Fed loan late fees Videos

+Wayne Vernon eager for the Forex video, with a payment example that involves the US and another that involves 2 other countries, that would be gold :)

+RGV " in which moment does that transaction affects the exchange rate of both currencies?"The moment that ICBC New York settles its payable to ICBC Beijing. If they exchange the dollars with their Central Bank,the US Reserves become a tool of the PBOC to peg their currency to the US Dollar in forex. If ICBC settles the payable/receivable in a Forex market, this directly affects the exchange rate. If a trend develops where the demand for Yuan excedes the demand for Dollars in forex markets, then the dollar will depreciate.  Of course, China maintains a close peg, so in this specific case, there would likely be no exchange rate consequences. How does China support the Dollar? By hording Dollar reserves....not using them.

+RGV " I assume when you mentioned "dollars never leave the United States" you meant eletronic dollars correct?"Yes, electronic dollars, which accounts for 97%+ of dollar transactions. However, because US dollars are a popular savings vehicle, it is not uncommon for entities to ship physical dollars out of the US. In the case of Ecuador, their central bank literally went to the Federal Reserves and withdrew the physical cash notes and shipped them back home. There are great risks associated with transporting physical dollars, but it does happen. Saddam Hussein had stashed away over a billion physical US Dollars, for security...ironic!Ecuador, and a few others are unique because they circulate physical US Dollars...Not a bad idea if the local currency is struggling, although Ecuador basically gave up sovereignty over their currency, which can be good or bad, depending. =PBut yes, you are correct, physical notes do get exchanged internationally, but they are a very small part. =)

+RGV " I assume when you mentioned "dollars never leave the United States" you meant eletronic dollars correct?"Yes, electronic dollars, which accounts for 97%+ of dollar transactions. However, because US dollars are a popular savings vehicle, it is not uncommon for entities to ship physical dollars out of the US. In the case of Ecuador, their central bank literally went to the Federal Reserves and withdrew the physical cash notes and shipped them back home. There are great risks associated with transporting physical dollars, but it does happen. Saddam Hussein had stashed away over a billion physical US Dollars, for security...ironic!Ecuador, and a few others are unique because they circulate physical US Dollars...Not a bad idea if the local currency is struggling, although Ecuador basically gave up sovereignty over their currency, which can be good or bad, depending. =PBut yes, you are correct, physical notes do get exchanged internationally, but they are a very small part. =)

Hey Wayne, I have been still trying to figure this out but haven't found much about how it works for countries with USD as their official currency. I have only found an article in Russian explaning how cash dollars enter Russia to cover the demand for cash dollars (most Russians save in dollars). The article basicaly says that russian banks transfer eletronic dollars to american banks such as Citibank and Banks of America (I believe they are talking about reserves in their FED accounts according to your class), the american bank takes a percentage up to 2% for their service and then send the cash dollars to russia in airplanes (U$250 million in each airplane maximum due to insurange limitations). The article says in March 2015 (Crimea crises period) this flow reached U$5 billion a DAY (20 airplanes)! So I assume when you mentioned "dollars never leave the United States" you meant eletronic dollars correct? Any guess of how it works for countries who have as USD as their official currency? Ecuador has a negative balance of trade, and their interest rate is 9.15%. How do they manage to get dollars in order to be able to spend more than collected in taxes and to pay interest? By making loan in foreigner markets and increasing their international debt?

+RGV "Why is the Belgium company required, or the swift transaction required"The Society for Worldwide Interbank Financial Telecommunication maintains standard universal protocols and security that is trusted by banks everywhere. Technically, they don't have to use SWIFT, but other banks would not likely do business with you. Basically, it is a trusted network, not a bank or clearinghouse.  Happy to answer questions! =)

+RGV Even though the dollars are in an account at The Fed, doesn't mean they are being used in the American economy - they are controlled by a foreign entity just like you control your bank deposits. Hypothetically, the foreign bank could just sit on the dollars and never use them again - this is the digital equivalent of mattress-stuffing. =PThe US Dollar acts strangely in exchange markets because there is such a huge demand. Our Treasury is recirculating our [huge] trade deficit at near zero percent, and the entire world is still screaming for more dollars. I have a working theory that global deflationary trends in developed economies, and inflationary trends in developing economies is all caused by a massive dollar shortage.This is shown in the rising exchange rate of the dollar, and collapsing dollar denominated commodity prices (oil, gas, etc.).

+RGV ICBC New York would be transferring $100 to the Chinese Central Bank, who is now holding the US reserves. This transaction eliminates the accounts payable to ICBC Beijing - ICBC New York is back in its original position. Next, The Chinese Central Bank credits the yuan reserve account of ICBC Beijing with new yuan, which eliminates the accounts receivable entry (swaps it for reserves).Not every Central Bank will exchange currency for banks, and this type of thing is frowned on - it is overt currency manipulation. Normally, if ICBC Beijing needed the Yuan, they would need to find another bank who needed dollars, in a forex market. Currencies are suppose to float against eachother in the open forex market. Exchanging dollars for new printed Yuan is how The Chinese central bank maintains their peg with the US dollar.

+Cool Slim Thanks! =D

KK

+mr freddy The video is moot. it was the audio I cared about. If you would like to send me a better video recorder, I am all willing to accept.

I called originally because on the front it read US FUNDS, and FEDERAL RESERVE NOTES are the oppisit of US FUNDS since each represents an amount the US PEOPLE owe the FEDERAL RESERVE, so the note is "LACK OF US FUNDS" and I wished to question them on why they go against there own posted requirement...This is a work in progress.  I did not put the requirement there, the city did.