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The Treasury Has Already Minted Two Trillion Dollar Coins

 
Hard Eight
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01/18/2013 10:51 AM
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The Treasury Has Already Minted Two Trillion Dollar Coins
(snip)
Come again?

Well, substitute a $2 trillion piece of paper called a Treasury bond for the platinum coin. Suppose the Treasury prints up such a piece of paper and hands it to the Fed and the Fed puts $2 trillion into its account. No difference right, except for the lack of platinum.

Next suppose the Treasury doesn’t hand the $2 trillion bond to the Fed directly, but hands it to John Q. Public who gives the Treasury $2 trillion and then hands the bond to the Fed in exchange for $2 trillion. What’s the result? It’s the same. The Treasury has $2 trillion to spend. John Q. Public has his original $2 trillion. And the Fed is holding the piece of paper labeled U.S. Treasury bond.

Finally, suppose the Treasury does this operation in smaller steps and over five years, specifically between 2007 and today. It sells, i.e., hands to John Q. in exchange for money, smaller denomination bonds, which Johns Q. sells to the Fed, i.e., hands to the Fed in exchange for money. Further, suppose the sum total of all these bond sales to the public and Fed purchases of the bonds from the public equals $2 trillion. Voila, you’ve got U.S. monetary policy since 2007.

In 2007, the monetary base – the amount of money our government printed in its 231 years of existence totaled $800 billion. Today it totals $2.8 trillion. And it increased by this amount via the process just described – the Treasury’s effective minting out of thin air two $1 trillion platinum coins.

[link to finance.yahoo.com]

Last Edited by Hard Eight on 01/18/2013 10:52 AM
Texas has yet to learn submission to any oppression, come from what source it may.
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NSF001

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01/18/2013 11:01 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
In 2007, the monetary base – the amount of money our government printed in its 231 years of existence totaled $800 billion. Today it totals $2.8 trillion. And it increased by this amount via the process just described – the Treasury’s effective minting out of thin air two $1 trillion platinum coins.

WOW. So over the past six years the dollar has fallen to a third of it's vlaue?
I don't think so,
he's up there with the others laying low,
vying with those who you've traded your life to to bless your soul,
Anonymous Coward
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01/18/2013 11:04 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Well, goodbye USD it was a good run.
Anonymous Coward
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01/18/2013 11:07 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
In 2007, the monetary base – the amount of money our government printed in its 231 years of existence totaled $800 billion. Today it totals $2.8 trillion. And it increased by this amount via the process just described – the Treasury’s effective minting out of thin air two $1 trillion platinum coins.

WOW. So over the past six years the dollar has fallen to a third of it's vlaue?
 Quoting: NSF001



Obama forgot to send me my bailout money.
Hard Eight (OP)

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01/18/2013 11:19 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
The govt. can debase the currency to paper-over a debt crisis. They can then repay in cheap dollars. BRIC's get screwed so rapidly seeking alternative payment systems. Savers, those nearing retirement, get hosed looking for stable capital preservation. It's similar to passing a giant tax increase without a vote (representation).
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Hard Eight (OP)

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01/18/2013 11:29 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
It would be great to hear from Argentinians on the joys of govt. currency manipulation gone wild.
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Anonymous Coward
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01/18/2013 11:32 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Next suppose the Treasury doesn’t hand the $2 trillion bond to the Fed directly, but hands it to John Q. Public who gives the Treasury $2 trillion and then hands the bond to the Fed in exchange for $2 trillion. What’s the result? It’s the same. The Treasury has $2 trillion to spend. John Q. Public has his original $2 trillion. And the Fed is holding the piece of paper labeled U.S. Treasury bond.


 Quoting: Hard Eight


I think the primary dealers have front run this process nearly to death. His example is nice and succinct but reality is far from clear cut economic examples.

Overall, the primary dealers buy the newly issued treasury bonds with credit from the federal reserve, posting as collateral who knows what most likely the bonds they are going to buy. Then they hold onto those bonds for a few weeks/maybe months knowing that eventually, the fed will pay a higher price for the bonds than what the PDs paid giving them a tidy risk free profit.

Its true our government spends like drunken sailors printing more and more currency from baseless expectations of future growth and coercive taxation of the middle classes (mostly) but its also true that a small, privileged group of financiers get very very wealthy from all this debasement of our currency.

.
ClydeX

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01/18/2013 11:35 AM

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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
It would be great to hear from Argentinians on the joys of govt. currency manipulation gone wild.
 Quoting: Hard Eight


How about a word or two from the Rhodesians?

Oh.....wait.........
Job 12:7) But ask now the beasts, and they shall teach thee; and the fowls of the air, and they shall tell thee:
8) Or speak to the earth, and it shall teach thee: and the fishes of the sea shall declare unto thee.
Hard Eight (OP)

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01/18/2013 11:36 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Inflation Calculator
If in (enter year)
I purchased an item for $
then in (enter year*)
that same item would cost:
Annual rate of inflation change:

[link to www.usinflationcalculator.com]

1913=$1.00
2013=$23.19

Annual rate of inflation change: 2219.1%
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Hard Eight (OP)

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01/18/2013 11:45 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Next suppose the Treasury doesn’t hand the $2 trillion bond to the Fed directly, but hands it to John Q. Public who gives the Treasury $2 trillion and then hands the bond to the Fed in exchange for $2 trillion. What’s the result? It’s the same. The Treasury has $2 trillion to spend. John Q. Public has his original $2 trillion. And the Fed is holding the piece of paper labeled U.S. Treasury bond.


 Quoting: Hard Eight


I think the primary dealers have front run this process nearly to death. His example is nice and succinct but reality is far from clear cut economic examples.

Overall, the primary dealers buy the newly issued treasury bonds with credit from the federal reserve, posting as collateral who knows what most likely the bonds they are going to buy. Then they hold onto those bonds for a few weeks/maybe months knowing that eventually, the fed will pay a higher price for the bonds than what the PDs paid giving them a tidy risk free profit.

Its true our government spends like drunken sailors printing more and more currency from baseless expectations of future growth and coercive taxation of the middle classes (mostly) but its also true that a small, privileged group of financiers get very very wealthy from all this debasement of our currency.

.
 Quoting: Anonymous Coward 961432


Yes, the whole system of debt-based currencies has many winners and losers. One of the biggest winners has to be the federal govt. and practically unlimited spending. Now I'm hearing that the congressional requirement to raise the debt limit should be automatic and without negotiation.
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Anonymous Coward
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01/18/2013 11:48 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Inflation Calculator
If in (enter year)
I purchased an item for $
then in (enter year*)
that same item would cost:
Annual rate of inflation change:

[link to www.usinflationcalculator.com]

1913=$1.00
2013=$23.19

Annual rate of inflation change: 2219.1%
 Quoting: Hard Eight


They constantly change the variables used to calculate inflation. In fact, you cannot predict how much inflation will occur in the real economy from money printing since the shadow banking system absorbs so much of the intended inflation. Equities also absorb a lot of the inflation as asset prices are bid up from banks who receive hot cash from the central banks.

Essentially, the former economy we all grew up in is gone, everything is manipulated now and controlled by banks and high frequency trading platforms.

The question is, how long can they continue to maintain control? We know the eventual crash will be far more spectacular than if we had not allowed our financial systems to be captured by criminal enterprise.

.
Hard Eight (OP)

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01/18/2013 11:51 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Virginia Tea Party says dollar has lost 98 percent of value under The Fed

In a pointed letter to Virginia's Congressional delegation, the Virginia Tea Party Patriot Federation recently called for an audit of the Federal Reserve System, blaming the bank for pushing the nation further into debt and devaluing the dollar.

The letter comes in response to Fed Chairman Ben Bernanke’s plan to buy $600 billion in additional U.S. Treasury bonds.

"The Fed, which was created and initially funded with taxpayer gold and monies by an Act of Congress, is opaque and operates in secrecy. It has done so since its inception in 1913," the letter reads. "Since that time, the U.S. Dollar has lost 98% of its purchasing power. We believe that this alone is compelling reason enough to tear down the veil and audit the Fed. Chairman Bernanke's recent actions make the need for this audit all the more urgent."

[link to www.politifact.com]
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Anonymous Coward
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01/18/2013 11:51 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
if the USA entered hyperinflation wouldn't that essentially reset all debts and credit obligations over a period of time?
Hard Eight (OP)

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01/18/2013 11:59 AM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Today, like the currency of most nations, the dollar is fiat money, unbacked by any physical asset. A holder of a federal reserve note has no right to demand an asset such as gold or silver from the government in exchange for a note.[11] Consequently, some proponents of the intrinsic theory of value believe that the near-zero marginal cost of production of the current fiat dollar detracts from its attractiveness as a medium of exchange and store of value because a fiat currency without a marginal cost of production is easier to debase via overproduction and the subsequent inflation of the money supply.

[link to en.wikipedia.org (secure)]
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Anonymous Coward
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01/18/2013 12:00 PM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
if the USA entered hyperinflation wouldn't that essentially reset all debts and credit obligations over a period of time?
 Quoting: Anonymous Coward 2539070


Good question, I suppose it depends on who you ask. Most people suspect that they (financial wealth) already have an alternative payments/clearing system in the wings ready for when the dollar collapses. But even if they have some new manufactured currency to replace the dollar they still have this web of interlaced debt/leverage in the world's financial system.

To keep their power structure they will have to maintain this web of debt and its the web of debt that is strangling the global economy and decimating the middle classes who are burdened with paying taxes to support the lower classes and continue to buy stuff or take on new debt to enrich the upper classes.

Personally, I think this whole idea of a new global currency to replace the dollar is a lie manufactured by those currently in control. They want their underlings to think they have it all figured out but in reality they don't, its going to be messy and as usual, as in every example from history, the market decides over time what it wants to use in the clearing houses for bills of credit.

That is called reality even for the worlds elite.

.
Hard Eight (OP)

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01/18/2013 12:12 PM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
if the USA entered hyperinflation wouldn't that essentially reset all debts and credit obligations over a period of time?
 Quoting: Anonymous Coward 2539070


What kind of society would that be. Real income and net worth have already dropped the last decade. If you can't pay your hyper-inflated taxes, who get's your property? You worked your butt off 40 years and tried to save a little to avoid being a retired pauper. Now what? Guaranteed the pension check won't hyper-inflate.

Retiree Net Worth Declines
Senior-citizen households lost the most money during the recession

Most households have seen their median net worth decline significantly since the recession. The median household net worth (the value of assets minus debts) declined 35 percent between 2005 and 2010, from $102,844 to $66,740, according to recently released Census Bureau data.

[link to money.usnews.com]
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Hard Eight (OP)

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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Family Net Worth Drops to Level of Early ’90s, Fed Says
(snip)
WASHINGTON — The recent economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve said Monday.
Families’ income also continued to decline, a trend that predated the crisis but accelerated over the same period. Median family income fell to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted for inflation.
[link to www.nytimes.com]
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Hard Eight (OP)

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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Dallas Fed proposes changes to rein in too-big-to-fail banks

The Federal Reserve Bank of Dallas on Thursday proposed sweeping nationwide changes designed to rein in “too-big-to-fail” banks and level the playing field for smaller banks.

It suggests breaking up the too-big-to-fail banks into smaller businesses and restricting the nation’s safety net to commercial banks. The theory is to make financial institutions small enough to fail without jeopardizing the entire financial system.

“We want all banks to be small enough to save,” said Harvey Rosenblum, director of research for the Dallas Fed.

Dallas Fed president Richard Fisher and his staff have advocated shrinking megabanks and other changes for a few years, but this is their first detailed proposal.

The idea of breaking up too-big-to-fail banks has gained support in the last few years. Last summer, former Citigroup chairman Sandy Weill, creator of the too-big-to-fail model, said it was time to break big banks up.

[link to www.dallasnews.com]
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Hard Eight (OP)

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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
For Americans, 'Cope' Replaces 'Hope': NBC Poll

The latest NBC News/Wall Street Journal poll shows that just 34 percent look at 2013 as a moment of economic expansion and opportunity; fully 60 percent call it a moment "to hold back and save because harder times are ahead."

Just 36 percent express significant confidence that Obama, after four years in the Oval Office, has the ability to produce a strong and growing national economy. (Read More: Obama: Congress Must Hike Debt Ceiling or Else)

[link to finance.yahoo.com]
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Anonymous Coward
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01/18/2013 01:54 PM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
The US will defaul.
Anonymous Coward
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01/18/2013 01:55 PM
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
Ron Paul said the US will default on debt.
[link to www.newsmax.com]
Hard Eight (OP)

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01/18/2013 04:13 PM
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Poll: Most see damage if US debt limit not raised

WASHINGTON (AP) — Most Americans think jarring economic problems will erupt if lawmakers fail to increase the government's borrowing limit. Yet they're torn over how or even whether to raise it, leaning toward Republican demands that any boost be accompanied by spending cuts.

According to an Associated Press-GfK poll, 53 percent say that if the debt limit is not extended and the U.S. defaults, the country will face a major economic crisis. An additional 27 percent say such a crisis would be somewhat likely, while just 17 percent largely dismiss the prospects of such damage.

[link to news.yahoo.com]
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

"The beauty of the Second Amendment is that it will not be needed until they try to take it."
Thomas Jefferson
Hard Eight (OP)

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IMF's Lagarde says U.S. debt ceiling fight could be "catastrophic"

"If it is not resolved appropriately by it being raised on time ... it could be catastrophic for the global economy," IMF Managing Director Christine Lagarde told Reuters Insider television.

Reuters
Texas has yet to learn submission to any oppression, come from what source it may.
Sam Houston

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Thomas Jefferson
BRIEF
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Re: The Treasury Has Already Minted Two Trillion Dollar Coins
assault spending
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