Question for "would-be" economist
- Thread starter lawpoke87
- Start date
The fed is like a bug on flypaper - stuck in paper printing. They have become addicted to the spending and justifying it as "economy repair". The debt they are incurring threatens the entire nations future and our kids. Interests will eventually go up out of necessity - just like the Chinese say. Then the bottom falls out.
We are headed to 1 trillion dollar debt service and the end to the dollar as the worlds currency.
Anyone collecting Yuans?
I remember on CSpan the head of Gallup predicting that in 40 years, the Chinese would have by far the worlds largest economy since ours is lost in stagnation. Our economy would roughly double (in dollars) through inflation to about 30 trillion, but China's would top 80 trillion. At some point in between, we will lose our "world currency" advantage. Then what?
This post was edited on 10/31 2:38 PM by rabidTU
We are headed to 1 trillion dollar debt service and the end to the dollar as the worlds currency.
Anyone collecting Yuans?
I remember on CSpan the head of Gallup predicting that in 40 years, the Chinese would have by far the worlds largest economy since ours is lost in stagnation. Our economy would roughly double (in dollars) through inflation to about 30 trillion, but China's would top 80 trillion. At some point in between, we will lose our "world currency" advantage. Then what?
This post was edited on 10/31 2:38 PM by rabidTU
I assume this is a trick question?
a. the federal printing press?
b. Parker Brothers - don't they make that kids game called Monopoly?
c. Thin air at first, then thick air later.
d. Ben Bernankes' secret stash.
e. Warren Buffets secretary
f. the mysterious Howard Hughes' trust fund
g. The Mexican drug cartel
h. Obama's chief donor and bedfriend aka the satanic George Soros
i. whoever screwed up the TU offense
Not a trick question. We're spending $85 Billion a month to buy our own debt. What line item are these huge expenditures listed on the federal budget? I ask because I don't see any single line item other than defense which is anywhere near this size when projected out for the entire year.
The Government needs to Quit beimng a Charity.
when sonmeone can get the equivilant of $30.00/hr tax free gfom the Gov, there are way too many gov programs that never end; welfare, food stamps, child tax credits, section 8 housing, . . .
when sonmeone can get the equivilant of $30.00/hr tax free gfom the Gov, there are way too many gov programs that never end; welfare, food stamps, child tax credits, section 8 housing, . . .
It is worse and vastly more complicated than simple monetization of debt (US buying US TBills with fiat money).
First thing to understand is that the Federal Reserve is not part of the US Government. It is in fact a private corporation created in 1913 by the Federal Reserve Act. The Fed is run by a Chairman (appointed by the President), a Board of Governors (12 of them, appointed for 14 years by the President and confirmed by the Senate) and the Federal Open Market Committee. The Fed is divided into 12 Federal Reserve District Banks that are, in turn, structured like corporations.
So, while the Chairman and Governers are appointed by the President, approved by the Senate and "supervised" by Congress the Fed works like a private corporation and has no direct relationship to the Federal Government. Which means that we have a private corporation setting interest rates, monetary policy and "printing money" to buy our Federal debt.
With regard to printing money, the U S Treasury controls printing of actual money. Printing is done by a contract company. However, that is not how money is "created" or the deficit supported. That is performed by the Fed performing something called "discount window lending" in which a Federal Reserve Bank replaces actual money on deposit by a member bank (reserves) with a place holder. That allows the bank to lend more money to corporations and the public. The Fed also uses something called "Federal Reserves" which they use to buy TBills. The "Federal Reserves" are magic binary money thingies that don't really exist but can be transferred around within the banking system
So
- Where does the money come from? The Fed creates "Federal Reserves" and buys the debt with same
- How is the expenditure showed in the budget? It isn't, because the District Banks are not a part of the Federal Government.
Yeah, pretty darned nifty!
First thing to understand is that the Federal Reserve is not part of the US Government. It is in fact a private corporation created in 1913 by the Federal Reserve Act. The Fed is run by a Chairman (appointed by the President), a Board of Governors (12 of them, appointed for 14 years by the President and confirmed by the Senate) and the Federal Open Market Committee. The Fed is divided into 12 Federal Reserve District Banks that are, in turn, structured like corporations.
So, while the Chairman and Governers are appointed by the President, approved by the Senate and "supervised" by Congress the Fed works like a private corporation and has no direct relationship to the Federal Government. Which means that we have a private corporation setting interest rates, monetary policy and "printing money" to buy our Federal debt.
With regard to printing money, the U S Treasury controls printing of actual money. Printing is done by a contract company. However, that is not how money is "created" or the deficit supported. That is performed by the Fed performing something called "discount window lending" in which a Federal Reserve Bank replaces actual money on deposit by a member bank (reserves) with a place holder. That allows the bank to lend more money to corporations and the public. The Fed also uses something called "Federal Reserves" which they use to buy TBills. The "Federal Reserves" are magic binary money thingies that don't really exist but can be transferred around within the banking system
So
- Where does the money come from? The Fed creates "Federal Reserves" and buys the debt with same
- How is the expenditure showed in the budget? It isn't, because the District Banks are not a part of the Federal Government.
Yeah, pretty darned nifty!
