Question for anyone here who knows a lot about money:

If the U.S. government needs to borrow money, it borrows from the Federal Reserve.

Question: if the government borrows, say, 2 billion dollars, what, if any, collateral is given to the Federal Reserve in exchange for the money? Some people have said "Treasury securities." Is that true? If so, how much is given in securities? What, if anything, does the Federal Reserve then do with the securities that were given as collateral for the loan? Or, is there no collateral at all given for the loan?








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Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities.

http://www.fact-index.com/f/fe/federal_reserve_note.html



Note: Components may not sum to totals because of rounding.

1 Includes securities lent to dealers, which are fully collateralized by other U.S. Treasury securities.
2 Face value of the securities.
3 Compensation that adjusts for the effect of inflation on the original face value of inflation-indexed securities.
4 Cash value of agreements, which are collateralized by U.S. Treasury and federal agency securities.
5 Estimated.
6 Cash value of agreements, which are collateralized by U.S. Treasury securities.
7 Includes U.S. Treasury STRIPS and other zero coupon bonds at face value.
http://www.federalreserve.gov/releases/h41/Current/

Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities.

http://www.fact-index.com/f/fe/federal_reserve_note.html



Note: Components may not sum to totals because of rounding.

1 Includes securities lent to dealers, which are fully collateralized by other U.S. Treasury securities.
2 Face value of the securities.
3 Compensation that adjusts for the effect of inflation on the original face value of inflation-indexed securities.
4 Cash value of agreements, which are collateralized by U.S. Treasury and federal agency securities.
5 Estimated.
6 Cash value of agreements, which are collateralized by U.S. Treasury securities.
7 Includes U.S. Treasury STRIPS and other zero coupon bonds at face value.
http://www.federalreserve.gov/releases/h41/Current/




Thanks.

But I still do not understand the collateral matter. When it says 'hold,' does that mean specific securities that came directly to the Federal Reserve from the Treasury as collateral for a certain cash loan? Or does that just mean 'in general' and not specific collateral for a specific loan? Does the government have to give full [100%] collateral in the form of Treasury securities each time, for each loan?



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there are special designators for those particular bonds, and moreover, the federal government and the social security administration hand special bonds back and forth to each other as well. I forget what they're called.

If the U.S. government needs to borrow money, it borrows from the Federal Reserve.

Where do you get that, Franco?

Short version: The US Gov't (Dept. of Treasury) borrows money through the issuance of bills, notes and bonds. Those are initially sold by auction mostly to a select group of "primary dealers," though general public can buy too. The dealers then sell off to ultimate investors, domestic and foreign. US Treasuries are by definition unsecured. There is no specific collateral--the obligations are backed by the "full faith and credit" of the US, meaning that if revenues fall short, and the market refuses to "roll over" the debt, taxes must be increased to pay off the bondholders.

The Fed comes to hold US Treasuries through purchases, sales and more complex arrangements directed by the Open Market Committee, which uses them to make monetary policy. The debt is no more secured in the hands of the Fed than in the hands of the public. Hope this helps.

Where do you get that, Franco?

Short version: The US Gov't (Dept. of Treasury) borrows money through the issuance of bills, notes and bonds. Those are initially sold by auction mostly to a select group of "primary dealers," though general public can buy too. The dealers then sell off to ultimate investors, domestic and foreign. US Treasuries are by definition unsecured. There is no specific collateral--the obligations are backed by the "full faith and credit" of the US, meaning that if revenues fall short, and the market refuses to "roll over" the debt, taxes must be increased to pay off the bondholders.

The Fed comes to hold US Treasuries through purchases, sales and more complex arrangements directed by the Open Market Committee, which uses them to make monetary policy. The debt is no more secured in the hands of the Fed than in the hands of the public. Hope this helps.


The newest info that I have is that the largest single piece of the national debt is interest on those bonds - interest that the government must pay later. In other words, the tax dollars of American citizens are used to pay that interest.

The real question, of course, is why the government borrows money instead of using only what is in the treasury. If one cannot afford something, then do not buy it, correct?






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Do you have the purported dollar amount on that, Franco? The last I read about it, a few years ago, interest on the national debt was the #2 greatest expense, at some 300+ billions per year, topped only by ''social security'' remittances. It was inevitable that interest would have to -someday soon- become expense #1. Does our govt. now admit that day has already come?

I have done a little reading on this,and heres how I understand it,for those of you that hate Jews,heres some good ammo for you.

The Federal Reserve Bank is a privately owned corp,headed by the Rothchilds of France,there are about 9 other banks(all run by Jews of course) and they are all in bed together,big surprise there.

When you pay your quarterlies like I do(I am self employed),or if your employer taxes out taxes(confuscates) the money is deposited in the bank,not the US gov't like one would think.

It is actually deposited into the bank!! The name US Treasury would be like your own private checking account. Heres where the jew boys really shine.They let Congress have as much money as they want,and cover it.
The gubbament never really has any contact with its own money.

I know you say what about Fort Knox and all that crap. Well Fort Knox has enough gold to cover about 2% of the actual collateral needed to cover the money. When the cash runs a little low,the Federal Reseve just prints more money,causing inflation.that way there is always plenty of cash around,but it has less value.

When congress does not see the money,it has no real budget,this is why they spend it like a bunch of drnken sailors,real nice eh,at last count about 7.3 trillion dollars in debt,and the taxes collected are about 1.2-1.5 trillion dollars annually.

When they have spent all the money in the account,like they always do,they pay interest.

This is why its such a cush deal for them,The Jews boys charge interest on money that they themselves have printed.they also charge the gubbament for the actual printing of the money,about .06 cents per bill.

We have been getting so fucked for so many years its pathetic. Two presidents tried to change that.The first was Lincoln,and the second was Kennedy,both were assasinated,another big surprise there,eh.


Let me put it another way,just to show you how bankrupt we really are.

If you my friends happen to want a mortgage,banks will only finace you if it does not exceed 2.5 times your gross salary,that is if you still want a good interest rate.

Lets say you make 50k/yr,that means you on paper can only reasonably afford125k house,or again 2.5 times your gross.

Oh sure they will finance you for more,but bend over with the interest rate.

The US has 7.3 triilion in debt,and grosses 1.2-1.5 trillion/year.Using the high number 1.5 divided by 7.3 comes out to 4.9 times the gross. almost twice the avg Joe six packs,credit worthiness,of 2.5 times his gross.

In other words the US gubbament is a high risk because of so much debt.The reason the jew boys continue loaning them money is because we are there slave puppets,and coddle Israel,but the other reason they do this and get away with it,is because,they consider congresses ability to tax an asset.

After all,if they single your ass out,they have the Army,Navy and the Marines to come take your stuff if they want it.

Keeping a man in debt is one very good way to enslave him,and the Federal Reserve has done just that to US.

This board seems to be full of some pretty sharp people,and if you have anything to add to this please do.

This is pretty much how I understand it.

I have done a little reading on this,and heres how I understand it,for those of you that hate Jews,heres some good ammo for you.

The Federal Reserve Bank is a privately owned corp,headed by the Rothchilds of France,there are about 9 other banks(all run by Jews of course) and they are all in bed together,big surprise there.

Actually, every domestic bank is a shareholder in the Federal Reserve. The New York Fed reports that its eight largest member banks on June 30, 1997 were:

Chase Manhatten Bank
Citibank
Morgan Guaranty Trust Company
Fleet Bank
Bankers Trust
Bank of New York
Marine Midland Bank, and
Summit Bank.

http://www.floodlight.org/theory/flaherty9.htm

Proud White Guy has pretty much nailed it! For more indepth reading on just how bad the jew bankers have us over a barrel this link here is about the best Iv'e ever read.



http://www.usa-the-republic.com/sheldon%20emry/billions%20for%20the%20bankers.html

Good Article Fritz. Let me make sure I understand this.
Do you mean the Federal Reserve a privately owned company,sells shares of its own stock??

Then they are also picking each others pockets too,and minimizing their risk as well,correct.

Does that mean that all the little banks have to buy into this?

This leads me to another question. How does the FDIC come in?

You know the ones that insure peoples deposits. the very same ones that could not possibly pay off when the shit hits the fan,or are they both unrelated con schemes,independant of each other.

Thanks for any info you can shoot my way.

This little con game is so screwed up.I am having a hard time putting it all together

Proud White Guy has pretty much nailed it! For more indepth reading on just how bad the jew bankers have us over a barrel this link here is about the best Iv'e ever read.



http://www.usa-the-republic.com/sheldon%20emry/billions%20for%20the%20bankers.html















And how about this tidbit:

"Germany issued debt-free and interest-free currency from 1935 an on,accounting for its startling rise from the depression to a world power in 5 years.Germany financed its entire government and war operation from 1935 to 1945 without gold and without debt,and it took the whole Capitalist and Communist world to destroy the German power over Europe and bring Europe back under the heal of the Bankers.Such history of money does not even appear in the textbooks of public (government) schools today."

Tell this to the typical Lemming and watch his head explode!

I have done a little reading on this,and heres how I understand it,for those of you that hate Jews,heres some good ammo for you.

The Federal Reserve Bank is a privately owned corp,headed by the Rothchilds of France,there are about 9 other banks(all run by Jews of course) and they are all in bed together,big surprise there.

When you pay your quarterlies like I do(I am self employed),or if your employer taxes out taxes(confuscates) the money is deposited in the bank,not the US gov't like one would think.

It is actually deposited into the bank!! The name US Treasury would be like your own private checking account. Heres where the jew boys really shine.They let Congress have as much money as they want,and cover it.
The gubbament never really has any contact with its own money.

I know you say what about Fort Knox and all that crap. Well Fort Knox has enough gold to cover about 2% of the actual collateral needed to cover the money. When the cash runs a little low,the Federal Reseve just prints more money,causing inflation.that way there is always plenty of cash around,but it has less value.

When congress does not see the money,it has no real budget,this is why they spend it like a bunch of drnken sailors,real nice eh,at last count about 7.3 trillion dollars in debt,and the taxes collected are about 1.2-1.5 trillion dollars annually.

When they have spent all the money in the account,like they always do,they pay interest.

This is why its such a cush deal for them,The Jews boys charge interest on money that they themselves have printed.they also charge the gubbament for the actual printing of the money,about .06 cents per bill.

We have been getting so fucked for so many years its pathetic. Two presidents tried to change that.The first was Lincoln,and the second was Kennedy,both were assasinated,another big surprise there,eh.


Let me put it another way,just to show you how bankrupt we really are.

If you my friends happen to want a mortgage,banks will only finace you if it does not exceed 2.5 times your gross salary,that is if you still want a good interest rate.

Lets say you make 50k/yr,that means you on paper can only reasonably afford125k house,or again 2.5 times your gross.

Oh sure they will finance you for more,but bend over with the interest rate.

The US has 7.3 triilion in debt,and grosses 1.2-1.5 trillion/year.Using the high number 1.5 divided by 7.3 comes out to 4.9 times the gross. almost twice the avg Joe six packs,credit worthiness,of 2.5 times his gross.

In other words the US gubbament is a high risk because of so much debt.The reason the jew boys continue loaning them money is because we are there slave puppets,and coddle Israel,but the other reason they do this and get away with it,is because,they consider congresses ability to tax an asset.

After all,if they single your ass out,they have the Army,Navy and the Marines to come take your stuff if they want it.

Keeping a man in debt is one very good way to enslave him,and the Federal Reserve has done just that to US.

This board seems to be full of some pretty sharp people,and if you have anything to add to this please do.

This is pretty much how I understand it.




There are 12 Reserve banks.

The latest information that I have is that, again, the biggest piece of the debt is interest on those government bonds [which American tax dollars must pay], followed by foreign aid, followed by various pension-type funds [which includes Social Security, etc.].

Can you guess where much of that foreign aid goes?




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The real question, of course, is why the government borrows money instead of using only what is in the treasury. If one cannot afford something, then do not buy it, correct?

Apparently not. The same people who, as consumers, rack up massive Visa bills, demand as voters lots of gov't programs but don't want to pay the taxes. Democracy at work.