fed makes huge profit, returns money to treasury...

[cubeless]

this morning's pop quiz is "where did that 'profit' come from?"...

http://www.msnbc.msn.com/id/34816272/ns/business-washington_post

i guess it's a little better than giving the chinese the interest, because it ends up back in our treasury, but it raises the question why we don't just create a closed loop and have the fed buy all the tbills issued if this can be counted as 'profit'...

interesting financial times...

it does directly illuminate how the banks are making a big profit right now, though... although when you can set the rate you want to borrow at and directly influence the rate you can loan at you have even better chance to rake in the green... nice work, bennie...

 

[MotF Bane]

answer: they printed it?

 

[Hacp]

this morning's pop quiz is "where did that 'profit' come from?"...

http://www.msnbc.msn.com/id/34816272/ns/business-washington_post

i guess it's a little better than giving the chinese the interest, because it ends up back in our treasury, but it raises the question why we don't just create a closed loop and have the fed buy all the tbills issued if this can be counted as 'profit'...

interesting financial times...

it does directly illuminate how the banks are making a big profit right now, though... although when you can set the rate you want to borrow at and directly influence the rate you can loan at you have even better chance to rake in the green... nice work, bennie...

How is this different from the US government just printing money?

1) Fed prints money
2) Fed uses money to buy US treasuries
3) US ends up paying 0% on treasuries because fed gives interest back to government.
4) Net result: money came from nowhere to finance growing US spending on social programs and corporate welfare.

 

[cubeless]

How is this different from the US government just printing money?

1) Fed prints money
2) Fed uses money to buy US treasuries
3) US ends up paying 0% on treasuries because fed gives interest back to government.
4) Net result: money came from nowhere to finance growing US spending on social programs and corporate welfare.

because it creates a nice story that makes people think that something wonderful is happening... and the gov't gets to say it 'took in revenue'...

 

[MotF Bane]

How is this different from the US government just printing money?

1) Fed prints money
2) Fed uses money to buy US treasuries
3) US ends up paying 0% on treasuries because fed gives interest back to government.
4) Net result: money came from nowhere to finance growing US spending on EVERYTHING.

ffy. it's not just social programs and corporate welfare. for starters, did you forget about a couple of ongoing wars?

 

[dullard]

This was pretty much a given.
1) Fed borrows money from the US government at very low rates (set by the fed).
2) Governmnet/Fed forces backs to borrow money from the Fed (at a higher rate).
3) A few payments come through.
4) Bingo, you have a temporary profit.
5) Shh, ignore step #5 where some banks don't pay back the Fed.


There is a temporary profit in almost all loaning situations. If you loan money to the most untrustworthy person in the world, you have a profit with the first check from that person. The problem is that person might not ever send a second check, or third, or any more.

Eventually some of the fed's riskier loans will fail to be paid back. So of course their was an initial profit. The real question is will there be a long term profit.

 

[JS80]

This was pretty much a given.
1) Fed borrows money from the US government at very low rates (set by the fed).
2) Governmnet/Fed forces backs to borrow money from the Fed (at a higher rate).
3) A few payments come through.
4) Bingo, you have a temporary profit.
5) Shh, ignore step #5 where some banks don't pay back the Fed.


There is a temporary profit in almost all loaning situations. If you loan money to the most untrustworthy person in the world, you have a profit with the first check from that person. The problem is that person might not ever send a second check, or third, or any more.

Eventually some of the fed's riskier loans will fail to be paid back. So of course their was an initial profit. The real question is will there be a long term profit.

Wow dude, the federal reserve does not borrow money from the US govt. The US govt effectively borrows from the fed because the fed buys treasuries to maintain target interest rates.

The fed made record profit because the fed printed record money (i.e. member banks had to borrow record amount of money).

 

[JS80]

How is this different from the US government just printing money?

1) Fed prints money
2) Fed uses money to buy US treasuries
3) US ends up paying 0% on treasuries because fed gives interest back to government.
4) Net result: money came from nowhere to finance growing US spending on social programs and corporate welfare.

US government does not print money....

what the hell is wrong with you people

 

[Fizzorin]

US government does not print money....

what the hell is wrong with you people

US Mint, a branch of the Department of the Treasury.
Bureau of Engraving and Printing, a branch of the Department of the Treasury

Department of the Treasury, headed by the Secretary of the Treasury
Secretary of the Treasury, currently Timothy F. Geithner

From Timothy F. Geithner's Wikipedia page: "On November 24, 2008, then-President-elect Barack Obama announced his intention to nominate Geithner to be Treasury Secretary."

Sooooooo......... Geithner, as a Presidential appointee, works for the government, and the branch he oversees encompasses two organizations that print money and mint coins, but somehow the Mint and Engraving are NOT the government?

 

[halik]

US government does not print money....

what the hell is wrong with you people

Youtube education via Ron Paul conspiracy loonies...

The fed balance sheet is available on the inter webs. If they were printing money, you'd see their assets growing.

It's a money shuffling game if anything. Treasury needs money to cover deficits and so they auction new issue. Fed buys up the issue and redirects the interest payments back to treasury. Net effect is a money transfer from Fed to Treasury.

Years down the road when FED will want to bump the target rate, they'll end up selling the same notes presumably at a loss. If they balance sheet gets too wobbly, Treasury will shore it up. Net effect in that case is money transfer from Treasury to Fed.

 

[JS80]

US Mint, a branch of the Department of the Treasury.
Bureau of Engraving and Printing, a branch of the Department of the Treasury

Department of the Treasury, headed by the Secretary of the Treasury
Secretary of the Treasury, currently Timothy F. Geithner

From Timothy F. Geithner's Wikipedia page: "On November 24, 2008, then-President-elect Barack Obama announced his intention to nominate Geithner to be Treasury Secretary."

Sooooooo......... Geithner, as a Presidential appointee, works for the government, and the branch he oversees encompasses two organizations that print money and mint coins, but somehow the Mint and Engraving are NOT the government?

I can't tell if you're trying to be funny or just stupid.

 

[JS80]

OP you need to change your title. Fed didn't "return" anything. It paid the profits it earned. Think of it like a 100% tax on profit.

 

[Fizzorin]

I can't tell if you're trying to be funny or just stupid.

Hey, you're the one that made the statement that, taken at face value, is 100% wrong.

 

[JS80]

Hey, you're the one that made the statement that, taken at face value, is 100% wrong.

What do you think we are referring to when the statement "US government prints money"?

 

[Nemesis 1]

http://www.youtube.com/watch?v=_CNIUB6CMpE

 

[cubeless]

someone needs to draw a simple diagram here...

is it: ben has $1trillion in cash in his wallet... he sees that the economy is having problems, so he buys $1trillion in tbills to shore up the gov... he gets interest on the tbills, and feels patriotic so he gives the interest back to uncle sam... not...

or maybe: ben uses his gov't backed institution to 'loan' himself $1trillion (at 0% interest) and buy tbills... his thin air investment pays out interest (taxpayer funded) so he gives the interest back to timmy (since timmy is who lets him spin $$$ out of air... we have money for nothin', kicks for free, as the song says... no money is printed, it's all just numbers in ben and timmy's ledgers, but all of a sudden there more money to go around!!! hmmm... seems closer to reality... and closer to our friend 'quantitative easing'...

i'm sure it's more complicated and much more above board than any scenario i can cook up...

 

[halik]

someone needs to draw a simple diagram here...

is it: ben has $1trillion in cash in his wallet... he sees that the economy is having problems, so he buys $1trillion in tbills to shore up the gov... he gets interest on the tbills, and feels patriotic so he gives the interest back to uncle sam... not...

or maybe: ben uses his gov't backed institution to 'loan' himself $1trillion (at 0% interest) and buy tbills... his thin air investment pays out interest (taxpayer funded) so he gives the interest back to timmy (since timmy is who lets him spin $$$ out of air... we have money for nothin', kicks for free, as the song says... no money is printed, it's all just numbers in ben and timmy's ledgers, but all of a sudden there more money to go around!!! hmmm... seems closer to reality... and closer to our friend 'quantitative easing'...

i'm sure it's more complicated and much more above board than any scenario i can cook up...

It's money shufffling around between the Treasury and FED. Had the government been printing money, you'd certainly see it in things like TIPS spread or the dollar going bonkers.

It seems that all the Ron Paul nuts have finally STFU about hyperinflation, since the theory they got from youtube is based on empirically-wrong school of thought.

 

[heyheybooboo]

"" Federal Reserve earned $45 billion in 2009 ""


I wonder how the total loss for Maiden Lane will work out ?

If BooBoo, Amalgamated, could shuffle his non-performing crap into a separate entity his balance sheet would come up roses, too ...









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