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Do you choose to lie about everything?
what lie exactly??????????
Do you choose to lie about everything?
what lie exactly??????????
Obama- solyndra. Dont play dumb.
why is the liberal so afraid to tell us the lie??? what do we learn from his fear???
You said that Obama said that Solyndra would be a massive success. Now you know he never said that but you lie about it.
money supply is controlled by Fed primarily through interest rates.
Solyndra's technology carries on, by the way...some new generation solar will be utilizing some of their research, so while Solyndra THE COMPANY might have failed, we will witness their technology forging new paths.
If you don't understand that, you just don't understand technology.
OK, Ludin - explain how you think the money supply is controlled, and I'll explain why you have it wrong.
i have already posted this to you before. The federal reserve has multiple ways to control the money supply.
https://www.stlouisfed.org/~/media/.../pub_assets/pdf/re/2013/b/reader_exchange.pdf
there is the answer straight from the federal reserve itself.
So if you want to say the fed is wrong then you should probably
tell us what kind of authority you have to do so.
There is nothing wrong with what the Fed said. What is wrong is your interpretation of it.
You keep claiming that the distribution of income makes no difference, because the we can simply add more money to the money supply. But that isn't really the case at all. The Fed can control MB, not M1 (and your source says exactly the same thing). M1 is what we use to transact; MB is merely settlement funds and cash in pockets.
When the rich earn an outsized share of the income and don't spend it back into the economy, that's M1 money they are hoarding. M1 money is created by loans, and it must be paid back. So that uneven distribution of income truly is a drag on the economy, because the active economy has to service the debt. That is to say, you can't take tons of money out of the income/consumption cycle without damaging the economy. Adding more money to the M1 money supply requires more private sector debt.
Sounds good. Except the very reason Solyndra went under is because their technology was inferior. It’s been 10 years. No new generation is interested in repeating failure.
If you don't understand that, you just don't understand technology.
The fed agree's with me. The federal reserve has the ability to expand or shrink the money supply as needed.
So income inequality doens't really matter.
It is why you will get your pay check on Friday regardless is someone else makes 10m dollars today.
According to you zero sum people if someone else makes 1m dollars
it means that some people are not going to get their money because that 1m dollars has to come from some where.
it also means that the person that received the 1m dollars shoves it in their mattress and does nothing with it.
It doesn't matter that someone else earned 1m dollars and you earned 50k.
come friday you will have your 2k dollar paycheck regardless of what they earned.
Why? because the federal reserve always ensures that there is enough money in the system so that everyone gets paid.
the only time that income inequality is an issue is if you have a finite pool of money such as monopoly.
If the federal reserve couldn't add more money to the pool then yes we would need a heavy system of redistribution.
but since we can add money as needed it doesn't matter.
it isn't like you can't earn 1m dollars because someone else did.
you zero sum people crack me up.
once the money in the bank is gone and i can't add anymore that is it once it has all be dispersed to people.
We are not talking about loans.
you are talking about irrelevant items.
unless rich people are hoarding money in mattresses and in glass jars in their backyard (which they are not)
their money is getting put back into the economy.
You have been educated on this before and are still wrong. so there is no point in talking to someone that in 2 years
still hasn't learned how our banking system works.
Just where do you think he saves that money at? in his mattress? in a treasure chest on an island? that is where you have 100% gap in your understanding.No, the Fed only has the power to control base money, and base money is basically just used for settlement funds.
Take a look at what happened in 2008; the Fed bought up a ton of bonds, and the MB money supply exploded. But it didn't put money into anyone's pockets, it didn't enter the economy, and it didn't even have much of an effect on borrowing.
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When you earn your paycheck, where do you think that money comes from?
The vast majority of M1 money (that's what your paycheck is made of) comes from bank loans. My mortgage, your business loan, some other guy's car loan - that's the stuff that makes up M1, and M1 is what fills our bank accounts. When it circulates, great, we can all earn enough of it back to pay off our loans. But what happens when one rich guy who sold the house, the car, and the business loan decides to save 90% of his income? Where will the money come from for us to earn? That is where you have a gap in your understanding.
If the rich guy sticks his money in the bank, it does not get loaned out; that's not how banks work. I have explained this before. https://www.cnbc.com/id/100497710
So now all of the money that the rich guy has saved is not available, unless and until he decides to spend it. New money, needed for the economy to operate, has to come from new bank loans. Which means that not only does the economy have to pay the interest on the money used for transactions, it also has to pay the interest on the rich guy's savings, which are doing absolutely nothing for the economy.
Normally, this demand lost to savings happens on a smaller scale. There is almost always some net domestic savings happening. There is also demand lost to a trade deficit, which is just saving by foreign parties. When you don't spend all of your income, that's demand leakage; if everybody earns $50K but only spends $40K, we will only consume 80% of our production; in response, production will decrease to meet demand.
But we also have additions to demand; increased credit and federal deficit spending. If they outweigh subtractions to demand (savings), then demand will grow year over year, and the economy grows. And this is what normally happens.
The key here, though, is that all of this is denominated in dollars, and dollars don't just happen because you want them to happen. Somebody has to take out a bank loan, or the government has to deficit spend, or both. And if too much of our income is going straight to savings (i.e. if rich guys get too much of the pie), then taking out new loans won't be profitable.
If our GDP is $18 trillion, our trade deficit is $0.7 trillion, and our savings rate is $0.5 trillion, then we need to add $1.2 trillion in new money just to keep the economy from shrinking. So deficit spending + credit growth must be at least $1.2 trillion.
That's why we can't have wildly high savings rates. That's why money that goes to the rich guy's savings are ultimately paid by government debt.
Just where do you think he saves that money at? in his mattress? in a treasure chest on an island? that is where you have 100% gap in your understanding.
if your businesses is borrowing money to pay employees then you are not going to be in business very long.
You still don't know how fractional banking works do you? nor do you understand the reserve system. even though you have been explained this before by many many sites including the Federal reserve itself.
If you think the bank just takes that million dollars and stuff's it in a vault and never uses it there is no point in continuing this discussion.
No you don't need new bank loans.
*SIGH* more of the debunked MMT nonsense.
you are just a broken record no matter how many times you are proven incorrect.
Actually we use to have high saving rates that didn't hurt demand it also improved the quality of life for a lot of people.
what has cause more "income inequality" has been the utter destruction of our savings systems.
why? people had more money to spend and so they bought more stuff.
amazing how that works.
If i save 500 and then i earn 1000 on that 500 and i go and spend that 1000 then well there you have it.
why? there is no reason to save money in a savings account. it is virtually useless.
I know people back in the 70's 80's were earning 10%+ on their CD's. Heck you could get a saving account that
was paying at least 3-4%.
Please see how fractional and reserve banking works. Banks keep enough cash on hand to meet the reserve rates.He probably saves it in a bank account. AND BANKS DO NOT LEND OUT OUR DEPOSITS. You can Google "banks don't lend out deposits" and get dozens of good explanations of how banks actually create loans. Maybe if you hear it from somebody besides me, you will understand it.
Many businesses operate on credit. Often it's simply because their assets are largely accounts receivable - money owed and not yet received. Anyway, account balances from business loans and mortgages make up most of the M1 money supply.
This is where you are really showing your ignorance. You might be the last person on these threads that still doesn't understand banking.
*sigh*. the million dollars comes in as a credit to my account and a debt to the banks assets sheet.The bank only has a fraction of that $million in hard assets. Deposits come in, and checks go out; the bank only receives (or disburses) hard assets (reserves) at the end of the day for the NET income or outgo. Meaning that your $1 million deposit isn't going to result in the bank having $1 million in cash. (And they don't lend out vault cash anyway.)
You do if there isn't enough money coming in. Account balances don't circulate unless/until the account owner spends the funds.
This doesn't have squat to do with MMT, except for the fact that MMT gets the operations right, and you do not. This is just a matter of you not understanding how banks actually operate, then extrapolating your very flawed understanding into statements like, "it doesn't matter what the other guy earns, because the Fed will always add enough money to the system." Do you really think that the Fed just gives money to people?
We had high savings rates when we also ran a trade surplus. Money for demand has to come from somewhere.
Where do you think interest comes from?
See my question above. Where do you think interest comes from?
*sigh*. the million dollars comes in as a credit to my account and a debt to the banks assets sheet.
the bank now has 1million more dollars that it adds to the reserve list. which means that the bank can possibly loan out more money.
at the end of the day the bank must meet the reserve % set by the federal reserve. if they can't then they have to borrow the difference.
this has been explained to you numerous times. if they are above the reserve list then they will loan that money out to other people that need it.
Firstly, here’s a short explanation of bank lending. Under normal circumstances, deposits and loans are more-or-less equal across the banking system as a whole. This is because when a bank creates a new loan, it also creates a new balancing deposit. It creates this "from thin air", not from existing money: banks do not "lend out" existing deposits, as is commonly thought. You can see this clearly on the chart. Until 2009, deposits and loans were roughly equal.
People spend money all the time.
LOL the federal reserve has said you are wrong. No where have i said that the federal reserve gives people money.
why do you have to be dishonest and lie?
Yep it doesn't matter the federal reserve controls the money supply. They can simply add more to the pool as it is required...
It is called a growing economy. how do you think the economy grew if we were not able to add more money to it as needed?
Banks charge interest for loaning out money they give you interest on your saving account for borrowing the money that you deposit.
https://www.thebalance.com/what-is-interest-315436
Your deposit doesn't mean that your bank has $1 million more. It means that your bank has BOTH $1 million more in liabilities (account balances) AND assets (reserves). That doesn't make them more able to create loans.
It is usually why people work and get paid.They have to have it, first.
You keep on claiming that, no matter how much people may save, the Fed will always make sure that there is enough money, so people and businesses can continue to spend. So how does the Fed get that money into people's pockets, if they aren't giving it away? You say it again, in the next sentence!
if you don't know how businesses get their money then you seriously cannot have this conversation.But where does your employer get its money, WHEN THE RICH GUY IS SAVING ALL OF HIS INCOME AND NOT SPENDING IT????? You seem to think that this money just comes out of nowhere, but it has to be borrowed into existence, from a bank, at interest, and repaid. If everybody is saving their income and not spending it, then the employer will not make enough income to write those paychecks. It doesn't matter if there is enough money "in the system" provided by the Fed, because THAT IS MB, NOT M1. There are already tons of excess reserves "in the system," but this doesn't put money into anybody's pockets. It just sits there on banks' balance sheets, in an account at the Fed. IT DOES NOT GET LOANED OUT.
Nope. As the links above very clearly explain, banks don't lend out our deposits. So you are, once again, WRONG.
.....
banks don't lend out the reserve but that is all they do not lend out or invest with.