Who is not printing money?

[piezoe]

Dude, we went over this before. You can get into semantics and differences into circumstances and stuff all you want, but U.S. Treasury bonds are a promise to pay a sum certain in the future plus interest. That is exactly what the most basic definition of debt is. The U.S. government CAN default on its Treasury obligations, just like any other non-government debtor CAN default on their debt/loans if they cannot repay them. The U.S. government CANNOT default on U.S. dollars in circulation, because they are not debt.

Probably only difference in substance is that the U.S. government can (although maybe indirectly), pay off its DEBT by printing money, private debtors cannot.

Its debt, dude, no matter what spin you try and put on it.

Don't worry about it. It's a difficult subject for most. I have given literature references here for those interested in delving deeper. If you later become interested, you can look those up.

Probably only difference in substance is that the U.S. government can (although maybe indirectly), pay off its DEBT by printing money, private debtors cannot.

You're on the right track here, but actually it is even easier than that. When the Central Bank buys Treasuries, the esatz debt they represent is eliminated and replaced with an equal liability in another form. And the C.B. didn't even have to print the money (again) to buy them. Remember, the money was already printed before the ersatz debt linked to it was issued. (To understand this completely you have to know what happens to Treasuries when they are on the government side of the ledger, i.e. on the Central Banks balance sheet.)

What the C.B. is doing when it buys Treasuries is simply exchanging one form of money for another. This is what Japan did when it got rid of ~50% of their ersatz debt. This did not reduce their total Treasury liability. They just stopped calling the liability "debt" , once it was in the form of bank deposits. So everyone in Japan would sleep easier.

When the C.B. does this kind of thing they don't change the amount of money in the private sector. Treasuries, cash and electronic notations in private sector accounts are all liabilities of the U.S. Treasury. The only difference between money in the Form of Treasuries and that in the form of Bank notes, coin or accounting notations is the future interest owed on Treasuries. That interest is a non-discretionary budget item that will first make it's appearance in the private sector as an account notation. To the extent Treasury interest contributes to a deficit it will first appear in the private sector as newly created money and later as a part of a Treasury security. (Remember, all New Treasuries issued are linked to new money already created and spent into the private sector, which in turn is linked to deficits.) The principal on, say, a bond in the private sector is the same as an equivalent amount of Ben Franklins except that when it is in the form of a bond you can't buy a hambuger with it. You have to first convert it into Ben Franklins. Thus Treasuries are not part of M2 until converted. Both Treasuries and Ben Franklins however represent Treasury liabilities. Do not think there is no government liability associated with Ben Franklins please.

 

[SoyUnGanador]

Don't worry about it. It's a difficult subject for most. I have given literature references here for those interested in delving deeper. If you later become interested, you can look those up.

LOL.

And this:

"I should mention something very important here if one is trying to get a correct understanding of U.S. money operations, and that is to recognize U.S. Treasury securities as a form of money."

Sure, it might be a form of money, in the sense that people mike take Treasury bonds for payment, might exchange Treasury bonds for things, etc. etc. But the Treasury bonds themselves are still DEBT. Just like both stock in a corporation and debt of that corporation are in a very real sense both an investment in that corporation, but one is clearly debt because it meets the characteristics of debt that I mentioned and the other doesn't.

It is DEBT dude.

 

[Overnight]

LOL.
...

It is DEBT dude.

Dude, it is NOT debt! Why are you so daft!?????!!!

The Central bank lends the money to the US in whatever form it wants, but charges interest on it. That secures the US government into an infinite loop of money it cannot pay back, because the USG has to borrow even more money to pay off the interest on that debt it does not have?!?!

Piezoe has solved the US debt problem which does not exist!

Stop arguing! Jeez!

You are so STUPID! Every economist in the world, and folks like Janet Yellen, are trying to stop the US from "defaulting on it's debt", which apparently will send the world economy into a tailspin, but Piezoe says that this is not an issue because the US has no real debt.

So you should listen to piezoe, the master economist that owns the world's economic theory.

Only Piezoe knows how this all goes down. LISTEN to him. He has all the answers.

I have begged him to go on CNN and explain to the world how US government debt works, but he refuses. That means he is a USA hater, because his knowledge would save this country, and the world, from the next depression. But he refuses to do so. He's a commie punk then.

 

[piezoe]

Sure, it might be a form of money, in the sense that people mike take Treasury bonds for payment, might exchange Treasury bonds for things, etc. etc.

That's not what is meant however when an economist treats Treasuries as a form of money. This is justified on the basis of both Treasuries and all other forms of money being liabilities of the U.S. Treasury, i.e., the government. U.S. Treasuries do not in any way represent borrowing from the private sector to fund deficit spending. In reality, as I have mentioned before, deficits are always funded by the creation of new outside money. Our government's Bonds --- I sometimes refer to them as ersatz bonds to set them apart from real instruments of borrowing and to avoid contributing to the confusion that pervades the American public --- serve an entirely different purpose then the raising of money to spend.

 

[piezoe]

The Central bank lends the money to the US

The Central Bank is a part of the U.S. government. See Wells Fargo v. The United States.

 

[Overnight]

...Our government's Bonds --- I sometimes refer to them as ersatz bonds to set them apart from real instruments of borrowing and to avoid contributing to the confusion that pervades the American public --- serve an entirely different purpose then the raising of money to spend.

Then why don't you educate Powell, Yellen, and CNN on how macro-monetary policy works, because the MSM is scaring the shit out of people, and they are dumping stocks from their 401K to insure against the incoming defaults!

 

[Overnight]

The Central Bank is a part of the U.S. government. See Wells Fargo v. The United States.

So the Central Bank is going to default on money it lent itself in June. Fascinating.

 

[piezoe]

I have begged him to go on CNN and explain to the world how US government debt works, but he refuses. That means he is a USA hater, because his knowledge would save this country, and the world, from the next depression. But he refuses to do so. He's a commie punk then.

Ha ha ha, I liked the communist punk part. Appreciate the confidence in me. There are many others more qualified than I to go on CNN and try to explain this stuff. You can see that that's a virtual impossibility. I can't even explain it to you numbskulls.

I used to think, why on earth doesn't the Fed send lecturers around the country to explain how U.S. finances work. Now I understand why. Because we have all grown up thinking government finances were just like our personal finances, and when we wanted to buy something we needed but didn't have enough money we had to borrow. After a lifetime of thinking this way it's amazing that anyone can get it right when faced with how different U.S. finances really are.

 

[piezoe]

So the Central Bank is going to default on money it lent itself in June. Fascinating.

This could be the foundation of a great comic strip!

 

[piezoe]

Then why don't you educate Powell, Yellen, and CNN on how macro-monetary policy works, because the MSM is scaring the shit out of people, and they are dumping stocks from their 401K to insure against the incoming defaults!

We are all scared as shit of what the Republican Terrorists may try to do. In the end though there are more sane than insane Republicans. It will only take a handful of the sane ones to vote with Democrats and stop the nonsense.