How is new money created in the economy?

[expat_panama]

When's the $34 trillion (and rising) getting repaid, bird brain?

Sounds like we're talking about the Federal Debt --all those savings bonds and t-bills. Are you aware that they all have dates of maturity when the bonds/bills are redeemed for full face value? Do you know that the bonds/bills can be exchanged for cash at any time?

Every dollar of those $34trillion gets repaid and a lot of 'em get repaid every day.

 

[Stormy Daniels]

BRICS brought in South Africa for 1 main reason. Gold. Gold has been used as a standard longer than anything else.

And horses have been used for transportation longer than anything else. Doesn't mean they're superior to modern day automobiles.

 

[frigidweirdo]

Let's not. Because, at best, you'd be referring to a commodity money system. So what your saying would be out of date.

Yeah, let's not deal with reality. Let's pretend that this has nothing to do with how the system now functions because.... because... I have no idea. But fuck it, if you don't want to talk about things, then conversation over.

 

[Oddball]

And horses have been used for transportation longer than anything else. Doesn't mean they're superior to modern day automobiles.

 

[22lcidw]

Nonsense. Money created by the Fed is always created out of nothing in the form of loans.

When those loans are paid back it is “destroyed”. What’s left is the interest

It has nothing directly to do with the factors you claim. Only whether the economy is growing or shrinking

The dollar can be lent out 9 times. Each time losing 10% of its value. Then it is destroyed. The system depends on loans and the velocity of money from it. The velocity of those loans creates new dollars at a certain speed. The Federal Reserve attempts to keep enough dollars in circulation to grease all the wheels. Not much more than what is needed was how it worked until we started to lose control. How many dollars are in circulation or are computer blips now above the Gross Domestic Product I do not know. Inflation comes from it and some inflation from my understanding can be hidden and sent to others for payment like overseas concerns. The currency can last a long time if it is kept under control. We are losing power in the world because we have lost control of the fiat currency. China has real assets in manufacturing that we used to have. We still have manufacturing. Not like it was though. There is supposedly a way that if we jettisoned the Federal Reserve and made the Fiat Currency owned by the people to save some interest that is owed. Joe is forgiving loans to college students. However, this is with the Privately owned Federal Reserve taking its cut also. Used smartly the currency can work well. Politicians though, they want everything when it takes time to get everything that can never be fully achieved.

 

[Oddball]

Sounds like we're talking about the Federal Debt --all those savings bonds and t-bills. Are you aware that they all have dates of maturity when the bonds/bills are redeemed for full face value? Do you know that the bonds/bills can be exchanged for cash at any time?

Every dollar of those $34trillion gets repaid and a lot of 'em get repaid every day.

After which they get immediately re-issued at the higher rate.....The principal will never ever be paid down.

 

[Lesh]

Ghead Stormy

I know you get this stuff and since you started it weigh in And explain to these cretins

 

[Oddball]

Ghead Stormy

I know you get this stuff and since you started it weigh in And explain to these cretins

Says one of the dumbest fucks on the forum...

 

[Lesh]

The dollar can be lent out 9 times. Each time losing 10% of its value. Then it is destroyed. The system depends on loans and the velocity of money from it. The velocity of those loans creates new dollars at a certain speed. The Federal Reserve attempts to keep enough dollars in circulation to grease all the wheels. Not much more than what is needed was how it worked until we started to lose control. How many dollars are in circulation or are computer blips now above the Gross Domestic Product I do not know. Inflation comes from it and some inflation from my understanding can be hidden and sent to others for payment like overseas concerns. The currency can last a long time if it is kept under control. We are losing power in the world because we have lost control of the fiat currency. China has real assets in manufacturing that we used to have. We still have manufacturing. Not like it was though. There is supposedly a way that if we jettisoned the Federal Reserve and made the Fiat Currency owned by the people to save some interest that is owed. Joe is forgiving loans to college students. However, this is with the Privately owned Federal Reserve taking its cut also. Used smartly the currency can work well. Politicians though, they want everything when it takes time to get everything that can never be fully achieved.

Very little of that word salad is based in. reality

 

[Stormy Daniels]

We are losing power in the world because we have lost control of the fiat currency. China has real assets in manufacturing that we used to have

China has been using fiat money for about 1000 years longer than we have, genius.

 

[Lesh]

Says one of the dumbest fucks on the forum...

Dude you ain’t look like anything more than a troll here… actually always

 

[Foxfyre]

There's two problems with that. First of all, currency is only a fraction of the money in the economy. Second, why would high interest rates be used to combat inflation based on your explanation?

High interest rates are intended to reduce buying which is supposed to bring down inflation. All they really accomplish is benefit big corp, big banks, and hurt the average American.

 

[Foxfyre]

Nonsense. Money created by the Fed is always created out of nothing in the form of loans.

When those loans are paid back it is “destroyed”. What’s left is the interest

It has nothing directly to do with the factors you claim. Only whether the economy is growing or shrinking

I suppose it would be lost on you to suggest you should take a first years course in basic economics?

 

[Stormy Daniels]

High interest rates are intended to reduce buying which is supposed to bring down inflation.

But how? Based on your explanation for money creation and inflation, interest rates would have absolutely nothing to do with the equation.

 

[Lesh]

I suppose it would be lost on you to suggest you should take a first years course in basic economics?

Really? Explain what I get wrong about the Fed and how you think it works.

This oughta be funny

 

[Lesh]

But how? Based on your explanation for money creation and inflation, interest rates would have absolutely nothing to do with the equation.

Well I thought Stormy knew this subject.

I guess. I was wrong about that

 

[Foxfyre]

Really? Explain what I get wrong about the Fed and how you think it works.

This oughta be funny

Hon your post was so far off the mark I don't have the time (or inclination) to educate you. But do have a pleasant evening.

 

[Natural Citizen]

When's the $34 trillion (and rising) getting repaid, bird brain?

I don't think our self-professed wise ones understand that we literally have to go deeper into debt every year, or else the whole thing goes into a deflationary collapse under the weight of its payments. As it is, there's always more debt in the system than there is currency under the modern model.

I've been kind of biting my tongue in this thread. Chuckling as I scroll through it.

There's so much that's missing from the discussion. But we've been through all of this before.

Heck. We're at the point now that we have to be taxed just to have a monetary system. The Framers are rolling over in their graves. They've gotta be...

Well, actually, Hamilton is probably giggling his ass off, but fuck him anyway.

 

[Lesh]

Hon your post was so far off the mark I don't have the time (or inclination) to educate you. But do have a pleasant evening.

Oh bullshit. If you knew what you were talking about you’d be spouting off like a banshee

You don’t

 

[Lesh]

I don't think our self-professed wise ones understand that we literally have to go deeper into debt every year, or else the whole thing goes into a deflationary collapse under the weight of its payments.

I've been kind of biting my tongue in this thread. Chuckling as I scroll through it.

There's so much that's missing from the discussion. But we've been through all of this before.

If you’re saying that the nation run on (moderate) inflation you’d be right.

Been that way for a long time and it’ll go one like that for a long time.

I am old enough to remember Reagan going off about a trillion dollar debt like it was the end of the world.

That was forty years ago