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What lie?Why do people keep claiming that lie?
Money can also be borrowed and printed.
What lie?Why do people keep claiming that lie?
Money can also be borrowed and printed.
Right. That explains why interest rates everywhere have always been and always will be zero%Interest rates don't have to rise. The government has a lot to do with the control of wholesale interest rates.
Interest is the price of money. Things that are in plentiful supply and which can be produced inexpensively aren't expensive. Money can be produced in unlimited quantity at virtually no cost, there is no reason for it to be expensive.
Right. That explains why interest rates everywhere have always been and always will be zero%
What lie?
A government that spends a trillion dollars had to first confiscate that trillion dollars from the public...
That is what is called a fact. Or are you not aware that governments engage in a practice known as taxation? Sorry, I tend to assume a certain level of knowledge when discussing this sort of thing...This lie:
So you were referring to deficit spending more than just government spending then.
Well, sure. There is no way for a government to spend a trillion dollars of debt in a single year and not stimulate significant economic activity.
The question is how long it can do that sort of thing before it starts to do more damage to the value of the currency and to future debt obligations than it does good.
Right now, while interest rates on our debt are at historic lows, it makes short term sense to run up debt to fuel growth.
The problem will come when those interest rates rise and payment on that debt sucks ever more money out of the economy. At that point you will be wishing we hadn't spent as much as we did.
That is what is called a fact. Or are you not aware that governments engage in a practice known as taxation? Sorry, I tend to assume a certain level of knowledge when discussing this sort of thing...
That is what is called a fact. Or are you not aware that governments engage in a practice known as taxation? Sorry, I tend to assume a certain level of knowledge when discussing this sort of thing...
The government gets its money form two primary sources: taxes and borrowing. Taxation is exactly as my first post says--the government spending money it has taken/confiscated from the public. If it takes a trillion and spends a trillion, how is that better than leaving that trillion where they got it? That was my only point. Borrowing is different and I addressed that in my second post.What you said had some truth to it, but it was not the whole truth. Not only that, confiscation is a bit of a distortion though not entirely inaccurate.
The government gets its money form two primary sources: taxes and borrowing. Taxation is exactly as my first post says--the government spending money it has taken/confiscated from the public. If it takes a trillion and spends a trillion, how is that better than leaving that trillion where they got it? That was my only point. Borrowing is different and I addressed that in my second post.
Actually there are a number of factors which have contributed to the dollar's strength despite the QE and TARP. These include:
1. Banks hoarding the money
2. The yen carry trade. Big investors borrow yen at a low rate. They convert it to dollars to buy U.S. Treasuries and profit from the spread. The result is an increase in demand for dollars.
3. The China carry trade (for lack of a better term). What I mean is that big investors borrow dollars at a low rate and invest in Chinese infrastructure projects and property and profit on the spread. The result is an increase in demand for dollars. The same happens with other emerging markets as well.
Banks don't " hoard " money.....ridiculous. And QE hasn't devalued the value of the dollar becacause over 80 percent of all that new money is sitting stagnant on the books of the FED marked as " Excess reserves ". The money never entered the economy because the economy sucks after 6 years of Hope and Change and there's no substantial demand for credit among Middle Class consumers.
Obviously there are public sector expenditures, but they are spent into the private sector economy.
Do you think that government employees only shop at government owned stores?
The problem is not with the counter. Although what you have said with respect to the dollar representing value, your implication that an increase in supply will reduce demand
Actually there are a number of factors which have contributed to the dollar's strength despite the QE and TARP. These include:
1. Banks hoarding the money
2. The yen carry trade. Big investors borrow yen at a low rate. They convert it to dollars to buy U.S. Treasuries and profit from the spread. The result is an increase in demand for dollars.
3. The China carry trade (for lack of a better term). What I mean is that big investors borrow dollars at a low rate and invest in Chinese infrastructure projects and property and profit on the spread. The result is an increase in demand for dollars. The same happens with other emerging markets as well.
That's right which goes to show you that printing money does not necessarily result in a decline in value.
There are other factors involved.
Banks don't " hoard " money.....ridiculous.
JPMorgan Chase has a problem: It’s taking in money faster than it can lend it out.
As long as this trend continues, the biggest bank in America by assets will drift further away from a commercial bank’s core social and economic role of lending.
At the end of the third quarter, the bank was lending out just 56 cents for every dollar it had in deposits, according to earnings results released on Tuesday.
And QE hasn't devalued the value of the dollar becacause over 80 percent of all that new money is sitting stagnant on the books of the FED marked as " Excess reserves ".
The money never entered the economy because the economy sucks after 6 years of Hope and Change and there's no substantial demand for credit among Middle Class consumers.
You are simply describing various reasons for demand.
dollars do not have intrinsic value - they are representative stores of value for which demand fluctuates
That is incorrect. It does not necessarily result in a net decline in value.
Which are capable of having greater effects. Which do not mean that the effect of devaluation is not still present, only that it can be greater or less than others.
....is nonexistent, since that is not what I am saying. I am saying that an increase in supply reduces value, although cost can still rise if demand rises faster.
What is a public expenditure?
It may sound ridiculous but it is true. Here's what I am talking about
JPMorgan Seems Less And Less Interested In Lending Money
View attachment 67180962
You half know what you are talking about here. What you did was prove my point. Banks are hoarding the money. Where you are wrong is that the 80% figure that you referenced is the amount that is in private banks. And that's what I am talking about. Banks are hoarding the money. Thanks for proving my assertion.
You DON'T know what your'e talking about, at all.
Banks will LEND when there's a demand for credit. There's no demand because the economy after 6 years STILL SUCKS.
Over 80 percent of all the new money created by QE is sitting idle on the books of the FEDERAL RESERVE marked as " excess reserves ".
It hasn't made it out into the economy because despite what the Obama administration says out economy is still on life support.
Actually you are the one who doesn't know what he is talking about. This can be very easily demonstrated by the fact that you keep repeating that 80% figure which is, in fact, THE EXCESS RESERVES OF PRIVATE BANKS. IT IS NOT THE FED'S EXCESS RESERVES. So what you are doing, in fact by repeating it, is proving my point that BANKS ARE HOARDING MONEY. In fact, some have suggested that the Fed stop paying the banks interest for the excess reserves they have on deposit at the Fed to force them to loan out the money instead of parking it at the Federal Reserve in this way. There is demand for credit, it's just that the banks have made it much more difficult to obtain credit.
Actually you are the one who doesn't know what he is talking about. This can be very easily demonstrated by the fact that you keep repeating that 80% figure which is, in fact, THE EXCESS RESERVES OF PRIVATE BANKS. IT IS NOT THE FED'S EXCESS RESERVES. So what you are doing, in fact by repeating it, is proving my point that BANKS ARE HOARDING MONEY. In fact, some have suggested that the Fed stop paying the banks interest for the excess reserves they have on deposit at the Fed to force them to loan out the money instead of parking it at the Federal Reserve in this way. There is demand for credit, it's just that the banks have made it much more difficult to obtain credit.
Yes, 80 percent of all the new money created by QE never made it out into the economy.
Your left wing and childish assessment is that the banks are being " greedy ", that they're hoarding.
And NO, the banks didn't make it more difficult to obtain credit, the DEMOCRATS did.
Look up Dodd Frank and educate yourself.
I suspect that they just can't find enough credit worthy customers.
Many large corporations have lots of money on hand, so they might not have a need to borrow, and the Great Recession ruined a lot of peoples credit.
I think that we are just now getting to the point where deliquencies and foreclosures may start to fall off peoples credit report soon, so hopefully home and car sales will start to pick up during the next few years as individual credit scores start to heal themselves.