Martinghoul you are a wise and very knowledgable trader and an expert in sovereing bondsThat's not correct... In general, kings routinely enjoyed the benefits offered by fractional reserve banking and only had issues with it when the bankers refused to cooperate (e.g. Edward I of England and the Ricciardi of Lucca in the 13th century). The point is that, if you're the king, fractional reserve banking is fine. If you're a commoner, it could be treason.
Finally, yes, the quote is allegedly attributed to Josiah Stamp. However, there is no record of him ever saying anything of the sort.
Our biggest creditor would be the U.S. private sector.China, Japan and a few others are our biggest creditors
Thank you for the compliment... And yes, indeed, the problem is that money and debt doesn't ever exist in a vacuum. It's almost always more about the politics than economics.Martinghoul you are a wise and very knowledgable trader and an expert in sovereing bonds
and interest rate products and what you say is true. I would hate arguing with you.
In the end living under a philosopher king or philospher banker is only as good as the philosopher.
I want to make a small, but important point here. Panthers posted is correct,i.e., 'money is created out of debt', It is very important to recognize that this is, to an extent determined later by economic conditions, a reversible process. When actual printing occurs the money created is not tied to debt, and the process is irreversible. Even economists who know better use the term 'printing' to describe the reversible process in which the Fed facilitates expansion of the money supply by buying bonds using money it has just created 'out of thin air'. (The money has to get into circulation in the economy, before it can have an inflationary effect. so if it just sits in banks reserve accounts as unused excess reserves it won't be inflationary.) This kind of 'money printing' is very different from irreversible printing of money that is not tied to debt. For example, what Zimbabwe did was actual irreversible printing of money not tied to debt, and then Zimbabwe used, or tried to use, that money to pay on debt. That kind of thing, once it is discovered, leads to hyperinflation.and it's just all printed by the Fed
Not confused at all. The entire world uses a fractional reserve currency system. Since switching to a fractional reserve system, the world has experienced unprecedented growth in pretty much any quality of life metric you care to measure. It appears that some here see that as bad and want to return to a system where we tie our currency to an entirely arbitrary mineral that we extract from the earth? Or perhaps you all want to go back to a barter based economy? If fractional reserve=bad then what equals good?You might be confusing two things here, there might be no connection.
I assume you were talking about US here. Infant mortality rate is one of the highest in OECD countries, education levels are high but not the highest, US ranks 31st in life expectancy which isn't that great. Of course you can say you were comparing to Somalia and Pakistan...
Translation, I don't have a good answer for you so I just tell you it's "not worth my time". Then throw in a "comprende" in there as a good final insult, because that's the way Achilles28 rolls.Its not worth my time. I've had this exact same debate a million times before. Sure, lots of benefits to fractional reserve banking during periods of massive capital investment. Not to offshore so we can finance consumer and Government debt, so we can all drown in it. Comprehende?
As per my understanding, China, Japan and a few others are our biggest creditors.
I believe a few years ago, the debt was 14T, now it's 19T. The US has been on a Deficet spending spree for the last decade and we haven't had a surplus since.
Can somebody please educate me where the money is coming from? The traditional answer I get is from investors, foreign governments (i.e. China) and others.
But let's be honest. 19 Trillion is a lot of money and I doubt it's all from the above... If China does buy our Tres bonds, than who lends China money? Last I checked they are in a deficiet too.
I have a very bad feeling less than half of that 19T is from real sources and it's just all printed by the Fed. I just can not see how the whole world is in debt to each other, where the hell is all the money coming from????