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You are wrong on all points: + " If it looks like a central bank, quacks like a central bank" - except it's not. It's a privately owned and managed entity. +

You are wrong on all points: + " If it looks like a central bank, quacks like a central bank" - except it's not. It's a privately owned and managed entity. + "I call BS. Low rates are almost always punitive to banks' bottom lines" this is completely false. + " The Fed chair + board basically decides the rate policy, and he/she is always a career economist, not from industry.". This is utterly, beyond naive. The Fed Chair is an extremely politically driven position - they don't get to this position and do whatever suits them or the economy. They take into account the positions of the companies shareholders - which are the banks. It's beyond reason that the banks act entirely in the public good. They are 'for profit' entities - and absolutely everything they do is 'for profit. But you missed a key item that throws your argument to the wind: Congress does not have access to the Fed's books. My friend - if you believe for a second that the Fed is acting entirely in the public's interest - then the public should be able to see what's on the Fed's books. You can't. Congress can't. The President of the USA can't. Neither can the CIA, the NSA or the Treasury. There is some legislation to this effect right now: https://oversight.house.gov/wp-content/uploads/2016/05/H.R.24.pdf https://oversight.house.gov/wp-content/uploads/2016/05/H.R.2... It's inconceivably naive to believe that a cabal of bankers - who manage the US currency - and who DO NOT LET US ACCESS THEIR RECORDS - is acting in the best interest of the US. There is NO COUNTRY IN THE CIVILIZED WORLD where this is the case. And there's more. Now - this is more public info but it does demonstrate a high degree of cabalism between banks and the Fed - after the 2008 crises, US banks were very 'unhealthy' - this is because they had 'toxic' i.e. worthless mortgages on their balance sheet. So - the Fed - allowed banks to put those mortgages on the banks balance sheet at face value - for a period of time. Ex: ABC banks has a a crap mortgages on a house with a market value of $100K, but the mortgage is for $200K (it's worthless) - they exchange them with the Fed for a full $200K. The intent of this 'program' was to shore up balance sheets of banks to make them healthy - then while interest rates are low, bring the value of the homes up so those mortgages are not 'underwater' at which point the banks will take them back on their balance sheet. But that may never happen. It it has not happened yet. In a nutshell - the Fed handed $1 to banks for something only worth 50 cents. This is fraud. Not only that - this was not a small thing. This was the biggest transfer of assets in world history. Have a look at the Fed's balance sheet recently: http://mengercenter.org/surprise-surprise-the-feds-never-shrinking-balance-sheet/ http://mengercenter.org/surprise-surprise-the-feds-never-shr... You see that big red are that is how 1/2 of the Fed's balance sheet and didn't exist before: those are bullt, worthless mortgages. 2.5 TRILLLION DOLLARS WORTH. You know where you don't find that toxic, worthless sludge: on the balance sheets of nationalized banks. Summary: A) The Feds transactions are private - and nobody in government can access them. B) The Fed states that it makes decisions for the benefit of the economy, but what they say is irrelevant: the system is designed first and formost for the benefit of the banks. C) A 2.5 Trillion dollar 'fraud' (technically, since the banks will 'one day' take those crap mortgages back, it's not fraud - but they haven't and maybe they won't so it's a crime in the making) - or at least a 2.5 Trillion dollar 'gift' to private banks by the central bank is only to the 'benefit' of the people of the US to the extent that the entire banking system doesn't come down and crash - but in a real capitalist system - most of those banks should have had 100% of their shareholder value wiped out. The Fed definitely needs to be nationalized.

smallnamespace 10y ago
Hm, you simply ignored my points or straight contradicted them without any sources. > + "I call BS. Low rates are almost always punitive to banks' bottom lines" this is completely false. Follow the link my friend -- net interest margins are sharply lower when rates are low. If you are going to just flatly disagree, you're entitled to your opinion, but I really don't think you will find accurate data to justify your viewpoint. > This is utterly, beyond naive. The Fed Chair is an extremely politically driven position - they don't get to this position and do whatever suits them or the economy. You're trying to have your cake and eat it too. Please make up your mind: either the bankers own the Fed, or politicians do. Also, if you think that the bankers own all the politicians, then nationalizing the Fed wouldn't help anyway, would it? Also, this bears repeating: THE PRIVATE SHAREHOLDERS OF THE FED DO NOT CONTROL THE FED, BECAUSE THEY ONLY CONTROL A MINORITY OF THE BOARD SEATS. > My friend - if you believe for a second that the Fed is acting entirely in the public's interest - then the public should be able to see what's on the Fed's books. This is a classic conspiracy theorist argument. They don't want to show us all their books, so they must be doing something bad and hiding it. You don't have any evidence of any wrongdoing, you just presume that it exists because of your prior beliefs. In reality, people don't like politically motivated critics to rummage through their books. Climate scientists don't want their critics access to their e-mails -- does that prove that those scientists were faking climate change? I wouldn't mind the Fed opening up all its books, but I also don't support a witch hunt. > the system is designed first and formost for the benefit of the banks Begging the question. Please show me a credible, historical source that supports your claim. It'd also help if you can explain the long history of Fed actions that would've been against the interests of its private shareholders that you claim completely control it. Let's start with the Crash of '29 and the Fed's efforts to prevent it, for starters. > or at least a 2.5 Trillion dollar 'gift' to private banks by the central bank is only to the 'benefit' of the people of the US to the extent that the entire banking system doesn't come down and crash - but in a real capitalist system - most of those banks should have had 100% of their shareholder value wiped out. I agree there are issues regarding moral hazard and who should be paying for the mess the bankers got us all in. But do you really think that the optimal solution is for the US to nationalize every insolvent bank, and that they could've done it without causing market panic and worsening the crisis in the process? Anyway, the Fed could be explicitly nationalized without any real-world effect, precisely because it has been the textbook example of how to run a central bank for the last 60 years. You seem to think that all other countries' run their central banks better, but the truth is that those banks look to the Fed for leadership and guidance. > So - the Fed - allowed banks to put those mortgages on the banks balance sheet at _face value_ - for a period of time. Ex: ABC banks has a a crap mortgages on a house with a market value of $100K, but the mortgage is for $200K (it's worthless) - they exchange them with the Fed for a full $200K. Really doubt that--credible source please? Open Market Operations by definition are done at market prices; the Fed does not buy assets for twice their market value. I agree it would be pretty criminal if they did, but it would also be blindingly easy to find the evidence: just look at the free money flowing into each bank's balance sheets and cashflow statements. If you think the Fed did this, and then everyone conspired to hide the evidence, then we are certainly far into conspiracy theorist territory.

smallnamespace 10y ago

Hm, you simply ignored my points or straight contradicted them without any sources. > + "I call BS. Low rates are almost always punitive to banks' bottom lines" this is completely false. Follow the link my friend -- net interest margins are sharply lower when rates are low. If you are going to just flatly disagree, you're entitled to your opinion, but I really don't think you will find accurate data to justify your viewpoint. > This is utterly, beyond naive. The Fed Chair is an extremely politically driven position - they don't get to this position and do whatever suits them or the economy. You're trying to have your cake and eat it too. Please make up your mind: either the bankers own the Fed, or politicians do. Also, if you think that the bankers own all the politicians, then nationalizing the Fed wouldn't help anyway, would it? Also, this bears repeating: THE PRIVATE SHAREHOLDERS OF THE FED DO NOT CONTROL THE FED, BECAUSE THEY ONLY CONTROL A MINORITY OF THE BOARD SEATS. > My friend - if you believe for a second that the Fed is acting entirely in the public's interest - then the public should be able to see what's on the Fed's books. This is a classic conspiracy theorist argument. They don't want to show us all their books, so they must be doing something bad and hiding it. You don't have any evidence of any wrongdoing, you just presume that it exists because of your prior beliefs. In reality, people don't like politically motivated critics to rummage through their books. Climate scientists don't want their critics access to their e-mails -- does that prove that those scientists were faking climate change? I wouldn't mind the Fed opening up all its books, but I also don't support a witch hunt. > the system is designed first and formost for the benefit of the banks Begging the question. Please show me a credible, historical source that supports your claim. It'd also help if you can explain the long history of Fed actions that would've been against the interests of its private shareholders that you claim completely control it. Let's start with the Crash of '29 and the Fed's efforts to prevent it, for starters. > or at least a 2.5 Trillion dollar 'gift' to private banks by the central bank is only to the 'benefit' of the people of the US to the extent that the entire banking system doesn't come down and crash - but in a real capitalist system - most of those banks should have had 100% of their shareholder value wiped out. I agree there are issues regarding moral hazard and who should be paying for the mess the bankers got us all in. But do you really think that the optimal solution is for the US to nationalize every insolvent bank, and that they could've done it without causing market panic and worsening the crisis in the process? Anyway, the Fed could be explicitly nationalized without any real-world effect, precisely because it has been the textbook example of how to run a central bank for the last 60 years. You seem to think that all other countries' run their central banks better, but the truth is that those banks look to the Fed for leadership and guidance. > So - the Fed - allowed banks to put those mortgages on the banks balance sheet at _face value_ - for a period of time. Ex: ABC banks has a a crap mortgages on a house with a market value of $100K, but the mortgage is for $200K (it's worthless) - they exchange them with the Fed for a full $200K. Really doubt that--credible source please? Open Market Operations by definition are done at market prices; the Fed does not buy assets for twice their market value. I agree it would be pretty criminal if they did, but it would also be blindingly easy to find the evidence: just look at the free money flowing into each bank's balance sheets and cashflow statements. If you think the Fed did this, and then everyone conspired to hide the evidence, then we are certainly far into conspiracy theorist territory.