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Do you think there is a separate bank that literally holds the money? Do you think the US government owns the assets owned by the federal reserve?

gruez 5y ago
>Do you think there is a separate bank that literally holds the money? holds what money? all the money in the US? all the money on the fed's balance sheets? >Do you think the US government owns the assets owned by the federal reserve? What do you think ownership means? The federal government might not "own" the assets in the sense that they can raid the federal reserve's holdings, but they (or their appointees) can very well direct the federal reserve to sell/buy holdings at will. They can also direct the federal reserve to buy government debt, which is essentially giving the government money.
- VirusNewbie 5y ago
  What I'm trying to say is that the Federal Reserve is not owned by the US government and instead owned by all of the chartered banks. So having 1B of mortgage backed securities go from being owned by JPMorgan to 'The Federal Reserve', just means it's more evenly distributed across all banks, not that 'the government' now owns the debt.
  - gruez 5y ago
    > So having 1B of mortgage backed securities go from being owned by JPMorgan to 'The Federal Reserve', just means it's more evenly distributed across all banks, not that 'the government' now owns the debt. What's the practical difference between: 1. federal government owns mortgage backed securities 2. an agency controlled by the federal government owns mortgage backed securities Please explain in detail, without resorting to "the government does/doesn't own it".
    - VirusNewbie 5y ago
      If the government owns it, the value of the mortgage backed security it owns would affect its balance sheet. If the banks own it, the banks balance sheets are affected and not the government. I'm unsure of the confusion though?

gruez 5y ago

>Do you think there is a separate bank that literally holds the money? holds what money? all the money in the US? all the money on the fed's balance sheets? >Do you think the US government owns the assets owned by the federal reserve? What do you think ownership means? The federal government might not "own" the assets in the sense that they can raid the federal reserve's holdings, but they (or their appointees) can very well direct the federal reserve to sell/buy holdings at will. They can also direct the federal reserve to buy government debt, which is essentially giving the government money.

VirusNewbie 5y ago
What I'm trying to say is that the Federal Reserve is not owned by the US government and instead owned by all of the chartered banks. So having 1B of mortgage backed securities go from being owned by JPMorgan to 'The Federal Reserve', just means it's more evenly distributed across all banks, not that 'the government' now owns the debt.
- gruez 5y ago
  > So having 1B of mortgage backed securities go from being owned by JPMorgan to 'The Federal Reserve', just means it's more evenly distributed across all banks, not that 'the government' now owns the debt. What's the practical difference between: 1. federal government owns mortgage backed securities 2. an agency controlled by the federal government owns mortgage backed securities Please explain in detail, without resorting to "the government does/doesn't own it".
  - VirusNewbie 5y ago
    If the government owns it, the value of the mortgage backed security it owns would affect its balance sheet. If the banks own it, the banks balance sheets are affected and not the government. I'm unsure of the confusion though?