Sunday, January 24, 2010
Fed "Profits" are a Counterfeiting Fraud
Earlier this month, it was reported that the Federal Reserve made record profits in 2009, amounting to $52 billion.
The Fed says it will return $45 billion to the U.S. Treasury — the highest earnings in the central bank's 96-year history.
This is a rather stunning explanation, since the Fed simply prints money out of thin air, and did so to the tune of $142 trillion over the two year period ending in November.
Did that just blow your socks off? That means the money supply more than doubled. In fact, it went up nearly 2 1/2 times, devaluing our money in the process.
This chart is quite staggering.
And that's only what the Fed admits to. But we know that the Fed continually, institutionally, and pathologically lies.
The U.S. Treasury sold more than $2.1 trillion in Treasury bonds and notes last year, much of it bought by the Fed with it's freshly created funny money.
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 whole thing is a charade. The Fed prints money backed by nothing and calls it a profit. This is ridiculous to the point of absurd. These are not earnings. It is manipulation, a smoke and mirrors campaign.
The Fed is referred to as a quasi government/private hybrid. But it acts entirely as a private enterprise, not a government agency.
What other government agency buys government debt? The State Department? The Labor Department? Education? Housing and Urban Development?
The answer is no, no, no, and no. That's because it would amount to a shell game, a ruse of borrowing from Peter to pay Peter.
Fed profits are nothing more than a lie. It's the same thing as "loaning" yourself money and calling it earnings, or profit.
When all of this money is brought into creation without a corresponding increase in goods and/or labor, inflation ultimately results.
Inflation is simply the increase of the money supply. That has occurred at an alarming and unprecedented rate. The subsequent increase in prices, most commonly viewed as "inflation" by the media and general public, is only a matter of time.
Hundreds of years of history prove this. It's happened over and over again, around the world.
The Fed's actions amount to larceny and counterfeiting on a massive scale. It is criminal activity by a criminal enterprise.
And we should never forget that. It's more evidence that the Fed's and government's books are cooked, and that neither can be trusted for honesty or objectivity.
There will be an enormous price to be paid. Our money is being devalue and, ultimately, that's all inflation really is.
All of this Fed printing will have some rather regrettable associated costs. We need to prepare ourselves for eventual and looming price inflation.
And that will cost us greatly.