jxnmsdemguy65
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Sun Jan-23-11 10:16 PM
Original message |
What would it look like if the Federal Reserve went bankrupt? |
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Many students of the economy, such as investigative journalist Michael Ruppert, thinks that this could very well happen in 2011.
What would be the ramifications?
Would I be able to access the funds in my checking account?
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barbiegeek
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Sun Jan-23-11 10:25 PM
Response to Original message |
1. Can you site the article? |
Tunkamerica
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Sun Jan-23-11 11:18 PM
Response to Reply #1 |
11. I believe it's cite; like citation. |
barbiegeek
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Mon Jan-24-11 12:05 AM
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Tunkamerica
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Mon Jan-24-11 12:08 AM
Response to Reply #14 |
15. I tried to be nice about it, but yeah. |
immoderate
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Mon Jan-24-11 12:14 AM
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tama
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Sun Jan-23-11 10:25 PM
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quaker bill
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Sun Jan-23-11 10:25 PM
Response to Original message |
3. They "print" the money |
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How again are they going to go "bankrupt"? They just created 2 trillion dollars from thin air.
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Rosa Luxemburg
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Sun Jan-23-11 10:26 PM
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4. they'd ask the printers to print more money |
lurky
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Sun Jan-23-11 10:29 PM
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5. How would they go bankrupt? They can print money to pay their debts, IIRC. |
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I would be interested in seeing a link to one of these articles.
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Statistical
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Sun Jan-23-11 10:30 PM
Response to Reply #5 |
7. More specifically they have no debts to begin with. |
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The fed creates money from nothing to purchase assets. They never borrow from anyone for anything.
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taught_me_patience
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Tue Jan-25-11 01:01 PM
Response to Reply #7 |
26. Yep... awesome post,... this is exactly how it works |
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People need to understand the jargon:
fed increasing balance sheet = printing money.
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truedelphi
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Tue Jan-25-11 03:20 PM
Response to Reply #5 |
30. That is it in a nutshell. |
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And since the Fall of 2008, they have been printing money like crazy.
Except the actual dollar bills are not necessarily printed.
Bernanke explained this to "Sixty Minutes" at one point. He said when there is an entity that needs the Federal Reserve Dollars, he simply opens up an electronic account for that entity and puts whatever number of "digitized" dollars into that account.
He said that it is erroneous for tax payers to think that they are going to be on the hok for these offerings to the larger firms in America.
After all, he said, the money is simply electronic blips. (Remember this is what Bernanke said - please do not blame me if what he said doesn't make sense.)
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Statistical
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Sun Jan-23-11 10:29 PM
Response to Original message |
6. Never going to happen. |
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The federal reserve issued record dividend to Treasury in 2008 & 2009. By law they are limited to 8% dividend on assets and any excess goes to Treasury.
The fed isn't going bankrupt.
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FBaggins
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Sun Jan-23-11 10:34 PM
Response to Original message |
8. They recently made an accounting change that makes this impossible. |
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It was considered pretty darn close to impossible before, but now it's off the table.
Though the net effect is what other posters have presented. They just get the treasury to print more dollars.
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Statistical
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Sun Jan-23-11 10:54 PM
Response to Reply #8 |
10. The fed doesn't even need the treasury. |
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If they need more dollars they simply make more dollars.
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barbiegeek
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Mon Jan-24-11 12:18 AM
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Lint Head
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Sun Jan-23-11 10:53 PM
Response to Original message |
9. I would look like the front row seat of a Hank Williams Jr. concert. |
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I think it's kinda improbable that would happen. Too big to fail.
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Recursion
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Mon Jan-24-11 01:21 AM
Response to Reply #9 |
20. Not just "too big to fail"; the Fed gets to decide how much money it has |
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Bankruptcy is literally impossible. Plenty of other things could happen, but it couldn't be literal "bankruptcy".
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Demeter
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Sun Jan-23-11 11:39 PM
Response to Original message |
12. Bernanke Could File for Unemployment |
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Edited on Sun Jan-23-11 11:41 PM by Demeter
The Fed has nothing to do with your checking account.
A great injustice would be lifted off the American economy, and Congress would be forced to return to its Constitutional duties.
Upon further thought: pigs would probably take wing.
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MrMickeysMom
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Sun Jan-23-11 11:48 PM
Response to Original message |
13. I think this is the best kept secret... |
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An insolvent Fed... Who's ever been successful in their audit?
Fractional Reserve = print mo money, mo money, mo money.... the answer to an austerity program state side. What difference would my money make if it's backed by nothing?
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Recursion
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Mon Jan-24-11 12:17 AM
Response to Reply #13 |
18. The Fed doesn't use fractional reserve |
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It has no demand deposits.
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MrMickeysMom
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Mon Jan-24-11 08:04 AM
Response to Reply #18 |
21. How do you know what you know? |
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I'm waiting for you to explain the Fed's role to the World Banking System now.
:popcorn:
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Recursion
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Mon Jan-24-11 09:48 AM
Response to Reply #21 |
22. How do I know the Fed doesn't have demand deposits? |
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Because I know the definition of "central bank" and "demand deposit".
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MrMickeysMom
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Mon Jan-24-11 07:27 PM
Response to Reply #22 |
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Me, too! But, that wasn't what I asked.
Now, going back to the point about what difference would my money make if it's backed by nothing... It's a continual watering down process and it's backed by nothing. Due to fractional reserve, that expanding money MEANS NOTHING.
I just followed the recent reports about the biggest assets in 2010 and saw that gold and silver as assets have risen substantially (putting it mildly), but where's the dollar?
Yeah, there it is...hear the flush?
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Recursion
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Mon Jan-24-11 12:15 AM
Response to Original message |
17. It's literally impossible |
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A central bank can't go bankrupt. Even if it completely collapsed, "bankruptcy" wouldn't be an accurate way to describe that.
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MrMickeysMom
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Mon Jan-24-11 09:20 PM
Response to Reply #17 |
24. Then quit with the trite descriptions already |
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And admit that this country's banking system is an insolvent one. The Fed cannot disclose what backs it up or it would.
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Recursion
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Tue Jan-25-11 12:01 PM
Response to Reply #24 |
25. Nothing "backs it up" |
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Nobody ever said something tangible "backs up" fiat currency.
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MrMickeysMom
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Tue Jan-25-11 03:08 PM
Response to Reply #25 |
27. Good... At least you understand that n/t |
Recursion
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Tue Jan-25-11 03:13 PM
Response to Reply #27 |
28. What exactly is your point? |
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That valuation of any currency is ultimately arbitrary? Ummm... ok, sure.
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Statistical
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Tue Jan-25-11 03:16 PM
Response to Reply #28 |
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Edited on Tue Jan-25-11 03:17 PM by Statistical
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