As the crescendo toward the climax builds the paper money syndrome becomes more evident and vulgar.
Let me explain. The dictionary definition of syndrome is: “A group of related or coincident things, events, actions, etc. There is also a pattern of symptoms that characterize…
WASHINGTON (AP) — The Federal Reserve pledged Wednesday to hold interest rates at a record low to drive down double-digit unemployment and sustain the economic recovery.
What the good Professor is suggesting is that the Treasury doesn’t have to issue bonds at all. In fact, since the Treasury does control the electronic printing press, it could legitimately buy stuff with money it prints out of thin air. Sounds a bit like counterfeiting, doesn’t it?
But, let’s step back for a second: what is the functional difference for the federal government between Treasury securities and bank notes? Both are liabilities of the federal government. But liabilities of what? The only obligation they enforce on the government is the promise to repay with more paper (or electronic bank credits, if you will). For all intents and purposes, bank notes, reserve deposits, and Treasury securities are fungible: they are obligations to be repaid in the same fiat currency.
Edward Harrison in If the U.S. stopped issuing treasuries, would it go broke? - Credit Writedowns (via quotingthecrisis)
Tim Geithner launched a fierce defence of his record as US Treasury secretary on Thursday as Republicans said his policies had failed and he should resign.
Pundits and policymakers around the world are wringing their hands over the possibility of further declines in the foreign exchange value of the dollar. Predicting exchange rates is notoriously difficult; there is almost as much chance of the dollar rising next year as of it declining. But if the dollar were to fall further, should we be concerned?
continuum: To your point, driftwood-nu, (and this is a cursory understanding of macroeconomic theory, so please retort) a massive increase in public sector spending comes at a direct cost to the private sector. That increased public spending has to come from somewhere in the form of capital, so the government sells more bonds. So far so good, except that we’re running a 0% interest rate, so our bonds don’t look too appealing—to anyone. Instead the government must issue new money, which used to be printed but is now moved around electronically, artificially increasing the money supply and causing inflationary pressure.
Now the private sector is facing a double whammy: low rates of return on savings (punishing those saving for a rainy day) and inflationary pressure where their dollars aren’t going as far.
IMO, the only way out of this morass is to unwind our debt—slowly, but steadily— and deal with the headaches and heartaches one step at a time.
Keynesians say you cannot save out of a recession. While true, you can’t either spend out of a multi-trillion debt hole. #austrianeconomics
yes you so can.
Keynesian economics could not be more appropriate right now. The higher the debt, the more you spend. Spending on what is the key issue. If you are like the UK government and spend money on failing banks who are largly responsible in the first place then its perhaps not the best of investments but generally, government spending increases aggregate demand which in turn, due to the multiplier effect stimulates growth in GDP. Simple. With this growth in GDP an upwards sprial is encouraged, at which point you being to level the country’s deficit.
i.e. spend like mad. Encourage investment, increase consumer spending, increase government spending. See the benefits of the investment. Pay off debt.
Dollar Will be Utterly Destroyed (via SignificantImagery)
http://www.tumblr.com/audio_file/234474049/tumblr_ksnkymBFfH1qz6q52
A Mises Institute presentation from this past October, questioning Ben Bernanke’s (lack of an) exit strategy for the current fiscal policy.
Like any strong prescription, loose monetary policy may have some undesirable side effects—namely, commodity speculation and further dollar weakness.
DoctoRx, Rob Parenteau and Marshall Auerback have each written articles here to bring clarity to some issues I first raised at the beginning of the month in my post, “The recession is over but the depression has just begun.”
Oct. 27 (Bloomberg) — In the months leading up to the September 2008 collapse of giant insurer American International Group Inc., Elias Habayeb and his colleagues worked nights and weekends negotiating with banks that had bought $62 billion of credit-default swaps from AIG, according to a person who has worked with Habayeb.
The financial crisis taught us that markets can drop further and faster than anyone expects. Housing prices, for example, fell for three straight years starting in 2006, even though the conventional wisdom right up until the bust began was that prices would not fall even a little bit.
Oct. 12 (Bloomberg) — Central banks flush with record reserves are increasingly snubbing dollars in favor of euros and yen, further pressuring the greenback after its biggest two- quarter rout in almost two decades.
ISTANBUL — The International Monetary Fund, acting at the behest of leaders of the Group of 20 nations, is examining how a tax on financial institutions could be applied globally.
I have enough issues with the taxes I’m paying now. If banks are taxed globally, guess who’ll be paying those taxes as well? Emphasis mine.
A recently declassified, formerly Confidential, 30 year old memo prepared by Henry Owen for President Jimmy Carter’s eyes only, highlights the perils facing the United States if oil were to be priced in SDRs instead of dollars, a topic which is all the rage today as rumors are swirling that this is an imminent transition to be “put” upon the United States.
Previous: Older Posts >
Total: 1 of 14 Pages
