It's the "profit" that accrues to the central bank due to the fact that the owners of coins and notes in circulation collect no interest on their capital.
Solutions - Nationalize the Banking System and Print Greenbacks
- Thread starter achilles28
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We are headed for complete monetization of the debt, anyway (debt-to-GPD > 110%). That's the point. Either way, that will precipitate a run on the dollar. We're damned if we do, damned if we don't.
At least in the later case, we retire the national debt completely and move to a nationalized banking system so the vig doesn't suck the economy dry (10% boost in GDP).
My ideal world includes banks and an elastic currency. You're making assumptions and they're incorrect.
As for the question - no, I wouldn't lend you the money. The gold standard assumes a deflationary price level, and holding money is superior to lending it out, assuming the interest cost is zero. Interest has to be paid to compensate for loan risk.
In todays world, banks loan out money they create as digital ledger entries, and the value from that loan is derived from all the holders of dollars, who are robbed an incremental amount, when that loan is spent. The owners of the currency are the people, and the people have to be compensated for the principle they forgo when a loan is made (decline in a dollar holders purchasing power via an increase in the money supply when a loan is made).
Your example proves my point. The loaner of the money has to be compensated for the loan (the people).
No, it appears your definition is incorrect.
The federal government realizes a financial gain when it issues notes or coins because both forms of currency usually cost less to produce than their face value. This gain, which is known as âseigniorage,â equals the difference between the face value of currency and its costs of production.
http://www.gao.gov/modules/ereport/..._savings/General_government/42._U.S._Currency
The point is that like Governments, commercial banks also create money and their production costs are near zero. From which they also derive a profit from the creation of that money. Not from spending it like the Government, but from loaning out, to earn interest.
It's the power to CREATE MONEY that is the essence of senioriage, and commercial banks have exactly that. You are splitting hairs and being difficult. Even the Dallas Fed implied commercial banks have the power of senioriage (which all banks clearly do), however, their focus in a research paper was on the Central Bank or Government benefit. Not the private benefit commercial banks receive.
OH MY GOD
Martin please, that was pathetic, but what is truly pathetic is that your logical fallacy is actually bought by majority. So you are actually better than majority, which is whole new level of sad for everyone
You are comparing Loan giving and interest charged, between two businessmen or companies AND ownership of entire currency in existence being lent to entire country with interest attached.
my my Marty, you know better than that, of course I don't really blame you, people you spill propaganda to buy it all, poor saps.
Martin please, that was pathetic, but what is truly pathetic is that your logical fallacy is actually bought by majority. So you are actually better than majority, which is whole new level of sad for everyone
You are comparing Loan giving and interest charged, between two businessmen or companies AND ownership of entire currency in existence being lent to entire country with interest attached.
my my Marty, you know better than that, of course I don't really blame you, people you spill propaganda to buy it all, poor saps.
Martinghoul is like an AI program being held hostage by the FED.
They have the plug cable in their hands, and the poor AI (martin) is told to go online and defend the FED or they pull the plug.
Whether human or AI, he is a slave.
see post just before this one
1. Why does the govt have to borrow the money when it deficit spends.
It does not. Lincoln did it. Thats where Greenbacks came from.
2. The next concept here is... what has causes the massive inflation we have suffered here in the United States.
a. is it govt spending? how could it be?
the purpose of borrowing the money instead of just printing it is to avoid the devaluation of the currency. So how did we suffer all that inflation the last 100 years. Even 50 years ago coffee was a nickel. And the demand for the dollar has been massive. Countires and black markets all over the world demanded dollars. The currency should have appreciated. Coffee should be less than a nickel.
b. So what caused such massive inflation on an in demand currency. The world has been flooded with trillions and trillions of dollars electronic and otherwise... but we were borrowing money to finance the deficit?
Who got the benefit of creating those trillions and trillions of dollars. Who or what assets do they now own? So many dollars were created we don't even track M3 anymore?
It does not. Lincoln did it. Thats where Greenbacks came from.
2. The next concept here is... what has causes the massive inflation we have suffered here in the United States.
a. is it govt spending? how could it be?
the purpose of borrowing the money instead of just printing it is to avoid the devaluation of the currency. So how did we suffer all that inflation the last 100 years. Even 50 years ago coffee was a nickel. And the demand for the dollar has been massive. Countires and black markets all over the world demanded dollars. The currency should have appreciated. Coffee should be less than a nickel.
b. So what caused such massive inflation on an in demand currency. The world has been flooded with trillions and trillions of dollars electronic and otherwise... but we were borrowing money to finance the deficit?
Who got the benefit of creating those trillions and trillions of dollars. Who or what assets do they now own? So many dollars were created we don't even track M3 anymore?
The unfortunate truth is that National Central bank is all good, but the government can still destroy a country by mismanaging the resources and printing money out of control to create inflation and in the end hyperinflation
So country has no long term future with private Central Banks.
But also a sovereign government can mismanage money printing too.
Yeah, we are fuked.
I am amazed that anyone thinks the US government can improve on anything. There is already a nationalized health insurance program for elderly that is insolvent, a retirement program that is insolvent, a veterans' administration that ignores veterans who have suffered for this country, and a new, murkily-funded health insurance program that is probably the last nail in the coffin of this country. Hell, the government cannot even run a post office. All the post office does is move pieces of paper around on trucks and planes: I'll bet I could do that.
The government is not out for you. In their mind, it is the money from the elite that put them in power, not the voters who elected them.
The government is not out for you. In their mind, it is the money from the elite that put them in power, not the voters who elected them.
And I am amazed how single tracked minded you are.
And this without drugs and alcohol.
So the government isn't workin for ya eh.
Well how about you change your government, and I mean completely, not Obama shit or Bush shit.
But whole new government, its called revolution, and it takes balls, something you Americans prove again and again you don't have.
I think processed food has turned you all into major slimeballs.
Your grandfathers ate meat, beans and wholegrains and drank room temperature whiskey.
Today's sugar filled Americans disgust me.
Come on, don´t be so critical about our "American friends" (Angela Merkel and her political buddies in Germany LOVE this expression). At least, uncle Ben Bernanke saw the necessity of printing money BEFORE THE ECB saw it, before the BOJ saw it and even before the Bank of England saw it. Ben WAS a visionary!!!
I am kneeing down in front of Ben and say THANK YOU:
Now, I admire everything BEN did in QE1.
BUT, BUT, BUT: QEII and QE III were solely intended to rescue the ruling class in the US of A. So to say, a rocket booster money printing program for the personal pockets of the famous 1%. This was when BEN lost his credibility.