all 14 comments

[–]Alphix 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (17 children)

The FED can't become insolvent. They literally printed every single dollar in circulation today and can print ad infinitum. Yes, they are using this to utterly enslave the population of the USA. Remember, it's not THEIR debt, it's YOUR debt.

[–][deleted]  (10 children)

[deleted]

    [–]Alphix 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (6 children)

    Yes, it it, but it's not technically insolvency, because they can print ad infinitum, meaning they can pay back any amount with increasingly worthless dollars, siphoning the value of all the dollars into the newly printed ones.

    They're not EVER going to try to buy back all dollars and collapse the monetary mass to zero. Not with real assets anyway. A CBDC would work because it is just imaginary numbers inside a computer, without even a banking system to keep the books.

    The net result of this is not the central bank going out of business, it's the PEOPLE starving.

    [–][deleted]  (5 children)

    [deleted]

      [–]Alphix 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (4 children)

      But the FED doesn't want to buy USD. At best it uses the reverse repo facility, which as of recent count had about 2 trillion in currency in it. That's how the FED holds USD.

      The FED's losses will get a good disappearing with the launch of FedNow later this year.

      I don't understand what you mean by "critical mass unbacking percentage" what is this?

      [–][deleted]  (3 children)

      [deleted]

        [–]Alphix 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (2 children)

        QE has proven that over the past decade, the only thing that matters for the control of inflation is ultimately the interest rate because it affects the price of all liabilities.

        The interest rate is just one way to expand or contract the money supply. This "money supply" is how many units of currency are chasing the amount of goods in the economy. If you double the amount of money, the prices will double. Simple as that. Low interest rates mean that getting money is easy and cheap, and expands the money supply, creating inflation. And the reverse is true. However, if the Fed prints a lot of money that is another mechanism for inflation, and that's precisely why we are in a high inflation context at present.

        Reverse repos are sells (it could be the opposite because of their language and my memory). They do it this way to have more precise control over interest rates. Trying to trade Treasuries directly made the effective Fed Funds too wild in the old days.

        The reverse repo is when the member banks have too much liquidity and need to park it somewhere, they send it to the Fed and in exchange they get collateral (Treasuries) to hold. This helps them match their assets (the Treaturies) and their liabilities (deposits) better.

        There's no currency on the Fed's balance sheet except what they've issued and the float they hold in reserve for bank demand. When the Fed trades, it just marks they buyer with a deposit on its own books or elimates an entry when selling.

        Yes. And if everybodyb tried paying off their debts at the same time, all money would disappear and there would still be debt left over.

        FedNow only increases the speed of ACH and FedWire unless this is some new thing. Only lower interest rates (higher prices) for the assets they hold may help them, and that appears gone with the China Bubble.

        I'm not following you. FedNow is the system of their Absolute Slavery system of CBDC.

        As of now, 15% of the Fed's balance sheet are worthless unrealized losses. That means 15% of the money printed by the Fed cannot be bought back and retired in inflation. This is probably the reason why countries have all of the sudden rushed to begin trading without denominating in USD.

        The reason is that the US has clearly weaponized its currency with the sanctions over Russia and their committing terrorist acts in order to gain a stranglehold on the world energy markets. Nations are fed up and going to alternatives. The US Dollar is toast.

        When a central bank has far more liabilities than assets, it cannot control inflation if holders begin to dump. The common story is like Weimar where new cash (liabilities) are used to pay debts without taking in something as assets. The more unbacked they became, the more they inflated.

        But what do holders "dump" in your idea? The USD? They use it to buy what? Or do they dump Treasuries, getting dollars in exchange, then trading the dollars for something else? These details matter.

        Turkey is an interesting case because they're forcing hyperinflation by interest rates alone. That normally comes after insolvency. Erdogan is just an ignoramus.

        I am not familiar with the situation in Turkey.

        Aside from totally voluntary interest rate suicide like Turkey, it's always an asset deficit that permits hyperinflation.

        We don't know what percentage because these banks rarely report their data and even rarely honestly.

        I agree on that one.

        [–][deleted]  (1 child)

        [deleted]

          [–]Alphix 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

          Well, that's begun already. The kicker is, a lot of the exchange has been for gold, but JP Morgan & many others are bent on keeping its price low, giving the appearance of a strong dollar. When that dam breaks... Sparks will fly.

          [–]BISH 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (2 children)

          Central bank insolvency is when they cannot buyback all liabilities, US Dollars.

          They can create more dollars if others are willing to purchase the Treasury bonds they issue.
          Bonds, as in, Bondage of the US citizen tax payers.

          Insolvency occurs at the Fed, when no one is willing to purchase US Treasury Bonds.
          That's game over.

          [–]Alphix 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

          How it works is the US Treasury emits bonds, and the Fed invents money to buy those bonds. With this system the Fed can LITERALLY NEVER become insolvent. It can always invent more money to buy more things. Yes, the FED can accrue losses but they can always print more money, so they can effectively never go belly up, unless the Treasury doesn't want to borrow using bonds, which is NEVER.

          [–]BISH 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (5 children)

          Remember, it's not THEIR debt, it's YOUR debt.

          It's the debt of the US citizens.

          I'm sure you're aware of the personal solution I've previously referenced.

          Unfortunately, you can't save everyone, but I can help you save yourself (and anyone else with the eyes to see).

          [–]Alphix 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (4 children)

          I am in Canada, so this has little to do directly with me.

          [–]BISH 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (3 children)

          Pretty sure you can become a Canadian national, but not a Canadian citizen.

          [–]Alphix 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (2 children)

          Dude, I'm ready to do almost ANYTHING to achieve that. I just don't know how. I looked for "non citizen national of Canada" and can't find anything.

          I'll trade the cure for cancer for that.

          [–]BISH 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

          Which Canadian office issues passports?

          [–]BISH 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

          Who's in charge of documenting a Canadians political status to other nations?

          Who would issue diplomatic passports for diplomatic missions?

          [–]William_World 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

          money masters