Federal Reserve earned $45 billion in 2009

[jgoose71 0]

Here is the Story:
http://www.msnbc.msn.com/id/34816272/ns/business-washington_post

Quote

Much of the higher earnings came about because of the Fed's aggressive program of buying bonds, aiming to push interest rates down across the economy and thus stimulate growth. By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. The interest income on those investments was a major source of Fed profits — though that income comes with risks, as the central bank could lose money if it later sells those securities to reduce the money supply.

So just to make sure I'm reading this right, the government made money by investing into the government and as soon as the government cashes in on government bonds, the government debt is going to go down?

Or can they not cash in the bonds, in which case the story headline is completely bogus. I'm confused.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[justinb138 0]

Bogus from the govt/fed's standpoint? No.

Bogus for the rest of us that live in reality? Yes.

The government is paying itself interest on money it created out of thin air and is considering it a profit.

[kallend 2,106]

Quote

Here is the Story:
http://www.msnbc.msn.com/id/34816272/ns/business-washington_post

Quote

Much of the higher earnings came about because of the Fed's aggressive program of buying bonds, aiming to push interest rates down across the economy and thus stimulate growth. By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. The interest income on those investments was a major source of Fed profits — though that income comes with risks, as the central bank could lose money if it later sells those securities to reduce the money supply.

So just to make sure I'm reading this right, the government made money by investing into the government and as soon as the government cashes in on government bonds, the government debt is going to go down?

Or can they not cash in the bonds, in which case the story headline is completely bogus. I'm confused.

The government does not own the Federal reserve system, nor its component banks.

...

The only sure way to survive a canopy collision is not to have one.

[Andrewwhyte 1]

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The government does not own the Federal reserve system, nor its component banks.

Who does?

[rushmc 23]

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Quote

The government does not own the Federal reserve system, nor its component banks.

Who does?

http://www.globalresearch.ca/index.php?context=va&aid=10489

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[jgoose71 0]

Quote

Quote

Quote

The government does not own the Federal reserve system, nor its component banks.

Who does?

http://www.globalresearch.ca/index.php?context=va&aid=10489

Thanks, I think I got it now. The government lent the banks money, the banks invested them back into the government, and then used the interest from the government bonds to pay off the government loan.

I wish the government would offer me a deal like that.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[rushmc 23]

Quote

Quote

Quote

Quote

The government does not own the Federal reserve system, nor its component banks.

Who does?

http://www.globalresearch.ca/index.php?context=va&aid=10489

Thanks, I think I got it now. The government lent the banks money, the banks invested them back into the government, and then used the interest from the government bonds to pay off the government loan.

I wish the government would offer me a deal like that.

You and me both

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[Gawain 0]

Quote

Here is the Story:
http://www.msnbc.msn.com/id/34816272/ns/business-washington_post

Quote

Much of the higher earnings came about because of the Fed's aggressive program of buying bonds, aiming to push interest rates down across the economy and thus stimulate growth. By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. The interest income on those investments was a major source of Fed profits — though that income comes with risks, as the central bank could lose money if it later sells those securities to reduce the money supply.

So just to make sure I'm reading this right, the government made money by investing into the government and as soon as the government cashes in on government bonds, the government debt is going to go down?

Or can they not cash in the bonds, in which case the story headline is completely bogus. I'm confused.

It's part of monetizing the debt, and I would be interested in learning if Goldman Sachs and others were brokers in the exchanges.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!