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This coin I heard about called USD
- Thread starter Illini Trader
- Start date
The surprising thing is that it is possible for essentially zero interest rates to last for ever. Zero base rates at least. Fiat money is created as needed of course, but responsibly assuming the money supply is managed. And most of it is complemented by bond issue. I.e, it acts as though it was borrowed. The thing about fiat money,when it is managed well, as our Fed does, is that it can be taken out of the economy as easily as it is put into it. Don't forget that all of the U.S. debt --how many trillions is it now? -- has to equal , to the penny, dollar denominated savings. We probably should change the name of the debt thing at Times Square to the savings thing. This is not theory, this is just basic balance sheet accounting.Perhaps I did if "Scotch Tape" and "Zero Interest Rates" last forever against vast increases in printing money.
"And most of it is complemented by bond issue. I.e, it acts as though it was borrowed. The thing about fiat money,when it is managed well, as our Fed does" you should be joking.The surprising thing is that it is possible for essentially zero interest rates to last for ever. Zero base rates at least. Fiat money is created as needed of course, but responsibly assuming the money supply is managed. And most of it is complemented by bond issue. I.e, it acts as though it was borrowed. The thing about fiat money,when it is managed well, as our Fed does, is that it can be taken out of the economy as easily as it is put into it. Don't forget that all of the U.S. debt --how many trillions is it now? -- has to equal , to the penny, dollar denominated savings. We probably should change the name of the debt thing at Times Square to the savings thing. This is not theory, this is just basic balance sheet accounting.
i will remind you of your post when interest rates spike to 7% or much higher.
. Don't forget that all of the U.S. debt --how many trillions is it now? -- has to equal , to the penny, dollar denominated savings.
Only if that were true. Ever heard of QE1 and QE2 and QE3? Money is printed and debt is created. There is no rich guy loaning us this all this money that we call Debt.
Complete utter nonsense.The surprising thing is that it is possible for essentially zero interest rates to last for ever. Zero base rates at least. Fiat money is created as needed of course, but responsibly assuming the money supply is managed. And most of it is complemented by bond issue. I.e, it acts as though it was borrowed. The thing about fiat money,when it is managed well, as our Fed does, is that it can be taken out of the economy as easily as it is put into it. Don't forget that all of the U.S. debt --how many trillions is it now? -- has to equal , to the penny, dollar denominated savings. We probably should change the name of the debt thing at Times Square to the savings thing. This is not theory, this is just basic balance sheet accounting.
Yes the debt. And as for assets many times people refer to federal lands as if Yellowstone or the Capitol Building can be sold to the highest bidder.What does that number represent? US debt? If so, you should also state how much assets the US has. And GDP too.
The only assets worth anything are taxes collected and loan receivables including a shitload (getting shittier by the day) of student loan debt - which will probably be written down a big chunk in the next year or two anyway.
GDP is what the country, not gubmint, produces.
As many have said Al Qaeda or ISIS or whatever next boogieman neocons create is not what will bring this country down. Debt is what will do it. Debt that both parties have piled on this country and both parties continue to give lip service to.
I am surprise, no not really, how many traders are clueless to this.
Wait, I thought this thread was about the bit coinz.
Yes it is, but this is all related because the fuel that gives bitcoin its rocket power is the debasement of the fiat currencies. See this article from the IMF that talks about the triumph of bitcoin. https://fee.org/articles/imf-head-predicts-the-end-of-banking-and-the-triumph-of-cryptocurrency/
I would suggest you would find a modern text on money and banking helpful in understanding fiat money and the role of deficits.$20,371,173,402,452.23 is all the perspective one needs to know the end game approaches.
Obviously not tomorrow or next week or next year. But no doubt it will at some point in the not too distant future.
Many are surprised when they learn that U.S. government sector debt equals private sector savings. They balance to the penny. That's why the debt clock could just as well be called the savings clock.
There is no trick being pulled here. It is just a matter of accounting.
Furthermore, a country like the the U.S. whose currency is a reserve currency and a country that imports more than it exports will run a persistent deficit as a normal state of affairs. This import-export imbalance is one mechanism for supplying dollars to foreign bank reserves. Another aspect that has helped make the USD a strong and very desirable currency is the U.S. central banks willingness to make loans to foreign central banks when necessary. In a crisis this could amount to trillions. It's just another reason why the dollar is such a desired currency around the world.
All of these things are very good things that the government does.
What is a concern is inflation, though that is largely a political issue. And also the distribution of money is a major concern. It is of great practical importance, as is what money is spent on.
Most of the crazy things you hear such as your children will be saddled with debt. Or the U.S. is bankrupt are purely political in nature and have no basis in fact.
P.S. The U.S. will never run out of money nor default on its debt. Well lets just say some other calamity will occur before that happens.
I think you misunderstood my post. While it is possible for the central bank to hold the overnight rate at near zero indefinately by letting reserves rise i don't anticipate the us central bank doing this . You will see rates rise some at a measured pace from what has been extraordinarily low rates. You'll recall that during the financial crisis the fed bought bonds and this increased bank reserves and hence the overnight rate plummeted . The fed did start paying interest on reserve accounts to establish an interest rate floor. Was it around 25 basis points maybe?"And most of it is complemented by bond issue. I.e, it acts as though it was borrowed. The thing about fiat money,when it is managed well, as our Fed does" you should be joking.
i will remind you of your post when interest rates spike to 7% or much higher.
By the way it isn't necessary to have a mandated reserve requirement like 10%.
We have fixed legal limit for reserves but banks will have reserves as a necessary part of their clearing operation in any case. Check out Canada for example they may have no fixed reserve amount. The
mechanism used to regulate the overnight rate would have to be different from what the U.S. uses to accomodate this. But it is doable.