Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Federal Reserve balance sheet trends

federalreserve.gov

Post reply on HN
Print view View original

51–60 of 266 posts

Re: Federal Reserve balance sheet trends

#51

Post by RobertoG »

LatteLazy wrote: post #42
RobertoG wrote: post #20

Earlier quoted context omitted.

Who are people selling their children to, and how?

I'm being tongue in check with that bit :). We're not literally selling the kids. But it is the kids that will be paying off these huge debts via higher taxes and less services. The debts are mainly owed to China, Japan and a few other nations as well as big private lenders (hedge funds and billionaires)

That's not how it works, but even if that was the case, if that debt was owned by the Federal Reserve, who get the interest of that money? and who is the owner of the debt?

Re: Federal Reserve balance sheet trends

#52

Post by samdamsam »

dforrestwilson wrote: post #37
etherwhitelable wrote: post #29

The federal reserve owns half of all US debt. We are paying interest on interest to our own Fed that serves as the banking systems perpetual bailout fund with the ability to create unlimited amounts of money.

Japan is even more pronounced regarding this. Interesting possibilities stem from it: https://www.huffpost.com/entry/sovereign-debt-jubilee-japane...

Modern monetary theory is long overdue.

Re: Federal Reserve balance sheet trends

#53

Post by ro-_-b »

christophilus wrote: post #15
aswanson wrote: post #9

So I'm hearing the " the dollar is over, throw everything into gold, fiat money is doomed" in other forums. Can anyone give some conterpoints to that narrative?

Look up Peter Zeihan. He’s bullish on the dollar mostly because it’s the world’s reserve currency and there really isn’t a good alternative. That said... I’ve heard the dollar referred to as the best looking horse in the glue factory.

That doesn't mean you shouldn't buy gold & other hard assets. Even if the Euro and others decrease in relation to the Dollar the Dollar might decrease in relation to gold/hard assets & in my opinion likely will in the next 2-3 years.

Re: Federal Reserve balance sheet trends

#54

Post by ro-_-b »

me_me_me wrote: post #19
somebodythere wrote: post #12

Earlier quoted context omitted.

The main counterpoint is that this stimulus would be needed to counter massive demand-side deflation.

Well easy fix instead of giving money to the top, give it to the bottom. That will surely drive demand as more money is available to spend. It will boost confidence in local economies further growing demand and supply caps. What we see now it large parts of the stimulus package are devoured by the top level bureaucracy never doing anything but being transferred to Cayman islands as performance bonuses. How about we t…

Exactly. We are in the worst crisis since WWII & the stock market is at record levels in relation to GDP

Re: Federal Reserve balance sheet trends

#55

Post by samdamsam »

jrockway wrote: post #24
LatteLazy wrote: post #2

Til, People are more than happy to sell their children for a slightly cheaper mortgage as long as you dress it up correctly.

I think this has always been the way we've paid for infrastructure. I remember reading an article about Japan. They've stopped taking on massive infrastructure projects, because the population isn't growing -- they don't want immigrants and people aren't having kids anymore. Without a future tax base to pay for infrastructure, they can't build it anymore. So things like the Tokyo subway system are "done"; no money wi…

This is extremely disingenuous. The reason we aren’t having kids is we can’t afford it. All of my friends want to have kids but can’t. The few who have done so anyways are hurting.

Re: Federal Reserve balance sheet trends

#56

Post by zrail »

6nf wrote: post #43
etherwhitelable wrote: post #29

The federal reserve owns half of all US debt. We are paying interest on interest to our own Fed that serves as the banking systems perpetual bailout fund with the ability to create unlimited amounts of money.

Is it true that the fed is privately owned and if so does it matter or not really

It’s not true.

Re: Federal Reserve balance sheet trends

#57

Post by etherwhitelable »

6nf wrote: post #43
etherwhitelable wrote: post #29

The federal reserve owns half of all US debt. We are paying interest on interest to our own Fed that serves as the banking systems perpetual bailout fund with the ability to create unlimited amounts of money.

Is it true that the fed is privately owned and if so does it matter or not really

Private banks technically own the Fed receive 6% interest on their capital with any net gains are paid to the treasury. They buy all the bad and risky loans from banks and never have to mark them to real value or take a loss. If asset recovers and becomes valuable they sell it back to the banks.

Re: Federal Reserve balance sheet trends

#58

Post by RobertoG »

rapsey wrote: post #31
vkou wrote: post #16

Earlier quoted context omitted.

No, that $1,200 didn't come out of the Fed printing press. It came out of the general budget, so taxpayers are going to be on the hook for paying it back, in the future. The trillions the Fed is printing aren't being sent out as stimulus cheques. They are being used to provide short-term liquidity (Which does not cause inflation), and to buy junk bonds, (Which does cause inflation, and also happens to prop up the sto…

> No, that $1,200 didn't come out of the Fed printing press. It came out of the general budget, so taxpayers are going to be on the hook for paying it back, in the future. Government debt does not really get payed. Old debts are payed off with new ones.

As it should be.

Public debt is just a number that express the accumulated of pass deficits. In order to reduce that number you need a government that, instead of a deficit, have a surplus.

If the government has a surplus, less money is spend in the economy.

If that reduction in spending is not compensated somehow, necessarily, the GDP has to fall.

The only things that can reduce that fall in government spending are a positive balance commerce or an increase in private debt.

Now, an increase in private debt, instead of public debt, that's a real problem.

Re: Federal Reserve balance sheet trends

#59

Post by rapsey »

RobertoG wrote: post #26
rapsey wrote: post #10

Earlier quoted context omitted.

> The $1200 money isn't free, it is borrowed from future taxpayers. That is a pretty outdated view. More like the money supply grew and everyone's money is a bit less worth.

>>"[..] everyone's money is a bit less worth. " Only if the economy is at full utilization. The reason for the stimulus is that the economy it's not at full utilization, ergo, there will be not accelerated inflation.

Not now.

Re: Federal Reserve balance sheet trends

#60

Post by ro-_-b »

raverbashing wrote: post #48
aswanson wrote: post #9

So I'm hearing the " the dollar is over, throw everything into gold, fiat money is doomed" in other forums. Can anyone give some conterpoints to that narrative?

The gold fans fail to realize that liquidity is more important than hoarding metals. Gold was important at the time where balances were done manually and purchases between countries were settled with physical gold. (And no, this is not a defense of bitcoin. Bitcoin has to be much more liquid and stable for it to work as a store of value)

This is true for short term store of value. Both gold & Bitcoin are doing terrible. In the medium/long term gold & Bitcoin have been historically very good store of value assets
Post reply on HN