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Old 06-04-2020, 11:30 AM
 
Location: NYC
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As long as foreigners keep buying T-bills and also need our protection they can keep printing. That's why we spend so much in the military. US military is like the mob, shows up everywhere on this planet so it can prop up our interests and dollar.
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Old 06-04-2020, 12:23 PM
 
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Originally Posted by shanv3 View Post
Technically yes. Even banks can do it. Now after march, I think the fractional reserve requirements has been set to 0 after march . So even if they have 0, they can still lend some 100$ and make interest on it.

"Fractional reserve banking is a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal. This is done to theoretically expand the economy by freeing capital for lending."

https://medium.com/navigating-life/w...l-c501432e9be6
Fractional lending has been essentially passe' since the 2008 crash. Of course zero reserves reinforces that concept.

Loans create deposits.

http://www.theguardian.com/commentis...land-austerity
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Old 06-04-2020, 12:27 PM
 
10,547 posts, read 4,580,802 times
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Originally Posted by vision33r View Post
As long as foreigners keep buying T-bills and also need our protection they can keep printing. That's why we spend so much in the military. US military is like the mob, shows up everywhere on this planet so it can prop up our interests and dollar.
Of course foreigners use the USD and buy US debt that don't want or need our protection. As well as our enemies who do the same.

The only reason to support the USD is to physically protect our nation and its productivity, safety and security. The reasons our dollar remains strong.
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Old 06-04-2020, 01:07 PM
Status: "Mi amigo es mi fan." (set 4 days ago)
 
2,831 posts, read 799,272 times
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Originally Posted by TimAZ View Post

The issue now is how the central banks will eventually unwind and sell all of these $trillions of bonds and loans without further disrupting financial markets. I know many see themselves as “momentum” investors and BTFD is their mantra, but it seems this latest action by the CBs makes a mockery of the whole concept of markets.

I don't think the Fed will be unwinding anytime soon. I think their balance sheet will stand around $20 trillion by the middle of 2021.
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Old 06-04-2020, 01:16 PM
 
Location: State of Transition
84,427 posts, read 77,596,360 times
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Originally Posted by g500 View Post
Can the Federal Reserve, at any time, just click a button and digitally add say $1 trillion to their account, and use it to purchase Treasuries, bonds, ETFs, etc.? Basically, can the Fed conjure-up any sum of money at their own whim?

Seems pretty crazy if they actually have that authority. Shouldn't (Is?) Congress be involved in controlling the nation's money supply? I guess as long as they avoid inflation I am fine with the arrangement we have, as most people probably would be.
Not without destabilizing the dollar. lol Seriously, that's one thing that caused the Soviet system to fail, and the ruble to never be taken seriously as a unit of exchange in foreign currency markets. No banks would take them or sell them, even if a customer planning travel to Russia made a request in advance of their trip. Only exchange windows in train stations in Vienna would touch them, lol. IDK about Helsinki.

If the Fed has decided to manufacture play money to cover the overwhelming expenses involved in the fallout from Covid, and now--the protests, taxes should be raised at some point, in some fashion, to shore up the value of the dollar. Otherwise, the economy will start circling the drain even faster, and foreign investors in US bonds, etc. will think seriously about bailing.
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Old 06-04-2020, 01:17 PM
 
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Originally Posted by heart84 View Post
I don't think the Fed will be unwinding anytime soon. I think their balance sheet will stand around $20 trillion by the middle of 2021.
I can't see it that high. I would guess half that.
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Old 06-04-2020, 01:21 PM
 
10,547 posts, read 4,580,802 times
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Originally Posted by Ruth4Truth View Post
Not without destabilizing the dollar. lol Seriously, that's one thing that caused the Soviet system to fail, and the ruble to never be taken seriously as a unit of exchange in foreign currency markets. No banks would take them or sell them, even if a customer planning travel to Russia made a request in advance of their trip. Only exchange windows in train stations in Vienna would touch them, lol. IDK about Helsinki.

If the Fed has decided to manufacture play money to cover the overwhelming expenses involved in the fallout from Covid, and now--the protests, taxes should be raised at some point, in some fashion, to shore up the value of the dollar. Otherwise, the economy will start circling the drain even faster, and foreign investors in US bonds, etc. will think seriously about bailing.

The Fed has and will continue to intervene with massive new moneys, and our USD will continue to stand strong. Federal taxes will not go up, but more local taxes are another thing. Mostly based on how much the Fed does.
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Old 06-04-2020, 01:22 PM
Status: "Mi amigo es mi fan." (set 4 days ago)
 
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Originally Posted by Hoonose View Post
I can't see it that high. I would guess half that.

We are over $7 trillion now. I think we will be at $9-$10 trillion just by the end of this summer.
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Old 06-04-2020, 01:56 PM
 
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Originally Posted by heart84 View Post
We are over $7 trillion now. I think we will be at $9-$10 trillion just by the end of this summer.
And then it will taper off. IMO of course.
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Old 06-04-2020, 02:33 PM
 
4,557 posts, read 3,403,895 times
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Originally Posted by PamelaIamela View Post
I worked in IT (design and programming) in my prior life and hadn't even thought about the fragility of cryptos as they are completely dependent on tech. But so are modern currencies.

National currencies, i.e. those required to pay taxes, usually collapse vis-à-vis other currencies, and since ALL currencies today are fiat and ALL Central Banks are ready, able and willing to create money endlessly I do not foresee a US$ collapse coming anytime soon.

But inflation? Likely. And evident now in assets such as RE, equities, ...you name it.
So despite (perhaps because of?) the massive quantitative easing by all the big players wealth will become even MORE unequal than it is today!

I believe the poor will be subsidized and bought off and become ever more dependent on governments.
Which will be controlled, for the most part, by the rich elites of all political and ethnic persuasions.

I hope I'm wrong.
Welfare was already doing that to some degree. It was basically how much can I pay you to stay out of our court system and out of our hospitals? In some ways it has worked and in other ways it hasn't.
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