easy to do when you just take our money out of the treasury and loan it out. how much do the taxpayers get back?

GaryPDX: Ahhh. Fiat money paper games.

Exactly. We need don't need an arbitrary money system with no basis for growth, that's subject to the market. We need gold. Once we run out, and we can't mine anymore we can invade countries to steal their gold supplies.

GaryPDX: Fiat money

DRINK

adamgreeney: GaryPDX: adamgreeney: GaryPDX: Ahhh. Fiat money paper games.

Um... what currency isnt fiat? You know gold is a fiat currency right?

Is that based on how much fiat per ounce you're willing to pay?

Lets go another route.

Say someone offers you 50 pounds of gold for your stock of food and ammo. You take it. 2 days later the bombs drop and we are in a fallout like world.

Does your gold do you any good? What is its value now? And what is the value of your food and ammo?

Gold is fiat.

Spices, in particular pepper, are far better than gold. After all, you can't eat gold. You can eat pepper, and in fact will probably need it in a post-federalist world. Never forget that pepper was tied, ounce for ounce, to the price of gold.

Bonus, you can grow more pepper. The farker relying on gold will run out!

Down with fiat currencies and metals! The spice shall flow!

inglixthemad: adamgreeney: GaryPDX: adamgreeney: GaryPDX: Ahhh. Fiat money paper games.

Um... what currency isnt fiat? You know gold is a fiat currency right?

Is that based on how much fiat per ounce you're willing to pay?

Lets go another route.

Say someone offers you 50 pounds of gold for your stock of food and ammo. You take it. 2 days later the bombs drop and we are in a fallout like world.

Does your gold do you any good? What is its value now? And what is the value of your food and ammo?

Gold is fiat.

Spices, in particular pepper, are far better than gold. After all, you can't eat gold. You can eat pepper, and in fact will probably need it in a post-federalist world. Never forget that pepper was tied, ounce for ounce, to the price of gold.

Bonus, you can grow more pepper. The farker relying on gold will run out!

Down with fiat currencies and metals! The spice shall flow!

Salt is even better as it is a favoring, a preservative, and is a necessary nutrient of humans. It might become highly valuable in land-locked areas.

But the by far the most valuable will be skills like: farming, baking, brewing, simple construction, spinning/looming, clothes making, animal husbandry, etc.

Skill with a firearm will most likely also be highly valued by those in power or want to depose those in power.

WTF Indeed: Once we run out, and we can't mine anymore we can invade countries to steal their gold supplies.

We would never run out because once we're back on the gold standard the government will confiscate all the gold and make it illegal to hold.
Just like in 1933 (new window).

Must be nice to be able to print your own profits into existence.

tjfly: Must be nice to be able to print your own profits into existence.

Banks create the money they lend out from unicorn tails, fairy giggles, and other more mundane imaginary things.

Wow you folks made Gary STFU. I am impressed. However. My guess is he headed on over to freeperville to ask for more talking points to defend his ignorant position

So everything is going to be all right then?

The Fed is required by law to give 97% of it's profits back to the Federal government. It does this every year. They are actually a lot of rules that they are required to follow before they can give out a loan. They have to have security/collateral if they give out loans.

They also cannot print money. Only the US Treasury can do that, they can give credit to banks just like every other banking institute. The big difference is they can dump hundred's of billions of dollars, million's of oz gold, foreign currency, or real estate onto any market at any time. They are also a federal agency which has been authorized by Congress under a statute in 1913 because people were sick of the banking systems collapsing every time bad weather delayed boats from Europe with gold payment.

If you want, you can e-mail them and they do respond.

/I am not a paid endorsé of the Fed but they have an absolutely fascinating history. A true story: The democrats were hell bent on having a public banking system. A two year investigation into how Europe ran their systems so horrified the panel that they completely reversed course. Fortunately a dual private/public system was hammered out, the first in existance.
//If only those dickheads hadn't crashed the stock market in 1929

Hobodeluxe: easy to do when you just take our money out of the treasury and loan it out. how much do the taxpayers get back?

All of it actually. By law they hand it over to the treasury.

adamgreeney: Gold has no intrinsic value.

That word. I don't think you know what it means.

Maybe if you substituted a synonym for intrinsic, which means built in or inherent, you would understand better the basic language mistake you are making. Try it.

Gold has no inherent value.

Do you not see what a dumbass statement that is? Gold's only value is inherent, it's only value is the value bestowed on it by virtue of it being what it is, gold. The value of gold is only determined by it's historic relationship with humans as a currency, the purest expression of supply and demand there is, as it is unencumbered by any debt or obligation attached.

Gold, as we all know, is actually quite useless. Although it's feasible to use minute amounts of gold in electronic applications it's really far too rare and valuable to be used in any real industrial applications and it's not. Virtually all of the gold ever mined is still around today as it's not consumed, it doesn't decay or spoil and of course it's valuable enough to never be lost or go unrecycled.

You might even say it has no extrinsic value whatsoever.

This is not some small point of semantics. This is people using the word in the exact opposite manner of what it really means and it's not uncommon to see it here in fark business threads or in the jargon of daily economic news.

It's also at the crux of the debate of golds value both in monetary terms and in the discussion of gold's place in today's economy as it explains why some people get it and some people don't.

It's obvious that gold has no extrinsic value (as I said its rarity and expensive nature makes it practically useless) so it's easy to see why people who have installed the "no intrinsic value" mental block in their head can then only come to the demonstrably ludicrous conclusion that gold has no value at all.

Really...if it's useless for industry and it has no inherent value either...then why the hell do people (and hedge funds and investment managers and central banks) pay $1600 plus for a single paltry ounce of the stuff?

If you know that it has no place in manufacturing and you also think that it has no inherent value either, then it's easy to see why you just don't get it. That you can completely disregard the obvious, that gold has always served a certain role in mankind's trading ways and that it always will despite the distaste some have for "that barbarous metal."

Feel free to argue that it is over or under valued at any given time but don't fool yourself into thinking that gold has no intrinsic value.

/pet peeve
//you looser

Were these profits based on the 0.01% loans they gave out? If so, they could've had TARP paid off if they charged 0.1% interest, and half the US debt if they charged 1%.

namatad: Hobodeluxe: easy to do when you just take our money out of the treasury and loan it out. how much do the taxpayers get back?

umm
all of it
or are you really that stupid???

any profit that the fed makes goes to the treasury


/the argument against the fed has nothing to do with this.

ummm...I think he was talking about the principle.

Any profit the Fed makes on its "investments" is paid out to the Treasury but the Fed bought the financial instruments that are generating that return at one point.

Most of the instruments that are generating these "profits" are the mortgage backed securities that the Fed bought up at the height of the sub prime crisis in 2009...almost a trillion dollars worth actually. Against a trillion dollar loan a 77 billion dollar return looks a little weak truth be told...less than 1 percent.

This of course is because most of these securities are crap...sub prime you might even say...and this amount (the trillion dollar principle) is likely to give the Fed (taxpayers...unless the Fed carries this paper forever) a trillion dollar haircut, either outright or in the form of inflation.

I think this is the money Hobodeluxe was wondering about.

/so yeah...this has quite a bit to do with the argument about the Fed

Eric The Pilot: Were these profits based on the 0.01% loans they gave out? If so, they could've had TARP paid off if they charged 0.1% interest, and half the US debt if they charged 1%.

Um, no.

Those were not loans, those were guarantees. The banks were having a run on them and the Fed was stepping to say that that they be there to give those firms temporary loans in the event the run went past their book value. The entire value of the loans that were given out was around $1.5T The guarantees were backed up by the bank entire capital. They couldn't transfer money fast enough around to keep up with the demands and selling them at that moment wasn't possible but they could loan against them.

The reason they got those loans was to keep them in business. When Lehman brothers went down, it was the smallest of the four investment banks with a market capital value of around $690B and a debt of around $700B which meant that $1.3T of the economy disappeared. Had any of the others went down then the entire financial system would have collapsed in short order because without trust all the credit comes due on the same day across the entire system. McDonald's was one week away from missing it's payroll.

It was messy but it had to be done.

Al Hashshashin: namatad: Hobodeluxe: easy to do when you just take our money out of the treasury and loan it out. how much do the taxpayers get back?

umm
all of it
or are you really that stupid???

any profit that the fed makes goes to the treasury


/the argument against the fed has nothing to do with this.

ummm...I think he was talking about the principle.

Any profit the Fed makes on its "investments" is paid out to the Treasury but the Fed bought the financial instruments that are generating that return at one point.

Most of the instruments that are generating these "profits" are the mortgage backed securities that the Fed bought up at the height of the sub prime crisis in 2009...almost a trillion dollars worth actually. Against a trillion dollar loan a 77 billion dollar return looks a little weak truth be told...less than 1 percent.

This of course is because most of these securities are crap...sub prime you might even say...and this amount (the trillion dollar principle) is likely to give the Fed (taxpayers...unless the Fed carries this paper forever) a trillion dollar haircut, either outright or in the form of inflation.

I think this is the money Hobodeluxe was wondering about.

/so yeah...this has quite a bit to do with the argument about the Fed

The fact that the Fed made 77 billion in profit suggests that 77 billion is over and above the trillion dollar principle not that it's a negative 99.23% ROI. Fortunately your misunderstanding of the word profit in no way undermines your sanctimonious treatise on the proper use of the word intrinsic, or you'd look like a real twat.

The Fed is going to get that money back on those Mortgage Securities. They are spent the last four months suing the crap out of those banks. You can run but you cannot hide from the Fed in the financial markets because they literally hold the key to the vault those banks operate out of.

This year will be a gigantic one for the Fed. Banks are betting on the Fed having QE3, another trillion dollar in mortgage purchase, and holding interest rates at zero. If they were a doctor, they would pumping adrenaline directly into the heart of the patient @ 15cc a sec. Congress needs to start spending this year.

cameroncrazy1984: How, exactly, is a loan that is generating a positive ROI going to cost the Fed money?

Well....I guess it's a ROI...albeit a minuscule one. I never said any different in my post did I? And as the article notes...most of the return comes from Treasuries that the Fed bought during QEI and QEII...and therefore most of the ROI (as you quaintly put it) is coming directly from the taxpayers.

The "loan" (consisting almost entirely of sub prime mortgages acquired during the bail out of the Maes and other lending institutions in 2009 plus various Treasury buying operations) is basically three trillion dollars, the balance at the moment being somewhere just north of 900 billion dollars of various sub prime securities and just over two trillion dollars of Treasuries. I'd venture to say the Treasuries are a little sub prime too.

At 77 billion dollars interest your precious ROI is about 00.25%...about two thirds of that (or more...those sub prime securities are crap to say the least) coming from the payments due on the Treasuries from the government...and that doesn't account for any payment on the principle.

Get that? The Fed is making about one quarter of one percent per annum on a three trillion dollar "loan" and nobody is really makin' much of a dent in the principle. So yeah...America is on the hook for it. Not that it will ever be paid off...it's in line behind the 15 trillion the taxpayer already owe to various creditors...it'll actually just grow and grow with future bail outs and QE programs.

But think of the ROI!!!

lol

Also, you RON PAUL types have been predicting hyperinflation for four years now. Shouldn't we have had it by now? I mean, the Stimulus and the TARP bailouts were four years ago as well. How long does it take for hyperinflation to set in?

heh...I know I don't post in here all that much but dude...I'm the libbiest libby that ever liberaled. I'm left of whidbey fer chrissake. I don't post much but here in the business tab and you won't find any OMG Hyperinflation!!!111!! in any of my posting history.

So fark ron paul and fark your assumptions. You're the one that goes off all half cocked here and in the politics tab blinded by your ideology. Just because we're lefties doesn't mean we shouldn't have an understanding of the ramifications of the financial mess America (and the world) finds herself in today.

I'm all for financial stimulus, as the result if we don't is too horrifying to contemplate, but don't think Keynes would be happy to see his name applied to what is going on today. The Keynesian model became obsolete about 12 trillion dollars ago. What today's stimulus programs are doing is nothing remotely like borrowing a little money to tide us over a rough patch and saving a little money when times get better.

We are in the end game of debt and the bankers are going to want their money.

/lefties and righties money both

Stile4aly: negative 99.23% ROI.

No. As I painstakingly spelled out (again) to cameron just above...positive 00.25%, most of it from the taxpayer...and no payment on the three trillion dollar principle.

Fortunately your misunderstanding of the word profit in no way undermines your sanctimonious treatise on the proper use of the word intrinsic, or you'd look like a real twat.

Thanks?

/you artless idle-headed lewdster
//not as good as you at the insult thing

$77 billion profit, loaning out money at 0% interest.

Wait, what??????

hubiestubert: Currency value always shifts. Be that paper. Be that gold. Be that silver. Be that jade. Be that cowry shells. Be that copper. Be that brass. Be that salt. Because value is comparative.

Gold shifts in value. Because it is a traded commodity. Flood the market with that commodity, and you get devaluation. Tighten the supply, and it rises. It is thus easily held hostage to those who would manipulate the market. Sort of like the value of diamonds--the supply is artificially manipulated at this point. South Africa sits on deposits that are astronomically large, but putting all that on the market? That is cutting the value of said commodity.

That is the problem with commodity based currency. It has relative value, but a value that is in many ways much more easy to manipulate. Which is sort of the point for the folks who are pushing for a hard currency. To return us to currency manipulation games that are a bit easier to manage, and thus cheaper.

Ultimately, you have to ask yourself, who do you want manipulating the market?

The sad thing is: we've done this before. And that's the reason why we have the system that we have today, with market regulations, because we've seen the results of this before. It was a boom-bust cycle that was held hostage by a tiny number of folks, and it resulted in panics and manipulation on a grand scale.

tl;dr: Watch Goldfinger

Al Hashshashin: I'm all for financial stimulus, as the result if we don't is too horrifying to contemplate, but don't think Keynes would be happy to see his name applied to what is going on today. The Keynesian model became obsolete about 12 trillion dollars ago. What today's stimulus programs are doing is nothing remotely like borrowing a little money to tide us over a rough patch and saving a little money when times get better.

We are in the end game of debt and the bankers are going to want their money.


Wat

77 Billion? Wow, it's almost like the Federal Reserve is a license to print money.

GaryPDX: Ahhh. Fiat money paper games.

At the Top Secret, Top Gear Reserve, they also have Fiat, championed by this man:

:

Here's your Fiat, GaryNixonYouDolt!

adamgreeney: It really baffles me that people dont understand that though. Words have meanings, and it isnt hard to look them up.

Well, sometimes those words mean things we don't want them to, and would like to change. We then get such things as gold-backed currency supporters, Fox news, and Catholicism.

adamgreeney: Does your gold do you any good? What is its value now?

Sure does. Make bullets out of it. Nice heavy material would have an excellent ballistic coefficient. Plus, I heard it is the only thing that kills zombie bankers.