Rodney Johnson | Tuesday, January 29, 2013 >>
That’s how much “profit” the Federal Reserve sent to the U.S. Treasury in 2012 to spend “any way it likes.”
Of course, this is profit from theft, which is usually punishable in the U.S.
Here’s how it works…
The Fed prints money out of thin air, buys interest paying securities, gathers up all the interest (less expenses), calls it “profit” and sends it on to the U.S. Treasury.
Only, when the Fed prints money it’s stealing from everyone who is a net saver, which obviously doesn’t include the U.S. government. So why then do we allow the Fed to steal from all of us, only to reward the biggest debtor in the country?
I’ve got a better plan…give the money back!
There are roughly 202 million adults in the U.S. At $88.9 billion the Fed could send every adult $440. They stole it from us, why not return it?
Ok, there are a few small reasons this won’t work…
It turns out that not every adult is a net saver, particularly the young adults who are just starting their careers. So sending $440 back to them would not equitably reimburse those who were harmed by the original theft.
Then there’s the problem of actually getting $440 to 202 million Americans. That’s no small task.
There is a more elegant solution. Destroy it.
Oh… wait. We can’t.
For whatever reason, we have set up our system so that we can’t destroy any funds the Fed created out of thin air. We’ve made this inflationary process a permanent, one-way move.
What sense does it make?
If the Fed is serious about its role as the keeper of our currency, then it should follow a very conservative path.
It wants to buy mortgage backed securities to keep mortgage rates low. I don’t agree with it, but I get it.
It wants to buy U.S. Treasuries to keep overall interest rates low as well as drive investors into risky assets. Again, I disagree, but I get it.
However, there is NO point served by sending our dysfunctional U.S. Treasury even more money to spend… money that was not openly taxed away through clear debate and policy, but was rather taken by force from an unelected committee.
Instead of sending the monies to the U.S. Treasury, the Federal Reserve should perform a reverse transaction every time it receives interest. It should zero out all funds except what is needed to perform its duties.
This is possible because the Fed has the only magic keyboard in the U.S. that allows for the creation… and therefore destruction… of money through one-sided transactions.
Think $88.9 billion is a small number?
Consider that right now the Fed is printing $85 billion every single month. The size of the payments to the U.S. Treasury over the next several years will only get bigger.
And every week the Fed continues to steal from you and me and make payments to the U.S. Treasury.
I’d like my money back… or at least my purchasing power.
Publisher’s Note: This Thursday, Harry will host a special two-hour presentation called THE NEXT FINANCIAL MELTDOWN: Harry Dent’s Shocking Predictions for 2013. To hear what he forecasts for oil, gold, China, Europe, stocks, bonds, global markets, stimulus and QE, you name it, reserve your seat here.