency.......

They create currency via Fractional banking.

That large of sum wasn't issued out. go to page 144 of the GAO report. It's spells it out for you. Required by the Freedom of Information Act via a Supreme Court Ruling. I can post that ruling for you if I must.

They create currency via Fractional banking.

No, banks do not create currency.

What is a "derivative debt"?

They make loans off of fiction...........Only keeping a fraction in reserve turning buck into 10 bucks.........Hell that's a lot of deer meat.............out of only one deer.

Magically created debt to over 1200 Trillion in some estimates..........worthless paper............with nothing to back up that paper, as there is no standard of value or collateral to back it up.............

In other words it's BS.

Guys, of course banks create money out of nothing but debt. They always have. As far a actual currency is concerned, they don't print it, they buy it then they hand it out to the people who are due money from the guy that borrowed from them in the first place.

 

[eagle1462010]

Why Timid Reforms of Central Banks Won?t Work - Frank Hollenbeck - Mises Daily

Only the abolition of this institution will begin to set our economic system on the right path.

The central bank should never have been created as a “lender of last resort,” which may sound like a good or beneficial thing, but it is just the opposite.

Having a “lender of last resort” simply ensures that banks win at everyone else’s expense. With such a system in place, banks are more willing to leverage their deposits (commit more fraud) and increase the riskiness of their lending. If a person with a gambling problem has a rich uncle ready to bail him out, is he more or less likely to get into trouble by taking bigger and riskier bets?

By taking away some of the risks of a bank run, the central bank also took away the fear that supported sound lending practices. The fear of bank runs is, of course, a beneficial aspect of bank runs, because bank runs prune out the deadwood in the banking system. When we use central banks to ensure that some banks are too big to fail, we have seriously distorted the profit and loss aspect of the banking system, and consequently, much of the capitalist system.

Some economists claim that the Fed’s dual mandate was a mistake and minor reforms (such as limiting the mandate to inflation) could set monetary policy on the right path. Americans only have to look across the pond to Europe to see that such reform would simply set monetary policy on a different wrong path.

 

[Toddsterpatriot]

They make loans off of fiction...........Only keeping a fraction in reserve turning buck into 10 bucks.........Hell that's a lot of deer meat.............out of only one deer.

Magically created debt to over 1200 Trillion in some estimates..........worthless paper............with nothing to back up that paper, as there is no standard of value or collateral to back it up.............

In other words it's BS.

Derivatives are not debt.

In other words it's BS.

Yes, most of your posts have been BS.

Look. Me and you are never going to agree here. EVER..........We've been round and round on this.

The Great Depression was caused by the same shit that hit the fan in 2008. They put a leash on the banks who are Stock Holders in the Reserve. aka Glass Steagall, out of lessons learned from what caused the great depression. Because they Margin'd the hell out of trading and everyone played the markets to the moon. Then it crashed because it was all BS........aka Derivatives and the same stuff that has been causing the recessions and the Great Recession. Bubbles from S and L, Dot com, Y2k, housing. Face it, the banks have been gambling with Fiat currency and Derivatives and when they go bust someone wants their dang money.

If Derivatives aren't a real debt, then why did all these too big to fail types go belly up and have to bailed out...........If it wasn't debt, then it shouldn't have been a problem right. They bundled garbage, and made it look like gold and then pulled the rug out.

That is what the Markets do, and the Fed and our Gov't have allowed this. By allowing them to go unregulated and allowing the banks to speculate their butts off.

The same now, and it will bust. With nothing to back up currency, they will generate money out of thin air to Pluto and they have, and the people of this country and the world will pay when they bust. As always.

That is what the Markets do, and the Fed and our Gov't have allowed this.

Yes, the Fed and our Gov't have allowed banks to write home mortgages, even under Glass Steagall.

Face it, the banks have been gambling with Fiat currency and Derivatives and when they go bust someone wants their dang money.

Banks gambled with gold and silver currency back in the good old days. So?

If Derivatives aren't a real debt, then why did all these too big to fail types go belly up and have to bailed out

Because they owned mortgages. Lots of mortgages. Mortgages that were allowed, even under Glass Steagall.

If it wasn't debt, then it shouldn't have been a problem right.

Derivatives weren't a problem, right.
Mortgages were the problem, right.

They bundled garbage, and made it look like gold and then pulled the rug out.

Yes, those mortgage bonds were bad. Those were bonds, not derivatives.

Look. Me and you are never going to agree here.

Obviously. Why would I agree with your inaccurate claims?

 

[eagle1462010]

Why Central Bank Stimulus Cannot Bring Economic Recovery - Patrick Barron - Mises Daily

Conclusion

The governments and central banks of the world are engaged in a futile effort to stimulate economic recovery through an expansion of fiat money credit. They will fail due to their ignorance or purposeful blindness to Say’s Law that tells us that money is the agent for exchanging goods that must already exist. New fiat money cannot conjure goods out of thin air, the way central banks conjure money out of thin air. This violation of Say’s Law is reflected in loan losses, which cannot be prevented by any array of regulation or higher capital requirements. In fact rather than stimulate the economy to greater output, bank credit expansion causes capital destruction and a lower standard of living in the future than would have been the case otherwise. Governments and central bankers should concentrate on restoring economic freedom and sound money respectively. This means abandoning market interventions of all kinds, declaring unilateral free trade, cutting wasteful spending, and subjecting money to normal commercial law, which would recognize that fiat money expansion by either the central bank or commercial banks is nothing more than outright fraud. The role of government would revert to its primary, liberal purpose of protecting life, liberty, and property and little more.