It's OUR money, and they're giving it back to "us"? Plus, excess revenue? When they create about $7 billion of new money a week on average, what's $20 billion?

You do know the federal reserve is a private company right? That our beloved government who cares so deeply about us outsourced money creation and management so they can lend as much money as they want to the government for a mere 10%. It's devalued right out of the gate, just like when you drive a new car off the lot.

If you get a chance, read this: I Want the World, Plus 5%

It's a little simplistic, but you get the idea...

As a former Fed employee, I'm fully aware of what type of quasi-government organization they are. They don't print money "willy-nilly" as you imply, that is done by the US Treasury Department's Bureau of Engraving and Printing (better know as the US Mint). The Federal Reserve is charged with the distribution of the new money based on needs and requests from US and foreign banks. The majority of new money printed is to replace old bills taken out of circulation, the rest is distributed based on orders received. there is no "release" of money as you implied.

Now, if you are talking about the Federal Reserve's use of overnight and long-term loans via the "discount window," that is a seperate conversation. However, that uses no cash between the lenders and borrowers.

The Federal Reserve makes the majority of its revenue via US Treasury bond/note sales, and is required by law to turn over excess revenue. They do not have a license to print and distribute money, as you implied.

What percentage rate is that, and how does it compare to the percentage rate of growth of the US economy?



I cannot believe that a professional in the banking industry would post this tripe. Show me where the banking industry earns a 42% return on capital, by the way. Good grief.

Taken directly from the Ron Mexico "When Proven Wrong Argue something else" Book of debate.

Come on; look around at what is average in today's world. Most households have multiple cars, multiple tv's, cell phones, PDA's, Ipods, and how many computers.

Personal wealth is much higher today than it was at any previous time in history. The fact that housing prices are declining now is a short term blip in an overall housing market that has increaesd 10 fold in a decade.

Can you see any good in anything or is everything always bleak?

I don't know where to start on the last three posts, except that the first stage is denial...

Straw - I agree. Most people have more "stuff." But is personal wealth higher? Most people pay for that "stuff" with debt. The exchange debt for goods, and often, those goods are worth less than the amount of debt issued for them over time. Sometimes I wonder how much better off we really are. I spend 10 hours a day on average working in a cubicle regurgitating banking law and regulatory findings. I'd much rather be doing something outside...But I've issued debt in the past I have to repay.

As for my personal life view, I'm pretty happy, despite what I post here. I think I'm pretty happy because I make it a priority to remove debt from my life. I don't carry a balance on credit cards, I don't live beyond my means, when my friends were going out buying McMansions for a half million or more, I bought a modest house and invested in education. My house will be paid off in a couple years, whereas my friends in their gigantic homes full of cheap plastic [censored] from Walmart, spend to keep up with their neighbors.

I, on the other hand enjoy the fruits of my labor. I travel and have experiences with friends and family that enrich me personally and spiritually. My ramblings about inflation, debt, and the financial system are my own personal views based on what I've read and the opinions I've formed as a result. I certainly don't believe the politicians the country has elected has my best interest in mind in whatever they do. You don't have to agree with me, but until I'm banned from the forums, you'll have to suffer my rants.

The capitalist system has poverty built into it. There will always be poor people, because those that are better in the their business and finances will always have more than those who do not. You can't have winners without losers in Capitalism, and I'm not anti-capitalism, because I have the tools to win...even if I don't always win.

Flame on...

No flaming; I believe that was well stated.

Congrats to you for staying above the fray.

FBH, debt is paid off with payments. If I buy a car two years ago, I pay two years worth of Principle. Seriously, are you so much worse off today then yesterday? If so, I feel for you. Because most Amercians and I are not.

False! Capitalism has an inequality of income built into it, so that the "winners" will have incentive to invest.

I guess you're not past the first stage if you're still denying that net household wealth is higher. Or maybe you just don't understand that word: "net".

Blue Hen, sorry if I came of as personal with my ending question. Didn't mean it that way, but in re-reading I can see how it comes off.

And yes you are correct in that more people carry debt today, and at higher levels than in previous generations, but the fact that overall wealth is up across the board in this country, I think, is hard to argue.

Look at the value of the "stuff" we all have. Whether you agree we should have or need all that "stuff", the value is there, even with the debt.

The difference now versus then is many geraduate school owing money, whereas parents' generation did not have this debt to start with.