Financial topics

[aedens]

I also avoided housing after ACRS on a few since demographics and the shifting sand on property rights as landlord and tenet laws left the realm of reality.

I was going to find that TED link on characteristic's in the so called modern cookie cutter play book to workplace issues. This stems how people have been stuffed over the decades from so called experts. Between the extremes reality exists and I will find that link to TED on how and why some people we touched on here on dystopian harbingers we see around us from time to time.

http://www.ted.com/talks/susan_cain_the ... verts.html

[vincecate]

With respect to gold or any commodity there is more than one mechanism to drive up price. Primary drivers are normally inflation of money and supply/demand for the product.

I have no problem with saying either of those can drive up prices, nor do I have a problem with saying both can occur at once.

Yes, demand is a factor. But I think it is important to understand the factors of inflation, it is not just money supply. I think it helps to look at the Equation of Exchange, which being an equation can be written several ways:

P = M * V / Q

P = Price level
M = Money supply
V = Velocity of money, how many times it turns over in a year
Q = GNP

Look at changing one thing on the right at a time. If GNP goes down, prices go up. If the velocity of money goes up, prices go up. If the money supply goes up, prices go up. In hyperinflation all 3 factors are changing in the way to drive prices up at the same time. So prices go up really fast.

http://en.wikipedia.org/wiki/Equation_of_exchange
http://pair.offshore.ai/38yearcycle/#hyperinflationmath

[Higgenbotham]

The lesson the big guys who keep trying to find the "next big thing" are refusing to learn is simply this, leverage quit working. If you want to do rentals, buy the units outright and own them.

That's another aspect and it's common sense, which is rare today. Once this is realized, housing prices have nowhere to go but down. I told a real estate broker I won't be buying again until I see cash only auctions.

...landlord and tenet laws left the realm of reality.

In the state I was in, if there was eviction and the tenant didn't move, the landlord had to hire a bonded and insured mover to move the tenant's belongings into storage and pay 3 months of storage. I'm sure there are many tenants who would get a good laugh out of requiring ABC Hedge Fund in New York to pay thousands of dollars to move a bunch of garbage that they were planning to throw out anyway.

[Reality Check]

The U.S. dollar bills we carry around in our wallets are Federal Reserve Notes, correct ?

All correct.

A Federal Reserve Note is a liability of the Federal Reserve Bank, and holding that note would give the holder legal rights.

If one is holding Hundred Dollar Bills, aka U.S. paper money, aka Federal Reserve Notes. Let's say one is holding 100,000 of these Hundred Dollar Bills.

What specific legal rights would that give the holder ( a U.S. citizen ) of those 100,000 Federal Reserve Notes ( "and holding that note would give the holder legal rights" )?

Other than the legal right to use the notes as legal tender to pay off U.S. dollar denominated debts?

Would those legal rights change if the holder was a foreign government, or foreign central bank, or foreign citizen, rather than a U.S. citizen?

[Higgenbotham]

What specific legal rights would that give the holder ( a U.S. citizen ) of those 100,000 Federal Reserve Notes ( "and holding that note would give the holder legal rights" )?

It's a right to a claim on the underlying assets, or in the terms we previously used what collateralizes the Federal Reserve Notes.

Other than the legal right to use the notes as legal tender to pay off U.S. dollar denominated debts?

None, so long as the agreement on the note is upheld.

[Reality Check]

It's a right to a claim on the underlying assets, or in the terms we previously used what collateralize the Federal Reserve Notes.

How, exactly, does a U.S. citizen, the holder of a 100 dollar bill, which is also a Federal Reserve Note, have the legal right to the underlying assets?

IMHO, the party being "collateralized" is the U.S. government., not the private citizen who hold's the Federal Reserve note.

The FED, which is not part of the U.S. government, puts up various types of collateral assets when it orders Federal Reserve Notes from the U.S. government.

Currently that collateral is more than 98% Treasury Notes, Mortgage Backed Securities and Agency ( Ginnie Mae, Fannie Mae, etc. ) Bonds, which are all owned by the FED.

Less than 2% of the Collateral are the Gold Certificates that the FED Owns ( that is because they are valued at only $42.22 per ounce of Gold ).

10. Collateral Held against Federal Reserve Notes: Federal Reserve Agents' Accounts
Millions of dollars

Federal Reserve notes and collateral Oct 10, 2012

Federal Reserve notes outstanding 1,312,753
Less: Notes held by F.R. Banks not subject to collateralization 217,965


Federal Reserve notes to be collateralized 1,094,788

Collateral held against Federal Reserve notes 1,094,788
Gold certificate account 11,037
Special drawing rights certificate account 5,200
U.S. Treasury, agency debt, and mortgage-backed securities pledged (1,2) 1,078,551
Other assets pledged 0


Memo:
Total U.S. Treasury, agency debt, and mortgage-backed securities (1,2) 2,571,487
Less: Face value of securities under reverse repurchase agreements 75,387
U.S. Treasury, agency debt, and mortgage-backed securities eligible to be pledged 2,496,101

Note: Components may not sum to totals because of rounding.

[Higgenbotham]

It's a right to a claim on the underlying assets, or in the terms we previously used what collateralize the Federal Reserve Notes.

How, exactly, does a U.S. citizen, the holder of a 100 dollar bill, which is also a Federal Reserve Note, have the legal right to the underlying assets?

IMHO, the party being "collateralized" is the U.S. government., not the private citizen who hold's the Federal Reserve note.

The FED, which is not part of the U.S. government, puts up various types of collateral assets when it orders Federal Reserve Notes from the U.S. government.

Currently that collateral is more than 85% Treasury Notes, Mortgage Backed Securities and Agency ( Ginnie Mae, Fannie Mae, etc. ) Bonds, which are all owned by the FED.

Less than 12% of the Collateral are the Gold Certificates that the FED Owns ( that is because they are valued at only $42.22 per ounce of Gold ).

The "How, exactly" can't be known until the courts or the politicians make their decisions as to how the holder of the note is to be compensated in the event the notes no longer serve as legal tender. Usually, in legal matters, there is specific more recent precedent to look back on so that more specific outcomes can be predicted but in this case we only have history as a guide.

In theory, the US government consists of "we the people" and is acting in the interests of all of the US citizens, who are all required by law to use Federal Reserve Notes as legal tender.
Therefore, the US government, acting on behalf of the holders of Federal Reserve Notes, may take ownership of those assets and then reissue a United States Note that is backed or redeemable (Kennedy was doing this or maybe more accurately getting ready to do this). It's correct in my opinion to think that no individual holder of a Federal Reserve Note would have a claim on a piece of gold but only on what represents its value. That's because a government has to issue some form of legal tender and unless the government itself were to be dissolved, there would be no sense in taking that process back to the individual level. If the US government were to stay intact, there's only one way I could envision individual holders of Federal Reserve Notes getting actual gold. If a decision were made to use the stockpile of Federal Reserve owned gold to mint legal tender gold coins, the Federal Reserve Notes could be turned in and exchanged for legal tender gold coins. I think that would only happen if someone like Ron Paul were to become President.

[Reality Check]

It's a right to a claim on the underlying assets, or in the terms we previously used what collateralize the Federal Reserve Notes.

How, exactly, does a U.S. citizen, the holder of a 100 dollar bill, which is also a Federal Reserve Note, have the legal right to the underlying assets?

IMHO, the party being "collateralized" is the U.S. government., not the private citizen who hold's the Federal Reserve note.

The FED, which is not part of the U.S. government, puts up various types of collateral assets when it orders Federal Reserve Notes from the U.S. government.

Currently that collateral is more than 98% Treasury Notes, Mortgage Backed Securities and Agency ( Ginnie Mae, Fannie Mae, etc. ) Bonds, which are all owned by the FED.

Less than 2% of the Collateral are the Gold Certificates that the FED Owns ( that is because they are valued at only $42.22 per ounce of Gold ).

The "How, exactly" can't be known until the courts or the politicians make their decisions as to how the holder of the note is to be compensated in the event the notes no longer serve as legal tender. Usually, in legal matters, there is specific more recent precedent to look back on so that more specific outcomes can be predicted but in this case we only have history as a guide.

In theory, the US government consists of "we the people" and is acting in the interests of all of the US citizens, who are all required by law to use Federal Reserve Notes as legal tender.
Therefore, the US government, acting on behalf of the holders of Federal Reserve Notes, may take ownership of those assets and then reissue a United States Note that is backed or redeemable (Kennedy was doing this or maybe more accurately getting ready to do this). It's correct in my opinion to think that no individual holder of a Federal Reserve Note would have a claim on a piece of gold but only on what represents its value. That's because a government has to issue some form of legal tender and unless the government itself were to be dissolved, there would be no sense in taking that process back to the individual level. If the US government were to stay intact, there's only one way I could envision individual holders of Federal Reserve Notes getting actual gold. If a decision were made to use the stockpile of Federal Reserve owned gold to mint legal tender gold coins, the Federal Reserve Notes could be turned in and exchanged for legal tender gold coins. I think that would only happen if someone like Ron Paul were to become President.

So are you saying that only the U.S. government, as a representative of all the people of the United States, has a legal claim against the collateral the FED puts up, or,

Or, are you saying that an individual U.S. citizen, who holds Federal Reserves Notes, has an individual legal right as the holder of the Federal Reserve Note to a portion of the collateral shown in Item 10?

There is a huge difference between those two types of legal rights. The first requires you control the U.S. government before you can exercise such a U.S. government right, and the first has nothing to do with an individual property right.

[Higgenbotham]

So are you saying that only the U.S. government, as a representative of all the people of the United States, has a legal claim against the collateral the FED puts up, or,

Or, are you saying that an individual U.S. citizen, who holds Federal Reserves Notes, has an individual legal right as the holder of the Federal Reserve Note to a portion of the collateral shown in Item 10?

There is a huge difference between those two types of legal rights. The first requires you control the U.S. government before you can exercise such a U.S. government right, and the first has nothing to do with an individual property right.

I would say neither. The individual US citizen who holds Federal Reserve Notes may have a legal right, but not an individual legal right, to a portion of the collateral shown in item 10. It is a right that will be determined by the courts or the politicians, and applied to all of the individual holders of the notes. While the holders of the notes may have this right and will likely receive value for their claim, they do not have a right to determine exactly what that compensation will be or exactly what form it will take, as there are not normally individual determinations of compensation applied to individual members of a class of claimants.

[aedens]

According to the case of Propeller Genessee Chief and 27 CFR 72.11, it is evident that admiralty or maritime courts have
jurisdiction over all commercial law. You are a Subject, not a Citizen and we covered this as no man status.