Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
So the $2 trillion paper money in circulation there is no debt for it?
When a bank or government ask the Bureau of Engraving & Printing to print money there is no debt?
The debt is already "created" by the federal reserve before the currency is printed in the acts it takes to increase the money supply (as discussed previously). Actually, its not even in response to increased debt, but is printed by orders from the federal reserve based on the demand for coin and paper money, which is separate from the issue of money supply, or as stated it's printed to replace damaged bills. In terms of debt, one doesn't really relate to the other. National debt can come up while the available currency can actually decrease. Why? Because the money supply is virtually represented electronically, currency is only a small part of it.
The debt is already "created" by the federal reserve before the currency is printed in the acts it takes to increase the money supply (as discussed previously). Actually, its not even in response to increased debt, but is printed by orders from the federal reserve based on the demand for coin and paper money, which is separate from the issue of money supply, or as stated it's printed to replace damaged bills. In terms of debt, one doesn't really relate to the other. National debt can come up while the available currency can actually decrease. Why? Because the money supply is virtually represented electronically, currency is only a small part of it.
So for every one dollar printed there is debt on it? Who has to pay the debt the government or the bank?
So for every one dollar printed there is debt on it? Who has to pay the debt the government or the bank?
Yes and no. Currency is only a medium of exchange. It has no intrinsic value.
But in a broader sense the supply of currency is backed by government bonds that cover the total value of issued currency. Again, currency is only a small portion of the money supply.
What is Fractional reserve banking and what is the point of it?
Banks need to keep at some funds in reserve given client fund withdrawals.
Origins are notable, according to one video: merchants used to store their gold in banks for security reasons and used bank notes to transfer ownership of gold holdings when trading. Bankers realized that most gold was not withdrawn because it was more practical to use bank notes and that there was increasing demand for credit because of exploration in the New World but not enough gold. Since depositors didn't want others to know how much wealth they had, then there were no audits of how much gold bankers kept in vaults, which meant bankers could issue more bank notes than there was gold.
The debt is already "created" by the federal reserve before the currency is printed in the acts it takes to increase the money supply (as discussed previously). Actually, its not even in response to increased debt, but is printed by orders from the federal reserve based on the demand for coin and paper money, which is separate from the issue of money supply, or as stated it's printed to replace damaged bills. In terms of debt, one doesn't really relate to the other. National debt can come up while the available currency can actually decrease. Why? Because the money supply is virtually represented electronically, currency is only a small part of it.
Also, money is generally created through loans, and most money is created through loans made in commercial banks.
In addition, money is part of a larger credit system, and much of that credit is created privately, too. The largest component is unregulated derivatives, which worldwide is said to have a notional value of over $1 quadrillion.
Someone describes derivatives this way: you have revenues generated from ticket sales and ads for a boxing match. Derivatives are the side bets made on the match.
So for every dollar printed how much debt does the government have to it?
If the government made the loan, then it's one dollar.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
