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We Are Now Paying for the Destruction of the US Dollar and Economy… Literally
We just hit
another milestone in insanity.
I’ve written
before that thanks to its QE lite and QE 2 programs, the Fed is now officially
the single, largest owner of US debt. However, even that nonsense pales in
comparison to the Fed’s latest accomplishment, that of owning over $1 TRILLION
in US debt.
That’s
right, as of yesterday afternoon the Fed now owns over $1 trillion in US debt. This amounts of over 7% of the US’s total
debt, own by our central bank.
Now, many
commentators have pointed out the various ways in which this policy has
endangered the US’s balance sheet, economic clout, and currency. However,
there’s one element that NO ONE seems to have picked up on. That is…
You, me, and
everyone else in the US, is now PAYING the Fed for its insane, anti-Middle
class policies.
Remember, we
are continually paying the debt via interest payments drawn up from tax
receipts. Thus, by buying up US Treasuries, the Federal Reserve is in effect
reaping interest payments from the US populace.
Now,
consider that none of us had any say in the Fed’s policies, nor the appointment
of our esteemed Fed Chairman, Ben Bernanke. None of us voted for him. None of
us influenced his policies. And, at this point, virtually none of us approve of
what he’s doing.
But ALL of us are NOW paying him and the
Fed for doing it. In fact, because the Fed is officially the single,
largest owner of US debt, the Fed is, in effect, raking in more money from our
debt situation than ANYONE else on the planet.
Thus, we are
paying LITERALLY for the insane policies of the US Federal Reserve. Never mind
abstract arguments of “paying” for the Fed’s mistakes in the sense of the US
Dollar collapsing or the US’s economy imploding. We are LITERALLY paying
BILLIONS in interest payments to the Fed.
This in turn
means we are:
1) Helping
the Fed to continue destroying the US Dollar
2) Funding
the Fed’s bubble-blowing efforts
3) Financing
the very same policies that have eviscerated the Middle class and retirees
Given that
we have no vote or say in the Fed’s actions, I know of only one way to deal
with this situation and that’s to buy assets that will maintain their
purchasing power and produce REAL returns to counteract the Fed’s anti-Dollar
policies.
Good
Investing!
Graham
Summers
PS. If
you’re getting worried about the future of the stock market and have yet to
take steps to prepare for the Second Round of the Financial Crisis… I highly
suggest you download my FREE Special Report specifying exactly how to prepare
for what’s to come.
I call it The Financial Crisis “Round Two” Survival Kit.
And its 17 pages contain a wealth of information about portfolio protection,
which investments to own and how to take out Catastrophe Insurance on the stock
market (this “insurance” paid out triple digit gains in the Autumn of 2008).
Again, this
is all 100% FREE. To pick up your copy today, go to http://www.gainspainscapital.com
and click on FREE REPORTS.
PPS. We ALSO
publish a FREE Special Report on Inflation detailing three investments that
have all already SOARED as a result of the Fed’s monetary policy.
You can
access this Report at the link above.
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6% on $14 Trillion. good times.
That's true in effect but they don't return the interest until the end of the year. At the current rate of expansion of the monetary base, the current purchasing power of a dollar is greatly devalued in a year's time, so the Fed is in fact paying the treasury back with cheaper dollars.
I know, but I the biggest robbery from the Fed is in favor of banks and the government.
The banks benefit from the Fed because it covers them (with cheap loans usually) and allows them to overextend credit and earn a lot more benefit while at he same time making everybody go into debt.
The government benefits because the Fed monetizes its debt allowing politicians to spend without direct taxation which angers people.
All of this is payed by the citizens through rising prices, that hit the middle class and the poor the worst. This is the real robbery. Its the politicians and bankers allied and benefiting from the monopoly on money.
What middle class?!!!
http://www.youtube.com/watch?v=SZk0EkJ2ukY
http://www.xtranormal.com/watch/8083657/
Where have you been PCR? Everyone on these forums has known this for years. Come back when you have something fresh.
The Fed says on its web site that it "remits interest payments back to the United States Treasury".
So is this article complete rubbish?
minus reasonable administration fees.
edit:
In the interest of smugness, I kept my answer brief. However, I realized that this was legitimate disinformation being foisted on the unaware. I am no bond guy, but here goes:
The gov sells T-Bills. By law, though not currently enforced, the FED cannot buy them directly. Instead, they are sold to a network of Primary Dealers-PD, made up of the likes of JP Morgan, Goldman, and the like. The PD sell these to the FED at a profit. The PD turn around and deposit the money at the FED, who are now paying interest on that money. The FED collects interest on the bonds, paid from our tax dollars all year long, doing whatever it is they do with the money. At the end of the year, they send it back to the gov, minus costs. nice uh, just like the website says?
Oh, the FED isn't a stand alone comany, its a corporation. Who owns it? JP Morgan, Goldman, etc. Hey, wait, aren't those the PD? why yes, yes they are.
To summarize:
The PDs sell Bonds to the FED at a profit. They deposit the money at the FED and recieve interest on that money. They get to collect payments on the bonds and use that money interest free until its time to turn it back to the gov, and when they do, they deduct the interest they paid themselves for having the profits they made, on selling the bonds, on deposit at a bank that they own.
They sell our own US bonds at a profit
They collect interest on that profit
They collect interest on the bonds, paid with our taxes, and get to use it, interest free
They use our tax money to cover the expenses of running the whole thing.
And that is how you fleece the American people without getting your hands dirty.
great work if you can get it.
We should move all of OUR gold from under the FRDNY to West Point
Then we should have an long conversation with the FED and a forensic audit
Surpassing China as the top holder of US debt reduces China's ability to wreak havoc with the "nuclear" option of selling its USTs.
If the goal or simply a common sense repair of the economy includes importing less and exporting more ... well, USD be damned.
We prefer to wreak havoc with ourselves.
http://www.usagold.com/whithergold.html I imagine this will be of interest to anyone who reads this page.
how can I buy stock in a federeal reserve bank? any country will do quite fine.
http://covert2.wordpress.com