Private Profits, Communal Losses

While the Federal Reserve Act explicitly requires that Federal Reserve member banks be assessed to cover operating losses, the Federal Reserve Board’s stated plan is to monetize these losses and still report a positive capital and surplus position through the use of “creative accounting” entries not seen since the 1980s savings and loan crisis. Those that recall that historical period know that relying on “regulatory accounting standards” to create phantom capital cushions did not turn out well. In the Fed’s case, failure is not an issue because the Fed can literally print as much money as needed to pay its expenses and member bank dividends. Monetizing operating losses will however enrich the Fed member banks that are supposed to be bearing the loss, while the public at large will face higher interest rates, higher unemployment, reduced growth, and the inflationary consequences of the new money printed to cover Fed losses. The Fed seems to be hoping that nobody notices.

Who Owns Federal Reserve Losses and How Will they Impact Monetary Policy?
By Paul H. Kupiec & Alex J. Pollock

A Deep and Powerful Evil

I am confident that God loathes the FED even more than I do.

But the problem is, the FED is an ancient near-core American evil.

Younger than Darwinism in the US, true. Also, younger than slavery and treaty-busting with American Indians.

But it is a really powerful evil, deeply rooted in American soil now.

Getting rid of it will cause great pain, and face great opposition from exceptionally powerful people and groups. But, I suspect, less opposition than the (statistically inevitable) bust-up of the welfare state.

It would be a very sweet move, if the breakup of the FED – “the welfare system/cartel for the senior banks” – can be forced as a package deal, tied to the end of the rest of the welfare state.

Why should the poor be the ONLY ones to suffer loss?

Righting an Old Wrong

Calvin and Luther sided with the Nobles, when the peasantry started to take “equality before the law” seriously.1

It’s time we corrected their error, and open the door to blessings that have been waiting for five centuries to fall on our heads.

1 See Blaming Moses: Rejection of Mosaic Civil Law During the Early Reformation by Joel McDurmon for details.

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