rickdri wrote:
News Flash! The federal reserve has already printed too much money! The inflation rate is much higher than these ridiculous government reports state. So is unemployment! Of course the government will never run out of money! The federal reserve will just print until the dollar is dead! Why do you think countries are making currency deals to by pass the dollar? Why have the BRICS countries created their own central bank to rival IMF? Try living in the real world with real economies! Not in you book world where reality doesn't exist!
News Flash! The federal reserve has already printe... (
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The Fed does not print money, you ignorant lout.
When a US bond is won in a Treasury auction, two accounts are affected: money moves from a private checking account to a government bond account that is equivalent to any perfectly liquid, interest-bearing savings account. There is no change in the money supply.
When the Fed buys a US bond from a private party on the open market, two accounts are affected: money moves from a government bond account that is equivalent to any perfectly liquid, interest-bearing savings account to a private checking account. There is no change in the money supply.
When the Fed buys a massive amount of US bonds, there is still no change in the money supply but the investors who sold their bonds to the Fed for cash are not satisfied with 0% interest on dollars. They look for the safest yield they can find and buy futures in commodities, raising prices. Or thy buy shares, hoping for an eventual profit. That is simply speculation.
There is no real change in the money supply but there is more liquidity: cash looking for yield. Some wholesale prices may rise, but the retail market prices still depend upon consumer demand and producer supply, where foreign trade may have greater influence than speculation.
Inflation has always existed and must exist to prevent deflation, an awful catastrophe. Who would spend a dollar today if it would buy more tomorrow? The economy would freeze solid. In an agricultural society, the inflation was generally low and stable but we always had crises.
The myth that the Fed is causing inflation by increasing the money supply is simply a lie meant to corrupt political dialogue.
The fact is that the Fed has been trying for more than five years to boost annual inflation to 2% and is now worried that we are headed for deflation. Japan has been trying that for 20 years without success.
The last time I looked into a department store full of merchandise into the aisles, there were few employees and fewer customers.
If next Christmas isn't better than the last, it could be the tipping point.
You are barking up the wrong tree.