Fed Posts Record Profit

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Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Fed Posts Record Profit

"WASHINGTON (AP) -- The Federal Reserve generated record profits last year, reflecting money made off its extraordinary efforts to rescue the country from the worst economic and financial crisis since the 1930s.

The central bank announced Tuesday it logged a record windfall of $52.1 billion. Of that total, a record of $46.1 billion gets turned over to the Treasury Department."

http://finance.yahoo.com/news/Fed-posts-record-profit-of-apf-231123775.html?x=0

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Let me see if I have this right.  The Fed buys tens of billions of securities using funny-munny-printed-out-of-thin-air and then claims the returns as "profit?"

Can this be right?  Isn't the return on funny-munny-printed-out-of-thin-air infinite?

machinehead's picture
machinehead
Status: Diamond Member (Offline)
Joined: Mar 18 2008
Posts: 1077
Re: Fed Posts Record Profit

Roughly speaking, when the Fed doubles its assets, it also doubles its interest earnings. They didn't quite double, because interest rates on the short maturities fell to zero, from around 5% in 2007.

But, as LemonYellowSchwin points out, this steaming heap of securities was purchased with counterfeit currency -- magic-wand purchasing power, systematically stolen from the public by diluting the value of existing currency.

Making a 'profit' on stolen capital is not a particularly impressive feat. If the pin-striped Fed banksters had any P.R. sense, they'd be building clinics and day-care centers in their Washington D.C. 'hood, just like dope kingpins do in Colombia. Street cred, dudes. Respect. You racketeers oughta hang together!

Seriously, though. If it were actually possible to compute the economic value of the Fed's centrally-planned financial manipulations -- versus the base case of having no central bank -- the calculation likely would show that the Federal Reserve (like the former Soviet Union) is a net value subtractor. And the bigger it gets, the more value it destroys.

Fortunately, the problem is self-limiting. One day the Fed's fubar fiat fantasy goes 'poof' in a Martenson minute; platoons of peasants with pitchforks grab the gold (the only thing of value after the dollar croaks); the 'reset' button gets pushed with a rifle butt. And the white marble sarcophagus of the Marriner S. Eccles Building gets toppled to the ground like Saddam's statue. Those who collect the busted-up pieces, hoping to sell them like chunks of the Berlin wall, will be disappointed to learn that they have no value. It might have been Dada, but it wasn't art! Cool

horstfam's picture
horstfam
Status: Bronze Member (Offline)
Joined: Sep 6 2008
Posts: 71
Re: Fed Posts Record Profit- Who really got it?

My question is: How much of the $6 billion that went to the FED ($52.1 - $46.1) ended up in the hands of the families that own the FED? Where is this disclosed? We do know Benny only gets about $200K; so, where's the rest? Are they required by law (OUR representatives) to disclose this anywhere?

 

Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Re: Fed Posts Record Profit / Machinehead

I humbly suggest that you all put all of Machinehead's posts on your must read list.

V's picture
V
Status: Platinum Member (Offline)
Joined: Dec 14 2009
Posts: 849
Re: Fed Posts Record Profit / Machinehead

Sorry LWS

i am not going to put MH'S post on my must read list.

They are on my must STEAL LIST.

My book of his posts is coming out on April 1 2010

V

Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Re: Fed Posts Record Profit / Machinehead

Seriously?  Details!

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