THE Federal Reserve Thread pt 1 (merged)

[MonteQuest]

When the FED gets involved in expanding credit without selling US securities as backing, then watch out.

The Fed expands credit without selling US securities all the time. The normal open market operation to expand monetary supply is for the Fed to BUY a security on the open market. The security (ie. bond) it then holds is in essence "backing" the money they put into circulation because someone in theory could redeem their currency for the underlying security (a treasury bond) held by the Fed.

Yes, they do but...

Federal Deficit Reality: An Update

There is and will be too much debt from the U.S. government for the financial markets to absorb and remain stable.

The burgeoning deficit means the U.S. government will be increasing its debt level significantly for years to come. Near term, the amount borrowed will increase more rapidly than the markets are expecting, with the economy slowing down and entering recession. The ultimate question is who will lend the money to the U.S. Treasury? The answer is not U.S. investors.

With new debt continually hitting the market, eventually the Fed will have to step in to buy the Treasuries -- as lender of last resort -- effectively monetizing the debt. The more the Fed monetizes, the greater will be the growth in the money supply, the greater will be the weakness in the dollar, the greater will be the rate of inflation.

Link

[spot5050]

Hi Tapas...we're not supposed to agree with each other, presumably.

Great, you agree with each other. But go somewhere else to slime all over each other like that.

Have you ever felt uncomfortable next to a couple in a restaurant with their tongues down each other's throats, or not known where to look if you go to a wedding and the couple suck each others faces for too long? That's all I'm saying.

Disagreement is the ONLY form of communication, these days, and those who agree will be insulted & belittled.

When Oil's gone, it's the West that's "for it", not the Third World.

I'm afraid the Meek really will inheret the Earth.

OOOPS, hey Tapas, we disagreed!

Goodness! D'you think we'll be insulted for that?

Oh, if we were insulted for agreeing, imagine the consternation caused by us DISAGREEING!

Head fer the hills!

Big John (erm, Spot 5050) is a-comin'!

Have a great chat and enjoy yourselves, but mutual peak-oil masturbation makes me want to be sick.

[ubercynicmeister]

Hi Tapas...we're not supposed to agree with each other, presumably.

Great, you agree with each other. But go somewhere else to slime all over each other like that.

Have you ever felt uncomfortable next to a couple in a restaurant with their tongues down each other's throats,

No, i don't frequent restaurants, sorry. I iz too broke.

or not known where to look if you go to a wedding and the couple suck each others faces for too long? That's all I'm saying.

HEY Tapas, did you know we wuz MARRIED? Gosh, and it all passed me by!

Remind me - where did we have our honeymoon, again? I keep forgetting.

Disagreement is the ONLY form of communication, these days, and those who agree will be insulted & belittled.

When Oil's gone, it's the West that's "for it", not the Third World.

I'm afraid the Meek really will inheret the Earth.

OOOPS, hey Tapas, we disagreed!

Goodness! D'you think we'll be insulted for that?

Oh, if we were insulted for agreeing, imagine the consternation caused by us DISAGREEING!

Head fer the hills!

Big John (erm, Spot 5050) is a-comin'!

Have a great chat and enjoy yourselves, but mutual peak-oil masturbation makes me want to be sick.

Yawhol, Mein Fuhrer!

Hey, sorry, Tapas, but me agreeing with you wuz BAD ENOUGH, but it's really upset poor Spotty, here, now that we're disagreeing.

Y'see, poor Spot ("out, damned Spot," as Lady MacBeth said) is allergic to all shows of public disaffection. Or was it public affection?

But, anyway, what would he know about affection, anyway?

[spot5050]

[smilie=icon_salut.gif] Yawhol, Mein Fuhrer!

Godwin's law is an adage in Internet culture that was originated by Mike Godwin in 1990. The law states that:

As an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one.

Once such a comparison is made, the thread is over and whoever mentioned the Nazis has automatically lost whatever argument was in progress.

http://en.wikipedia.org/wiki/Godwin's_law

http://www.killfile.org/faqs/godwin.html

http://members.tripod.com/~goodwin_2/law.html

[EnergySpin]

It appears that the Fed will try to defuse the bubble before the Japs/Chinese/Europeans detonate the bomb that will sink the dollar so they can afford oil (as long as oil is priced in dollars).
BBC News

Rock-bottom interest rates have helped drive a boom in house prices as homeowners remortgage their properties, and sometimes increase their borrowing to fund consumer spending or home improvements.

Fed chairman Alan Greenspan has denied there is a nationwide housing bubble but acknowledged that some locations may be at risk.

[Eli]

I do not think the bankers are going to comply with a planed slow down.

Home loans to illegal aliens

What could possibly go wrong?

The bankers have to keep selling loans so now they are giving loans to people who do not have a ss# or legal status in the US. Man if I was an illegal I would rush out and buy a house. If you couldn't make a payment just pack your stuff and head for the boarder. No fuss no muss.

[EnergySpin]

I do not think the bankers are going to comply with a planed slow down.

Home loans to illegal aliens

What could possibly go wrong?

The bankers have to keep selling loans so now they are giving loans to people who do not have a ss# or legal status in the US. Man if I was an illegal I would rush out and buy a house. If you couldn't make a payment just pack your stuff and head for the boarder. No fuss no muss.

First of all ... is this legal? I mean how can one get a loan without a SSN?
How about the IRS? (silly question,. do not shoot me)
In any case ... I was referring to the role of the Central Bank. I just finished reading the article by William Clark
and if the scenario he describes is plausible (I think it is), the bubble will be burst by the action of Central Banks around the globe. Surely AG understands that. Maybe a controlled detonation (ie. sacrificing a few states) will take place to avoid a global "hit" on the dollar.
In anycase ... people with no debt will find themselves in the top 5% of the population ... even if they live on the streets

[emersonbiggins]

I do not think the bankers are going to comply with a planed slow down.

Home loans to illegal aliens

What could possibly go wrong?

The bankers have to keep selling loans so now they are giving loans to people who do not have a ss# or legal status in the US. Man if I was an illegal I would rush out and buy a house. If you couldn't make a payment just pack your stuff and head for the boarder. No fuss no muss.

OMFG, who authorized this?

The banks must be scraping the bottom in order to keep these housing markets afloat.

[Eli]

I think it was authorized by the invisible hand of the market.

The need for new streams of revenue drove the banks to do this and competition with one another.

The unfortunate thing is that invisible hand of the market is about to ram rod us all. Yeah, the housing market deserves to fall and all the bank executives will cashout and walk away.

I assume that as an illegal alien they do not get SS# remember most of them can't even get a drivers license in most States. But they can own a home .

[Kooka]

I mean how can one get a loan without a SSN?

There isn't a law in the U.S. that says a person has to have a S.S.N. It's just that most institutions require one for "bookkeeping" purposes.

As far as the illegals getting loans - another issue. Hell, why not advertise a come-n-get-it on the BBC.

[EnergySpin]

I mean how can one get a loan without a SSN?

There isn't a law in the U.S. that says a person has to have a S.S.N. It's just that most institutions require one for "bookkeeping" purposes.

As far as the illegals getting loans - another issue. Hell, why not advertise a come-n-get-it on the BBC.

Oh I meant that when you go in a bank to open an account they ask you for two forms of ID. One is the SSN card ... I'm not so sure though that it is not mandated. I thought the PA required SSN/other forms of ID to initiate a transaction

[gnm]

SSN's are required for any interest bearing bank account because the IRS now taxes interest and they require one. They might use a TIN or tax ID number to establish an account for an illegal I would think. fake SSN's and such are routinely used by illegals also..

While there is no law requiring an SSN in the US the fascist pricks make it damn near impossible to function without one. All in the name of taxing every goddamn thing you do.

I should mention that while an illegal has the ability to get a TIN for tax purposes and avoid getting an SSN which puts you at higher risk of ID theft etc... a US citizen is not eligible for a TIN since the theory goes that they are eligble for an SSN so they are only allowed to get that.

-G

[Kooka]

SSN's are required for any interest bearing bank account because the IRS now taxes interest and they require one....
While there is no law requiring an SSN in the US the fascist pricks make it damn near impossible to function without one. All in the name of taxing every goddamn thing you do.

Yeah re: pricks. I have a friend who drives legally without a DL, and who has never paid taxes - legally. He refuses mail that has a zip code on the envelope <G> The bottom line is that one can have an account without a SSN.

[gnm]

I also know somone living under the radar like that - he opened an account solely so he could cash checks from other people. He did it by requesting a non-interest bearing account. The bank finally agreed after much protest..

-G

[Tyler_JC]

I admire people who can manage to live under the radar like that, it's too late for me though (I already have a Socialist Slave Number).

My mother is a tax accountant and does her best to insure that they get as little money as legally possible from her clients. But the laws are just so damned complex.

I read somewhere that the IRS tax code has SEVEN MILLION WORDS. The Bible only has 1 million. It's insane.

Government meddling is to blame for the recession of the late 80's/early 90's. But the explanation of this takes more time than I'm willing to put into this.

But wow, illegals getting home loans. It's like when I get offered a credit card or life insurance. What are they thinking??

[Daculling]

Some states offer in-state tution for illegals... why the hell wouldn't we give them houses too?

Lookup the Dream Act

[jimmydean]

Isn't Bush also hoping to give illegals work cards? LOL

As if there isn't enough cheap labour competition with the east now removing jobs this is just ridiculous.

[lyrl]

I think the Fed is doing the best it can to aim the housing bubble toward a 'controlled detonation'.

In theory, raising interest rates should make mortgages harder to get, which should make speculation more difficult.

Of course, raising interest rates will also make consumer debt more difficult to manage. And decreased spending resulting from lessening of the consumer debt will hurt our current growth-dependent economy.

So the Fed is walking a tightrope here.

Whether they will be sucessful or not I don't know. Economy manipulation is pretty much all experimental.

On giving home loans to illegal aliens, that's been going on for years. The banks have found that they're a good loan risk - illegal aliens are actually less likely to default than some groups of debt-happy citizens. I think that says more about the unhealthy American attitude towards finances than about the bank's morals.

[agmart]

Raise interest rates
Tip the economy into recession
Demand drops
Oil prices fall
What peak oil, there is no peak oil

[EnergySpin]

Raise interest rates
Tip the economy into recession
Demand drops
Oil prices fall
What peak oil, there is no peak oil

This might be a much safer alternative for a peaceful powerdown.
They are not doing it for this though; FED is trying to prevent the Japs/Chinese/Europeans/Asians from pulling the plug overnight