Federal Reserve to Declare Insolvency in September?

[NoStateofMind]

During a conversation I overheard someone talking about a secret congressional hearing where Congress was informed that the Federal Reserve will declare insolvency in September and president Bush will in turn declare a state of national emergency. Take this with a grain of salt as I did (believe that or not). But through my Googling I came across some numbers that I would like someone with better financial experience to explain.

I found this thread: http://www.abovetopsecret.com/forum/thread331074/pg1

He brings in two links that show a report from the Federal Reserve H3, which I assume is basically deposits. Everything looks fine until Jan '08 when it goes negative:

Aggregate Reserves of Depository Institutions and Monetary Base H.3

Here is the same report but goes as far back as 1959, yet it never shows a negative number under "non-borrowed" until Jan. '08.

Table 2/H.3

I'm not sure if I understand this so I would like someone to correct me if I am wrong. Does the "non-borrowed" column represent Dollars created?

 

[techs]

Thanks, Bush.

 

[LegendKiller]

The non-borrowed deposits number doesn't mean anything. It used to be a decent proxy for capital, but isn't anymore. The Fed won't declare insolvency.

It doesn't represent dollars created. I'll have more time to look at it later.

 

[NoStateofMind]

Originally posted by: LegendKiller
The non-borrowed deposits number doesn't mean anything. It used to be a decent proxy for capital, but isn't anymore. The Fed won't declare insolvency.

It doesn't represent dollars created. I'll have more time to look at it later.

Also I would like to know if it is even possible in any realm that the FED become "insolvent". Thanks.

 

[brxndxn]

Originally posted by: LegendKiller
The non-borrowed deposits number doesn't mean anything. It used to be a decent proxy for capital, but isn't anymore. The Fed won't declare insolvency.

It doesn't represent dollars created. I'll have more time to look at it later.

The Fed is supposedly able to create as much money out of thin air as it needs - so it can never declare insolvency. At least, that was the 'selling point' of it when it was created. However, in creating those dollars, all it does is cause inflation - something previous generations did not do too much about.. But, the current generations know exactly what is happening to their money and they dive out of the dollar as fast as possible during inflationary periods. So, Bernanke has realized that he's at a point where he either devalues the dollar into the ground (and causes it to cease being the world's reserve currency) or he sucks it up and sits at the head of the Fed during the worst negative growth period in history.

 

[whylaff]

The Federal Reserve is not insolvent.

This is primarily due to the Fed?s new Term Auction Facility.

Edit:

Just wanted to clarify on the TAF ? anyone who is able to tie their own shoes would take advantage of the TAF, you have insanely low rates for a one month loan compared to the interbank rates, and you can use the worst collateral in the world, and it is anonymous. So you have a situation where banks are clearly taking advantage of this.

 

[dmcowen674]

Originally posted by: PC Surgeon
During a conversation I overheard someone talking about a secret congressional hearing where Congress was informed that the Federal Reserve will declare insolvency in September and president Bush will in turn declare a state of national emergency.

Man if I posted something like this (which I wouldn't because how can someone overhear a "secret" congressional hearing) I would be lambasted like a dead turkey on here.

Anyway if the Fed did in fact declare America bankrupt and Bush announced the "national emergency" and suspended the election I for one would welcome the resulting Revolution against him and his minions.

 

[StageLeft]

bs, nuff said

 

[Linux23]

I assume they can just print more money, making the value of the dollar less than that of toilet paper. At least we'll have some pretty green paper to wipe our asses with.

 

[Double Trouble]

That's complete crap plain and simple. Someone's trying to concoct a conspiracy story, and it misrepresenting the figures to be something they are not.....

 

[LegendKiller]

Originally posted by: PC Surgeon

Originally posted by: LegendKiller
The non-borrowed deposits number doesn't mean anything. It used to be a decent proxy for capital, but isn't anymore. The Fed won't declare insolvency.

It doesn't represent dollars created. I'll have more time to look at it later.

Also I would like to know if it is even possible in any realm that the FED become "insolvent". Thanks.

To become insolvent you'd need to have taken on debt. AFAIK the Fed has only one real debt and that's the note, which doesn't bear interest so you don't need to have a specific cashflow to support it.