Why can't I create money out of THIN AIR and then charge interest like the Federal Reserve does?

Question

Yes, I am being sarcastic, but the fact still is that what the Federal Reserve does is also misleading and unconstitutional.

Thanks, Joe! I will remember to do that!

Answer 1

Fedup, have you ever read any of my answers to your other questions, or are you simply looking for someone to reinforce your delusions?

I have pointed out to you time and time again that the Federal Reserve returns excess earnings to the U.S. Treasury. This can clearly be seen on the INDEPENDENTLY AUDITED financial statements of the Federal Reserve.
http://www.federalreserve.gov/boarddocs/rptcongress/annual06/pdf/audits.pdf

As dot.dot said, the Federal Reserve will purchase U.S. Government securities on the open market. These securities are then used as collateral in order to request printed bills from the U.S. Treasury's Bureau of Engraving and Printing. The U.S. Government pays interest on the $800 billion in securities the Federal Reserve holds. Once the Federal Reserve pays its expenses, extra income is returned to the U.S. Treasury. In 2006, the Federal Reserve paid $29.1 billion to the Treasury on $36.8 billion in gross income.

The Federal Reserve is a congressionally chartered central bank system. It is entirely constitutional and has consistently been upheld in court to be constitutional.

EDIT: Yes, the Federal Reserve district banks do have stocks, but the amount each member bank is required to own is set by law. THE MEMBER BANKS DO NOT HAVE A CHOICE IN THE MATTER. All national banks are required to become member banks and they are required to "subscribe" to an amount of Federal Reserve district bank stock that is equal to 3% of their capital. If the member bank reduces their capital, that bank must surrender excess stock. If the member bank has an increase in capital, they must purchase additional stock in the Federal Reserve district bank. The district bank simply issues additional shares with no reduction in par value of any other shares. The stock does not confer any rights of ownership to the holders beyond the par value. The member banks cannot sell, trade, or even give away their shares in the Federal Reserve banks. If the Federal Reserve system was dissolved by Congress, excess assets above the par value of the shares would become property of the U.S. Government.

Enormous amount of dividends? What do you consider enormous? Did you look at the audited financial statements? In 2006, the Federal Reserve paid $861 million in dividends to the member banks. The only reason for the dividends is to allow the member banks to earn something on the amount of money they are required to have invested in the Federal Reserve district banks. In 2006, the Federal Reserve paid $861 million in dividends and paid $29.1 BILLION to the U.S. Treasury.

Answer 2

Mortgaging your future??? Sounds like a great idea and I would just love to sign up to that one...it basically means that before you even start off in the great rat-race, you are indebted to someone.

If anyone out there believes that there is not something 'questionable' with the Federal Reserve (The name raises the first alarm bells!) then you are either blinkered, or in on it.

The entire system is set up on a constantly rotating basis so that govt requests money, fed prints it with interest, IRS then charges taxes to the country....and on it goes.

Of course it is all legal - BECAUSE THEY WRITE THE BLOODY LAWS!!! I'm sure if Fed-Up was able to print money and write laws, she would be able to say it was legal too.

What is not legal though is paying your taxes via the IRS...if you remove that stone from their immoral pyramid, then it collapses....start looking at court cases where people have refused to pay taxes and have been acquited as the jury asked to see a law that states you must pay taxes - THERE IS NONE FOR THE INDIVIDUAL.

Think about it; how else could they get away with it if they weren't using scare tactics with IRS tax, and writing laws themselves???

How do you think the gold standard removal was passed??? They passed it while most congressmen were on holiday for the xmas break...why do this if it was above board???

You are being played with people, and you need to wake up and realise it.

For those of you who think this is a political debate between Democrat, Liberal, Conservative or any other label you choose to use; think again, BECAUSE THIS A HUMAN ISSUE THAT CONCERNS US ALL.

Answer 3

I wish.. but then I'd be put to jail..

You can't cheat.. government hates competition.. or is that the Fed hates competition.

To enn..
Fedup is not talking about her debt.. she is talking about the way the Federal Reserve is set up.

Why would government need the Federal Reserve if the government has it's own mint? The US mint can print money, and it doesn't need to get permission from the Federal Reserve.

It's a ponzi scheme. The government could print it's own money if it wants to, but the Fed gets in and acts like it owns the money. It doesn't. It can only hold other people's money.

We have been brainwashed to think that we NEED the Fed. As a matter of fact, America was fine without a Fed or a Central Bank for over 100 years.

But I do agree with enn about investing in gold and silver. I invest in gold and silver too.

Answer 4

It's not the creating money part, it's whether or not people will use your money.
There have been problems in the past before the Treasury Dpeartment established a monetary system. Banks in California, for instance, minted their own gold coins, but went bankrupt because their coins were not accepted everywhere, and some of them were counterfeited to the point that the money was no good. Gold in the form of dust or nuggets was far more acceptable currency in the Gold Rush Days of California than U.S. Bank notes or bank-circulated coins. (The History Channel had an awesome special on this subject)
The Federal Reserve Bank is a bank that offers government loans. The money for many of the loans comes from people who buy U.S. Savings Bonds (hence the Bond measures on election ballots.) The interest charged on the loans is paid to those who collect interest and cash out their savings bonds. The Federal Reserve does not print the money, the U.S. Treasuty Department prints the money. The Federal Reserve holds gold and silver as reserve in case of a bank collapse so it can pay all of the shareholders their due.
In some ways you are correct in that money is now created out of thin air - I don't like the idea of money all being numbers in a computer! But your fear of the Federal Reserve has its foundations in the knowledge that our economy is a false economy, where too many people are living beyond their means and are heavily in debt. The collapse of the economy would mean the ruin of thousands, if not millions of people due to an inability to repay their high debts.
You fear your own debts. It's wrong to blame your fear on the Federal Reserve or the nameless government.
What you can do is learn how to clear your debt and live within your means. You can learn how to do what many who survive disasters do, learn to trade skill for skill, and real goods for real goods. You need to learn how to live on less, find clothing for free or very cheap, cultivate friends who know how to preserve food, learn how to grow your own food and make friends who know how to garden well, establish your own trading community and pull out of the feeding frenzy that the piranha pool of retail sales. Stop depending on big-box retailers and start supporting your local businesses. Take your money out of the computer system and invest in gold, silver, and real property.
The more you learn how to care for yourself and survive, the less you will fear the big bad government in times of trouble.
God helps those who help themselves. May He guide you and show you the way to do so.

Answer 5

The Federal Reserve Bank only creates the Principal - not the usury or interest that it lends to the U.S. government. Therefore the usury can NEVER be repaid and the end result is foreclosure and bankruptcy.

In 1764, Britain forbids all its American colonies to issue paper money as legal tender

In 1765, the Bank of England demanded that the American Colonies pay taxes in British specie or coins which the people did not possess. If they had borrowed from the Bank of England to pay the tax, the end result would have been the same: foreclosure and bankruptcy with the Bank owning everything!!

1775-1783 The American Revolution or War of Independence
The American Congress, and individual states. finance their war effort overwhelmingly by printing money. This eventually leads to hyperinflation rendering the continentals worthless - but the Revolution is successful.

Does this cycle sound familiar?

Answer 6

The Fed does not charge interest; the Treasury pays the interest (because it pays interest on all securities that it issues) and then reclaims the profit.
Congress delegated the authority to issue currency to the Fed so it is false to state that the Fed is unconstitutional. The Supreme Court has also voted unanimously that the central banking system is constitutional.

EDIT: TheDude, NGC6205 may not see your answer, so I'll clarify a point on behalf of him.
The Federal Reserve Stock as an investment is a lousy one. It is not an equity stock, but a membership stock. The stock price is fixed at $100, and the stockholders receive a 6% dividend. The catch is that the stocks cannot be sold or traded. This means that it would take over 16 years just to reach the nominal break-even point.

Answer 7

NGC6205 : the federal reserve does have stock , which only the banks can own , and it does pay a enormous amount of dividends to those stockholders

Answer 8

This is a Federal Reserve privilege...

Answer 9

The Fed doesn't create money out of thin air. It mortgages the future of the US. Conservatives love to blame the Fed for our debt crisis, but that's sort of like drinking yourself to death and then blaming your liver. If it wasn't the Fed, we'd be borrowing the money some other way.

And you -can- do the same thing. You can borrow money based on -your- future. That's what student loans are, they are unsecured, based on your future earning capability. So long as you keep your indebtedness down below, say, six months of your income, you'll probably be okay. But if you keep borrowing and spending like debt just doesn't matter, then I wouldn't want to be you. 8^)

Answer 10

That would be cool!!!

I definitely get your point though, it just does not seem right. I wish we still had a gold standard.