How is new money created in the economy?

[ThisIsMe]

And here’s the kicker, you can no longer exchange your currency for gold, but you can take your currency and buy gold from a broker who will, I’m sure, sell it to you for a marked up value..

A double eagle coin which has a face value of $20, but it will cost you $2000 to buy it.

There are 28 grams in an ounce, if gold is $2000 per ounce, then that equates to $71 per gram…so say, $20 will buy you about 1/3rd of a gram.

That’s not much…

 

[Lesh]

The treasury needs an influx of cash so they send IOU’s to the federal reserve who then create “money” out of thin air and send to the treasury which then loans that money to banks which then use a process called fractional reserve lending.

It’s all a scam

A pretty good explanation here:

It’s not a “scam” , it is how it works and it does

 

[Lesh]

And here’s the kicker, you can no longer exchange your currency for gold, but you can take your currency and buy gold from a broker who will, I’m sure, sell it to you for a marked up value..

A double eagle coin which has a face value of $20, but it will cost you $2000 to buy it.

There are 28 grams in an ounce, if gold is $2000 per ounce, then that equates to $71 per gram…so say, $20 will buy you about 1/3rd of a gram.

That’s not much…

It’s also irrelevant

 

[ThisIsMe]

Who said anything about creating wealth? This thread is about creating new money in the economy. I can save a million dollars simply by being frugal, and thereby create wealth for myself. But that doesn't add money to the economy.

Oh why am I bothering with you? You're one of the most idiotic people around here.

Money is created, partly, by the exchange of IOUs , in the form of checks from the federal reserve to the banks for the purchase of bonds from the treasury.

The real creation of money is from the fractional reserve by the banks, which happens on an exponential scale. That video I posted said that that is where like 96% of all money is created.

However, at the very root of it all, money is simply created by someon typing numbers into a computer, and money is created out of thin air.

 

[ThisIsMe]

It’s not a “scam” , it is how it works and it does

Sure it’s a scam. From my understanding, there was no need for personal income tax until the federal reserve was created. It was because we allowed an outside entity to loan money to the government that income tax became necessary.

Also, it only works because we keep propping up with more and more borrowing, but doing so has given us the most instability that we ever had. Countries are already trying to ditch the dollar.

The only reason we have the economy we do is because the U.S. dollar is the world’s reserve currency and the petro dollar is the most common exchange for oil. If we lose either of those, our economy will fail.

 

[Oddball]

To my reading we've been on/off the gold standard now since Nixon was in office

And it was only done via EO....Can be undone with one.

 

[ThisIsMe]

It’s also irrelevant

It’s relevant in the fact that you can no longer exchange your currency for gold like you used to be able to, which means we are pretty much stuck exchanging our labor for a fiat currency that can be manipulated by governments, by the world economy, and by events that are completely out of our control.

 

[LeroyDumonde]

Sure it’s a scam. From my understanding, there was no need for personal income tax until the federal reserve was created. It was because we allowed an outside entity to loan money to the government that income tax became necessary.

The first federal income tax was during the Civil War (thanks Lincoln). However it was later ruled unconstitutional.

 

[Lesh]

Money is created, partly, by the exchange of IOUs , in the form of checks from the federal reserve to the banks for the purchase of bonds from the treasury.

The real creation of money is from the fractional reserve by the banks, which happens on an exponential scale. That video I posted said that that is where like 96% of all money is created.

However, at the very root of it all, money is simply created by someon typing numbers into a computer, and money is created out of thin air.

Kinda. You read Creature from Jekyll Island huh

Yes, money is created out of thin air and then loaned out to banks.

What that jackass left out was that when those loans are repaid that money goes POOF, back into thin air

 

[Oddball]

Money is created, partly, by the exchange of IOUs , in the form of checks from the federal reserve to the banks for the purchase of bonds from the treasury.

The real creation of money is from the fractional reserve by the banks, which happens on an exponential scale. That video I posted said that that is where like 96% of all money is created.

However, at the very root of it all, money is simply created by someon typing numbers into a computer, and money is created out of thin air.

No matter it's form, it's all debt.....There's no actual value to the notes.

 

[Lesh]

It’s relevant in the fact that you can no longer exchange your currency for gold like you used to be able to, which means we are pretty much stuck exchanging our labor for a fiat currency that can be manipulated by governments, by the world economy, and by events that are completely out of our control.

Irrelevant to this discussion

 

[Oddball]

Kinda. You read Creature from Jekyll Island huh

Yes, konly is created out of thin air and then loaned out to banks.

What that jackass left out was that when those loans are repaid that money goes POOF, back into thin air

You're really fucking gullible enough to believe that the principal is ever going to be paid, aren't you?

 

[Lesh]

No matter it's form, it's all debt.....There's no actual value to the notes.

There’s very little actual value to gold.

 

[Lesh]

You're really fucking gullible enough to believe that the principal is ever going to be paid, aren't you?

The principle is paid all the time jackass

 

[Oddball]

There’s very little actual value to gold.

That's why it and silver have been money for over 2,000 years.

 

[Oddball]

The principle is paid all the time jackass

$34 trillion and rising, sub-cretin....And never mind all the T-bills that foreigners are holding.....That's never going to be paid.

 

[eagle1462010]

The Great American Bubble Machine

 

[Lesh]

That's why it and silver have been money for over 2,000 years.

Because we BELIEVE it has far more value than it does.

Gold has “value” as a trinket mostly. Which isn’t really value.

It has some value in electronics, but that is a pretty recent use.

 

[Lesh]

$34 trillion and rising, sub-cretin....And never mind all the T-bills that foreigners are holding.....That's never going to be paid.

It is paid and rolled over constantly

But hey. You tuck your gold under your bed and fuck off

 

[ThisIsMe]

Except that doesn't happen.

The Federal Reserve does not buy bonds from Treasury, it conducts the auctions for new Treasury bonds. And Treasury does not loan money to banks, banks loan money to Treasury through the purchase of Treasury bonds.

Everything you're saying is exactly backwards.

Well, the banks are the middle man
It’s been awhile since I looked at the information, but it is essentially how it works.

The government issues bonds to the treasury which the auctions those off to the banks, the banks buy the IOUs (bonds) from the treasury and sells them to the federal reserve for a profit. The federal reserve then buys those bonds with another IOU (a check) that they send to the bank. The banks then use that money to buy more bonds from the treasury and the cycle repeats.

The treasury then deposits that money from the banks into various government department who then pay for contract services and what not. Those contractors then deposit the money into banks where is is loaned out via fractional reserve lending…

It’s all in the video I posted. You should watch them (there are several). They are pretty good.