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The most important news of yesterday, and you didn't hear it, did you?
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georgia_tech_swagger Offline
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Post: #1
The most important news of yesterday, and you didn't hear it, did you?
"The Federal Reserve holds $821.128 billion of US Treasury Bonds, surpassing Japan today to become the second largest holder of US Treasury Bonds. The Federal Reserve is $25 billion away from surpassing China for the number one spot."

Gold skyrockets. The Ron Paul crowd keeps screaming "inflation you dumb f*cks inflation!"

But if you tune in to CNBC you'll see the establishment guys saying inflation is low it's not a problem at all.

Well ... there's your inflation folks. That balance sheet has to come home to roost at some point. We're in staglation ... looking at a double dip ... with the largest tax hike ever ... and the inflation dam is fillin' up to bursting levels.
(This post was last modified: 10-07-2010 08:38 AM by georgia_tech_swagger.)
10-06-2010 11:37 PM
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WoodlandsOwl Offline
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Post: #2
RE: The most important news of yesterday, and you didn't hear it, did you?
I don't think its a double-dip. I don't the Recession has ever ended in the first place.
10-07-2010 07:36 AM
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Ninerfan1 Offline
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Post: #3
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 07:36 AM)WMD Owl Wrote:  I don't think its a double-dip. I don't the Recession has ever ended in the first place.

+1
10-07-2010 07:53 AM
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DrTorch Offline
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Post: #4
RE: The most important news of yesterday, and you didn't hear it, did you?
Funny, I saw some other signs yesterday pointing toward inflation. That was after the discussion on gold and stocks going up.

I think the real trigger has to be for interest rates to rise. But everything else is in place.

If the Fed raises rates, watch out.

Too bad Owl 69 hasn't been around much. Would like to get his perspective.
10-07-2010 09:11 AM
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Owl 69/70/75 Offline
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Post: #5
RE: The most important news of yesterday, and you didn't hear it, did you?
In the last two years, we've pumped nearly $2 trillion into a $15 trillion economy and we've had interest rates sitting at zero, and nothing has hapened. You can't keep going in the hole a trillion a year, and you can't lower interest below zero. You connect the dots.

Question for the Obama supporters. How manyof those 3 million jobs "createdorsaved" can stand on their own if the federal spigot is turned off? Check out 1937.
10-07-2010 10:01 AM
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Hambone10 Offline
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Post: #6
RE: The most important news of yesterday, and you didn't hear it, did you?
Most people don't understand what it means that the Fed is holding treauries. They probably think it's a GOOD thing. Shows that we have "money in the bank" Why don't we eliminate our debt by just writing all of that off??

03-banghead
(This post was last modified: 10-07-2010 10:05 AM by Hambone10.)
10-07-2010 10:04 AM
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SumOfAllFears Offline
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Post: #7
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 10:04 AM)Hambone10 Wrote:  Most people don't understand what it means that the Fed is holding treauries. They probably think it's a GOOD thing. Shows that we have "money in the bank" Why don't we eliminate our debt by just writing all of that off??

03-banghead

Who owns the Federal Reserve? 03-weeping
10-07-2010 10:09 AM
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georgia_tech_swagger Offline
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Post: #8
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 10:09 AM)SumOfAllFears Wrote:  Who owns the Federal Reserve? 03-weeping

The wealthiest private bank owners in the world.
10-07-2010 10:24 AM
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flyingswoosh Offline
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Post: #9
RE: The most important news of yesterday, and you didn't hear it, did you?
can someone explain, for the young people like myself, what exactly it means for the fed to hold US treasury bonds and what the consequences of those actions could be?
10-07-2010 10:28 AM
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georgia_tech_swagger Offline
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Post: #10
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 10:28 AM)flyingswoosh Wrote:  can someone explain, for the young people like myself, what exactly it means for the fed to hold US treasury bonds and what the consequences of those actions could be?

I will gratuitously copy a paste a comprehensive response I saw elsewhere:

Quantitative Easing is a policy used by central banks to increase the money supply by increasing their reserves ex nihilio ("out of nothing"). The newly created money goes to purchase government bonds (see article above) and mortgage-backed securities, thus the total amount of money in the economy increases. As more base money is added to the economy, the purchasing power of the currency gets diluted and it creates the illusion that prices are going "up." In reality, it is the currencies' value that goes down, causing one to have to use more devalued notes to pay for the same good of the past.

Said another way, Quantitative Easing is another way of saying the Fed is printing money to buy bonds which creates inflation and a weakening dollar, thus making us all poorer through the worst tax of them all -- the inflation tax.
10-07-2010 10:41 AM
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Hambone10 Offline
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Post: #11
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 10:41 AM)georgia_tech_swagger Wrote:  
(10-07-2010 10:28 AM)flyingswoosh Wrote:  can someone explain, for the young people like myself, what exactly it means for the fed to hold US treasury bonds and what the consequences of those actions could be?

I will gratuitously copy a paste a comprehensive response I saw elsewhere:

Quantitative Easing is a policy used by central banks to increase the money supply by increasing their reserves ex nihilio ("out of nothing"). The newly created money goes to purchase government bonds (see article above) and mortgage-backed securities, thus the total amount of money in the economy increases. As more base money is added to the economy, the purchasing power of the currency gets diluted and it creates the illusion that prices are going "up." In reality, it is the currencies' value that goes down, causing one to have to use more devalued notes to pay for the same good of the past.

Said another way, Quantitative Easing is another way of saying the Fed is printing money to buy bonds which creates inflation and a weakening dollar, thus making us all poorer through the worst tax of them all -- the inflation tax.


Bottom line... they print paper (notes) to buy paper (treasuries) which gives the false impression that there is less supply and thus lower interest rates... when REALLY all they've done is diluted the purchasing power of the dollar... which is "back door" inflation borne not by debtors, but by consumers. The cost of a happy meal doesn't necessarily go up, but the wages earned by the people who made the happy meal buys less (as an example) imported oil or hi tech goods.... the cynic in me says so that the government can blame "big business" for raising prices... when the reality is that the currency is working against us. Our standard of living declines relative to other countries... and the BIGGER threat, that China decides to "index" to the Euro rather than the dollar.... selling dollars to buy Euros, which, at the volume they hold, becomes a self-fulfilling prophecy
(This post was last modified: 10-07-2010 11:53 AM by Hambone10.)
10-07-2010 11:50 AM
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SumOfAllFears Offline
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Post: #12
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 11:50 AM)Hambone10 Wrote:  
(10-07-2010 10:41 AM)georgia_tech_swagger Wrote:  
(10-07-2010 10:28 AM)flyingswoosh Wrote:  can someone explain, for the young people like myself, what exactly it means for the fed to hold US treasury bonds and what the consequences of those actions could be?

I will gratuitously copy a paste a comprehensive response I saw elsewhere:

Quantitative Easing is a policy used by central banks to increase the money supply by increasing their reserves ex nihilio ("out of nothing"). The newly created money goes to purchase government bonds (see article above) and mortgage-backed securities, thus the total amount of money in the economy increases. As more base money is added to the economy, the purchasing power of the currency gets diluted and it creates the illusion that prices are going "up." In reality, it is the currencies' value that goes down, causing one to have to use more devalued notes to pay for the same good of the past.

Said another way, Quantitative Easing is another way of saying the Fed is printing money to buy bonds which creates inflation and a weakening dollar, thus making us all poorer through the worst tax of them all -- the inflation tax.


Bottom line... they print paper (notes) to buy paper (treasuries) which gives the false impression that there is less supply and thus lower interest rates... when REALLY all they've done is diluted the purchasing power of the dollar... which is "back door" inflation borne not by debtors, but by consumers. The cost of a happy meal doesn't necessarily go up, but the wages earned by the people who made the happy meal buys less (as an example) imported oil or hi tech goods.... the cynic in me says so that the government can blame "big business" for raising prices... when the reality is that the currency is working against us. Our standard of living declines relative to other countries... and the BIGGER threat, that China decides to "index" to the Euro rather than the dollar.... selling dollars to buy Euros, which, at the volume they hold, becomes a self-fulfilling prophecy

The Chinese, Japan and the FED are buying Treasury Inflation Protected Securities (TIPS), so they are insulated from inflation, unlike the people.
10-07-2010 12:00 PM
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Hambone10 Offline
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Post: #13
RE: The most important news of yesterday, and you didn't hear it, did you?
To make it worse... when they "buy" securities, they sometimes do it in an open purchase, where they simply buy from dealers... but other times in repo... where they actually borrow the securities from member banks... and pay them interest for the pleasure
10-07-2010 01:50 PM
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NOQTR Offline
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Post: #14
RE: The most important news of yesterday, and you didn't hear it, did you?
So what your saying is America is soon to be owned by a PRIVATE bank as opposed to a foreign country?
10-07-2010 01:51 PM
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georgia_tech_swagger Offline
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Post: #15
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 01:51 PM)NOQTR Wrote:  So what your saying is America is soon to be owned by a PRIVATE bank as opposed to a foreign country?

Frequently they're one in the same. When Andrew Jackson killed the central bank, in the unraveling it was revealed it was largely massive foreign banks running the show. How much bailout money did RBS get, again? :)
10-07-2010 01:53 PM
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NOQTR Offline
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Post: #16
RE: The most important news of yesterday, and you didn't hear it, did you?
Sure wish i worked for a public financial institution instead of a private one so we could get these bailouts i keep hearing about
10-07-2010 02:08 PM
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flyingswoosh Offline
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RE: The most important news of yesterday, and you didn't hear it, did you?
so the federal reserve is autonomous to the point where it can just print more money to buy bonds? and maybe this is a dumb question, but what's the point? why do they want to buy government bonds in the first place. Another question is, why do people keep referring to the fed as part of a private bank?
10-07-2010 02:12 PM
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Post: #18
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 02:12 PM)flyingswoosh Wrote:  Another question is, why do people keep referring to the fed as part of a private bank?

...because it is.
10-07-2010 02:19 PM
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NOQTR Offline
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RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 02:12 PM)flyingswoosh Wrote:  so the federal reserve is autonomous to the point where it can just print more money to buy bonds? and maybe this is a dumb question, but what's the point? why do they want to buy government bonds in the first place. Another question is, why do people keep referring to the fed as part of a private bank?

Feel free to use WIKI
(This post was last modified: 10-07-2010 02:32 PM by NOQTR.)
10-07-2010 02:22 PM
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SumOfAllFears Offline
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Post: #20
RE: The most important news of yesterday, and you didn't hear it, did you?
(10-07-2010 02:12 PM)flyingswoosh Wrote:  so the federal reserve is autonomous to the point where it can just print more money to buy bonds? and maybe this is a dumb question, but what's the point? why do they want to buy government bonds in the first place. Another question is, why do people keep referring to the fed as part of a private bank?

The federal reserve is not owned by the US gov't. The gov't has limited control and the FED has never been audited by congress.
10-07-2010 02:23 PM
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