Serious question - 10 points if you know the answer

Discussion in 'Off-topic' started by NTA, Apr 6, 2017.

  1. NTA

    NTA Well-Known Member

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    OK, the FED has $4.x trillion on its balance sheet. These assets, some bogus highly overvalued stuff bought from banks and lots of US treasury bills purchased to keep interest rates low for the taxpayers are likely to be sold off over the next few years.

    The question is what happens to the real money that is collected from the sale of these financial items originally bought with pretend digital money ?
     
  2. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    Profits from Federal Reserve assets are just general revenue. They already generate 3% of revenue. I am guessing that the sale revenue would be treated the same way.
     

  3. Mrs_Esterhouse

    Mrs_Esterhouse Swollen Member

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    Ask the Rothschilds.
     
  4. Wegahe

    Wegahe NRA Instructor

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    What "real money"? You mean that paper stuff they hand out in the form of a pay check?

    The digital money or actually on paper like IOU's is just paper government debt it owes to itself. As far as real money when this debt is sold or traded the seller gets it. Which in this case is the government. But this transfers fantasy debt into real debt that the government has to pay back plus interest.

    Another way to look at it is if you were to buy a house and write your own mortgage. You write the mortgage for the amount of the purchase plus interest. At this point you have a mortgage on the house but it is unfunded. When you sell the paper you get the money to purchase the house but you also have the debt to the buyer that has to be paid back plus the interest stated on the mortgage.

    It boils down to the government has 4.xT in an unfunded mortgage. The sale of which creates real debt plus interest which will at some point have to be paid back.
     
  5. NTA

    NTA Well-Known Member

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    I'm sure the interest on the treas bonds they held would be legit income for the FED but certainly not the $trillions in principal (created with a keystroke).

    Probably they will offset the return of principal on the bonds with the huge losses in gifts to the bank type purchases of their junk mortgage trances and such.

    It is hard to wrap my head around debt money, especially when it can be so blatantly fiddled with.
     
  6. NTA

    NTA Well-Known Member

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  7. phantoms

    phantoms Senior Mumbler

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    It's a trick question. It's all pretend money.