What nobody wants to discuss in this debt ceiling saga is the fact that during the beginning of the pandemic Trump combined the Federal Reserve Bank and the US Treasury together. The Federal Reserve is not a separate independent entity anymore. So when Janet Yellen says the US Treasury is expected to run out of money on June 1st that also means the Federal Reserve will be bankrupt on the same day.
McConnell looks lost and defeated… Sad.@Pouissant17 pic.twitter.com/0W8OamaQB5
— intheMatrixxx (@intheMatrixxx) May 2, 2023
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They pretend to care, they argue, they posture, then they raise it…again.
Yawn.
Yup
Had a conversation with a friend yesterday.
“Why do they even have a vote? It is not like they will ever not raise it.”
Because an incredible amount of people believe there is some legitimacy to the US Congress, so they keep the show going.
It’s a show. Entertainment for the gullible. Nothing changes, business as usual.
It has always been a forgone conclusion the debt limit would be raised, the Republicans already admitted that. The only question is how much will it be raised? Which in reality makes no difference, because if they approach the limit, they will just raise it again.
They will sort out their “differences” that don’t really exist, at the very last minute. Both sides will claim victory and the spending will continue unabated. Just like all the other times they have played this charade.
McConnel always looks lost and defeated. He da man.
They will raise the ceiling. What else can they do? I have seen this so many times before, it’s simply a theatrical joke.
Not this time. For the US government to “borrow” money they have to issue bonds for other countries to buy. Who’s going to buy those bonds when the BRICS nations are dumping the US dollar and using their own currencies for international trade? The SVB and FRB collapses are directly related to the US hitting the debt ceiling at the beginning of the year. The US government/Federal Reverse Bank is bankrupt.
All that they have to do is lie: “We had an auction today and all the bonds sold.” Fire up the press. Done, easy as that. It doesn’t matter who “bought” them. Until one of those Brics countries makes a stand and values gold in their currency nothing will happen.
That’s not how any of this works. Money isn’t created by just printing physical cash. It’s created by borrowing money and creating debt.
That not how any of this works. Money isn’t created by borrowing money and creating debt. It’s created by making someone a sucker first.
Haha downvotes. Public(Taxpayer) losses Privatized profits. Interest never printed. Jeez….. What is BIS? Why does your country have a central bank? Who is paying the interest on the borrowed currency? Suckers. Pay me my Reparations.
Money is the lubricant of the economy; debt is the throwing of sand into the lubricant.
Sounds like my last trip to Rehoboth Beach!
Thanks again, Jen!
Try Bethany
Stephanie, The federal reserve can’t go broke. They simply have a license to create monopoly currency. That is all. They can go on doing that forever. Commerce between countries works as you have described. However, each of those countries has its own Fed that is creating its own monopoly currency. The method by which one of those monopoly currencies becomes king is by being backed by something, ie. real money such as gold or silver. So, the US fed can do whatever it wants until some country reveals its gold holdings and sets the price. If the US wanted to try to remain top dog, it would have to reveal its own gold holdings, something which it will not/can not do. Until now, the US has relied on its military might to remain king however, everyone in the world knows now that the US military is no longer something to be feared.
It’s a corporation. Yes, it can go broke.
The way the Federal Reserve was created was the country had a bunch of state banks with gold deposits. The Federal Reserve Act required all those state banks to buy shares in the Federal Reserve Bank in turn the Federal Reserve was funded by the gold deposits of those state banks. The Federal Reserve Bank is a complete scam because they never needed their own capital to exist. It’s been a parasite from the beginning of it’s creation. Now none of those banks who own shares in the Federal Reserve have gold deposits to back up the Fed’s debt. I assure you, it can go bankrupt and very easily.
The Fed doesn’t have any debt. The Fed creates debt. Debt is what the Feds product is.
What? I think you’re just trying to argue with me because that made no damn sense whatsoever. Of course the Fed has debts. It creates debt and holds debt on its balance sheet. It also hold toxic debt from other banks on its balance sheet.
No, i am not trying to argue. My previous statement is fact. I have nothing else to say now.
Ignore the mouth breathers, this is a great thread
Right, you print it, hand it from your left hand to your right, and charge yourself interest.
The Federal Reserve will buy them.
That’s actually funny because that surge protector isn’t even an American surge protector.
I thought so, too.
Guessing it is the Chinese version. (There was a time when I knew all the connector style, pinouts, voltages, and frequencies of typical AC power provided to end users throughout the world-but I forget the details).
Sir, there’s a no nipples rule on TBP.
Show Us Your Ni**ples!
Goddamn, the us govt is NOT the Federal Reserve. Jeez….I don’t think anybody knows anything anymore…..And did you really mean Reverse Bank. This hurtz on low levels…..
US Gov’t(Sucker Taxpayer aka Treasury).
Federal Reserve (Private Club aka Central Bank) —–And we ain’t in it.
Stephanie – I believe the Fed has been the primary purchaser of Uncle Sugar’s debt for a few years. In economic terms it is called monetizing your debt and it is NEVER a good thing.
Social Security deductions from working folks go to the Treasury where they fund immediate and ongoing spending; the SS Administration gets in return a trainload of IOUs from Treasury every year, with the “promise” to pay the funds back. At one time every so often the morons would have to build another windowless, concrete building in Senator Robert Byrd’s home state of West Virginia to store the pieces of paper the IOUs were printed on. Call it what you want-debt, leverage, ponzi scheme-it matters not. It is all smoke and mirrors, lies, and corruption.
The banksters, crooked bureaucrats, and corrupt politicians have just about milked it for all it’s worth-not a whole lot of value left in the country to keep their act going. Kind of like a drug addict in his last days.
Foreign bond holders control the end-date of the United States of America.
Everything you say is true except that part about the IOU’s. They’re actually UOU’s.
Just like the Bank 0f Japan, owns 52% all the bonds and hold 80% of exchange traded Funds (around 6 % of all the stocks) it is a perpetual money machine but it can become unstuck as BOJ is publicly traded…. Don’t you love it when you can borrow @ 1.37% and carry trade that into US$ earning 5% and pocket the difference.
They’ve been buying their own debt. Got it covered.
When customers deposit funds with a bank the bank invests the money in securities until it can loan it out. These woke idiot banks (and lots of others) bought low interest-bearing securities at the urging of the US Govt….the Fed then raised rates and now these banks (and lots of others) are sitting on significant losses (like hundreds of billions if not trillions) and since banks operate on very thin equity margins….all their equity is now wiped out…they are bankrupt. Not sure where the debt ceiling is impacting this dynamic but would like to hear an explanation.
The US Gov’t is obviously bankrupt…..we can’t pay current expenses without borrowing (annual budget deficit) much less cover the entitlements (social security, medicare, etc.). Is the Federal Reserve Bankrupt…that’s a more complex question and it depends on what you think happens to US Treasuries (they own lots of those!)….I think we are seeing the loss of the USD as a reserve currency and that will lead to the US being unable to issue debt at low-interest costs…….and then yes the Fed is bankrupt as the price of all their holdings in the UST will drop significantly. Gold and Crypto!
The US Government/Treasury/Fed Reserve are in checkmate. The debt ceiling isn’t going to be raised. There’s no way out of this situation except a full bankruptcy or hyperinflation. Hyperinflation isn’t going to happen because the BRICS nations aren’t going to buy US bonds and Europe is having an energy crisis and their own liquidity problems.
My hunch is Trump set them up during the pandemic and then moved out of the way when they stole the election so the US Government would default on their watch.
Cocaine Mitch looks like he needs to do a couple lines!
May will get pretty interesting. As if I needed more interesting.
The Siren song of “sell in May and go away” played loudly in my head today.
How did Trump combine the Fed and Treasury? What bill did Congress author and send to him for signature? The game is still the same. Treasury issues debt, primary dealers buy it, and turn it in at the discount window for the Fed to monetize.
The gubmint won’t default. They have a printing press and will just conjure the money. None of the fuckers have to deal with the consequences like the little people.
https://www.yahoo.com/video/feds-cure-risks-being-worse-110052807.html
Gee, won’t Belgium step into the fray again?
It’s a circle jerk. It always has been.
The Fed and the Treasury may be more overtly monetizing the debt, but they are still (nominally) seperate entities.
Do you really think the bankster owners of the Fed are going to give up their control?
What you’ve provided is how debt issuance has worked since 1913. They just give it fun names like SPV and Exchange Stabilization Fund. It’s still a primary dealer buying it and the Fed funding it.
The discount window was a secondary backstop for the once infrequent need of banks to obtain overnight funds to meet their reserve requirements. Albeit that was in the age before “Too Big to Fail Banks”. At the time the preferred backstop was for the banks to tap the fed funds market whereby they paid something akin to a “special market rate” for their overnight funds, those funds coming from other banks that had excess reserves. Discount window borrowing was done at a favorable, lower rate since the lender was the Fed. However, the Fed strongly discouraged use of the discount window-one might guess that too frequent use of the window could set the bank up for extra scrutiny. But, that was then and this is now. For one thing, reserve requirements are now all but gone-and that is about as brazen of a self-indictment as a country’s banking system can have.
In the age of massive derivative use (cocaine, anyone??) a more sophisticated way is needed for over extended banks to look legitimate when they are overextended for longer periods of time than just overnight, so the repurchase market evolved. While technically the fed funds market and the discount window still exist, the more highly leveraged banks need a less transparent mechanism to provide cover for their financial weaknesses.
Like virtue and trust, Motherhood and Apple Pie, the US greenback is on wobbly legs and faltering as fast as the chump in the White House.
Can we just end the useless discussions here?
They will ignore all rules and/or make up new ones on the fly.
There is nothing to make predictions/assumptions on – if it’s not a physical law.
Governments never run out of money, they control the printing presses and mint the coins! They can just print and steal your money! No PROBLEM!
The Kennedy Center would be the appropriate venue for this Kabuki Theatre.
As for McConnell the befuddled look of a senile treasonous babbler that realizes there is an adult in the room speaking facts as his ChiCom legacy connection circles the drain
If that were a cow rather than a human even someone with Down’s Syndrome would ask you what’s wrong with your cow.
Funny. It’s in his best interest to grow a beard. And put on a hat & sunglasses.
All I know is an eight pound bag of potatoes are now 5.00 dollars three years ago could be bought for 2.
Nothing burger