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A Thought Experiment: Why Not Just Print, Print, Print And Then Print Some More?
In the past we have jokingly discussed the creation of a Death Star as the way the world can save itself by printing an almost infinite amount of money to support growth. As almost everyone, especially the MMT crowd it seems, can plainly see, if printing some money is good (well it must be, markets are up) then printing more money must be better, right? Well, no (as we discussed in detail here). There are unintended consequences and as we pointed out recently, we are already seeing less and less effervescence in the real economy from QE's impact and the spectre of the inflationary pressures that implicitly limit the 'benefit' of this action is nowhere more painful than in energy prices (and in fact the price of anything in relative limited supply as opposed to cash which is printed daily). Professor Antony Davies, of Duquesne, takes this subtle concept to task in this exceptionally straightforward 206-second video on money as an IOU and its solution to the caveman's ills providing the background for why money's inherent value is relinquished once it becomes printed en masse. Printing more money doesn't make more goods and services appear, simply spreads the value of the existing goods and services among a larger number of dollars - this is inflation. Our wealth comes not from money but from the goods and services that money buys. Q.E.D.
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The fed is the biggest pharma company in the world - they make the money drug, which behaves just like all the other ones.
The lineup! How long would it take Bernank to resign if this was Mitt's team!
http://annoyanidiot.blogspot.com/
Ron Paul - President, Gary Johnson - VP, Andrew Napolitano - Secretary of State, Rand Paul - Secretary of Defense.. and Jim Grant Fed Chairman (to preside over its final days ). Hi ho silver away ..
Libertarian nation - no war, no inflation, balanced budgets and goodbye CIA, DHS, NSA, FBI, Dept Education, etc etc
Unfortunately even if RP is elected he would need to invoke emergency powers to sieze the media so he would stand a chance against the CIA and friends, by exposing them on TV (because for Americans - if its not on TV it didn't happen) - if that succeeded and they had some trustworthy people put in to head the police, then they could actually get stuff done without too much fear of being assassinated.
Except for bankers, as their wealth comes from debt, specifically the interest payments they receive.
Banks and the politicians they own see debt as wealth, because it is, for them.
For the last 30 years, growth was being generated by borrowing.
The borrowed money did not exist. It was created, (heheh, God Work)
Can borrowing, (creation of money), continue without paying back the lender with interest?
Who or what organization is capable to continue lending without getting their loans paid back?
How long can loans be given out with only a token cash flow coming back to the lenders?
At some point in time, there has to be loan forgiveness and a rebalancing of the books. (There has to be a recognition that bankers are false gods)
The participants of all this fraudulent accounting are well aware of what is happening and must continue the pretend game.
There is no other game in town.
You can substitute "default" for "loan forgiveness"...
"Our wealth comes not from money but from the goods and services that money buys." NO it is actually even simpler than that. Wealth is the sum of unconsumed human productivity. Wealth comes from the labor and creativity of human beings. Money is a representation of wealth. More money subdividing the sum of unconsumed human productivity does not equal more wealth, unless of course you have gone down the rabbit hole with Alice.
The Kool-Aid "TM" analogy.... Lets say the whole United States population wants Kool-Aid, and the problem is we only have 1 packet. Well, the government thinks this is an easy fix, just add about a few TRILLION gallons of water, Voila'
Hey, its still Kool-Aid..... However it is only in minute trace amount, just like our "Weimar Republic Dollar".
The other side of that coin is that their wealth comes their monopoly on payment and settlement systems. By extension, our conventional wealth comes from their permission to let us use this apparatus--thanks guys! It kinda sucks to think that even if I protect what I've earned by being clever in advance of massive fiat catastrophe, that I will still rely on an international settlement system to exchange that value for anything I cannot physically settle, in person.
It also blows my mind that antitrust law seems to give a pass to the single most powerful corporate trust on US soil besides the Fed, DTCC.
It's like that gorilla you never noticed, even though it waved at you.
Our veins (settlement/clearning), our blood (fiat currency), and our heart (monetary authority) have all yielded to the parasite.
No....they would mos def assassinate him before he had the chance to do any good.
Bolton for Secretary of State. Put Andrew Napolitano in as Attorney General.
Seriously, though, "he would need to invoke emergency powers to sieze the media" is a bizarre suggestion for a libertarian president. Sort of like a certain elected president bemoaning the existence of the Constitution or having to deal with Congress or the SCOTUS.
What's needed is a good, libertarian-minded dictator for a few months. The only person I'd trust in that position is...ME.
Bolton is a total putz! A cog in the existing sick machine.
No kidding. Bolton is a neocon dickhead that will gladly fellate anyone advocating endless war.
Dude Bolton? I hope you're talking about Michael Bolton...
My thought experiment: why not have the Fed buy treasuries at maturity? The exchange of fiat money for matured treasuries creates no new wealth to (possibly) circulate through the economy. Bondholders then have cash to buy new bonds.
The matured bonds become a line item on the Fed balance sheet called "Maiden Lane XXX" which can sit there forever. Because the bonds have matured, no future interest is owed.
Slowly, the outstanding debt lowers and the government pays less and less interest.
Other than the Fed eventually having a balance sheet exceeding $16 trillion of made-up money, wouldn't this solve the national debt problem?
The exchange of fiat money for matured treasuries creates no new wealth to (possibly) circulate through the economy
'new wealth'? - the fed doesn't create this in any case.
The purchase of treasuries for instantly created fiat does however create new currency to circulate through the economy - ie, such a move would (will!) be inflationary.
But currently the Treasury pays the owner of the bond at maturity. That doesn't create new currency. The bond owner has no more money either way, simply exchanging a piece of paper that says he's worth $10,000 for pieces of paper that say he's worth $10,000.
But where the Fed pays $10,000 for a $10,000 bonds, then simply books it, the Treasury is releived of the need to float more debt to buy back bonds.
Over time, the "national debt" decreases (no need to pay off bonds at maturity) and the Fed just books the amount as an asset of the Fed.
That's like Newman eating the muffin stumps.
First, the expansion of the money supply necessarily causes inflation. You say that it creates no new wealth to possibly circulate through the economy, aside from a tic on the definition of wealth, I would say this only works, at least temporarily, when velocity is slowed to a crawl... In short, that currency would not have been available otherwise.
Second, practically speaking, BOND HOLDERS DO NOT WANT NEW BONDS. Our creditor nations are dumping the shit like the currency was getting devalued or something. Thus, the ability of bondholders to buy new bonds is moot (they don't want them anyway and sure as hell not at these rates).
Third, the duration of our debt is an impediment... In other words, the maturities of these debts come quickly...
Fourth, the FED credits back the interest to the treasury...
A viable solution does not involve any additional misallocations of resources... period... it's as simple as that.
silver investors are always happy:
a) they manipulate the market down i LMAO and buy more
b) silver goes up i am happy i have my money in something real
just buy silver today, Ben bullshit is a gift
Just ordered 200 oz of shiny new maples.
Joy!
great! how much over spot?
Around $US2.05/oz.
good price man
got few more mexican libertads at .85 over :) picked my own dates too
I have to save for a year to buy that much. :(
Silver (hammered) down -6% today
looks like the downtrend continues for a while yet
Sure it's a "down trend" and not a margin call on those highly-leveraged equity funds. So they hammer silver down to what...+14% YTD?
That's the problem with silver though, people only want it when it's shiny and new, not when it gets oxidized after 30 years of storage. I'd rather have Gold so I dont have to worry about it losing its luster.
I got a good stack o' them, too. This just happens to be silver month in the rotation. :)
hhmm T that is not 100% true, the metal value is the same unless you have major ring damages, filing, acid exc exc, but if you buy generic .999 silver the difference is minimal, numismatic coins if polished/cleaned can loose big part of their value,many morgan dollars pre '21 with nice original tone can be actually more valuable & desirable than white shining coins sometimes... then you know, in gold too, when you see a small copper spot is a turn down as well in price...
I don't think I've heard "effervescence," apart from Alka-Seltzer, in 30 years. I tip my hat to the Tyler word doctors.
Yeah playing scrabble with them could be a bitch.
"Plop, plop, Fizz fizz..."
http://www.youtube.com/watch?v=bxjb2UJZ-5I
What if not everyone has twice as much money? What if only a few people have multiples more money, and the masses have less?
No doubt thats where they screwed up this time. The Germans were at least smart enough to make sure the printing went to the people, so that when it bit them in the ass at least they had wheelbarrows full of money to buy a sausage or 2. In this case, only a few at the top are buying $300K bottles of champagne at niteclubs while 99.9% are broke. Good luck going forward Ben, you'll need it big time.
Again with the every post down vote. Screw it why even bother writing here, assholes.
I think some people just vote down to be idiots.
More like "asshole". Not sure why it even bothers you - the fact that it does means whoever is doing it will keep doing it.
It doesn't bother me. If somebody disagrees with my comment or postion more power to them.
Dude someone is fkin with you and probably sees me telling you it's not me and is making it look like it's me. Fk em.
There is never a good reason to comment on any blog. One does it to discuss. ZH discussion is better than most in that every once in a while a solid fact rather than opinion is offered.
The comments average slightly better than the articles, on average. There are exceptions, and there are bad days, but on average, the article writers are slightly inferior.
Interesting perspective. I wouldn't handicap the article-writers against the commenters. Different parts of the value chain. It's also much, much more demanding to post original material than to be an at-will commenter. That said, I would agree that there is often as much or more content and insight in the collection of comments than in the articles.
Was it over when the Germans PRINTED Pearl Harbor?
Blow it off... We all pick up the down bots, forget it..
You are absolutely right.
Don't let it get to ya SD1, lots of passive aggresiveness going on as of late.
Wait till the next leg down starts.
No worries, I am not offended by the asshole remark, as I can be quite a fine one at times!
pods
Fuck 'em if they can't take a joke. Haters gonna hate.
Well, I would hypothesize that the general value of the goods and services are essentially controlled by the general masses, that have less money and therefore the prices for those products will stay low, like food, because the pions just can't afford them.
So the ones with all the money, have effectively, increased their purchasing power.
Hmm....
•J•
V-V
Peon = Worker-Slave, Pion = Quantum particle
This just in (http://www.cnbc.com/id/46950482):
Don't Let Deficit Fear Stop Public Spending: GeithnerU.S. Treasury Secretary Timothy Geithner said on Wednesday that Americans can't let fear of future deficits stymie necessary government investment in projects needed to spur growth.
CNBC.com Timothy GeithnerSpeaking to the Chicago Economic Club, Geithner tackled Republican opponents of the Obama administration who claim that spending is excessive, effectively laying out the administration's economic agenda ahead of November's presidential election campaign.
"There is no economic or financial case for using the fear of future deficits to cut as deeply into core functions of the government, to weaken the safety net or fundamentally alter Medicare benefits as do the Republican proposals," Geithner said.
Geithner said Republicans' call for actions such as rolling back Wall Street reforms constituted "a dark and pessimistic vision of America."
He said the U.S. economy still was in the process of deleveraging, or paying down excessive debts from the 2007-2009 financial crisis, but said it was growing moderately.
Geithner said the challenges that the recovery still faces, including high rates of unemployment, can only be addressed through government actions such as long-term investments in infrastructure projects.
Absolutely nothing to worry about Mr. Geithner. My analysis shows that the majority of US citizens can only afford the essentials like food and can't live without it so there shouldn't be any less spending. Unless of course they lose their job and/or you can't afford to pass out food stamps anymore. Congrats you fucking bitch.
Geithners' an idiot. Truth is, most don't have any disposable income. Just struggling to get by.
His comments prove he's not in touch with reality.
Why does Mr. "no chance" refer to the "financial crisis" as an event of the past? Inquiring minds want to know.
>>
He said the U.S. economy still was in the process of deleveraging, or paying down excessive debts from the 2007-2009 financial crisis, but said it was growing moderately.
>>
Timmy, you're borrowing 1.3Trillion per year and you have run up going on $16 Trillion. Who the FUCK told you you're paying down debt?
Turbo Tax told him.
He clicked the "Ask the Expert" button - it was just that easy!
Son of Solyndra?
Passive voice warning! "Growth" cannot be spurred. Mr. Geithner, We The People do not wish to be spurred. It is demeaning and painful.
If you happen to be lucky enough to be the one printing the money it sure works out ok - because you get to spend the money into the economy using the old prices, before anyone else figures out what you are doing.
Go ahead and print more Ben you dildo, I dare ya....rubbing my hands together for the show if you do!
I wouldnt mind my PM's shooting up, and $7 gas wouldnt effect me much I dont really need to drive a lot so bring on the show Ben.
Go ahead trolls keep on doing your stupid little down vote attacks to anything I post, friggin simpletons. Shouldnt you be over at Yahoo!Finance?
Don't let it bother you dog. Wear it like a badge of honor.
dog1 i am sorry i can only give u one vote up, don't worry about the votes down, is probably a FED or HS or SS employee...
SD-1,
You are having a stress reaction. I almost always agree with that which you share with us.
Please, step away from the computer and take the dog to the park, or just go for a walk. I would hate to lose you right as we about to win.
Easy wins in the long haul re: tortose vs. hare.
My "understanding" is that PMs work best in cases of inflation when you've got older debts that are in fixed interest.
PMs move with "current" pricing (debts are "previous"), in which case there is no real advantage when applying at today's pricing: if a meal costs $31 at today's prices and 1 oz of silver is $31 and then tomorrow you buy that meal for $62 and 1 oz of silver is $62, there is NO gain (of course, there is no LOSS, such as there would be if you'd had $31 in your pocket for which to pay for tomorrow's meal).
P.S. No junks from me.
I like one of the main articles today "The economy can't survive without Wall Street". Actually I just like the title I didn't read the garbage.
After all we've been thru it's pretty apparent the economy can't survive WITH Wall Street.
Of course maybe the system would work if it wern't full of crooks I don't know.
Sounds like more cries for QE3 to me. Less and less faith is in this system and rightfully so. If all that is holding it up is funny money and everyone knows it...game over. There's just no point to it. I'd like to say im for the reset however the consequences of such and what the gov't will do in response aren't going to be so great. They'll do anything to stay in power.
A Thought Experiment: Why Not Just Print, Print, Print And Then Print Some More?
~~~
I thought that's what they were already doing...
Why not have the Fed go all the way? Eliminate the income tax entirely. Eliminate payroll taxes. Cover all Federal spending with new fiat. In fact, expand it to cover states like California and Illinois - cover the deficits in all the blue states.
Daddy be dancin' naked in the street today - soaking up the the rain of money after a long drought
Ben Bernanke knows this. He's purposely deceiving the public. Benefiting a very few wealthy at the cost of many. The lies continue until the US dollar implodes.
Are you insinuating that Fed Reserve Chairman Ben Bernanke is not acting in the best interests of the American people?
/sarc off.
There, fixed it for you. Your sarc lock was stuck on.
"I'm Shocked! Shocked that there is gambling... you know the rest.
MAN that clown Ben AssShalom was considering "further easying" in the cards only a week ago, but wait, yesterday we just realized that he economy is all better, no need for more grease... give me a break
We're "the public," and clearly we're not deceived. But...
Yes, they're not going to throw their hands up and say "we're fucked!" These folks are trying to hold on to power, that's for sure, but I also don't think that they think that they're going to walk away from the train-wreck. They've chosen the only track (well, it's really only ONE track when one gets down to real bottom of things) that they've been programmed to take: the System works, and they're the ones that are trying to make sure that it does.
This is MUCH bigger than just an issue of the "economy." This has to do with the growth-oriented paradigm coming to a close. NO ONE has any blueprints for what's to come next. These folks are trying to buy time in order to figure out how they're going to stay on top (just as much as we all here are trying to figure out how to keep from being killed); there is no answer, in which case nature will ultimately decide, and nature doesn't differentiate between the 1% and the 99%.
Is there any other choice? Our debt and unfunded liabilities rise at $8.13 trillion a year. There are only two solutions - default or print. Printing is much less painful. We will print until the dollar collapses.
http://www.usdebtclock.org/
Too many words. You should have said "Printing is much less painful until the dollar collpses."
Thank God that they don't actually have to print each FRN they 'create'.
I bet if every fiat actually had to be printed, every last tree would be cut down and the planet would be covered in printed currency 3 meters deep (just a guess).
Better idea: Why not just strip search, and spy, and commit crimes against ordinary citizens at will?
http://blog.sfgate.com/techchron/2012/04/03/how-california-cops-get-phon...
Here is the dirt on how some of those 'famous brand names' hand over your iPhart and GoogJunk details and bypass your passwords and create clones of your devices for the cops to play with. No warrants. No reason. Just for the hell of it.
Don't buy these assholes' stocks.
Don't buy stocks.
Fixed ;)
Is this message more interesting to the average person if it is delivered via Xtranormal?
Any message is more interesting to the average person when delivered via cartoon.
Ooh pretty colors!
I miss the bears!
They are cute, smart, and have flithy mouths.
Just my type, I guess.
So printing boatloads of Federal Reserve Notes will not save the financial system ???!!! ....
Dang! It seemed like such an easy solution.
Somebody needs to send this video to Bernanke asap!
Surely the question is what happens when the Fed monopoly on printing money evaporates ? What happens if some Town/County/State starts issuing either Token Money or Specie Money only tradable within a defined locality and it starts to have a higher credibility than Greenbacks ?
If the printed dollars or even euros are going back into Fed or ECB that IMO means that the extra ones printed are NOT wanted by world customers (oil producers, food producers etc). Hence, the money stays ROTTEN just like food at Fed or ECB since nobody accepts the extra money. It looks like the world has already started to not accept USD and has already decided not to accept at all EUR.
Hence, huge inflation may not happen since this money is not accepted, IMO. Untill..........people are forced to accept it = helicopter Ben. Then Weimar hyperinflation. Then lifetime jail for..............(enter name here).
In other words, my hypothesis:
Money reserved at the Fed or ECB is REJECTED MONEY that resource producers or world are refusing to exchange with real goods.
I would further the hypothesis, that ECB begged for SWAPs in Nov 2011 because oil and food countries refused to accept EUR for oil and food exports, since nobody knows if EUR will keep existing. Hence, the europeans swapped EUR with USD to buy oil and food imports to Europe. Hence, USA is stuck with Euros that may not exist later.
Hence: World acceptance of USD = resource inflation for consumers. If the world DOES NOT accept USD, the interest rate is as important as Cuba's interest rate.
Natural solution: Increase Int Rate to attract investment
Un-natural solution: Another war to fear people into USD.
Any challenges to my hypothesis?
I wonder what will come next...maybe groupon or farmville credits?
The tip-off will be when 7/11 only will accept Yuans.
stairway to heaven
the euro is currently the worlds second reserve currency - eek!!
ekk!! yes. the trusty sidekick of the reserve currency. Dollar's girlfriend.
I thought that California has already done something like that, maybe a year or two ago. Maybe someone else can provide a link, if one exists. Or maybe I've become unable to distinguish between imagination and reality, whatever that is.
There are 7 towns in Germany I think - mainly well-heeled ones like Chiemsee I think
The faith in fiat is supported most by those who need it most. As the confidence in government and banking deteriorates, along with that goes faith in currency and bonds and all kinds of paper. It's all very simple. A con game works til enough people just get fed up and look for other ways and vehicles to take up the function of money: A vehicle of exchange and a store of value.
Faith in the whole system and the way things work is eroding rapidly for too many reasons to mentionand at some point all that jawboning and hopium will not put enough food on the table and the jig will be up. It's happened over and over again throughout history, and it's been said a million times in a million ways.
The banksters con is putting the cart before the horse by telling us that fiat = things. Unbelievable. Right in front of our eyes this very day they have the audacity to demonstrate this very con again. And look at how many are falling for it: The dollar is up, long live the con... NOT! I'm holding on to my PM's and my convictions to the bitter end, and accumulating all the way for as long I have paper to trade for them.
I'm no economist, have never "studied" economics, but is seems to me there is a time (preference) value involved in money as well. For any goods being produced for future consumption, there must also be an equivalent anticipated future demand for those goods, this is represented in a bill of credit that a producer draws upon to pay for or produce those goods in the present. That instrument requires a place holder who's value is ASSUMED constant. In our current system, the dollar attempts to function as this placeholder, where originally the system evolved upon gold as the place holder.
That system evolved on gold and remained relatively stable as the annual production of gold was relatively stable. So assuming that the standard unit of account was constant allowed for the future value of any bill of credit to be calculated with relative accuracy.
Once the unit of production (gold) was usurped by fiat currency (governments and banks) that assumption is no longer valid as governments and banks can fabricate that unit from promised or even public opinion/trust in the system as a whole. The problem is that the standard unit of account necessary for all bill of credit is non-linear or even unquantifiable, as dollars can be manufactured at will by banks and governments trading nearly instantaneously on world markets.
The net effect is that the entire system of world trade using currency becomes more and more speculative over time (ultimately reaching complete speculation) as opposed to historically where the predominance of trade was based upon proved production equated to labor using the stable annual production of gold.
Or at least it seems that way to me.
Bluntly put, you put it aptly. When the store of value system around the globe gets too shakey to support the whole show, we gold bugs will finally be proven right. Days like yesterday and today are called 'climbing the wall of worry' and the powers 'shaking the tree', and are perpetrated to transfer more actual stuff in any form including stocks into the hands that proffer paper in trade.
A few years back Prof. Antal Fekete had some really interesting essays on the subject of bills of credit, if anyone's interested in pursuing the subject.
Yeah, I try to read Antal's work whenever he comes up with a new article. Most of his stuff is over my head, but I do seem to grasp this concept that I learned from him (most likely it is a real bills doctrine).
What I garner is that gold is only useful when it serving its' function as the standard unit of account. When it enters permanent backwardation, it will be removed completely from the markets as ppl will opt to hold onto their gold in lieu of exchanging it for any kind of other invented currency (but not necessarily barter). Once gold has been permanently removed from the markets, its function will be eliminated and complete instability will ensue. It will only reappear following the collapse and real hope of a new, reconstructed system of bills of credit denominated in gold appears.
Physics aside: There is no thermal transport mechanism that could get enough heat to the surface of a small (160km diameter acording to Wikipedia) Death Star even if each cubic meter averaged only 1 watt of power. Even if you could, the surface would not be black in the visible, it would be white hot.
Economic anology: There is no economic mechanism that could tranfer the printed money at the Fed (core) to growth in the productive economy (surface) to prevent inflation from destroying the economy through inflation (heat).
The club gives me an idea...
Central bankers need to be clubbed so, in effect, they need a club.
Someone must want a club and could use the CBs printed fiat to buy one.
Let the clubbing begin.
Who says fiat is useless?!
Biggest problem with the claim that printing money does not create wealth is the assumption that the money is evenly distributed across society...everyone has double the money, but everything costs twice as much...bullshit!
In reality new money created is not distributed equally across society (not all income is inflation adjusted), so prices rise, but generally not in equal proportion to the amount of new money created due to supply and demand. This inflation causes wealth transfer via wealth creation for those who receive a disproportional amount of new money (exceeding the rate of inflation) and wealth destruction for those whose incomes lag the rate of inflation. The real danger of printing money comes when the net effect is wealth destruction due to the number of those in the second camp vastly outnumbering those in the first...or pretty much always.
flag as real understanding (1)
+1 and +1
Yes, think about who is "printing" the money and the dispersion conduits being used.
I do not recall the FED depositing any fiat-bits into any of my bank accounts.
get a SNAP card
This guy doesn't get it. Economics, the dismal science, is far more complicated and frankly hopelessly out of reach of all but keynesian academicians' intellectual grasp. People need to stop trying to understand why printing is good for the economy. Here is all you really need to know: the Bernanke is smart; trust him; he's doing all he can for you and me. Stop trying to understand hopelessly complex economic issues without having taken partial differential equations and looking at lots of complex charts and graphs that would give a migraine to even the best technical stock analyst. Indeed, the problem with this country is that people think things are simpler than they really are. Didn't anyone learn anything from Plato? Remember: lying politicians and taxes are as unavoidable as death, you can never watch too much television, gold is a barbarous relic, the ends always justify the means, and cognitive dissonance is really a good thing (don't listen to these zh'ers).
So the video is saying that if there had been Jewish cavemen, then they could have all found a way to go to college and get fed a daily diet of Saul Alinsky-ism?
That is again only part of the story.
Another part is:
If I'm a central banker and I would like to take over the world then I can print print print and give all the inflationary dollars to my friends in the military industrial complex as well as to other bankers. That way very few dollars go into circulation to cause inflation and more importantly the money that I steal from the general population goes towards killing my enemies, decreasing global populations and leaves the world a better place for my children.
I think the professor should add that part of the story.
Violent statists know that printing money does not create more prosperity.
Violent statists want more money to be printed because the printing of money is in itself a transfer of wealth.
Those who get the new money first get the benefits.
Well its not as simple as that , once you decide to back malinvestmented deposits & Bonds (bank credit) over lets say £100,000 you must print or else the economy goes into a deflationary pit.
What is the result of such printing ?.......... goods & service substitution
Consider the little island of Ireland .... with both Sterling & Euros operating in different juristictions while sharing a border.
Northern Irish railways has seen record growth in passenger and rail miles while its southern counterpart with a much larger network has seen continual declines............ why is that ? - the greater distances favour southern rail operations...... its a stange one for sure.
Its the Monetary policey stupid ............. you must always get postive money growth in a debt based system.
If you have negative growth of the money supply good & service alternatives cannot be accessed therefore reducing the input /output equations = deflationary collapse.
Dork,
"you must always get postive (sic) money growth in a debt based system" is just another way of saying devaluation of the currency.
The issue with a fiat currency system is not the system, it's the user. This is why fiat currency systems are so seductive, they play on man's desire to believe he can create things that will allow him to avoid the laws of nature.
More importantly, fiat currency systems are the apple of the economic garden of Eden. Rather than build a shelter to weather the storms of economic nature, he tries to control economic nature.
He can create a theoretical system, fiat currency, that on paper does this.
But to create the fiat system, btw "fiat" means "let it be so", he must embrace and proclaim this belief; that problem of the perfect storms of economics are not created by the fall of man but rather by evil invisible hands which must can be regulated and controlled.
In short, he must proclaim he can set up rules so perfect that they can not be abused (the fantasy at the heart of all bureaucracies) rather than the true answer.
To merely not lever up (concentrate eggs in a few TBTF baskets) and to punish those who disobey the law.
But such tyranny and intolerance is an anathema to the Liberal-Progressive-Keynesian soul.
AMDG
@Centurion
In a national currency its a devalutation of external factors ....... think oil and such but not internally.
Think of printing as a renationalisation of the money supply .......... globalisation was all about com. bank credit production really.
We probally need to reverse the globalisation process so as to maximise our internal resourses again.
I live under Euro rule which is a bankers wet dream...........we have had a 26% reduction of internal demand yet oil imports / money exports were at a record in Y2011......... why was that I wonder ?
If we went back to the punt our real money exports would decrease but the internal economy which really does not exist because of Euro mechanisms(3 decades) would hopefully slowly recover.
The $ is looking attractive from this side of the pond.......... the $ maybe a satanic currency but the Euro is pure evil.
Here are the Irish rail stats.
Rail passenger kilometers (million) R.o.I.
Y2007 : 2,007 (peak)
Y2008 : 1,976
Y2009 : 1,683
Y2010 : 1,678
Rail passenger kilometers (million) N.I. financial year ending March
Y2004/5 : 225.2
Y2005/6 : 240.5
Y2006 /7 :261.8
Y2007 /8 :293
Y2008 /9 : 303.9
Y2009 /10 : 277.2
Y20010 /11 : 306.7
& the weekly average rail passenger numbers oct to dec Y2011 increased by 5% compared to the same period in Y2010. (record numbers) (oct - dec 2011 53.15 million passenger miles vs 49.11 passenger miles for oct -dec 2010)
Keep in mind there is only 211 miles of track in N.I.
I think much of the post 1980 turmoil is a result of post 1980 Euro wage deflation policey which functions to export inflation via international bank credit mechanisms.
I am on a fixed income, I don't know why they call it FIXED when it seems pretty broken to me.
I am thinking they will do more QE and LTRO's and such, they will have to because now they have the financial system on a steroid sugar high they cannot stop the flow of printing and channeling to the TBTF's without a crash. They did this in response to a very close call crash and with vast amounts of wealth redistribution (upwards) and with all this feeding frenzy only managed to prevent a depression worse than the 1930's, barely, if they ever stop this bonfire of bucks there will be a crash that makes 08 and 29 look like a mild recession and they know it.
"Our wealth comes not from money but from the goods and services that money buys."
Nope, that's wrong too... that's consumerism, not wealth creation ...which will lead you to another false/fake politico cul-de-sac that stimulating consumerism is healthy when it's not, it's just consumptive
Wealth comes from the productive (private) sector, from agriculture, energy and industry
Which is why no amount of counterfeit wealth printing by the Fed or other central banks up in ivory towers can stimulate productivity... the private sector are never stimulated by central command control dipshits in the parastical (public) sector
all Govt intervention in the economy is a fuking tragedy
Dumb question I am sure but something I have never understood. When the government physically prints money how does that get in to the hands of the citizenry? In other words, the physical money comes from the Bureau of Engraving and Printing - how does it go from there in to the hands of the people? It's not like they have a hand out program, and the banks aren't giving it out, so I'm wondering how does that money get in to circulation?
it doesn't
the Feds printing is equal to the black holes in the balance sheets of insolvent Wall Street banksters and the spend-a-holics in the US Govt
there is some minimal trickle-down to public servants, it keeps their worthless jobs afloat and the societal parasites on welfare
Govt (and the Fed) is just one huge parasitical orgy love-in
new money begins as debt, the Fed adds assets to the balance sheet of a charter bank, which in turn loans out to other banks. (through fractional reserve this credit is mulitiplied as much as a hundred times) this new line of available credit is tapped, for personal and business loans. when the money is spent, on dinner, or a new car, then the new money can enter the money supply. when payment is made on new debt it is first through the electronic form, checking accounts, (M2) etc. from there some of it actually is made into cash. after the fed introduces this new debt, that line of credit is used (big if) and the money is transferred to suppliers and laborers, who then go the bank and draw out cash. the local bank calls the UST and says i need some cash to cover my depositors withdrawals. (see the rise in M1 at this point) the second important consideration is money velocity, how fast those dollars are turning over. when money velocity goes down and money supply goes up, the feds plan to add credit in order to boost economic activity isn't working, people are hoarding cash. and specifially not people but corporations who sit on their cash, or use it to buy back their shares, and prop up their asset value (which is really the purpose of the Fed's activity, according to its critics, in order to prop up asset values for the people who own those assets, (1%) while real economic growth stagnates 99%) actually printing money and distributing it to the cash users would stimulate the economy, and sometimes USG does that, through tax rebates and so on. critics used to call this Fed policy of monetizing debt, in a sluggish economy, pushing on a string.
the only workable solution is to allow asset prices to fall to a point where buyers see bargains and come off the sidelines with their cash, or buyers see inflation and rush to buy now before prices go up (pretty hard to do with chickens), while simultaneously bringing down the money supply in order to increase velocity. the high point of Greenspans career was his policy of raising rates incrementally while increasing the amount of credit available. Bernanke can't go down that road because there is no room to expand the amount of credit available. the only path for him is to retire some of those T bonds, and start over. least that's how i see it.
Thanks man. That' a lot to digest. Will have to study that :)
The American ethic
If some is good;
then More is better;
and Too much is just enough
one) this guy is talking to young Obama voters two) you mean the caveman can't start a chicken ranch and create enough (true) wealth by selling to more than one caveman at a time, on the barter system, and send his caveboy to college? three) supply and demand doesn't work, the more of something there is the more people want it. print more money and create more millionaires more people want to be millionaires. i have seen the importance of money go from nearly nothing to a complete obsession, to the point that people now fret about macroeconomics. put the rise of materialism on a chart with the rising money supply and consider the correlation. the more money you print the more people want. the secret formula to central banker success four) the purpose of money was to create a universal form of exchange, however creating false assets in order to leverage prices creates a multitiered structure, sweat money versus electronic fiat money. why save collateral when my Uncle Ben can put assets in my account that i can leverage out as collateral. five) when you arrive at these several different meanings of money, then you have no choice but to create (or place in tranches) the various levels of money, real cash all the way to electronic keyboard assets. that's when the whole thing falls apart DUCKLINGS. of course a real economics class is much longer, and much more difficult, and you could also correlate the number of Harvard PHDs in government to our problems today, study that chart.
Zero point energy is greater in energy density than the surface of the sun.
It exists everywhere and is not white hot but black to the visible eye and cold.
Things aren’t always as they seem.
P.S. I voted SheepDog-One up because I enjoy his comments and he irritates the trolls.
Does anyone have any idea of the consequences if EVERY countries central bank doubled the money supply all at the same time - i.e. printed money double in excess of what was outstanding?
Would that cause inflation or would it all balance out because everything doubled at the same time everywhere?
It made perfect sense to the Fed/monetarism mind to take the tact it did in the minutes released. Why?
Well prior to that meeting the ECB came in with the cabal's desired liquidity, and has since been further "reinforced" by indications of larger liquidity to come.
So the ECB brother provided Benny & the Jets the FX cover needed to allow for a ramp up in the USD.
The result, Benny gets a stronger USD to later devalue through QE and gets the natural "correction" to equities he will need to justify the QE.
The big picture goal is simple, and in many ways elegant and just.
Where is the majority of the baby boomer and older capital? In bonds. These Sheeple have been trained that at their age it is too risky, for them and what they want to leave to their heirs, to move that capital out of the capital market and into equities. This freezes these Sheepl in this market and allows the Fed to take back and re-distribute that capital through devaluation of the currency.
For the dumb@ss "OWS" kids, this is EXACTLY what they should want. It is their elders, who by their vote created the entitlement system and debt; so it is only right that the debt should be paid by their elders. And the only way to force the elders to pay is through devaluation of the currency in which their capital resides.
Furthermore, for the dumb@ss OWS kids, this will provide two very critical opportunities. First, if they invest in commodities and equities, in the very long run, their 20+ year horizon, either the US will fail or not. If the US does not, they will be greatly rewarded.
However it is the SECOND critical opportunity that will decide all of this. It is THEIR VOTE. If they follow their self-centered baby-boomer elders and vote to be able to continue to suckle from the government sow, the US will collapse and they will have nothing.
However, if they vote against the promises the baby-boomers voted themselves but never paid for, e.g. against free health care and the other entitlements now claimed to be rights, then in 20 years the US will digest the demographic pornography and glutton presented as unfunded guarantees of rights, and the US will recover more strongly than all the other nations of the world.
This is what is truly faced by Americans.
If the baby-boomer's really believe their empty mantra of "the children are the future" and "the children are the most important thing", THEN THEY WOULD REJECT THE UNFUNDED PROMISES THEY VOTED FOR and follow the lead of the Eskimo. They will proudly and without fear sit out on the ice flow and let nature take it's course.
Of course that would require a belief in something greater than themselves, and an ascent to that deity. Something they have repeated rejected.
Jefferson's manure of the Tree of Liberty will come if sacrifices are not made.
Gold, jewelry, lead & seeds bitches.
This video brings up a very basic and valid point. Let's say that the fiat currencies of Euorope and the mighty world reserve currency, the FED Reserve Note, actually do fail. A major readjustment to a new value based exchange unit will eventually be decided on. YOU and I will probably not benefit from this new system, as it will benefit those (governments, banks, etc) that devise the system or currency unit. Therefore, as the video states, we should consider the value of goods and services that can be utilized in exchange for the new exchange unit.
Knowing that cockroaches survive even Nuclear events, it would be safe to assume that the likes of Goldman Suchs, JP Morgan Chase, etc... will come out on the top of the smoldering heap. Therefore one must invest in and perhaps stock pile things of value that can easily be leveraged for the likes of the mega investment banksters. Hookers and Cocaine, hookers and cocaine. Sell all you gold, and ammo NOW and Raise, house and Stockpile hookers and cocaine. These are the commodities of the bankster elites. Services and products for the ("sniff") New World Odour.
Peace
If printing money is so prosperity-producing, then perhaps they should legalize counterfeiting, and we can counterfeit our way to eternal prosperity. We can all become couch potatoes, and just sit and eat and spread our way to endless wealth!
Ben Dover Bernane is counterfeiting by hiding / obfuscating all the USD that he is "lending" to the ECB, using to buy USTs, and buying the ES. Ben is leaving it to the Bank of Isreal to buy all the high Div payers.
Fuck you, Bernanke.
Stimulating poverty. Now I understand.
Yo, Cave Man Dude. How much ya want for them dead chickens.
I for one am glad they continue to print. When this whole mess finially collapses, paper money is excellent for starting campfires. It also makes better toliet paper than phone books.
It was great when they actually printed...but the electronic bits that are "printed" today are completely useless!
Just checking...the IBEX (Spanish stock market) is now at levels seen on March, 2008 and, longer term, one sees that since 1998 to date, the capitalization of Spain's big companies has gone nowhere....14 years lost!!!
Natural gas- cheaper
Housing- cheaper
iPads- cheaper
Keep printing Benny Boy.
The ENTIRE problem with what passes as modern "money" is exactly the mistake this stupid professor makes in his otherwise reasonable video. The problem is, this fool believes money should be an IOU.
THAT is the problem. When your money is gold, silver, platinum coins or bars, you do NOT receive a paper IOU --- you receive a REAL, PHYSICAL GOOD. This is REAL, HONEST money, because it retains the honesty of barter (nobody is ever left holding something without value) but also exhibits the convenience features of "money" that he mentions (plus other features he doesn't mention). The most important feature of money SHOULD BE the fact it is a real, physical, valuable good AND not something some group of unproductive predator banksters can manipulate and convert into a means of enslaving all of mankind.
It is good to see people make videos about the insanity of modern banking, but REALLY. By the time someone becomes a professor, they should understand the issues they profess to understand.