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05:46 PM
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Why won't the Fed just cancel/retire it's $ 4+ Trillion in U.S. Debt securities ???
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[quote:Anonymous Coward 1347486:MV8yNDgyMDQ3XzQyNzg2NTY5Xzg0MDI1OUE1] [quote:RDprofessor:MV8yNDgyMDQ3XzFGRERBMDkw] 1. The Federal Reserve supposedly derives its powers at the express pleasure of the U.S. Congress. 2. The Federal Reserve Chair is appointed by the U.S. President. 3. The Federal Reserve digitally creates real dollars and uses them without Congressional oversight. 4. The Federal Reserve is currently carrying 4 Trillion in U.S. debt. 5. Everyone on TV wants to know how the Fed will unwind this balance sheet, by selling the debt to the markets, or by holding the debt to maturity. 6. The U.S. taxpayer is paying interest on money created at zero cost with full benefit of interest paid to the consortium of banks headed by the Federal Reserve. 7. The Federal Reserve can never really take a loss, because it always has a zero cost basis. 8. If the Federal Reserve serves American interests, why don't they talk about canceling the debt off the U.S. deficit by retiring the debt securities they hold ? discuss. [/quote] Well, put simply it would obliterate the value of the dollar and collapse the global economy. The Fed is the backstop (with limits) to central banks worldwide, and to 'erase' those holdings would immediately torpedo both the Fed's credibility and the perceived value of the currency. Somebody has to pay. By the way, most of your points are inaccurate, OP. Point #2 The Fed chair is not appointed, they are nominated, #3 Treasury only spends what Congress approves, #4 Not all U.S. debt...European debt as well, #6 The Treasury pays interest to the Fed for purchases, and the Fed then returns that money to the Treasury per agreement, #7 True to a point, but as the Fed's balance sheet expands, it's credibility becomes stretched, thus jeopardizing faith in the dollar as the reserve currency. #8 See above. Still, at least you are thinking 'out of the box'. We're going to need more of that in the months and years to come. [/quote]
Original Message
1. The Federal Reserve supposedly derives its powers
at the express pleasure of the U.S. Congress.
2. The Federal Reserve Chair is appointed by the
U.S. President.
3. The Federal Reserve digitally creates real dollars
and uses them without Congressional oversight.
4. The Federal Reserve is currently carrying 4 Trillion
in U.S. debt.
5. Everyone on TV wants to know how the Fed will unwind
this balance sheet, by selling the debt to the markets,
or by holding the debt to maturity.
6. The U.S. taxpayer is paying interest on money created
at zero cost with full benefit of interest paid to the
consortium of banks headed by the Federal Reserve.
7. The Federal Reserve can never really take a loss, because
it always has a zero cost basis.
8. If the Federal Reserve serves American interests, why
don't they talk about canceling the debt off the U.S.
deficit by retiring the debt securities they hold ?
discuss.
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