What does the Fed actually do?

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It runs the interbank payments system. It lends the commercial banks and LFIs reserves on demand at interest.

It does not lend the government $US to spend. It cannot spend into the private sector. It cannot increase the 'money supply' whatever that is.

It can only set interest rates in compliance with Treasury diktat.

Banks do not operate under the Fractional Reserve Banking system that Wikipedia and Ewetube promote as fact.

Banks do not lend reserves except to each other.

Every new loan is new money. 100%. A bank's balance sheet increases by 100% of the loan amount.

George Romey can't get a job because he's a moron.

Comments

Dino Manalis Added Apr 26, 2017 - 8:13am
The fed adjusts interest rates, that's extremely important, and it has to be independent from politics, although I would support occasional meetings between the president and the Fed chairman to discuss conditions and potential actions to help economic growth and jobs.  However, the Fed can't stimulate the economy on its own, the president and Congress are responsible for pro-growth policies and make the Fed's job much easier.
Patrick Writes Added Apr 26, 2017 - 8:58pm
Weathermen across the world are all idiots because they speak of sunrise and sunset. The sun isn't moving, the earth is. Morons...
 
Article: " It [The Fed] cannot spend into the private sector. It cannot increase the 'money supply' whatever that is."
 
http://www.financialsense.com/contributors/matthew-kerkhoff/qe-printing-money-inflation
 
"...think of the Fed's QE program as an asset swap....QE does enable more bank lending, but the lending must take place for the total money supply to grow.
 
Bank lending is dismal, which is why the total money supply has not increased as much as anticipated. The money which the Fed is making available for banks to lend is not being lent out, and is instead working its way into asset prices and accumulating in the reserve accounts of member banks. If and when that money begins to flow out as loans - then we will need to be acutely aware of inflation showing up on our doorstep."
 
 
Banks don't operate on the fractional reserve banking system? Do you feel the need to cite these kind of statements when it disagrees with 99% of accepted knowledge? 
 
Could you explain how did Lehman Brothers Bank collapsed in 2008 (if I can assume that commercial cash reserves aren't important in your view)? 
Michael B. Added Apr 26, 2017 - 10:51pm
John G., go fuck yourself, you slimy limey ass-fucking-hole. You and Jeff Bitchka should 69 each other's old, wrinkled, puny pee-pees and lick out each other's dessicated assholes.
John G Added Apr 27, 2017 - 3:10am
The money which the Fed is making available for banks to lend is not being lent out
The Fed doesn't not make money available for banks to lend out.
If and when that money begins to flow out as loans
Reserves cannot be lent outside the payments system.
Banks don't operate on the fractional reserve banking system?
No. Reserves are not lent outside the payments system and savings are not lent to borrowers.
Every new loan is new money. Loans create deposits. 
 
John G Added Apr 27, 2017 - 3:13am
They do this by buying or selling  US  Treasuries in the open market through a select number of brokers and banks that qualify financially. This adds or subtracts dollars from the system.
No it doesn't. It just changes that asset portfolio of the private sector.
John G Added Apr 27, 2017 - 3:16am
"...think of the Fed's QE program as an asset swap....QE does enable more bank lending,
QE is an asset swap. Yes.
It does not enable more bank lending. No.
Bank lending is only limited by the availability of willing qualified borrowers.
 
John G Added Apr 27, 2017 - 3:55am
George is no moron , but a smart individual.
How could a moron like you judge?
Nope. George is a rude, ignorant moron like you.
Katharine Otto Added Aug 7, 2017 - 2:05pm
Patrick,
You've confirmed what I suspected, that qualified borrowers are scarce.  If I were in business, I would be terrified of going into debt, these days, with the economy so unstable.  Debt is a trap, and after 2008, more and more people are realizing it.  
 
We are being conditioned to believe debt is an asset, because that's how the system has worked since 1913, with the start of the Federal Reserve System.  When so many indebted farmers lost their farms in the Depression, we should have learned better, but we didn't.  The Fed/Feds  are a Ponzi scheme, and the haha truth is that they are desperate to lend their fake money to further pollute the money supply, but not enough people are buying the scam, and that's why they can't create the inflation they so desire.  Too many people walking away from debt, paying off debt, and refusing to borrow more.  Debt write-offs serve to deflate currency, too, and presumably, to shrink the money supply.  This is good for the individual, because her money has more buying power.

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