tag:blogger.com,1999:blog-2132506648412240909.post5541397041400460289..comments2023-06-19T06:21:32.114-05:00Comments on Who Moved My Liberty?: Government Buys Own Debt?Prof Jhttp://www.blogger.com/profile/16539902592080231165noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2132506648412240909.post-9018077772212800552012-03-30T19:42:58.944-05:002012-03-30T19:42:58.944-05:00I'm reading about the origins of the federal r...I'm reading about the origins of the federal reserve right now. I'll see if I can find out why the structure is the way it is.Prof Jhttps://www.blogger.com/profile/16539902592080231165noreply@blogger.comtag:blogger.com,1999:blog-2132506648412240909.post-34860411204876763422012-03-30T17:10:42.645-05:002012-03-30T17:10:42.645-05:001) I do believe you're right. The Fed does tu...1) I do believe you're right. The Fed does turn over interest to the Treasury. See: http://www.federalreserve.gov/newsevents/press/other/20120110a.htm<br /><br />The Fed reported "83.6 billion in interest income on securities acquired through open market operations". Of this amount, it turned over about $77 billion to the Treasury. And this is counted as "income?" Huh.<br /><br />This then begs the question: why not ONLY issue Treasury debt to the Federal Reserve? Then, the Treasury can avoid paying interest on the debt. Of course, this is hyper-inflationary.Brad Dhttps://www.blogger.com/profile/03950312793230274562noreply@blogger.comtag:blogger.com,1999:blog-2132506648412240909.post-54883538735437591002012-03-30T08:58:40.418-05:002012-03-30T08:58:40.418-05:00I will expand on my answers in a post, but for now...I will expand on my answers in a post, but for now:<br /><br />1)Yes, the Fed earns interest on the bonds. I believe the interest may be remitted to the Treasury, but I'll have to look that up.<br /><br />2)Yes, they are 'printing' money. This is the precise transaction the Fed uses to manage the money supply.<br /><br />3)This is the big question. I have to gather some information before answering. My instinct is that there's already too much money in the bank system, so as soon as the cat gets out of the bag, all hell will break loose. When the cat flees is up for debate.<br /><br />4) Yes. See the history on central banks; they were created to finance government spending through debt purchases. I'll dig up some references for this matter. I think Rothbard will be able to help us out here.Prof Jhttps://www.blogger.com/profile/16539902592080231165noreply@blogger.com