Staggering World Debt Points toward Crisis
Moderator: Global Moderator
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
Lets look at all this debt in real world terms... via the debt to income ratio:
[img width=800]http://i64.tinypic.com/6pt34i.png[/img]
[img width=800]http://z822j1x8tde3wuovlgo7ue15.wpengin ... 2_debt.png[/img]
Federales: taking into consideration total tax revenues, total national debt and total unfunded liabities... 36% debt to income ratio.
Now, the Federales (as opposed to the private sector) do have more liabilities than assets, but that is irrelevant to debt service. A huge portion of those liabilities is private sector "savings accounts" (Treasuries) and student loans anyway; i.e. it facilitates economic growth.
[img width=800]http://i64.tinypic.com/6pt34i.png[/img]
[img width=800]http://z822j1x8tde3wuovlgo7ue15.wpengin ... 2_debt.png[/img]
Federales: taking into consideration total tax revenues, total national debt and total unfunded liabities... 36% debt to income ratio.
Now, the Federales (as opposed to the private sector) do have more liabilities than assets, but that is irrelevant to debt service. A huge portion of those liabilities is private sector "savings accounts" (Treasuries) and student loans anyway; i.e. it facilitates economic growth.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
-
- Executive Member
- Posts: 5994
- Joined: Wed Dec 31, 1969 6:00 pm
Re: Staggering World Debt Points toward Crisis
Supplied a shorter description of when that is likely to happen.Simonjester wrote:unfortunately government malinvestment is difficult to measure or chart out its movements relative to debt numbers, is our corruption index or bureaucratic incompetence up or down? (it seems way up to me ) how about the amount of waste and spending on projects that only result in unintended consequence and further spending? (also seems high to me) i wont offer any predictions, but it seems that until government investment gets feedback from the type of self correcting mechanisms that are built into free markets pigs fly, a collapse is inevitable (but still very difficult to impossible to put a time line on)MachineGhost wrote:
Debt is not bad if it is issued for productive purposes. You have to make a convincing argument that both private sector and government debt has been massively malinvested to support a doomsday scenario where economic confidence is lost and there's no bid at auction for safe assets. That's easy to do in Red China with endless empty cities, corruption and human rights abuses. But the USA? We've got decaying infrastructure, a joke of an education system, means testing for all kinds of transfer payments, stingy banks that have strict credit criteria, lack of any fiscal spending due to political polarization and total assets several times more than all total liabilities, including the unfunded. That's a huge smorgasbord of productive opportunities just waiting to be filled. So I think we'll do just fine for another decade or two, especially if we get a recession soon to clear out all the zombie companies.
Simonjester wrote:roflmao
Re: Staggering World Debt Points toward Crisis
I believe I read that, as of late, excess reserves, which are reserves above what banks are required to have, are near record levels. So, this means banks don't want to lend, people don't want to borrow, or some combination of both. How do you know that this is being caused by demand for loans being low? My impression is that there are plenty of people who want to borrow, but banks are being ultra-picky about who they lend to.TennPaGa wrote:Fair enough. My main point was that all this "money" stuff is simply a confidence game, even with stocks. A doomsayer would worry that people could never cash in their stocks, as it is equal to more than 100% of U.S. output.jason wrote:I think owning a share of stock is a bit different. If you own a share of stock, and the company does not pay dividends, then you are not a debt burden/creditor to the company. That share of stock might have been issued 30 years ago, and just keeps changing hands, with no negative impact on the company.TennPaGa wrote: The same is true of stocks! That is, a share of stock is simply a claim on the company's future earnings stream.
In October 2014, U.S. Stock market capitalization was $22 trillion (link), while GDP was $17.5 trillion (see page 3).
MG covered this pretty well. Money isn't "parked" at the Fed any more than it usually is. More accurately, reserves don't circulate in the economy, but merely serve as buffer in the interbank payment system (the Fed is a bank for the banks).The only reason why we haven't seen massive inflation is because very little of this new money is circulating. Last time I looked into this, the bulk of it was parked at the Fed, collecting interest for the banks. If this money starts circulating at some point (that is a big if), there is a good chance we will see big-time inflation. And the Fed will probably want to raise interest rates to get the inflation under control, which in turn would increase the interest payments on our national debt, which in turn would force us to print more money to pay the higher interest payments, which in turn adds to the inflation, and so on, creating a downward spiral.
The reason why interest rates and inflation are low is that the demand for money (loans) is low.
Last edited by jason on Thu Mar 31, 2016 4:00 pm, edited 1 time in total.
Re: Staggering World Debt Points toward Crisis
I don't think I follow. My understanding is that banks in the US are required to hold reserves of 10%. This means, for example, if a bank has $10 million in reserves, it can lend out $90 million. If a bank has excess reserves, that means that the bank is holding more than 10% in reserves. For example, a bank that has $30 million in reserves and that has lent out $90 million is holding excess reserves of $20 million. That $20 million is money that they could lend out if they wanted to, but have decided not to lend out, as a business decision. So, if the bank changes its mind and decides it wants to lend out that $20 million, then $20 million in new loans will be issued, and that $20 million will start circulating in the economy. So, if many banks are holding excess reserves, and they all decide to increase lending at once, then this could contribute to inflation. Am I mistaken about any of this?TennPaGa wrote:Banks don't lend reserves into the economy.jason wrote: I believe I read that, as of late, excess reserves, which are reserves above what banks are required to have, are near record levels. So, this means banks don't want to lend, people don't want to borrow, or some combination of both.
This is certainly a possibility (jafs mentioned this as well).How do you know that this is being caused by demand for loans being low? My impression is that there are plenty of people who want to borrow, but banks are being ultra-picky about who they lend to.
But, again, this has nothing to do with excess reserves. Banks don't lend out reserves.
And so there isn't a store of money somewhere waiting to enter the economy and inflate prices.
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
That's the money multiplier theory which is purely hypothetical, but it may have even been true at some point pre-1971 under fixed exchange rates, but it is certainly no longer the case today. Banks find the reserves to meet the regulatory requirement after they create new money at the POS. That's what the Federal Funds Rate is for.jason wrote: I don't think I follow. My understanding is that banks in the US are required to hold reserves of 10%. This means, for example, if a bank has $10 million in reserves, it can lend out $90 million. If a bank has excess reserves, that means that the bank is holding more than 10% in reserves. For example, a bank that has $30 million in reserves and that has lent out $90 million is holding excess reserves of $20 million. That $20 million is money that they could lend out if they wanted to, but have decided not to lend out, as a business decision. So, if the bank changes its mind and decides it wants to lend out that $20 million, then $20 million in new loans will be issued, and that $20 million will start circulating in the economy. So, if many banks are holding excess reserves, and they all decide to increase lending at once, then this could contribute to inflation. Am I mistaken about any of this?
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Staggering World Debt Points toward Crisis
I thought we covered this a while back.
Banks could do as you suggest, but most often in practice they use deposits or borrow money to make loans.
The idea that a bank can create money is completely counter-intuitive (doesn't mean it's wrong, but it seems implausible).
Banks could do as you suggest, but most often in practice they use deposits or borrow money to make loans.
The idea that a bank can create money is completely counter-intuitive (doesn't mean it's wrong, but it seems implausible).
- Pointedstick
- Executive Member
- Posts: 8866
- Joined: Tue Apr 17, 2012 9:21 pm
- Contact:
Re: Staggering World Debt Points toward Crisis
And yet it's true! The whole monetary system is "counter-intuitive." That's why it's so widely misunderstood.jafs wrote: The idea that a bank can create money is completely counter-intuitive (doesn't mean it's wrong, but it seems implausible).
To a certain extent, it doesn't really matter to people like us whether banks lend out of thin air or from reserves. It's a pretty wonky, technical thing that mostly concerns Fed technocrats trying to keep the whole thing from grinding to a halt. The TL;DR version is, "our system has some inherent fragilities that would seem to recommend hedging, which is one of the reasons why the PP includes gold."
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
- CEO Nwabudike Morgan
Re: Staggering World Debt Points toward Crisis
Right, it's not a real world practical concern for most people.
I still don't buy it, though, even conceptually. Banks have to have more money coming in than going out, since they're in business to make money, not to lose it or just break even. And, for example, with a mortgage loan, money goes out of one bank immediately to a seller. With other loans, like home equity loans, the money doesn't necessarily go out immediately, but may go out over time.
And, yes, money is an abstraction, but it takes the concrete form of dollar bills/coins that we use in a variety of ways.
Banks can't print dollar bills or mint coins, so at that level the money has to exist already. As we move farther away from concrete forms of money, this may be less true, but as long as I can go to a bank and withdraw concrete dollar bills/coins, they have to come from somewhere.
I still don't buy it, though, even conceptually. Banks have to have more money coming in than going out, since they're in business to make money, not to lose it or just break even. And, for example, with a mortgage loan, money goes out of one bank immediately to a seller. With other loans, like home equity loans, the money doesn't necessarily go out immediately, but may go out over time.
And, yes, money is an abstraction, but it takes the concrete form of dollar bills/coins that we use in a variety of ways.
Banks can't print dollar bills or mint coins, so at that level the money has to exist already. As we move farther away from concrete forms of money, this may be less true, but as long as I can go to a bank and withdraw concrete dollar bills/coins, they have to come from somewhere.
Re: Staggering World Debt Points toward Crisis
I did a bit of research and found what I posted is the case.
You even agreed at the time, if I remember correctly.
You even agreed at the time, if I remember correctly.
- Pointedstick
- Executive Member
- Posts: 8866
- Joined: Tue Apr 17, 2012 9:21 pm
- Contact:
Re: Staggering World Debt Points toward Crisis
Jafs, I find that having a discussion about this sort of thing with you is very frustrating because it usually just goes like this:
Us: Here's something interesting
You: Well, I don't believe that
Us: here's an enormous amount of compelling and so far un-refuted evidence supporting it
You: That doesn't make sense to me, and here is some flimsy or discredited evidence against it
Us: You are behind the times; your information is widely understood by the experts to be inaccurate or inapplicable, and nothing you have said contradicts our point
You: Well, I still don't believe that
This seems to happen a lot. If you could be a little less closed-minded, you might learn something hanging around here.
Us: Here's something interesting
You: Well, I don't believe that
Us: here's an enormous amount of compelling and so far un-refuted evidence supporting it
You: That doesn't make sense to me, and here is some flimsy or discredited evidence against it
Us: You are behind the times; your information is widely understood by the experts to be inaccurate or inapplicable, and nothing you have said contradicts our point
You: Well, I still don't believe that
This seems to happen a lot. If you could be a little less closed-minded, you might learn something hanging around here.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
- CEO Nwabudike Morgan
Re: Staggering World Debt Points toward Crisis
You should read this: http://www.relfe.com/wp/money/want-earth-plus-5/jafs wrote: I still don't buy it, though, even conceptually. Banks have to have more money coming in than going out, since they're in business to make money, not to lose it or just break even.
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
Savings and loans, community banks and credit unions may still operate on that model, but not commercial banks. I don't rightly know when the divide happened.jafs wrote: I thought we covered this a while back.
Banks could do as you suggest, but most often in practice they use deposits or borrow money to make loans.
The idea that a bank can create money is completely counter-intuitive (doesn't mean it's wrong, but it seems implausible).
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
Well, then the bank just asks of the Fed for the dollar bills or coins needed to satisfy the withdrawer (from which the Fed directs the Bureau of Engraving and Printing to print up or coin). It's a way of making the "internal" credit money that banks create at POS tangible and "external". Hence the current drive by the transnational elites to outlaw such external cash so that there is no loophole to escape negative interest rates.jafs wrote: Banks can't print dollar bills or mint coins, so at that level the money has to exist already. As we move farther away from concrete forms of money, this may be less true, but as long as I can go to a bank and withdraw concrete dollar bills/coins, they have to come from somewhere.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
He's just old, stubborn and probably a liberal.Pointedstick wrote: This seems to happen a lot. If you could be a little less closed-minded, you might learn something hanging around here.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
- Pointedstick
- Executive Member
- Posts: 8866
- Joined: Tue Apr 17, 2012 9:21 pm
- Contact:
Re: Staggering World Debt Points toward Crisis
All three, in fact. Not that there's really anything intrinsically wrong with this, but I always find it amusing that some of the most closed-minded people I meet have a self-image that heavily emphasizes tolerance and open-mindedness.MachineGhost wrote:He's just old, stubborn and probably a liberal.Pointedstick wrote: This seems to happen a lot. If you could be a little less closed-minded, you might learn something hanging around here.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
- CEO Nwabudike Morgan
Re: Staggering World Debt Points toward Crisis
If that's true, then the banks aren't creating money out of thin air, they're getting it from the Fed.MachineGhost wrote:Well, then the bank just asks of the Fed for the dollar bills or coins needed to satisfy the withdrawer (from which the Fed directs the Bureau of Engraving and Printing to print up or coin). It's a way of making the "internal" credit money that banks create at POS tangible and "external". Hence the current drive by the transnational elites to outlaw such external cash so that there is no loophole to escape negative interest rates.jafs wrote: Banks can't print dollar bills or mint coins, so at that level the money has to exist already. As we move farther away from concrete forms of money, this may be less true, but as long as I can go to a bank and withdraw concrete dollar bills/coins, they have to come from somewhere.
Maybe the Fed can create money from nothing, I don't know about that.
Re: Staggering World Debt Points toward Crisis
Wait, are you guys talking about me???MachineGhost wrote: He's just old, stubborn and probably a liberal.
Seriously, I enjoy a lot of the back and forth with jafs. As one who is not directly involved in a lot of those conversations, I find that he sometimes takes the discussion in a different direction or forces folks to dig deeper.
Re: Staggering World Debt Points toward Crisis
I usually ignore these little personal taunts, but enough is enough.
You don't know me well enough to know anything about my "self image", and I find it tiring that when frustrated you often turn to condescending remarks.
I'm reminded of the lengthy debate about minimum wages, and how I was told to "read an econ 101" book. At least that ended when someone posted a chart that undermined his claim and supported mine.
You don't know me well enough to know anything about my "self image", and I find it tiring that when frustrated you often turn to condescending remarks.
I'm reminded of the lengthy debate about minimum wages, and how I was told to "read an econ 101" book. At least that ended when someone posted a chart that undermined his claim and supported mine.
Last edited by jafs on Fri Apr 01, 2016 1:17 pm, edited 1 time in total.
Re: Staggering World Debt Points toward Crisis
Thanks for the support.barrett wrote:Wait, are you guys talking about me???MachineGhost wrote: He's just old, stubborn and probably a liberal.
Seriously, I enjoy a lot of the back and forth with jafs. As one who is not directly involved in a lot of those conversations, I find that he sometimes takes the discussion in a different direction or forces folks to dig deeper.
Forcing people to dig deeper would be something I'd be glad to be doing.
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
Well, that's probably because those "virtures" were in-group dogma and not deeply-held core values specifically choosen by deliberate and rational thought. It's very easy to stand up forcefully and emotionally for something you think you "really believe in" (not without good reason as say, the "Black Lives Matter" movement), but it is likely just going through the motions of cognitive and behaviorial biases (which are unconscious by the unaware).Pointedstick wrote: All three, in fact. Not that there's really anything intrinsically wrong with this, but I always find it amusing that some of the most closed-minded people I meet have a self-image that heavily emphasizes tolerance and open-mindedness.
I'm really glad people have come to be more aware, skeptical and open-minded as a result of their participation in this here forum. I've never really thought about it before, but I would say that is my zeal for posting. Having lived (and believed) through what seems like endless amounts of B.S., its relatively easier for me to perceive thus and want to inform others about it.
I know not many people have visited The Tax History Museum because of the boring subject, but it's been illuminating in providing a much broader emotional content to our Western political history than just reducing the matter to a bunch of taxes. Reality is never as simple or as black and white as political polarization oversimplyfies. If there is one flaw the USA seems to exhibit, its the perverse Anglo-Saxon obsession with reducing everything and everyone to Homo Economicus as if that was the only entirety of the explaining variable.
I think I'm actually bucking the trend of becoming more conservative as I get older. Figures.
Last edited by MachineGhost on Fri Apr 01, 2016 1:21 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Staggering World Debt Points toward Crisis
Of course - that's why I said as our system becomes more abstract, ie. electronic stuff/banking instead of cash, it changes things.
So when we have our paycheck automatically deposited into the checking account, no actual money transfers, it's just some numbers on account balances, or something like that.
But ultimately, all of that is convertible to cash if we want to take it out, so that cash has to come from somewhere.
Also, a quick search about the Fed and this stuff seems to show that the Fed creates money and puts it into bank reserves. But those reserves aren't lent out, by definition. So that wouldn't explain where the money comes from, really. If the bank just holds the reserves, then money given out must come from somewhere else.
It's possible that some time in the future, we might not have any concrete forms of money at all, and everything would be electronic. Then there'd be no need for any cash. I hope that doesn't happen in my lifetime, because I like cash - when you use cash, you know how much you have, how much you spend, and how much you have left.
So when we have our paycheck automatically deposited into the checking account, no actual money transfers, it's just some numbers on account balances, or something like that.
But ultimately, all of that is convertible to cash if we want to take it out, so that cash has to come from somewhere.
Also, a quick search about the Fed and this stuff seems to show that the Fed creates money and puts it into bank reserves. But those reserves aren't lent out, by definition. So that wouldn't explain where the money comes from, really. If the bank just holds the reserves, then money given out must come from somewhere else.
It's possible that some time in the future, we might not have any concrete forms of money at all, and everything would be electronic. Then there'd be no need for any cash. I hope that doesn't happen in my lifetime, because I like cash - when you use cash, you know how much you have, how much you spend, and how much you have left.
Last edited by jafs on Fri Apr 01, 2016 1:31 pm, edited 1 time in total.
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
Of course its true, but I think you're confusing "value" with "money". "Money" is just a tokenized medium-of-exchange that never keeps its value because its eroded by inflation or debasement over time or vis a vis other assets. Hence, we all exchange "money" for return-bearing (or protective in case of gold) assets. Under the present system, only literal zero-duration Federal Reserve Notes and coins are "money" in the old way of thinking.jafs wrote: If that's true, then the banks aren't creating money out of thin air, they're getting it from the Fed.
Maybe the Fed can create money from nothing, I don't know about that.
The Fed does create bank reserves out of thin air internally in bookeeping accounting just as banks create loans out of thin air at POS (technically its an exchange for the borrower's promissary note). But, you're assuming there is a transmission mechanism from the Fed to the real economy in terms of the "value" created that was created out of thin air. That just isn't the case. Otherwise we would undoubtedly have had raging inflation or hyperinflation because there is no worse time to "print money" in face of declining or collapsing productivity.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Staggering World Debt Points toward Crisis
To be fair, there was some baffling ignorance on display there.jafs wrote: I usually ignore these little personal taunts, but enough is enough.
You don't know me well enough to know anything about my "self image", and I find it tiring that when frustrated you often turn to condescending remarks.
I'm reminded of the lengthy debate about minimum wages, and how I was told to "read an econ 101" book. At least that ended when someone posted a chart that undermined his claim and supported mine.
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
"Money" is also anything that others will accept as a transfer of value, and that does include credit card, checkbook balances, airline mileage points, etc. (as well as girls/women, cattle, tally sticks, shells, etc.)jafs wrote: Of course - that's why I said as our system becomes more abstract, ie. electronic stuff/banking instead of cash, it changes things.
So when we have our paycheck automatically deposited into the checking account, no actual money transfers, it's just some numbers on account balances, or something like that.
But ultimately, all of that is convertible to cash if we want to take it out, so that cash has to come from somewhere.
All "money" is ultimately backed by an intrinsic value of some kind. Whether that is the labor required to dig supernova waste out of the Earth or taxation on income. It's a metaphysical concept whether or not it is tangible.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: Staggering World Debt Points toward Crisis
Money or value? Don't conflate the two. When a borrower goes to a bank they give a promissary note that becomes the liability of the bank and they corresponding credit your checking account with funds as an asset. The balance is the money but the value is in your creditworthyness. If you want that money to be transferrable value outside of the financial system, ask for currency/coins or exchange it for a real asset.jafs wrote: Also, a quick search about the Fed and this stuff seems to show that the Fed creates money and puts it into bank reserves. But those reserves aren't lent out, by definition. So that wouldn't explain where the money comes from, really. If the bank just holds the reserves, then money given out must come from somewhere else.
It's definitely about an issue of control ("the power to control is the power to tax; the power to tax is the power to destroy"), but the Millennials disagree with you.jafs wrote: It's possible that some time in the future, we might not have any concrete forms of money at all, and everything would be electronic. Then there'd be no need for any cash. I hope that doesn't happen in my lifetime, because I like cash - when you use cash, you know how much you have, how much you spend, and how much you have left.
Last edited by MachineGhost on Fri Apr 01, 2016 2:10 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!