Is printing money free money or debt the government has to pay off? (credit, borrow)

[Bubble99]

Originally Posted by Johnny Wadd

Yes I read it...and?

The physical act of printing paper money does not in itself increase debt or create "free money".

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?

[Hoonose]

Originally Posted by Bubble99

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?

There is bound to be associated debt. But most of what they do is replace worn out bills.

[Lycanmaster]

Originally Posted by BugsyPal

Americans are moaning about inflation rates ranging between 4% to 6% ought to experience > 200% inflation rates of Argentina.

https://apnews.com/article/argentina...53af37908bcb78

https://www.reuters.com/world/americ...on-2024-02-14/

That's because over the past few years, the inflation rate was far, FAR higher than that especially on food and gas.

[Lycanmaster]

Originally Posted by ralfyman

According to one source, only around 3 pct of money supply consists of paper bills and coins. Much of it involves numbers in hard drives.



Also, money is part of a larger credit system consisting of all sorts of financial instruments, with unregulated derivatives (or financial bets made on other financial bets) being the largest.


Finally, much of credit isn't created or even printed out by governments but by commercial banks, and takes place through a money multiplier, i.e., for each loan, new money is created to back it. What's worse is that because banks can borrow from other banks and choose not to follow reserve requirements, then the amount of new money created is much larger.

Fractional reserve banking.

One of the biggest culprits for all the debt and resulting inflation.

If people only knew more about this...

[Hoonose]

Originally Posted by Lycanmaster

Fractional reserve banking.

One of the biggest culprits for all the debt and resulting inflation.

If people only knew more about this...

They should since it no longer applies in actual function anymore. Loans create deposits.

https://www.theguardian.com/commenti...land-austerity

[WRM20]

Originally Posted by Lycanmaster

Fractional reserve banking.

One of the biggest culprits for all the debt and resulting inflation.

If people only knew more about this...

Without fractional reserve banking, the US economy would be 5% of its current size.

[Lycanmaster]

Originally Posted by Hoonose

They should since it no longer applies in actual function anymore. Loans create deposits.

https://www.theguardian.com/commenti...land-austerity

"

In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money. This is because money is really just an IOU.

What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow.

"

That does not really sound any better...

[Lycanmaster]

Originally Posted by WRM20

Without fractional reserve banking, the US economy would be 5% of its current size.

And that's bad because...?

[Hoonose]

Originally Posted by Lycanmaster

""

That does not really sound any better...

Post-2008 QE demonstrated it best. Depositors were not needed. Massive money creation by the Fed but few showed up to borrow. So QE didn't incite enough inflation.

Loans are what moves economies upward.

[Hoonose]

Originally Posted by Lycanmaster

And that's bad because...?

Not enough stuff. Not enough money. Not enough commerce. Not enough jobs. Standards of living drops.