I read an article(s), (http://silveraxis.com/todayinsilver/ , http://www.safehaven.com/article-11453.htm) that claims the Fed is bankrupt and was nationalized by the treasury on September 17th.
What are your thoughts about this article and its conclusions?
The whole US banking system is bankrupt.
Haha, That is not what I am talking about. I know that anyone practicing fractional reserve lending is inherently bankrupt. Read the article please.
That is very surprising. I wish that were true. That means no more interest payment on the $850 Bilion bailout loan.... That would save a lot of money...
Most of the Alternate News media has not yet covered it, so it must not really be true... Wait and watch...
I have actually been following this. I couldn't say the FED is bankrupt. I'm not sure that can happen. But yes - it's back is up against the wall, and the helicopter has begun to dump money on the streets.
The latest numbers are only the tip of the iceberg. AT LEAST the next observation (early october) will also show monumental increases. Beyond that, who knows, but it appears the FED, Treasury, and Congress are ready to spend exponentially larger amounts that they don't have.
When this will actually factor in the market is beyond me. But this indicates the total money suppy could potentially double in less than a year or two. That's serious hyperinflation territory.
...stock up on gold/silver...
Check my blog, if you're a loser
Am I missing something? Can't the Fed just print more money?
Political Atheists Blog
kaju - read the first article which deals with this. the FED is effectively limited by the collateral which it can monetize (not a huge limit). He has a link to a paper that explains why strict additions to the money supply have been avoided.
Rather than simply monetizing the illiquid debt of the bad banks, it's special facilities, such as term auction credit, have been used to exchange the FED's liquid treasury debt with the banks's illiquid debts. "sterilized" is the word he uses.
The article points out that this practice has recently seemed to vanish (it's time was limited because the FED's balance sheet was quickly approaching the point where it would have run out of Treasury debt). Now they are directly trying to add to the money supply by increasing bank reserves.
Check this:
And that brings us to the strong possibility that the new commercial paper facility will not be financed using Treasury auctions under the Treasury SFP after all but will rather be monetized with commercial paper serving as collateral. By doing so, the Fed would be injecting liquidity at the Monetary Base level in the form of Reserve Balances
I wrote last Thursday's post about the Federal Reserve's bankruptcy right before the new Factors Affecting Reserve Balances report came out with data as of October 1, which confirmed my statement that the Federal Reserve is a dead man walking. The Reserve Balances report supports what Ed Bugos and several of my readers pointed out on Friday: a massive jump in the Adjusted Monetary Base during the second half of September.
=====================================================
napster
Flat Fee MLS
The fed doesn't go bankrupt until it runs out of paper.
Not yet.............they will first bankrupt the whole world............then they will be in trouble.
I didn't want to sign up and immediately start a new thread, so I hope nobody minds this post here.
One argument I have not heard against the Fed is that it's a dictatorship. If you think about it, the Fed is like a tribal organization. Ben Bernanke is the chief. Greenspan was the chief before him. And the chiefs are surrounded by a council of elders - the governors of the different Fed branches. And they answer to nobody. Once appointed, they are unaccountable for 10 years, yet they hold the power to destroy our economy in our hands.Out here in the self-governing world, congress passed the TARP program and is debating Obama's stimulus boondoggle. But during the same time, Bernanke created program after program after program, manipulating our economy with no oversight from the people. Bernanke has refused FOIA requests and operates in complete opaqueness. He operates as a dictator in a shadow government. Nothing could be farther from the American ideal of freedom and self-government.And the Fed has no power to improve our economy, only to harm it. Suppose Fed policies were as effective as possible. That would mean that the Fed was doing exactly what the free market would be doing without it. The Fed would have set interest rates exactly where the free market would set them and the money supply would be exactly where the free market would have it. That's as good as it gets because the free market is best possible system at determining those things.But the moment the fed deviates from free market conditions, it's harming our economy. It's perverting our economy from its most efficient state to a less efficient state. No amount of good intentions can change this fact. And people are imperfect, so the Fed will never be as good as a free market. The only conclusion is that the Fed is always harming our economy.
Ludwig von Mises Institute | 518 West Magnolia Avenue | Auburn, Alabama 36832-4528
Phone: 334.321.2100 · Fax: 334.321.2119
[email protected] | webmaster | AOL-IM MainMises
Mises.org sitemap