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How does that square with the fact that China holds 1.27 Trillion dollars in U.S. Treasury Securities. That is 75% more than they held in 2008.
With the exception of a bunch of reactionary tea partiers, the world financial experts think that the dollar is better, stronger and more robust than ever.
1. The value of the dollar is bolstered by being the world's reserve currency. That will not go on forever.
No, it's not. No effect. The Fed can manipulate the dollar to make it worth more or less. Our dollar still isn't on par with the Euro.. but compare the two economices.
Quote:
Originally Posted by hawkeye2009
2. While the fed can print as many dollars as they want, currency values fluctuate. Right now, the dollar is strong. However, the dollar has had a long slide which could be accelerated by less demand from foreign nations.
Yes, and?
Quote:
Originally Posted by hawkeye2009
3. Currency IS CREATED THROUGH DEBT. That is our federal reserve system, which REQUIRES debt in order to maintain supplies of currency. "Balancing the budget" (with our current system) can and will cause a recession/depression. How to avoid this? Issue "debt free notes" with retiring bonds and scrap the Federal reserve system.
4. Even though we can print as much money as we want, the federal government still has a budget. If the feds borrow massive amounts of money for a long period of time, the interest to service the debt will exceed the ability of the US to "purchase" other governmental services.
Nope. The government is not limited in any way by "ability" to purchase government services. It simply issues an order to the banks to credit the account of the party in question.
Quote:
Originally Posted by hawkeye2009
5. If interest rates go up, we have a problem, as our ability to service the debt vanishes.
We control the interest rates.... Interest rates adjust to fight inflation or "stimulate" the economy.
Quote:
Originally Posted by hawkeye2009
The key (in our current system) is not the magnitude of the debt, but the ability to service the debt. Further, the Fed Reserve system (which is privately owned) DEMANDS DEBT CREATION TO CREATE CURRENCY, thus giving a nice profit to the bankers who buy bonds (bought from the Treasury and sold to the Federal Reserve) and the Federal Reserve (which had the highest profits of any corporation in the world last year- $82 billion).
........it's a nice fictional story, but magnitude of the debt has no bearing on the ability to issue more debt (debt = money).
Quote:
Originally Posted by hawkeye2009
Essentially, our system rips off the citizens in the form of income taxes and gives it to the bankers. Now that is just peachy if you happen to be one of the owners of the federal reserve or those who sell our bonds to the fed, but the rest of us are getting screwed.
I read it. Who knows? As I stated in a previous post look at what happened to the Germans during the Weimar Republic. If inflation comes into the picture, we are toast.
So your argument is that it must be wrong, you don't know why, and fear is coming? We've heard that for decades.....
The Weimar Republic intentionally hyperinflated its currency to reduce the value of war reparations. If you read the OP, one of the points I outlined was that currency is backed by "full faith and credit." Full faith and credit is a function of political stability.
Quote:
Originally Posted by lycos679
The relevance is unless Congress decides to transfer money into SS they can only pay out what they collect in SS taxes. When the FICA tax was cut Congress decided to transfer money from the general fund into the SS fund to make up the shortfall. In the future they could decide to do something similar...or not, but SS spending is limited by law to what they collect.
....and that is irrelevant. The law is there for policymakers. It has no effect on how SS is paid. The U.S. government issues an order through the bank to credit the account of the party in quesiton.
No, it's not. No effect. The Fed can manipulate the dollar to make it worth more or less. Our dollar still isn't on par with the Euro.. but compare the two economices.
Yes, and?
Nope. The government is not limited in any way by "ability" to purchase government services. It simply issues an order to the banks to credit the account of the party in question.
We control the interest rates.... Interest rates adjust to fight inflation or "stimulate" the economy.
........it's a nice fictional story, but magnitude of the debt has no bearing on the ability to issue more debt (debt = money).
Where do you think money comes from?
The quantitative easing fairy??? Paper money has no inherent value. It only has value as long as people believe in it.
The quantitative easing fairy??? Paper money has no inherent value. It only has value as long as people believe in it.
This was already stated in the OP....
It has value because the U.S. is a sovereign nation with laws that govern sovereighty of the dollar. It has value because we live in a country that says it has value. Nothing more, nothing less.
So your argument is that it must be wrong, you don't know why, and fear is coming? We've heard that for decades.....
The Weimar Republic intentionally hyperinflated its currency to reduce the value of war reparations. If you read the OP, one of the points I outlined was that currency is backed by "full faith and credit." Full faith and credit is a function of political stability.
....and that is irrelevant. The law is there for policymakers. It has no effect on how SS is paid. The U.S. government issues an order through the bank to credit the account of the party in quesiton.
The US government is inflating it's currency just like Germany with the same arrogant attitude that they could control things. Until hyperinflation bit them in the --- they were just like our current political leaders, believing they were in control. History teaches us lessons but some people refuse to learn. And btw, I am not fear mongering. I just remember what my Grandmother told me about the Depression. "Never trust the bankers or politicians. They care nothing about you." She was right. The country as a whole can go to hell and most of them would not give a rats --- as long as their pockets are lined with our money.
Last edited by toryturner; 11-13-2014 at 12:24 PM..
It has value because the U.S. is a sovereign nation with laws that govern sovereighty of the dollar. It has value because we live in a country that says it has value. Nothing more, nothing less.
You should run for Congress. You will fit right in.
Well; I'd say the FED was and still is pretty worried. But that doesn't compared to worry of Europe going the so called loss decades going forward. If one wants to look at SS and the future I suggest searching and reading the last few SS trustees reports. One thing they do not discuss tho its the decline in excess funds under the pay go system to general government funding.
The US government is inflating it's currency just like Germany with the same arrogant attitude that they could control things. Until hyperinflation bit them in the --- they were just like our current political leaders, believing they were in control. History teaches us lessons but some people refuse to learn.
To the extent of your point you should add Japan, England, Europe, and China to that list.
To the extent of your point you should add Japan, England, Europe, and China to that list.
You are right.
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