President Lincoln saved taxpayers four billion dollars...how can we do this in 2013?

Discussion in 'Economics & Trade' started by DennisTate, Apr 20, 2013.

  1. bringiton

    bringiton Well-Known Member

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    No, to LEND to the government AT INTEREST. There's the rub: the banks get their privilege of money creation from government, then CHARGE THE GOVERNMENT INTEREST for exercising it!!
     
  2. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    To some extent you have it backwards. The bigger issue is the Fed lending to the government at below market interest rates. That's what leads to inflation.

    The Fed is basically subsidizing a part of the cost of the government borrowing money. But since money (maybe economic value is a better term here) can't appear out of nowhere, the cost is absorbed as inflation. (Ultimately this is kind of self-counterproductive because much of the burden of inflation ends up absorbed by the government itself in the form of reduced purchasing power of collected tax revenue, at least from a theoretical economics standpoint)

    When the Fed "expands the money supply" they need to get at-market return rates on the loans they make, otherwise that ends up diluting the value of the dollar. (fundamental reason for this is because you can't temporarily swap out money for someone's asset without also compensating them for the lost investment returns on that asset, it's the same whenever the Fed tries to expand the reserve assets on its balance sheets by issuing more money)

    Now, I'm not saying the Fed isn't making interest off the government. So to some extent you have the worst of both worlds. The government can't borrow money from the Fed without paying the Fed interest, or the Fed paying the interest on these loans through inflation.

    You know private big banks actually have an ownership stake in the Fed and the Fed pays them dividends?
     
    Last edited: Feb 9, 2018
  3. Longshot

    Longshot Well-Known Member

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    No. The bond issuer pays THE BONDHOLDER. The bondholder isn't necessarily the lender. The lender could have sold the bond after he loaned the money to the government.
     
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  4. bringiton

    bringiton Well-Known Member

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    Nope.
    Garbage. Excessive money creation is what leads to inflation, and in advanced capitalist countries, that means private banks' debt money issuance.
    More garbage. The Fed is not a value producer, and therefore can't be subsidizing anything.
    More garbage. There is no reason to think inflation is the only way money can be created.
    You appear to know very little about it.
    The Fed SETS the "at-market" return. Duh. Your monetary understanding is non-existent.
    Gibberish.
    More gibberish.
     
  5. bringiton

    bringiton Well-Known Member

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    Whoever holds the bond is the lender, and that's why they get the principal and interest payments. The ORIGINAL lender can be long gone. That does not affect who is lending the money NOW.
     
  6. Longshot

    Longshot Well-Known Member

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    No. Whoever holds the bond is the creditor. The lender is the one who lends money. The creditor is the one who the borrower must pay. See the difference?
     
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  7. Baff

    Baff Well-Known Member

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    Banks are bond holders.
    The state pays them the dividend on those bonds.

    By law as part of fractional reserves, the banks must keep a fraction of their deposits aside. For safe keeping they must keep some of it in the Fed in the form of government bonds.

    They don't have an ownership stake in the Fed any larger than your own. All citisens own the Fed.
     
    Last edited: Feb 10, 2018
  8. bringiton

    bringiton Well-Known Member

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    By that "logic" there is no lender at all, just a buyer of a bond. A bond buyer does not extend a loan, he purchases a right to receive payment of principal and interest, even when buying the bond from its original issuer. The great market variation in bond issue prices shows that.
     
  9. bringiton

    bringiton Well-Known Member

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    Stocks pay dividends, not bonds. Bondholders receive principal and interest payments.
    That's just baldly false:

    "A member bank is a private institution and owns stock in its regional Federal Reserve Bank. All nationally chartered banks hold stock in one of the Federal Reserve Banks."

    https://en.wikipedia.org/wiki/Federal_Reserve_System#Member_banks

    No private citizen is allowed to own shares in the Federal Reserve, and the federal government doesn't own shares in it, either..
     
  10. Longshot

    Longshot Well-Known Member

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    Let's say that you need $100 and I agree to lend it to you. So I lend you the money, and you write out an IOU. It says, "I agree to pay the bearer of this IOU $100 plus $10 of interest on 7-13-2019." So clearly, I am the lender, because I was the one who loaned you the money. I also happen to currently own the IOU, so I am also the creditor.

    Now let's say that I decide to sell this IOU to Tom. After I sell the IOU to Tom, he is now the creditor because he is the owner of the IOU. However, he never loaned you any money, so I remain the lender but he is now the creditor.

    I hope that clears up the difference between a lender and a creditor.
     
  11. bringiton

    bringiton Well-Known Member

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    No, because you have not described a bond issuing process. You have described a lending process.

    I hope that clears up the difference between lending and buying a bond for you.
     
  12. Longshot

    Longshot Well-Known Member

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    You seem to be contradicting yourself. When a bond issuer issues a bond, are they borrowing money from a lender or not?
     
  13. bringiton

    bringiton Well-Known Member

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    No, you are either equivocating or splitting hairs, depending on which way you want to go.
    They are borrowing from many lenders: everyone who holds any of the bonds.
     
  14. Longshot

    Longshot Well-Known Member

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    Could you please provide what definition you are using for the verb lend?
     
  15. Baff

    Baff Well-Known Member

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    I wouldn't bother mate. He'll argue the toss with the back end of a bus.
    He's understood you.

    Ignorance can be corrected by a teacher. Stupidity has to be self corrected.
    Give him time and space alone to chew it over.
     
    Last edited: Feb 16, 2018
  16. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    I think, if we want to be more precisely accurate with semantics, it's fair to say the Fed is the creditor, though not necessarily the original lender, in relationship to the debt owed by the Treasury.

    I still think it's fair to say the Fed lends money to the Treasury, but as Longshot previously said, he's a stickler for accurate terminology.
    We could of course say the Fed indirectly lends to the Treasury, if that's any better.
     
    Last edited: Feb 17, 2018
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  17. bringiton

    bringiton Well-Known Member

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    Allow another temporary possession and use of something of one's own.
     
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  18. DennisTate

    DennisTate Well-Known Member Past Donor

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    My question is.........
    is the Federal Reserve fulfilling the role that dad2three
    stated that they were supposed to accomplish?

    If so....... then why is the national debt of the USA growing so rapidly?

    Who Actually Owns the Fed and Why That Must End



     
  19. bringiton

    bringiton Well-Known Member

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    That objection is easily removed by making the issuance of money the function of an independent Mint whose sole mandate is price stability.
     
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  20. DennisTate

    DennisTate Well-Known Member Past Donor

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    Here in Canada the printed notes are only about two percent of the total money supply.......

    From 1940 - 1974 the Bank of Canada put roughly fifty percent of the total money supply of Canada
    into the economy through low interest rate loans of zero to one percent......
    for infrastructure projects.

    In 1974..... Prime Minister Pierre E. Trudeau decided to dump this excellent central banking system...... and you can guess what happened to the national debt of Canada:




    [​IMG]

    You Americans made similar decisions and thus:


    https://www.michaeljournal.org/articles/social-credit/item/the-public-debt-problem?/plenty34.htm


    [​IMG]

    Here is a good explanation of what happened here in Canada from three courageous economists who don't mind getting politicians angry at them.

    https://www.michaeljournal.org/arti...ce-our-country-debt-free-say-three-economists

     
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  21. bringiton

    bringiton Well-Known Member

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    And one typical salary would easily pay for a typical house, and there were no homeless people.
    The banksters told him to, or they would destroy the economy.

    Thanks for the information.
     
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  22. DennisTate

    DennisTate Well-Known Member Past Donor

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    I am hoping that they ...... off the wrong man!

    Did going bankrupt in '91 prepare Mr. Trump for the Presidency?

     
  23. DennisTate

    DennisTate Well-Known Member Past Donor

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    [​IMG]
    Here is an early photo of Lincoln from about 1840.
     
  24. DennisTate

    DennisTate Well-Known Member Past Donor

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    The current situation is complicated......
    in 2014 CIA economist Jim Rickards stated that there was seven hundred and ten trillion dollars in the worldwide Derivatives market and he fears a one hundred trillion dollar meltdown in those markets that could spread to other markets creating a Bear Market.

    Here is one of the best responses to a Bear Market that I have read about so far:


    Would a Basic Minimum Income dramatically reduce abortions?


     

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