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TRILLION DOLLAR RIPOFF BY FED



Olde Reb, Feb 22

DEFICIT SPENDING IS (HIDDEN) PROFIT FOR THE FED

Much has been written of the New World Order, the CFR, the Illuminati, the Trilateralists, the Bilderbergs, etc. If such organized bodies exist for a specific objective, as Carroll Quigley would have us believe, a profuse amount of money, such as via a printing press, would definitely be a useful tool to promote their agenda. Does such access to easy money exist, perhaps even hidden right in front of us ?? Let us reflect on the Federal Reserve and analyze their operation.

When the government wishes to spend money it does not have, it utilizes deficit spending. That means they “borrow” from the Federal Reserve. In practice, a Treasury security is given the Fed and the Fed makes a book entry on an account of the government in the amount of the security. Voila !!! The legislators spend the book entry money and builds roads and bridges, buys military products and funds military projects in their home state, returns a few pennies on the dollar for social programs, and all their constituents applaud when their congress critters occasionally go home to press the flesh.

But wait a minute. We left the Fed holding on to that security. That is an asset. The Fed will not give it away. It has value. What will the Fed do with it? Of course, the Fed will either hold it to maturity or it will sell it. Whichever course of action it takes, the result is the same.

If the Fed holds the security to maturity, it will present it to the government and demand it be redeemed. Shucks. The government spent all of that money and does not have any more. So the government gives the Fed a replacement security; i.e., it rolls the security over. What does the Fed do with the new security? That is obvious; it sells it.

Whether by the initial security or the replacement, the Fed sells the security in the Treasury auctions. All accounting records of the auctions are handled by the Federal Reserve bank of New York. No audit of these accounts is known to exist.

The auctions sell approximately $9 trillion securities annually. Deficit spending accounts for $1.5 trillion so $7.5 trillion is roll over securities for prior years. Once a security is issued, it is rolled over into perpetuity unless the national debt is reduced. The national debt is reduced if the government runs a surplus.

If the receipts from the auctions go to the government, such as the roll over securities used to redeem maturing debt, there is no increase in the national debt nor is there an inflationary surge in the economy. If the money from the auctions go to the profit of the Fed, the National Debt increases and the currency in circulation is increased (inflation via book entry money).

To say it in an imaginary way, the government pays its (deficit spending) bills literally with money off of the printing press. That money is then in circulation and, after moving through the financial structure, eventually becomes the funds that will be used to purchase the security sold at auction. The trillion dollars created by deficit spending last year was an unreported profit of the Fed.

By FRBNY merging the two different groups of auction funds, the funds involving redeemed securities (involving payments to Primary Dealers) can be combined with receipts of securities owned by the Fed with the profit paid to the (unknown) private owners of the Board of Governors (the Primary Dealers ??). And it is all out of sight.

Criminal law provides that all profit of the Fed belongs to the government. The profit from the auctions is not included in the ANNUAL REPORT by the Fed to Congress. What does it take for Congress to investigate ????

[Excerpt from RIP OFF BY FEDERAL RESERVE posted at www.scribd.com/doc/49040689 .]

Olde Reb