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Our understanding of monetary system is wrong?
- Thread starter lemeeeplay
- Start date
Quote from Traden4Alpha:
Government debt and the central bank printing press are two different independent issues. Governments don't need the printing press in order to borrow (they just need willing lenders). Lots of governments have failed to live within their means without using the printing press -- just look at the Latin American debt crisis.
In fact, one could argue that the printing press provides a natural deterrent (and natural safety valve) to government over-borrowing because lenders should know that the printing press would enable the government to softly default on the loan without the harsh consequences of a true default.
It's also crucial to realize that all cases of over-borrowing and failing to live within one's means involve two guilty parties -- a borrower that over-borrows and a lender that over-lends.
Why should the government borrow something they have the constitutional power to create themselves
it doesn't matter were you get the money supply in terms of borrowing. the only thing that will stop over borrowing or money creation is complete transparency and a vigilant populis
but i think we're saying the same thing
The problem is that the constitution does not say "not delegable power". So............congress can delegate power. Some countries have added the not delegable power closure.
Quote from antitrust:
Why should the government borrow something they have the constitutional power to create themselves
it doesn't matter were you get the money supply in terms of borrowing. the only thing that will stop over borrowing or money creation is complete transparency and a vigilant populis
but i think we're saying the same thing
Quote from jueco2005:
The problem is that the constitution does not say "not delegable power". So............congress can delegate power. Some countries have added the not delegable power closure.
but i think we both know what the intent of it was.But they twist and turn and analyze certain words and paragraphs to death until they find some logic that fits their agenda
Yes, we are saying the same thing at some level. The rationale for borrowing vs. printing is the difference in effective interest rates and the impact on long-term growth rates. For many countries, it seems to be much cheaper to borrow $1 trillion (and keep prices stable) than to print and circulate $1 trillion (and create inflation).Quote from antitrust:
Why should the government borrow something they have the constitutional power to create themselves
it doesn't matter were you get the money supply in terms of borrowing. the only thing that will stop over borrowing or money creation is complete transparency and a vigilant populis
but i think we're saying the same thing
Quote from Traden4Alpha:
Yes, we are saying the same thing at some level. The rationale for borrowing vs. printing is the difference in effective interest rates and the impact on long-term growth rates. For many countries, it seems to be much cheaper to borrow $1 trillion (and keep prices stable) than to print and circulate $1 trillion (and create inflation).
well i guess we aren't talking about the same thing
when the government barrows from the fed, the fed creates that money so the result is the same as far as inflation is concerned.
so their is know sane reason to let the fed and their stock holders profit for something we can create ourselves
I agree that when the govt borrows from the Fed, the Fed printed the money. But when the govt borrows from the Chinese or from private investors looking for a "safe" place, then no money is printed. T-bill auctions don't involve printing money, only a lending of money already in circulation.Quote from antitrust:
well i guess we aren't talking about the same thing
when the government barrows from the fed, the fed creates that money so the result is the same as far as inflation is concerned.
so their is know sane reason to let the fed and their stock holders profit for something we can create ourselves
Once the Fed starts really buying T-bills with printed money, we'll see a real fecal-turbine collision. Private or sovereign holders of T-bills will dump treasuries once they realize that no other third-party is willing to buy them.
Quote from trefoil:
All commodities eventually wind up selling for the cost of their extraction plus some small premium that makes it economically viable to get the stuff. Every dollar over that small premium amounts to speculation on the commodity in question's price rising in the future due to some circumstance that makes it more valuable, which in the case of any other commodity means some new use for it that will make it more valuable, or some looming shortage due to, as in oil last year, the depletion of the resource.
I like to think of it in slightly more simpler terms: every dollar above the mean marginal extraction & refining cost you pay is the "premium" on the catastrophic downside protection insurance policy you're buying.
Quote from moo:
You're right in saying that the gold miners will get rich, if gold were to become money again. But this is just a one-time bonanza.
They may or may not. Many will be wiped out by all the forward sales they've already made, or hedges on their expected production (if they are companies).