federal reserve bank

Hi,

I just discovered that the Federal Reserve Bank is privately owned.

Bush recently asked for $175 billion to be made available.

Will this money come from the Federal Reserve Bank?

Will the US government pay interest on this money and if so how much?

Will the money have to be printed?

The EU recently asked for 600 billion Euros.

Where will that come from?

It's obvious that I'm not an economist so the questions may be dumb, but I'm trying to learn :-)

thanks,

Michael

Reply to
Michael Redbourn
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Yup.

Yup.

Yup.

It will go to a bidding process and so the interest paid will depend on the bidding.

Yes and no. This is "printing" money, but these days they just throw some ones and zeroes down a comms line.

The EU Central Bank?

If it's the "liquidity surge" you're talking about, it's a little different in that it's only made available for days (or weeks with some of the latest money) but other than that the idea is somewhat similar.

Me too. If we stop learning, our brains turn to cheese.

FoFP

Reply to
M Holmes

Life is like riding a bicycle. To keep your balance you must keep moving.

:-)

Albert E>Michael Redbourn wrote:

Reply to
Michael Redbourn

Why did I ask about the 'printing' ?

Printing would cause inflation.

What will a 'loan' cause ?

Mike

Reply to
Michael Redbourn

That's what everyone still calls it, even for electronic money, when it's created by a state reserve bank?

With these short term loan for the bank "liquidity provisions" the theory is that when the banks who take the cash pay it all back, that puts everything back to square one and no inflation should be caused.

Pretty obviously, by monetarist theory, if Bush and Bernanke write 800 Dollar cheques to every man, woman and child in the US and finance these by central bank "printing" then it will be inflationary. that's unless the central bank does something to sterilise it elsewhere, but then doing that would negate the point of the cheques.

Bernanke is supposed to be an authority on depressions, their causes, and prevention of them. They've known a recession was coming and had pretty much bought into that scenario. The 750 basis points cut in rates, and the 800 Dollars cheques are about preventing a US depression (technically a debt-deflationary depression- the sort that pretty much always follows the bursting of large credit bubbles).

Bernanke's paper in 2002 was on how to avoid "The Japanese Scenario" (debt-deflation) in the US. They were worried that this would occur as a result of the 2000 stocks crash and 9/11. It prescribed "helicopter drops" of money by cranking up the printing presses. They did some of it in 2003, to prevent a debt-defaltionary recession, by slashing rates to 1% and ramping up tax cuts. That gave them an even greater exacerbation of the already extant housing bubble, leading to where we are now.

We'd better hope that the Monetarists and neo-Keynesians are right and that this is the correct solution. If the Austrians are correct 9and I believe they are) then this is going to delay things, but overall make the denouement worse.

I've said here many times over the years that Greenspan would be the man who saved a recession at the cost of a depression. I believe that we're now about to test my hypothesis. Sadly I believe that Brown has put us in a similar, but exaggerated, position.

Despite the fact I've been expecting all this for some years, I'm surprised at the pace of the collapse and do wonder if I've been too optimistic all this time.

The guys at housepricecrash.co.uk like to say "Crash Helmets On!". I'm saying "Brace! Brace! Brace!"

FoFP

Reply to
M Holmes

Sorry to come back to something very rudimentary.

Money does of course still get printed (paper) and minted. So when does this happen in the chain?

Thanks for sticking with me on this.

Michael

Reply to
Michael Redbourn

Some money does get printed and minted, but most doesn't need to be. For example, in the case of high-value transactions such as the sale of a house or a car, nobody goes around carrying actual printed cash in brown envelopes. It's all done by electronic transfer, possibly but not necessarily involving a cheque. There isn't even a pile of printed cash lying in a vault somewhere corresponding to the electronic transfer. It's all done with mirrors.

Reply to
Ronald Raygun

The central banks decide how much cash money is needed in circulation, and print and mint it as required. They also do this to replace worn out notes which are incinerated.

This is a fraction of the amount of money electronically created to keep interest rates at the preferred level or to supply liquidity in emergencies.

FoFP

Reply to
M Holmes

Or to paraphrase: it's all done with smoke and mirrors, and the sh!t hits the fan (see Northern Rock) when some kid stands up and says 'but there isn't any money in the bank' or 'the king has no clothes' or 'Hey, i can see the strings working it...'.

Not just NR .. remember Argentina?? Zimbabwe??

Reply to
GSV Three Minds in a Can

The Working Group on Financial Markets (also, President's Working Group on Financial Markets or the Working Group) was created by Executive Order 12631, signed on March 18, 1988 by United States President Ronald Reagan.

The Group was established explicitly in response to events in the financial markets surrounding October 19, 1987 ("Black Monday") to give recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence".

As established by Executive Order 12631, the Working Group consists of:

  1. The Secretary of the Treasury, or his designee (as Chairman of the Working Group); 2. The Chairman of the Board of Governors of the Federal Reserve System, or his designee; 3. The Chairman of the Securities and Exchange Commission, or his designee; and 4. The Chairman of the Commodity Futures Trading Commission, or her designee.

Executive Order 12631--Working Group on Financial Markets

Source: The provisions of Executive Order 12631 of Mar. 18, 1988, appear at 53 FR 9421, 3 CFR, 1988 Comp., p. 559, unless otherwise noted.

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:

Section 1. Establishment.

(a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:

  1. the Secretary of the Treasury, or his designee; 2. the Chairman of the Board of Governors of the Federal Reserve System, or his designee; 3. the Chairman of the Securities and Exchange Commission, or his designee; and 4. the Chairman of the Commodity Futures Trading Commission, or her designee.

(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.

Sec. 2. Purposes and Functions.

(a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

  1. the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and 2. the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.

(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self- regulatory bodies, and with major market participants to determine private sector solutions wherever possible.

(c) The Working Group shall report to the President initially within

60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.

Sec. 3. Administration.

(a) The heads of Executive departments, agencies, and independent instrumentalities shall, to the extent permitted by law, provide the Working Group such information as it may require for the purpose of carrying out this Order.

(b) Members of the Working Group shall serve without additional compensation for their work on the Working Group.

(c) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions.

There are just four people who control all of the U.S. markets through their use of dangerous and explosive DERIVATIVES. They are risking the assets and retirement funds of all Americans. Because of their manipulations, especially since 2001, U.S. financial markets are now based on the gambling whims of a special fraternity of Federal Government DERIVATIVE dealers.

This group is known among Wall Street as the Plunge Protection Team (PPT). Their "official" role was to prevent another 1987 "Black Monday". They have the entire U.S. Treasury at their disposal to manipulate the markets through DERIVATIVES (futures options). In other words, they are using the assets behind the U.S. Treasury to rig the prices of commodites (gold, currencies, etc.) and stocks.

This fraternity comprises of Fed Chairman Alan Greenspan, the Secretary of the Treasury, and the heads of the SEC and the Commodity Futures Trading Association. It works closely with all the U.S. exchanges and Wall Street banks, including the largest DERIVATIVE risk holders Citibank and JP Morgan Chase.

Few people are aware of Executive Order 12631 signed by Ronald Reagan on March 18, 1988. In a nut shell, this is the "authority" behind the four dictators and the [sic] "laws" and "regulations" that have backed their casino-style DERIVATIVE gambling spree since 2001.

The pre-911 U.S. markets showed an astounding - yet confounding and puzzling - rise for the 4 months proceeding 911. The U.S. media dubbed it a "patriotic rally". The European Press called it a "PPT [Plunge Protection Team] rally". Obviously, the U.S. markets were manipulated and rigged to an inflated value in advance of the 911 disaster. Was this a coordinated measure in anticipation of what was to come? Only The Powers That Be can answer that question directly.

Since 911, there have been at least three major long-term stock market rallies. In all 3 instances, when the markets opened all the indexes began to quickly plunge. In each incidence, by early afternoon the markets were brought back from the brink of collapse to the surprise of everyone, including historical analysts.

An event that should have sent markets spiraling downward was the Enron, et al, unprecedented corporate accounting scandals. Yet despite this, an unprecedented accross-the-board markets rally began on July

24, 2002. Once again, the European Press called it a "PPT rally".

Outside the U.S., it's no secret who is behind these secretive "no- name" purchases of high risk DERIVATIVE gambling wagers:

On September 16th, 2001, The Guardian reported "that a secretive committee... dubbed 'the plunge protection team'... is ready to coordinate intervention by the Federal Reserve on an unprecedented scale. The Fed, supported by the banks, will buy equities from mutual funds and other institutional sellers... " On Feb 21, 2002, the Financial Times featured an article about Japan's Stock Buying Body. The article stated that "...government backed equity markets, as Japan has recently become aware, do not work... Plunge protecting the world's markets may be a hazardous pursuit."

In each of these occurances, a large "no-name" buyer in the futures market secretly plunged in and bought up massive quantities of DERIVATIVES through banking groups such as JP Morgan. These were completely reckless gambling bets that the futures index [S&P] would rise even though it was obvious that it was going to fall. Because such a large amount of money was wagered on the S&P's rise, in each instance, it reversed the market's free-fall.

At the Federal Open Market Committee meeting on Jan 29-30, 2002, the Federal Reserve System (Greenspan) openly discussed the use of "unconventional methods" to stimulate the economy. Recently, the Financial Times of London quoted an anonymous U.S. Fed official who stated that one of the extraordinary measures "considered" in January

2004 was "buying U.S. equities".

These gambling interventions by the "Four Financial Dictators" have successfully brought the markets back each time... despite the inflated financial realities that existed. The purchase of these gambling DERIVATIVES at a great loss have transformed each market crisis into a rally. By manipulating the markets in this way, they have further inflated the highly overvalued market indexes.

Perhaps Americans can now understand why the major U.S. banks, such as JP Morgan, are holding TRILLIONS of gambling derivatives on their books as the PPT group of four use them to rig the markets. Sooner or later, these market "fixes" will no longer hold the bubble from bursting.

Thus, we have witnessed the creation and growth of the financial bubble that is on the brink of explosion... and we know who rigs and controls the markets to create this inflated bubble of gambling debt.

Paper Stocks Rise as Metals Loose - PPT Rigging is Obvious

In the same motus opperandi, the PPT group of 4 are currently buying metals futures (DERIVATIVES) in great amounts on the New York and Chicago exchanges. For the past two weeks, they have created a loss in silver and gold indexes by purchasing (at U.S. taxpayer's expense) large gambling bets (derivatives) against the true value of intrinsic metals.

The result is that they have rigged the value of metals to discourage investors from purchasing gold and silver instead of U.S. Federal Reserve Notes. This is a measure by the PPT to plug a large hole in the bursting dam of the financial bubble, but even Hans Brinker cannot stop this leak.

The bottom line? Stick with history and prepare for the financial explosion. When the bubble deflates and pops, economic deflation will control our daily lives. The PPT cannot continue to spend what it doesn't have. The retirement funds they are "borrowing" from are already exhausted. Get yourself some gold and silver... it will buy your bread to survive in the coming future... while paper Federal Reserve Notes will burn in your furnace to heat your homes.

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Reply to
Veracity Jones

If you ignore the conspiracy theory stuff at the very end, this is a good web video explaining money and banking:

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And yes, it really is as crazy as it looks.

FoFP

Reply to
M Holmes

Thanks.

I will take a look at it.

The reason that I asked my original question was ..

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Mike

Reply to
Michael Redbourn

I watched the movie and learned a lot.

It is clear how this relates to the US but how does it relate to countries like China and Russsia?

thanks

Mike

Reply to
Michael Redbourn

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