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Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt

JohnfrmClevelan said:
Well, that is the accepted definition of "printing money." Assigning your own definition to already-defined terms just clouds the issue.

The fact is that all government liabilities (bonds, reserves, and cash) are similar, and perfectly interchangeable. The Treasury issues bonds to pay for deficit spending. The Fed buys (and sells) bonds in exchange for reserves, which the Fed creates. And banks exchange cash for reserves (and vice versa) as customer demand to hold cash dictates. So there is little effective difference between holding cash and holding a Treasury bond.

Those government liabilities increase every year. That is certainly a form of "printing money" by your definition; any bondholder can easily cash in and spend the proceeds if he wishes. There is no hard limit on the amount of cash in circulation - that's just a matter of demand.

The deficits, and the resulting debt, have not led to inflation, high interest rates, or any other problems. Nor has the large increase in MB. More people should start to question why that inflation hasn't happened over the years, instead of sticking with their old, monetarist beliefs and constantly fretting that it's just around the corner.
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My definition is created by the definition of printing and the definition of money.
 
Pedestrian said:
Jut like it started in 1907 again when Morgan and co. knocked 6000 private banks out of business and

.....like 1930 when the remaining 15,000 banks went bankrupt which of course, is a word we don't need anymore thanks to the
government single-payer insurance program for banks kicking in (FDIC) and they go into receivership.

The definition of capitalism does not include serving all of society...only the investor class.
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But it could serve the middle class...we remade it into a tool to serve the middle class during the WW2 postwar years.
Worked pretty damn well if you ask me.

Capitalism can assume many forms, and in the last forty years we've been on a steady march toward the very worst kind of capitalism if you're not part of the investor class. We had the stomach to make the necessary changes after the war, all we need to do is have the stomach to do so again.

Pure capitalism is just as defective as any other pure fundamentalism. It's fundamentalism.
Fundamentalism is a form of mental illness. Nature doesn't tolerate absolute purity, not in genetics, not in any form of biology,m and absolute purity is the kiss of death in art, music, literature, religion, politics and...ECONOMICS.

If we want our economic "food to be tasty" we're going to get off the addiction to gruel and start adding a few spices.
A few small socialist tweaks did the trick in the postwar years. I'll gladly take that route again.
We had plenty of filthy rich people walking around back then, but we also had the strongest middle class in modern history.
 
Pedestrian said:
I see medicare deducted from paychecks and seniors pay billion$ in premiums.
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And both SS and MDCRE are insurance programs at their core.
Insurance programs stay solvent when actuaries make necessary adjustments, happens every single day to every other insurance program, just ask anyone who works in the field.
 
meh... US debt is still far safer than most, especially China with its dubious collateral, besides Russia needs the money, two wars to fund, sanctions biting and the world cup will take its toll.
 
Pedestrian said:
My definition is created by the definition of printing and the definition of money.
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My point was that there isn't as much difference between your definition of "printing money" and normal deficit spending.

If the government was to simply print up currency and spend it into the economy, there is an increase in total government liabilities in the amount of the spending. There is also a boost to aggregate demand, and a boost to income.

If the government, instead, issues bonds to pay for its spending, there is still an increase in total government liabilities in the amount of the spending. And we get the same boost to aggregate demand, and the same boost to income.

The only real difference is in the form of assets held by the private sector. Either there is an increase in bonds, or there is an increase in MB - and the makeup of those assets held by the private sector can be manipulated by the central bank. The form of asset is not likely to change the spending or saving behavior of those asset holders, especially when interest on those bonds is so low, and bonds are so liquid.
 
Pedestrian said:
I see medicare deducted from paychecks and seniors pay billion$ in premiums.
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And yet its not enough. Part A is pretty close. But B and D only collect 10% of costs. Then we have medicaid, schip, and hundreds of billions of other healthcare spending. Then you have 500bn in welfare. And mandatory spending is only getting worse. Meanwhile we collect more than enough income tax to pay for defense and other discretionary spending. Such that the rest of it goes to pay for mandatory spending deficits. And still, we have to borrow hundreds of billions to pay for the rest.
 
JohnfrmClevelan said:
...
The deficits, and the resulting debt, have not led to inflation, high interest rates, or any other problems. Nor has the large increase in MB. More people should start to question why that inflation hasn't happened over the years, instead of sticking with their old, monetarist beliefs and constantly fretting that it's just around the corner.
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The deficits from the Great Recession didn't lead to inflation, high interest rates, etc. Economists who understood IS-LM and took it seriously declared in advance, in late 2008 and early 2009, that big deficits and huge increases in the monetary base would lead neither to soaring interest rates nor to soaring inflation. This is a very special case -- when private demand has fallen so far that the economy remains depressed even at a zero interest rate. That's not the case today -- at near full employment.
 
Checkerboard Strangler said:
And both SS and MDCRE are insurance programs at their core.
Insurance programs stay solvent when actuaries make necessary adjustments, happens every single day to every other insurance program, just ask anyone who works in the field.
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How are they insurance if you're guaranteed to use them? SS is more of a savings account/pension. And insurance mitigates risk, but there is no mitigating retirement or aging. They are 100% guraunteed.
 
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