Fiat Money is just institutionalized scams, Part 2: Reinterpreting official narratives.

Fiat Money is just institutionalized scams, Part 2: Reinterpreting official narratives.

by tonytran2015 (Melbourne, Australia).

Click here for a full, up to date ORIGINAL ARTICLE and to help fighting the stealing of readers’ traffic.

(Blog No.20x).

#fiat money, #free health care, #money for everyone, #quantitative easing, #monetary tightening,

Fiat money is just “Coupons for paying taxes and receive goverment’s goods and service”.

1. Fiat money of any nation is just only its coupons:

Former USSR, Eastern European Communist Countries were with a system of fiat money not unlike current USA is. Everyone has his coupons but goverment stores may not be able to supply the needed goods.

With enough reckless printing, “easy to print coupons” may become not appreciated by its citizens and that is when we say hyper-inflation occurs to that fiat money.

There is NO MAGIC in wealth creation with printing fiat money.

2. Printing more coupons as an election promise:

Gullible voters still believe that government has the Wealth Creation MAGIC and can distribute that wealth using its printed coupons.

Logics and the inevitable wake up from the cruel policies in former communist states have shown that no such magic had existed yet voter fools still believe in such magic upon which election candidtes made their promises,

Election candidates should not be allowed to say that “my elected government will provide free health care, will give citizen payments for doing nothing”. The promises are not feasible (It is impossible to provide all citizens with service totalling to more than the works supplied to the nation plus its imported services).

Rather election candidates should be required to say only what they can actually do such as “my elected government will freely distribute coupons for use at health care centers. Even for people doing nothing they will still get coupons“. Whether the coupons can bring in the promises is quite another matter.

3. Federal Reserve Bank policies reinterpreted:

2a/- As coupons can be printed at will, holders of coupons better spend them before the market get flooded with new coupons from any “Quantitative Easing“.

2b/-With the current economic setting giving 100% tax deduction on all interest payments on business loans, everyone has to borrow to be competitive.

The FRB can jack up interest rates (Monetary tightening) to give bigger shares of profit to lenders of coupons (fiat money), or to next tier of lenders (non-central banks) who issue notes promissing to give coupons to the first 10% of these notes presented (brought back) to them (the next 90% will get NOTHING from the issuers but may get something in consolation from the government who issued licenses to the non-central banks).

References:

[1]. Your fiat money (Part 2), https://survivaltricks.wordpress.com/2017/01/12/your-fiat-money-part-2/.

[2]. https://survivaltricks.wordpress.com/2019/04/28/fiat-money-is-just-institutionalized-scams/

[3]. https://survivaltricks.wordpress.com/2017/03/01/qe-may-be-another-scam-to-steal-national-wealth/

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Making money from Treasury Bonds with Insider Information

Making money from Treasury Bonds with Insider Information

by tonytran2015 (Melbourne, Australia).

Click here for a full, up to date ORIGINAL ARTICLE and to help fighting the stealing of readers’ traffic.

(Blog No.86).

#Treasury Bonds, #Quantitative Easing, #QE,

Making money from Treasury Bonds with Insider Information.

An insider can make outrageous amount of profit with his insider knowledge, at the expense of the tax payers. This blog gives the details description for such a process of transferring public money into private pockets.

1. Assumptions.

1. The going interest rate is 3% in year 2000.

2. The Federal Reserve Banks (FED) will rescue the economy by lowering interest rate on the “signals”.

3. The insider controls banks.

4. Insider has 200M.

2. Execution of plan.

1. Insider borrows 1000M from banks on a year to year basis, renewable up to 2005.

2. Insider buys 5 years Treasury Bonds at the price of 1000M*(1-5*3%)= 850M to be matured in 2005 at value of 1000M

3. Insider pays 4% interest to banks at the end of each year.

4. Insider puts his account of 200M (earning interest) and 1000M Treasury Bonds (to mature in 2005) as securities to banks.

3. Banks have secured loans.

The worse case for the bank is to keep the Treasury Bond until 2005 to obtain 1000M from the Treasury. Interest accrued to that date would be 1000M*5years*4%per-annum = 200M that can be deducted from Insider’s account of 200M.

The Insider still has some earned interest for his decreasing account of 200M left as security for his loan of 1000M.

The loan will be approved by banks as it is fully secured and interest payment is guaranteed by the account of 200M left as security.

4. Insider looks silly.

Without the loan, Insider would collect from his bank account an interest payment of (say at 2%):

200M*5years*2%per-annum = 20M.

With the loan, Insider has a decreasing account starting at 200M ending at almost zero. So the total interest would be

200M*5years*2%per-annum*0.5 = 10M.

Besides that reduction of 10M in interest earned, he earns only 150M from Treasury Bonds but has to pay 200M in interest to the bank. So he would lose 40M after 5 years with that loan.

The insider does indeed look silly with his complicated financial plan.

5. Insider wins big amounts.

The banks with connection to the Insider now behave recklessly and are threatened with bankruptcy ! This worries the Federal Government.

The government decides to bring interest rates down to 0.1% and buy back all affected Treasury Bonds (Quantitative Easing) (to help the reckless banks and indirectly the Insider). Suppose that this happened in the year 2001.

1000M of Treasury Bonds to mature in 2005 is now bought back by the FED at

1000M*(1-0.1%per-annum*4years) = 1000M*(1-0.004) = 996M.

Insider now resell his 1000M Treasury Bonds maturing in 2005 to the FED for 996M and pays off his bank loan.

His out-goings are

850M buying Treasury Bonds in 2000.

40M interest paid to banks.

His incomes are

996M selling Treasury Bonds in 2001

4M Interest earned by his account of 200M left as security (assuming an interest rate of 2% paid to him)

So his net income after one year is

996M + 4M – (850M + 40M) = 110M,

that is an income of 110M on a capital of 200M after one year!

6. How can he earn that much.

The insider now wins because of the Quantitative Easing policy of the Federal Reserve Banks. He has bought Treasury Bonds at market price, hold them for one year then resold them at Government supported price.

His insider knowledge is that the FED will buy back Treasury Bonds at higher than market price. If there was no such thing he would certainly look silly with his plan.

7. Who has won? Who has lost?

The Insider won, the banks made profits on the secured loans to him while the tax payers have lost.

The figure of 200M dollars is only an example figure, in reality the figure is much higher, it may involve trillions of dollars. The year figure was started at 2000 for ease of argument but it can be any year.

That is why any relationship between a powerful financial institution and a government should be looked at with suspicion.

References

[1]. Mish Mishtalk, Margin debts hit record high-coinciding with extreme-consumer confidence, mishtalk.com, http://mishtalk.com/2017/03/30/margin-debt-hits-record-high-coinciding-with-extreme-consumer-confidence-analysts-say-dont-worry/, 30 March 2017.

[2]. stock-markets-sit-blithely-on-a-powerful-time-bomb, sentinel blog, http://sentinelblog.com/2017/04/22/stock-markets-sit-blithely-on-a-powerful-time-bomb/, accessed 22 April 2017.

[3]. https://lplresearch.com/2017/04/07/margin-debt-worry-or-overblown-anxiety/

[4]. Yashaswini Swamynathan, Reuters, The S&P 500 is worth $20 trillion for the first time, business insider, http://www.businessinsider.com/sp-500-market-cap-crosses-20-trillion-for-the-first-time-2017-2, Feb 13, 2017.

[5]. The last time this happened the market crashed, sentinelblog.com, https://sentinelblog.com/2017/04/22/the-last-time-this-happened-the-market-crashed/

[6]. http://wallstreetonparade.com/2016/08/bailed-out-citigroup-is-going-full-throttle-into-derivatives-that-blew-up-aig/

[7]. https://bonnerandpartners.com/u-s-stocks-are-disastrously-overvalued/

[8]. Michael Pento, curve-inversion-and-chaos-to-begin-by-december-2017, Re-Blogged https://us-issues.com/2017/06/10/curve-inversion-and-chaos-to-begin-by-december-2017/
By Michael Pento – Re-Blogged From PentoPort

Added after 2017 Feb 10:

http://riggedgame.blog/2018/02/11/the-game-truly-is-rigged-admits-economist-magazine/

https://dailyreckoning.com/central-banks-great-experiment-failed/

Central Banks: The Great Experiment Has Failed

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Government money flowing into private banks.

Government money flowing into private banks

by tonytran2015 (Melbourne, Australia).

Click here for a full, up to date ORIGINAL ARTICLE and to help fighting the stealing of readers’ traffic.

(Blog No.80).
#money, #private bank, #Federal Reserve Banks, #underwriting fee, #bond, #quantitative easing,

Government money flowing into private banks.

American people keep paying to private bankers through (private) Federal Reserve Bank and various schemes.

1. USA fiat money.

fiatmoneyc60.jpg

Figure: Fiat money relies only on the taxation power of its issuing government for its backing.

From the above simple design for fiat money, International Private Bankers have managed to hook onto it their system living off the flow of fiat money.

2. Current flow of US money.

Fogure: Private banks are taking money off the government. Solid arrows represent current flows, hollow arrows future flows. Three dark green boxes on the right represent FRB.

Private banks “earn” their money from the government by:

1, “Underwriting” the issuing of new US money !

2. “Earning interest” for leaving their fractional deposits at (private) Federal Reserve Bank.

3. Influencing Government’s policies on Government Bonds.

4. Having free money from Quantitative Easing.

Notes:

1. The government of USA is a money sovereign. It can print as much fiat money as it likes (and bear the consequences). Its fiat money has value to American people because they have to use it to pay taxes to their federal and states governments.

2. The deposits by the contributing constituent, private banks of the Federal Reserve Bank are part of their own effort to make themselves appear more liquid. They cannot demand any interest from the government on their deposits, just like airlines cannot demand government compensation on the costs of carrying their statutory reserve fuel on each flight. It is currently (for 2016) costing $40 per year per person for the US to keep using the private Federal Reserve Bank.

3. It is nice when you are the buyers of Bonds and you can influence the seller (government) !

4. Early redeeming of bonds still at face value is having free money ( [11]).

3. Chilling story of United States Notes.

Presidents Abraham Lincoln, Thomas Jefferson and John F.Kennedy had seen the unfairness of private bankers charging interests to the country and had tried to unshackle the burden on the country. Lincoln and Kennedy had been assassinated while Jefferson survived the assassination attempt.

A chilling history of private bankers gripping the US government system is given by reference [9]:

“Central bank usury control caused the US Constitution… to get their First Bank Of The United States in 1791. … When their 20-year charter was up in 1811, the Jeffersonian Democrats prevented its charter from being renewed. So the Rothschild bankers summoned their mercenaries (the British army and navy) to teach us a lesson, the War of 1812. … they got their Second Bank Of The U.S., again with a 20-year charter. When Andrew Jackson was elected in 1828, the bankers tried everything to stop him; they created the 1833 recession; had him censured in 1834; and a failed (both guns misfired) assassination attempt on Jan. 30, 1835… Jackson killed the bank in 1836, … During the Am. Civil War, Abraham Lincoln created Greenbacks instead of the 24% to 36% usury the Wall Street bankers wanted to charge, and he was assassinated on Good Friday 1865. … 1913 the Rothschild bank got their …. Federal Reserve Bank. The Federal Reserve Act of 1913 originally had a 20-year charter. But … 1927, the McFadden Pepper Act was signed into law. It made the F.R.’s power over our monetary policy perpetual. . … 1963, President John F. Kennedy created United States Treasury Notes, known as Silver Certificates, with Executive Order 11110, and he was assassinated on Nov. 22, 1963.”

4. Conclusion.

Bankers are now even pushing for the use of cashless cards issued by them [10] !

American people should resist that and should further demand United States Notes (each with a red seal) issued directly by the Treasury just like those issued under Kennedy’s administration. Those notes had nothing to do with the FRB.

Using the dollar notes with red seals (such as Five dollar with Red Seal Notes in series 1953 A through C, see picture in reference Five-Dollar-Bill-Red-Seal-Series [6]) will save Americans $40 per head each year.

References:

[1]. Your fiat money, https://survivaltricks.wordpress.com/2017/01/09/your-fiat-money/

[2]. Your fiat money (Part 2), https://survivaltricks.wordpress.com/2017/01/12/your-fiat-money-part-2/

[3]. The-thirty-families-made-plans-for-a-future-without-you, theMicky.org, http://mikeyy.org/2017/01/30/the-thirty-families-made-plans-for-a-future-without-you/, originally by horse237, https://vidrebel.wordpress.com/2017/01/30/the-thirty-families-made-plans-for-a-future-without-you/

[4]. Stack Jones, The Banking Swindle-The History of Banking Fraud, criminalbankingmonopoly.wordpress.com, https://criminalbankingmonopoly.wordpress.com/2014/02/20/history-of-banking/#comments, accessed Jan 2nd, 2017.

[5]. Federal Reserve System, wikipedia, https://en.wikipedia.org/wiki/Federal_Reserve_System, accessed Jan 2nd, 2017.

[6]. Five Dollar Bill Red Seal Series 1953 US Currency, Natural Web Solutions Inc.(US), https://www.collectons.com/shop/item/58107/Five-Dollar-Bill-Red-Seal-Series-1953-US-Currency#imgs58107

[7]. Us issues, Central banks alchemists of finance part iii-reblogging, http://us-issues.com/2017/04/05/central-banks-alchemists-of-finance-part-iii/, 03 April 2017

[8]. Dale B. Halling, History of Central Banks in the United States, thesavvystreet.com, http://www.thesavvystreet.com, accessed 03 April 2017.

[9]. http://rudolfhess.net/

[10]. tonytran2015, ,
[11]. , Reuter , https://www.reuters.com/article/uk-us-economy-imf-idUKBRE95O0P720130625, June 25, 2013.
Added after 2018April21st:
[12]. https://us-issues.com/2018/04/21/black-tuesday-october-29th-1929-revisited/
[13]. https://counterinformation.wordpress.com/2018/05/03/i-know-which-country-the-us-will-invade-next/

[14]. http://www.chuckmaultsby.net/id94.html

[15]. https://riggedgame.blog/2018/07/09/banks-squeal-as-spains-new-government-threatens-to-do-unthinkable-raise-taxes-on-their-profits/

[16]. https://fellowshipoftheminds.com/2018/07/25/president-trump-is-taking-on-tptb-the-federal-reserve/

[17]. https://socioecohistory.wordpress.com/2018/08/14/the-central-bank-illusion-is-falling-apart-kim-dotcom-warns-of-a-crash/

[18]. https://nationalinterest.org/feature/who-pays-uncle-sams-deficits-26417

During the great recession, the Fed bought a vast quantity of debt (around $4 trillion) but paid interest to banks that keep their “excess reserves” at the Fed to keep this so-called “base money” from increasing the broader money supply. Normally through public deposits at banks, these purchases by the Federal Reserve would typically produce a substantial increase in the monetary supply.

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QE may be just another scam to steal national wealth.

QE may be just another scam to steal national wealth

by tonytran2015 (Melbourne, Australia).

Click here for a full, up to date ORIGINAL ARTICLE and to help fighting the stealing of readers’ traffic.

(Blog No.55).

#treasury bonds #QE #quantitative #easing #scam #stealth, #zero interest,

Figure: Fiat money relies on the payments to government employees with it and the power to collect it back as taxes on the population.

It has been a US policy of borrowing from bankers through Treasury bonds (the method is given in section 1). USA have thus been designed to be in a perpetual state of indebtedness to bond holder bankers. Quantitative Easing is an even more outrageous extension of that monopoly. This posting shows why.

1. Borrowing from the population.

(as previously posted in ref. [2], sect. 7)

We note that the US government regularly issues and has been using its own Fiat money. When the government wants to borrow X units of its fiat money from its citizens, it may have to conduct an “auction”.

b. It may offer to all of its people to give the government any each of their spare $1000 now to receive a (transferable, resellable) certificate to receive $30 every year and hold it until the end of 10th year to get $30 plus the principal of $1000.

Too many of its citizens may accept the offer and the total amount of their money may far exceed the requirement of the government. If that is the case, it may next say No, not $30/year anymore, but $20/year. The amount may goes up again until the acceptance has only about X units, the amount it requires.

This is the idea of Treasury Notes, Treasury Bonds.

Anti-corruption requires that the bidding process be public and transparent.

If the final auction price is $30/year of for $1000 of money then the Treasury Bond rate is 30/1000 or 3.0% per annum.

The transferable T-Bonds is then available for resale on the financial market. Initially it is worth $1000 then it may drift up or down.

Its value at any time is the worth of all money collected from the remaining time compared to prevailing market.

Example:

A $1000 bond entitled to $30/year has 9 years left. The economy now has 0.01% interest and this rate will extend past the redemption date.

When interest rate is at 0.01%, the present value of the bond is worth nearly

$30 X 9 + $1000 = $1270,

(To be exact, the inflation discounted values should be used. Inflation has been assumed to be zero in the calculation).

It has been US government practice to always keep the US in debt with Treasury bonds. There has been no plan to ever free the US from debts.

It would be alright if the debts are spread to ordinary US citizen. In reality, the debts are concentrated to only a handful of billionaires. The indebtedness to a handful of them may threaten the democracy of the US and these people have now extended their grip into another scheme for skimming national wealth called Quantitative Easing.

2. Quantitative Easing.

Quantitative Easing is an even more outrageous extension of the manipulations on Treasury bonds.

When the government wants to have more money circulated in the economy of the population, it can buy gold from the population so that the population keeps the money and the government keeps the gold for future resale. Beside gold the government can also buy infrastructures or services from the population.

But instead of doing that the US government carried out QE (Quantitative Easing) (see reference [7], [8]). This is what the government does in a QE (continuing with the example at the end of section 1):

The government now buy back the Treasury Bond at a price of nearly $1270 from bankers a bond it has previously sold 1 year ago for $1000.

So the government has given away $270. The government lost money for nothing. That why US debt has ballooned up after Quantitative Easing. See reference [6] for the new level of debt.

The injection of money should have been done by government buying gold, infrastructures (including hiring people to build anew or maintain infrastructures) or services from the population.

Notes:

1. Reference [4] stated that “A central bank enacts quantitative easing by purchasing—without reference to the interest rate—a set quantity of bonds or other financial assets on financial markets from private financial institutions. .. QE does directly increase the broad money supply even without further bank lending.”

2. If inflation had been targeted by the government to be 2% (see reference [5]), buying back a 9 year bond at $1180 is just giving away $180, and bankers will be happy to take that.

3. QE gives bond holders surprised gifts.

As long as the bond holders know that the government wants to buy back an enormous amount of X dollars of immatured bonds, they will hold tight to their bonds until the auctioning bid reaches its present value discounted by inflation. Any reasonable bond holder would do that.

After that, the absurdity of zero interest rate is born.

4. Social effects of absurd zero interest rate.

With zero interest rate, pension (or superannuation) funds will not have incomes on any future investments in bonds. They will have to keep cash, gold or plunge into the share markets. This shows that even well designed pension funds will face more risks from the share markets.
Bond holders (including some pension funds) got a surprise gift of free money through QE by the government, but the gift will not drip down to pension funds and individuals on fixed term deposit with the banks.

5. Conclusions.

Having PRIVATE Federal Reserve Banks, practicing obfuscated Quantitative Easing all look like plans to defraud American people of their wealth and permanently enslave them with ever increasing debts to bankers.

References:

[1]. Your fiat money (Part 2), posted January 12, 2017.

[2]. Your fiat money, posted January 9, 2017.

[3]. Quantitative Easing, Investopedia, http://www.investopedia.com/terms/q/quantitative-easing.asp, accessed 1st Mar 2017.

[4]. Quantitative easing, Wikipedia, https://en.wikipedia.org/wiki/Quantitative_easing, updated on 02 March 2017, accessed 03 Mar 2017.

[5]. Why does the Federal Reserve aim for 2 percent inflation over time?, Board of Governors of the Federal Reserve System, https://www.federalreserve.gov/faqs/economy_14400.htm, updated January 26, 2015, accessed 03 Mar 2017.

[6]. kchild2013, US national debt soars by $100 billion. . . in just 8 hours, sentinelblog, https://sentinelblog.com/2017/01/05/us-national-debt-soars-by-100-billion-in-just-8-hours/, January 5, 2017

[7]. sdbast, Ripped-off Britons: Osborne finally admits BofE’s QE payouts gifted min £600bn to the wealthy, worth half the national debt: https://t.co/WNp9Kw7XVb, sdbast.wordpress.com, https://sdbast.wordpress.com/2016/12/18/ripped-off-britons-osborne-finally-admits-bofes-qe-payouts-gifted-min-600bn-to-the-wealthy-worth-half-the-national-debt-httpst-cownp9kw7xvb/, Dec 18, 2016.

[8]. peoples trust toronto, Bank Of Japan Said To Start Preparing For Losses On Its “Huge” Debt Holdings Once QE Ends, https://peoplestrusttoronto.wordpress.com/2016/05/20/bank-of-japan-said-to-start-preparing-for-losses-on-its-huge-debt-holdings-once-qe-ends/, 2016 May 20.

[9]. https://www.treasurydirect.gov/
[10]. , Reuter , https://www.reuters.com/article/uk-us-economy-imf-idUKBRE95O0P720130625, June 25, 2013.
Added after 2018 Feb 02:
[11]. https://venitism.wordpress.com/2018/01/08/what-has-quantitative-easing-wrought/
[12]. https://us-issues.com/2018/04/21/black-tuesday-october-29th-1929-revisited/

[13]. https://straightlinelogic.com/2018/04/23/this-is-not-a-market-by-raul-ilargi-meijer/

[14]. https://www.theautomaticearth.com/author/ilargi/

[15]. https://dailyreckoning.com/central-banks-great-experiment-failed/

[16]. https://riggedgame.blog/2018/05/15/central-banks-the-great-experiment-has-failed/

[17]. https://www.rollingstone.com/politics/politics-news/stock-market-slump-trump-737792/

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