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Isn't it grand that we are monetarily sovereign with freely floating exchange rates off the gold std?
According to the treasury department at the end of 2012 USA was circulating $863,073,103,300 in $100 banknotes. That figure normally goes up at least $5 billion per month, but I figure with the new color c-notes coming out next week, that people will want them to give as birthday gifts, or to gamble with. The old ones will be turned in, but not at the same rate.
We should hit a trillion dollars in c-notes within two years. Probably 80% are overseas. Now I know that the deficit is a trillion dollars per year, but it would still be a a huge hit to our government if people around the world start exchanging large numbers of these banknotes for a different currency that they perceive as safer (Canadian, Swiss, EMU, Yen, Australian dollars, etc.)
But I still think that circulating €285 billion in €500 Euro notes is even more irresponsible.
And even if you know it isn't totally rational, you got to wonder if people will suddenly go "Wait a minute, this is just paper".
According to the treasury department at the end of 2012 USA was circulating $863,073,103,300 in $100 banknotes. That figure normally goes up at least $5 billion per month, but I figure with the new color c-notes coming out next week, that people will want them to give as birthday gifts, or to gamble with. The old ones will be turned in, but not at the same rate.
We should hit a trillion dollars in c-notes within two years. Probably 80% are overseas. Now I know that the deficit is a trillion dollars per year, but it would still be a a huge hit to our government if people around the world start exchanging large numbers of these banknotes for a different currency that they perceive as safer (Canadian, Swiss, EMU, Yen, Australian dollars, etc.)
But I still think that circulating €285 billion in €500 Euro notes is even more irresponsible.
And even if you know it isn't totally rational, you got to wonder if people will suddenly go "Wait a minute, this is just paper".
Both depressions in this country happened on gold standards. It is not hard to imagine what will occur when a non perishable risk free asset grows in value , as Silvio Giselle observed. That isn't to say I am arguing for a position, all of which are far from ideal. To be honest I argue very little about the actual position. The battle is on just getting people to understand the situation.
That might be one of the most astute general observations I've seen in a while! I've noticed that merely proposing alternatives, in the quest to expand understanding, provokes the perception of taking sides. Which often sidetracks debate into partisan territory. People like simple solutions so they can move on. Yet, if the challenges we face economically were that simple, they would have been overcome long ago! Not to mention unexpected/unintended consequences of taking action.
Last edited by shaker281; 10-02-2013 at 11:53 PM..
It depends on how, where, why and how fast the money was created, and in what economy.
For instance $1T of relatively rapid TARP like central money would have different economic implications and impacts than Millions of private sector conventional mortgages taken out over say a decade all throughout the USA. If our economy was on a high burner, there of course would be no reason for anything like TARP, and all those mortgages would be inflationary.
Thanks for your contribution. In retrospect, I should have qualified my question by saying, "all else being equal". But, your points are well taken.
I could see that as an endorsement of US policy vs Europe.
I have believed the EU to be doomed to failure unless they physically unite more like our USA, or the ECB becomes more Fed like. Giving up their monetary sovereignty was and is a huge error, IMO of course.
According to the treasury department at the end of 2012 USA was circulating $863,073,103,300 in $100 banknotes. That figure normally goes up at least $5 billion per month, but I figure with the new color c-notes coming out next week, that people will want them to give as birthday gifts, or to gamble with. The old ones will be turned in, but not at the same rate.
We should hit a trillion dollars in c-notes within two years. Probably 80% are overseas. Now I know that the deficit is a trillion dollars per year, but it would still be a a huge hit to our government if people around the world start exchanging large numbers of these banknotes for a different currency that they perceive as safer (Canadian, Swiss, EMU, Yen, Australian dollars, etc.)
But I still think that circulating €285 billion in €500 Euro notes is even more irresponsible.
All stories indicate the new color c-notes are very popular, and people are not turning in the old notes. They may end up circulating more $100 banknotes than $1 banknotes (10.3 billion in circulation) sooner rather than later.
All stories indicate the new color c-notes are very popular, and people are not turning in the old notes. They may end up circulating more $100 banknotes than $1 banknotes (10.3 billion in circulation) sooner rather than later.
You just gave me some ammunition for the theory on money I hold. Money is inherently unstable because it must be plentiful enough to circulate while being perceived to be rare and valuable enough. Pennies are already losing too much value to circulate and $100 bills have yet to emerge but they must one day replace the $20. Thus money must both retain and lose value. Every form of it has a life cycle.
You just gave me some ammunition for the theory on money I hold. Money is inherently unstable because it must be plentiful enough to circulate while being perceived to be rare and valuable enough. Pennies are already losing too much value to circulate and $100 bills have yet to emerge but they must one day replace the $20. Thus money must both retain and lose value. Every form of it has a life cycle.
I have my own theory. $100 bills make for great hide away stashes. ($1000's would be better, but I've only seen one in my life) And all the millions of people of wealth, power and influence all over the world, including political and business leaders, crooks, thieves, drug runners and pols, have their stash in $100 USD. I would bet all that influence would rather have the USD hang around awhile.
I have my own theory. $100 bills make for great hide away stashes. ($1000's would be better, but I've only seen one in my life) And all the millions of people of wealth, power and influence all over the world, including political and business leaders, crooks, thieves, drug runners and pols, have their stash in $100 USD. I would bet all that influence would rather have the USD hang around awhile.
And hence so much for runaway inflation...With the current wealth distribution fewer $100 will be spent.
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