Fed Print money;literally or figuratively or at all?

[demoisedrawings]

I've come to respond to the Austrian way of thinking concerning economics. However I'm still not beyond asking whether Ron Paul in particular has actual proof as to whether or not The Fed physically prints money up whenever it needs it. Where is your sources Ron? My father and I looked at some books in our neighborhood library that explain banking and the Federal Reserve System. They say something to the affect of The Fed lends money to banks; At times they withhold money from banks and other times allow more money to go to banks so that those banks may lend out more money when necessary. Now if I interpreted this right, it's still some control by the Fed, but it's not the explanation given to us by Ron Paul and Austrian economists. They say the Fed is literally printing up money it needs from the printing press that prints our money: hence counterfeiting. Depending on what books you and I read, we'll get different philosophies and hopefully credible sources from those books to back up the claims. I am not denouncing Paul or Austrian Economics. On the contrary. I feel any philosophy that I latch on to for whatever the reason, I have a right to call those beliefs into question. Since we are not privy to information and only have books from the library; you always have to ask which theory is right, because confirmation is most often never given. Which history is correct; Murry Rothbard's or our history text book in schools? If counterfeiting is correct, I'd have to say it wouldn't be seen in school text books. On the other hand the fact that I'm guessing that it isn't in school text books makes it look like Paul's word is right when it might not be. How does anyone know? Answers anyone? Someone provide some credible sources to back up the claims that money is created out of thin air by the Fed!

 

[powerofreason]

Well, the Fed is responsible for controlling the money supply. If they didn't increase the supply of money (inflate) then the dollar would not have lost 95% of its value since 1913. The Treasury Dept. I think is responsible for actually printing paper money when it is needed.

 

[nbhadja]

The money supply statistic is growing like crazy. That is proof that they are inflation rapidly.

 

[forsmant]

http://www.ronpaulforums.com/showthread.php?

http://reinventingmoney.com/documents/ModernMoneyMechanics.pdf <--------From the Federal Reserve in Chicago

The search feature revealed these results

http://www.ronpaulforums.com/search.php?searchid=2665449

Print money out of thin air is a euphimism for the effect of the money multiplier and the creation of money from bank credit into existance. The Treasury sells debt to the federal reserve in order to increase the monetary base which raises reserve ratios and encourages bank to lend money which increases the total money supply by 10 times the initial amount of debt the Federal Reserve monitized.

The federal reserve does control the printing of all new federal reserve notes.

http://en.wikipedia.org/wiki/Federal_Reserve_Note

 

[forsmant]

The money supply statistic is growing like crazy. That is proof that they are inflation rapidly.

Actually the Fed has been inflating moderately since last year up until two weeks ago at a pace of about 2.5%. Within the last two weeks the Fed and Treasury have increased the monetary base by $150 billion.

http://silveraxis.com/todayinsilver/

 

[Lovecraftian4Paul]

If the Fed isn't involved in the printing some way, then why does every bill say "Federal Reserve Note?"

 

[Chase]

Allow me to attempt to explain... the Fed "printing money" is shorthand for two different things.

1. The Fed thinks there isn't enough liquidity in the market, and their bunk Keynesian economic theory suggests they can just print that capital instead of producing and saving it. So they make a decision to inflate the money supply by printing, and then they'll make the money available for borrowing. Example:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9MTZEgukPLY&refer=home

Really, search the news for "Federal Reserve liquidity". You'll find tons and tons of articles about it. I don't know personally whether the Fed's lending to cut rates and increase liquidity ever contains any real capital off their balance sheet, or if it's all printed. Most of that wealth *has* to be printed, because you can be assured that they don't have hundreds of billions of dollars of real capital sitting in a vault waiting for the right time to release it.

2. The US government comes up short and can't fund its obligations. In that case, the Treasury department sells enough T-bills to cover the shortfall. But sometimes they need to sell so many that there aren't enough buyers at the kind of rates they're offering. In these cases, they direct the Fed to print some money and buy those T-bills.

 

[rockandrollsouls]

Most of the money is electronic.

 

[Lovecraftian4Paul]

This is a decent Wikipedia piece that answers part of my original question (does the Fed physically print our money since every one is stamped with Federal Reserve Note?), for anyone else interested:

http://en.wikipedia.org/wiki/Federal_Reserve_Note

 

[eric_cartman]

this 45min documentary should explain it well.

http://video.google.ca/videoplay?docid=-466210540567002553

today, i wouldn't say they literally "print" money... because most of the money is electronic. they just add zeros.

but they control the supply of money... they have the power to increase or decrease the supply of money... to buy up whatever they want, or create as much money as they desire. it's a bit of a complicated process, but in a nutshell, they print money.

 

[fahayek]

I've come to respond to the Austrian way of thinking concerning economics. However I'm still not beyond asking whether Ron Paul in particular has actual proof as to whether or not The Fed physically prints money up whenever it needs it. Where is your sources Ron? My father and I looked at some books in our neighborhood library that explain banking and the Federal Reserve System. They say something to the affect of The Fed lends money to banks; At times they withhold money from banks and other times allow more money to go to banks so that those banks may lend out more money when necessary. Now if I interpreted this right, it's still some control by the Fed, but it's not the explanation given to us by Ron Paul and Austrian economists. They say the Fed is literally printing up money it needs from the printing press that prints our money: hence counterfeiting. Depending on what books you and I read, we'll get different philosophies and hopefully credible sources from those books to back up the claims. I am not denouncing Paul or Austrian Economics. On the contrary. I feel any philosophy that I latch on to for whatever the reason, I have a right to call those beliefs into question. Since we are not privy to information and only have books from the library; you always have to ask which theory is right, because confirmation is most often never given. Which history is correct; Murry Rothbard's or our history text book in schools? If counterfeiting is correct, I'd have to say it wouldn't be seen in school text books. On the other hand the fact that I'm guessing that it isn't in school text books makes it look like Paul's word is right when it might not be. How does anyone know? Answers anyone? Someone provide some credible sources to back up the claims that money is created out of thin air by the Fed!

The Fed doesn't print money, the Treasury does. You need to go back to your library and reread your banking books especially the chapter on fractional reserve banking.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

 

[nate895]

The Fed doesn't print money, the Treasury does. You need to go back to your library and reread your banking books especially the chapter on fractional reserve banking.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

If we get really technical, it is the Bureau of Engraving and Printing, on the orders of the Federal Reserve.

 

[forsmant]

This is a decent Wikipedia piece that answers part of my original question (does the Fed physically print our money since every one is stamped with Federal Reserve Note?), for anyone else interested:

http://en.wikipedia.org/wiki/Federal_Reserve_Note

I posted that link in post number 4 of this thread. Along with many other links to satisfy the original posters request for sources.

 

[heavenlyboy34]

this 45min documentary should explain it well.

http://video.google.ca/videoplay?docid=-466210540567002553

today, i wouldn't say they literally "print" money... because most of the money is electronic. they just add zeros.

but they control the supply of money... they have the power to increase or decrease the supply of money... to buy up whatever they want, or create as much money as they desire. it's a bit of a complicated process, but in a nutshell, they print money.

+1...it's a modernized Weimar tactic. They used to print bills in low denominations on one side, and when those bills came back through through the treasury, higher denominations were printed on the other side. No new wealth was created, but there was more high denomination paper for the gov't to spend on wars of conquest. It lead to hyperinflation and destruction of the republic-same thing is happening before your eyes, just more slowly.

 

[fahayek]

I posted that link in post number 4 of this thread. Along with many other links to satisfy the original posters request for sources.

Right on.

 

[itshappening]

only about 1% of all money is in circulation, they dont need to print it all... if they did.. lol... it would be a lot... but they would do it if need be

 

[demoisedrawings]

Well, I got some good responses on my last post questioning the claims austrian economic thinkers put forth concerning the Fed. I think it is good to look at as many sources as possible whether it is library books, newspapers or internet archives, and not to forget news sources. One such youtube source that I believe one of the members brought to my attention, was a Money Matters video. In it the description of our Federal Reserve and Treasury structure according to the commentator, is a "debt based system." He seemed to say that whenever the government needs money, they issue T bills, bonds and the like for us to buy. Americans and those abroad can buy up these bonds and along with taxes these methods are used to help pay for the governments debt. So these resources are apparently some choices utilized in an attempt to cover this 700 billion plus sum. The commentator on Money Matters said when these avenues fall short of the sum needed, the Fed/Treasury issues more bonds to make up the difference and then buys them. Either way it seems it would take generations to realize the total money amount needed to pay off this staggering debt. This seems fantastic if true. It's one thing for us and foreigners to purchase bonds issued by the Fed, but when and if the Fed buys up bonds that it has issued, it becomes a different story. If true, then that is in effect, to use the euphemism; "creating money/credit out of thin air."

 

[jonahtrainer]

Most of the money is electronic.

Very insightful. Watch this 2 minute video if you really want to understand what rockandrollsouls means.