Well, can't be all substance all the time, y'know... But look on the bright side, my confused friend. With or without a carrot in my mouth, at least I have some understanding of what I am talking about.
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US Treasury accused of manipulating markets - again?
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If you buy a bond issued by a business, you're lending to that business, no? Conversely, if you an individual a mtge, you're buying a collateralized loan... So I still fail to see a clear difference.Quote from Ivanovich:
By lending, we're referring to the more generic term. Lending to businesses, consumers, etc.
Quote from Martinghoul:
Firstly, nothing is printed out of thin air, obviously. Secondly, I described a pre-condition that must hold true for your "inflationary effects" not to occur. Thirdly, it has obviously worked, otherwise debt would not exist as a financing instrument. Fourthly, my reasoning is to try to understand how people here can be so incredibly unfamiliar with basic economics. Fifthly, when did I ever promote it as a magical solution? The approach has its flaws, which I would happily point out. Finally, if anything I have said so far isn't entirely obvious, I would be happy to spend some time (at some point) to go through the whole "island A lemons" textbook economics malarkey.
First, money is printed out of thin air because we do not even need to use paper anymore. It is electronically recorded. And the only thing backing it is a promise by the governments that they will pay it back. It's not that much different with soft money lending, which for some reason you are unable to distinguish from hard money lending.
Second, I am not sure you described anything except that you are ignoring the increased costs due to added money in circulation. You kind of ignored the statement that I made and assume that your costs stay the same irregardless of the money injected into the system. Which is simply not true.
Third, it has never worked as a stable system and the current events in financial history are obviously pointing to a major financial crisis unfolding. Obviously you disagree, as you seem to think that constant government bailouts, aka more government debt out of thin air, is a normal and reasonable process.
Fourth, you are not willing to look at the other side & point of view. My opinion is that you do not even know what inflation is, as simple of a concept it is, only because you are strongly pro-central bank biased.
Fifth, you are viewing it as the best possible solution and obviously support the current financial system when the other side believes that the current central bank scheme is the cause of the problem and the only real solution would be to get rid of it.
No, disagree... I know I won't be able to convince you, but money, actually, doesn't necessarily have anything to do with the govt. The govt is an intermediary, though.Quote from Anaconda:
First, money is printed out of thin air because we do not even need to use paper anymore. It is electronically recorded. And the only thing backing it is a promise by the governments that they will pay it back. It's not that much different with soft money lending, which for some reason you are unable to distinguish from hard money lending.
I assumed that the point I was making is obvious. It isn't, so I'll be more explicit. If the inputs that I need for my carrot production cost $X, I sell my carrots for $Y and Y>X, what do you think happens to the supply of $ in the economy as a result of me producing carrots? If X rises, as you say, there are two possibilities: a) Y > X, still; b) my carrot project goes out of business. For a) see above, while b) is a special trivial case.Second, I am not sure you described anything except that you are ignoring the increased costs due to added money in circulation. You kind of ignored the statement that I made and assume that your costs stay the same irregardless of the money injected into the system. Which is simply not true.
No, I never said anything of the sort, neither have I thought it. As to what has and has not worked as a stable system, pls give me an example of a social institution that you would define as stable. Otherwise, there's no pleasing you...Third, it has never worked as a stable system and the current events in financial history are obviously pointing to a major financial crisis unfolding. Obviously you disagree, as you seem to think that constant government bailouts, aka more government debt out of thin air, is a normal and reasonable process.
I am certainly willing to look at the other side, as long as you provide an actual argument. Furthermore, I am not pro- or con- anything. I think about the possibilities and evaluate them based on their own merits. Pls don't insult me by suggesting that I blindly adhere to one doctrine or another.Fourth, you are not willing to look at the other side & point of view. My opinion is that you do not even know what inflation is, as simple of a concept it is, only because you are strongly pro-central bank biased.
I would love to discuss your specific ideas for how the economy should be reorganized.Fifth, you are viewing it as the best possible solution and obviously support the current financial system when the other side believes that the current central bank scheme is the cause of the problem and the only real solution would be to get rid of it.
Quote from Martinghoul:
No, disagree... I know I won't be able to convince you, but money, actually, doesn't necessarily have anything to do with the govt. The govt is an intermediary, though.
The government issues the treasuries and the Fed monetizes them. US Treasury debt is placed as an asset on the Fed's books and the Fed authorizes the printing of the currency, or more like, creation of it in the computer with a certain portion actually printed by the U/S treasury. The Fed can boost its balance by doing nothing more than purchasing newly issued US debt and it does so with Federal Reserve Notes that it gets created out of nothing. You can argue to the contrary, but this is how the process was devised for the 1913 act and it is based on the British Central Bank model.
There is not much to argue about it, except whether it makes sense or does not. Really, I prefer to read what the creators of the Fed say, as I think their opinion holds the most water. It's a racket, plain and simple.
I assumed that the point I was making is obvious. It isn't, so I'll be more explicit. If the inputs that I need for my carrot production cost $X, I sell my carrots for $Y and Y>X, what do you think happens to the supply of $ in the economy as a result of me producing carrots? If X rises, as you say, there are two possibilities: a) Y > X, still; b) my carrot project goes out of business. For a) see above, while b) is a special trivial case.
You don't need to explain the results of additional carrots hitting the supply. I am talking about the inputs, whose price will rise proportionally higher than the resulting price decrease from additional carrot supply. Add in your required profit margin and this shows exactly why inflation is rampant in this economy. Because that it is exactly what has been happening and still is happening right now.
No, I never said anything of the sort, neither have I thought it. As to what has and has not worked as a stable system, pls give me an example of a social institution that you would define as stable. Otherwise, there's no pleasing you...
There have been plenty of propositions, whether full reserve banking, gold/silver standard or free market banking. All of these solutions require that there is no central bank and that money is not a debt instrument but an instrument that facilitates commerce.
I am certainly willing to look at the other side, as long as you provide an actual argument. Furthermore, I am not pro- or con- anything. I think about the possibilities and evaluate them based on their own merits. Pls don't insult me by suggesting that I blindly adhere to one doctrine or another.
It's just an observation based on your comments. You are against Austrian economics and often comments that the posters who promote their ideals do not understand basic economics. You discount any prior monetary systems that were backed by hard metals. You almost always come off as pro central banks and are pro bailouts. Plenty of arguments have been provided by certain posters and I have yet to see you seriously engage them.
I would love to discuss your specific ideas for how the economy should be reorganized.
Ron Paul has the right idea. Call him whatever you want but he is on point. You either treat the infected wound and deal with the pain or keep covering it up with bandages until your whole body is infected beyond saving. We're pretty close to the latter scenario.