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JimW

Headline- "Fed posts record $52B profit for 2009 with $46B going to Treasury "

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View Posthttp://www.usatoday.com/money/econom...-profits_N.htm

 

 

Sorry, that headline just made me giggle. They printed the money and bought $1.3 trillion in garbage assets. These apparently have paid them better than most so far to hide it off market somewhere.

 

They didnt print money. They borrowed money. They sold treasuries. Taking out a loan and paying it back with interest is not printing money out of thin air.

 

 

If the money was just printed, they wouldnt have sold treasuries....

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View PostThey didnt print money. They borrowed money. They sold treasuries. Taking out a loan and paying it back with interest is not printing money out of thin air.

 

If the money was just printed, they wouldnt have sold treasuries....

 

Incorrect. The Federal Reserve cannot issue bonds nor can it print money.

 

Treasury Bonds can only be sold to fund the national debt.

 

The Federal Reserve can provide liquidity to the banks by buying bonds. Usually it done short term via Repurchase Agreements (aka Repos). They can also remove money from the system by Reverse Agreements, which is basically selling them existing bonds for a period of time. After which time the bonds and money are returned.

 

In the case of these toxic mortgage bonds that the Fed bought, these were done outright, not on term agreements. It did add money to the system but only in book entry form. They don't print it.

 

Most people expected that the Fed would make good returns on those bonds.

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Most people expected that the Fed would make good returns on those bonds.

 

 

Until they have to sell them to reduce money supply.

 

 

Sorry I said printed money. Increasing the supply of money although exisiting only as a book entry just doesn't have the same pizzazz.

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View PostUntil they have to sell them to reduce money supply.

 

 

Sorry I said printed money. Increasing the supply of money although exisiting only as a book entry just doesn't have the same pizzazz.

 

Got it highfive.gif

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Guess they forgot to mention they lost their asses on GM, Amtrak, Medicare, the EPA, Food Stamps, Section 8, Housing, Dept of Education, Dept of Interior, Dept of Defense, Department of Redundancy Department, Congress Travel Department........................................ .................................................. .............

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Don't forget the Post Office. They come begging for more cash every year or two.

The model that Obama has fshioned national healthcare after.

Am I dreaming all of this (nightmare, really).

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View PostThey didnt print money. They borrowed money. They sold treasuries. Taking out a loan and paying it back with interest is not printing money out of thin air.

 

If the money was just printed, they wouldnt have sold treasuries....

 

 

they money alluded to is interest on the tarp funds

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View PostThey didnt print money. They borrowed money. They sold treasuries. Taking out a loan and paying it back with interest is not printing money out of thin air.

 

If the money was just printed, they wouldnt have sold treasuries....

 

 

 

Wow...you still don't get it...amazing

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Example #1: Treasury prints bonds....the fed buys the bonds....money out of thin air .... aka quantitative easing

 

Quantitative easing is sometimes described as 'printing money', although the central bank actually creates it electronically 'out of nothing' by increasing the credit in its own bank account

 

 

Example #2: The Us Government lends money at absurdley low interest rates, e.g. 0.25% to large "too big to fail," banks and banks formerly known as investment banking firms (see: Goldman, MS etc) the banks take the newly lent money and buy US Bonds that pay a higher interest , eg 3 percent , rate than what they borrowed the money from the Us Govt they then later collect the interest and pay back the original loan ...this is known as the carry trade......more money from thin air.....more money for Wall Street...the banks do not borrow the money to get the system flowing again they borrow the money to improve their balance sheets and NOT lend it, as they see too much risk in lending to small businesses that are about to get HAMMERED FROM LIBERAL ANTIBUSINESS DEMOCRATS....so rather than lose their shirts again, they simply do what is safe and enjoy HUGE bonuses....one way or another these bankers get HUGE BONUSES, which ARE NOT the problem (the bonuses help local governments like NY State and NY CIty collect local tax revenue) ....the problem isthe anti-business environment fostered and encouraged by the DEMS.

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View Post....the problem isthe anti-business environment fostered and encouraged by the DEMS.

 

 

you seem willing to completely overlook the fact that the housing crisis was caused by bi-partisan PRO-BUSINESS policies vis a vis the housing industry

 

'twas the bankers and mortgage brokers who got carried away

 

i'll bet you could count all the democratic bankers in this country on one hand, with room for more

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you seem willing to completely overlook the fact that the housing crisis was caused by bi-partisan PRO-BUSINESS policies vis a vis the housing industry

 

And this was made possible by....

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i'll bet you could count all the democratic bankers in this country on one hand, with room for more
headscratch.gif

 

Funny - I work on Wall St - I could probbaly list a few hundred Dems that were trading mortgage backed securities

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