Originally Posted by
bxm042
The mechanics of the trade doesn't matter. Which is why I used a simplified example. This is just yet another red herring of yours. See below:
Are you seriously trying to tell me that because the Fed buys the lowest bid it invalidates this extremely basic economic principle outlined above?
You keep repeating this as if it's some kind of secret. Everyone and their mother understood this by page 4 of this thread. Give it a rest, already, for $#@!s sake.
Besides, the PD's are simply an intermediary. The profits earned due to printed money don't occur in just a single transaction. The PD's earn a little profit by trading with the Fed. The bankers earn a little profit by trading with the PD's. The assets and money changes hands between bankers, PD's, and the Fed, very often so all those "little profits" add up to a lot.
In fact, the amount of profits gained through those transactions can actually be calculated, with just a little analysis.
The monetary base as of 2011 is $2,150,000,000,000. That means the Fed, since its creation, has bought more than $2 trillion dollars worth of assets.
According to their Oct 31 2012 balance sheet, their current Assets-Liabilities = $54,760,000,000. That means they have bought $2 trillion dollars worth of assets, and only have $54 billion dollars to show for it. (There may be some mitigating factors in their balance sheet that changes these numbers, but my point is there is a concrete number that can be calculated.)
That's $2 trillion straight profit. I can see only two possible recipients of that profit. 1) The bankers. 2) Military industrial complex, government contractors, hospitals, etc, and any other recipient of government funds. (Both groups 1) and 2) profit from the Fed)
That's $2,096,000,000,000 that just went "poof." You would have me believe that this free money (it is what it is), went to the bankers, and they didn't take any cut of this pie, and simply gave it all to the government without making any profit.
However, with some time and research, we could actually determine how much of this cut the bankers took using just a bit of subtraction. The only two possible recipients of these profits are the bankers and government spendee's. With the treasury data available, we should be able to determine precisely how much of that $2 trillion profit was distributed by the government
From there, we could determine how much the bankers have profited by simply subtracting the M0-normalized government spending from $2.15 trillion, and then multiplying it by M2/M0 to achieve the final result.
It would take some work and careful fact checking, but I think it can be done. And I do believe you would be surprised by the result. Taking into account FRB, it would quickly get quite substantial.
If you're interested, this would be an interesting project, and considering that you're a banker apologist, I'm sure you'd be more than happy to catch my errors in the process.
I said you implied it. Which you did. Your exact words were "you people." Which a) is an assholish thing to say begin with. and b) I never said anything of that kind, so you throwing me in that group makes you a liar. Your purpose with that statement was obviously to try to discredit me. It's dishonest, and rather than own up to your mistake (or intentional lie?) you double down with more personal attacks.
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