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I meant "expand", or contract...
==AC
I think the point to this is that the Fed is monetizing debt at a large rate! They buy securities - that is debt, and in turn put it down on the books as an asset. Problem is this "asset" is in turn a liability against the American People. Once this fake cash starts being spent by our fair govt, it is deposited into banks and a small part is held as reserves and the rest is loaned out and it goes to another bank and the process repeats itself.
The "assets" are already an obligation to somebody. If the Fed buys those assets, thereby giving money to a financial entity, that financial entity might then cover their eurodollar contracts -- no need for the liquidity if the related transaction has been transferred to the Fed, right?
When the FED buys the debt they are giving fake "cash" for a piece of paper. So the FED gives money for a piece of paper, so they are increasing money in the system, not decreasing.
You also must keep in mind that they are buying debt. They buy 10 year T bills, which are debts of the people of the US. Then they take this DEBT and on paper change it into an asset of the bank. Now do you understand that our lender of last resort (the biggest bank in the world), is using the US debt as a basis to expand the money supply.
The only assets I am talking about are repurchase agreements, repo's, and those are done with other governments or our government.
T-Bill's not sold to public ---> Congress takes these to the FED and the FED writes a check ---> On the FED balance sheets, this debt is now a securities asset ---> the government deposits the money into commercial banks through issuing checks to various people agencies, etc. ---> those banks receiving the money only needs to hold a fraction of what was deposited so this orignal govt money has been re deposited up to nine times and up to 9 banks lend of 80-90% of whatever was deposited ---. so they loan out the rest and it cycles.
The world didn't want to take on the debt of the US, but when the FED assumes the debt (enters in a repo agreement with the govt) it is in effect, creating money from debt. Thinking only in terms of off setting debits and credits in accounting terms won't let you see the bigger picture.
"One of the trademarks of perma-bears is to blame all the World's ills on a hyper-active Fed whose policy shifts endanger the state of our economies and the value of financial assets. But is this a fair indictment? Judging Fed policy by the growth rate of the US monetary base, we find that the US monetary base has been growing fairly steadily and in line with US GDP growth.
In fact, if one wants to blame a central bank for volatility in global monetary aggregates, one should instead turn to Japan. Looking at the past thirty five years, we find that the Japanese monetary base has been allowed to double over short periods (i.e.: less than three years) three times.
Another interesting fact is that, following the large 2001-2004 expansion in the Japanese monetary base, the Japanese monetary base is now larger than the US'. That is quite impressive for an economy less than half the size."
Think about it....money was "created", so of course it is reported within GPD growth, in much the same way as your pay is reported on your paycheck.
That is why they are in line with one another (and growing fairly steadily, I might add, or was until fairly recently).
GDP can grow above and beyond the inflationary amount, but in order for that to happen more goods and services have to be 'created' than money/credit/debt is created. Very little of that has happened. The US does not actually "make" much of anything anymore, after all.
The US Federal Reserve has created more money, via the issuance of more debt, since 2000, than was in the system total prior to that year. Our debt load more than doubled in that time. As mentioned before, inflation is the result. A $1USD today buys only a fraction of what it did a few years ago.
Japan is a totally different case, one of a slow deflationary collapse over a nearly 20 year period that has been carefully controlled by the Japanese.
Prior Fiscal
Years National Debt
09/30/2006? $est 8.5T
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/28/2001 $5,807,463,412,200.06
09/29/2000 $5,674,178,209,886.86
OUCH! This will be interesting to see how this spirals...
http://www.timesonline.co.uk/article/0,,3-2170099,00.html
Ya that might make sense if the GDP numbers, make that any official economic numbers, the government reports were REAL. The numbers are a joke so judging anything based on the economic numbers is a joke. Here is a mainstream article pointing out the lies. It is probably worse than this:
The numbers behind the lies
http://tinyurl.com/rqzje
It is worth reading the PDF report referenced in the article
:
http://tinyurl.com/meq6s
==AC
The "assets" are already an obligation to somebody. If the Fed buys those assets, thereby giving money to a financial entity, that financial entity might then cover their eurodollar contracts -- no need for the liquidity if the related transaction has been transferred to the Fed, right?"
Does this answer your question?
"Because the Federal Reserve can be counted on to "monetize" (convert into money) virtually any amount of government debt, and because this process of expanding the money supply is the primary cause of inflation, it is tempting to jump to the conclusion that federal debt and inflation are but two aspects of the same phenomenon. This, however, is not necessarily true. It is quite possible to have either one without the other.
The banking cartel holds a monopoly in the manufacture of money. Consequently, money is created only when IOUs are "monetized" by the Fed or by commercial banks. When private individuals, corporations, or institutions purchase government bonds, they must use money they have previously earned and saved. In other words, no new money is created, because they are using funds that are already in existence. Therefore, the sale of government bonds to the banking system is inflationary, but when sold to the private sector, it is not. That is the primary reason the United States avoided massive inflation during the 1980s when the federal government was going into debt at a greater rate than ever before in its history. By keeping interest rates high, these bonds became attractive to private investors, including those in other countries. Very little new money was created, because most of the bonds were purchased with American dollars already in existence. This, of course, was a temporary fix at best.
Today, those bonds are continually maturing and are being replaced by still more bonds to include the original debt plus accumulated interest. Eventually this process must come to an end and, when it does, the Fed will have no choice but to literally buy back all the debt of the '80s -- that is, to replace all of the formerly invested private money with newly manufactured fiat money -- plus a great deal more to cover the interest. Then we will understand the meaning of inflation."
This may be the reason the Fed suspended the M3 because they are beginning the process to "buy back" all the private debt plus interest from the 80s and early 90's. The ponzi scheme is coming to an end, there is no way out. It was fun while it lasted...
==AC
The FED is quoted as saying they will take unconvential means to maintain the dollar. It pointed out that our trade deficit was like 55B in APR 05, yet Net Foreign Investment was only 45B. So who are we getting the other 10B from? I say we're printing money, though not with any presses, unless it's the press of a button.
Did you ever here of The Bank for International Settlements?
A banker's bank, the BIS does no direct business with individuals, governments, or corporate entities. Instead, it deals solely with member nations' central banks (most of which are privately owned). There are 55 of them at present, and the list includes every central bank of consequence in the world.
All members are owners and have voting privileges, in proportion to the number of shares they have. (Private citizen ownership was originally allowed, and comprised about 14% of shares outstanding, but in 2001 all of those were bought out by the central banks.) We were unable to pin down the exact present share structure, but it can be assumed that the founding members have the most clout.
The founders were the central banks of Belgium, France, Germany, Italy, Japan and the U.K., all of which got an identical number of shares. The U.S. Federal Reserve was not an original shareholder; however, three American banks (J. P. Morgan, First Bank of New York, First Bank of Chicago) each got the same number, giving the U.S. three times the voting power from the outset.
Management's inner circle is of course the Board of Directors. There are six ex officio (i.e., permanent) members, the central bank governors of Belgium, France, Germany, Italy, and the U.K., plus the chairman of the Fed. These six appoint six others of their own nationality, and then there can be up to nine more elected members (there are five at the moment, representing Canada, Japan, the Netherlands, Sweden and Switzerland). Ben Bernanke has thus just replaced Alan Greenspan as the U.S.'s ex officio rep, and his appointed American sidekick is New York Bank President Timothy Geithner.
So, what does the BIS do these days? According to the bank's website, "BIS . . . fosters international monetary and financial cooperation and serves as a bank for central banks . . . by acting as: a forum for discussion and decision-making among central banks and within the international financial and supervisory community; a centre for economic and monetary research; a prime counterparty for central banks in their financial transactions; and agent or trustee in connection with international financial operations."
http://tinyurl.com/epa8d
==AC
Knowledge comes from understanding.
We won't/can't pay the foreigners back at fair value. So what if the Chinese cancelled our debt in exchange for us relaxing our policy on the defense of Taiwan? And the Japanese cancelled our debt in exchange for grain export guarantees after peak oil? Or a bunch of nukes for their new army? Or both of them on some other political deal? We can't pay them back, and as Bob Dole would say, "You know it, I know it, they know it, we all know it.".
Not that many people? I'm trying to believe you. I guess it should be obvious to me that not that many agree on this, given the DJIA runup (until recently).
http://www.thomaspmbarnett.com/images/pentagons_new_map.jpg
are all working together towards a common goal. Through central banking they have gained control of governments and are in the process of redistributing the wealth around the globe. When this process is completed the will pull the plug on the current finacial paradigm and bring about a high-tech global feudalism under the guise of a New World Order. If I was at the top of the pyramid it is what I would do. We must die so they may live.
==AC
Dogs of war and men of hate
With no cause, we don't discriminate
Discovery is to be disowned
Our currency is flesh and bone
Hell opened up and put on sale
Gather round and haggle
For hard cash, we will lie and deceive
Even our masters don't know the webs we weave
On world, it's a battleground
One world and they smash it down
One world...one world
Invisible transfers, long distance calls
Hollow laughter in marble halls
Steps have been taken, a silent uproar
Has unleashed, the dogs of war
You can't stop what has begun
Signed, sealed, they deliver oblivion
We all have a dark side, to say the least
And dealing in death is the nature of the beast
On world, it's a battleground
One world and they smash it down
One world...one world
The Dogs of War don't negotiate
The Dogs of War won't capitulate
They will take and you will give
And you must die so that they may live
You can knock at any door
But wherever you go, you know they've been there before
Well winners can lose and things can get strained
But whatever you change, you know the dogs remain
On world, it's a battleground
One world and we're going to smash it down
One world...one world
~Pink Floyd