Here Comes the Recession

#851
#851
NorthDallas40 said:
Same quote Velo linked.

Money supply = money in circulation at any given time. That isn’t the same as the total currency pool.
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Money supply includes M1 (physical coins and banknotes), M2, M3, etc... You've got checks, credit cards, lines of credit, etc that all goes into that gumbo pot.
 
#852
#852
NorthDallas40 said:
No really. You’re hung up on equating debt with hard currency.
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I'm not hung up on the hard currency argument. For some reason, you are hung up on it.

The amount of hard currency we have is but a drop in the bucket when compared to actually money supply.
 
#853
#853
Rasputin_Vol said:
Money supply includes M1 (physical coins and banknotes), M2, M3, etc... You've got checks, credit cards, lines of credit, etc that all goes into that gumbo pot.
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And none of that equates to our existing currency pool. You’re going to have to work thru it in your own. I’m no expert. But like I said it always seems to come back to existing pool of hard currency as compared to total pool of goods and services to buy with the currency.

Im an engineer like you. This is already more than I ever cared to understand about economics.
 
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#855
#855
NorthDallas40 said:
Why are you hung up on rejecting it and continuing to assert that the Fed creates money when it has no such power.
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Because you won't answer where the fed gets the money that it lends to the Treasury. All you keep saying is that the Fed gets it from the hard currency supply in circulation or something. But that can't be the case because there is no where near enough M1 money for the Federal Reserve to loan out the billions and trillions it does.
 
#856
#856
Rasputin_Vol said:
Because you won't answer where the fed gets the money that it lends to the Treasury. All you keep saying is that the Fed gets it from the hard currency supply in circulation or something. But that can't be the case because there is no where near enough M1 money for the Federal Reserve to loan out the billions and trillions it does.
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Printed out of thin air
 
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#857
#857
Rasputin_Vol said:
Because you won't answer where the fed gets the money that it lends to the Treasury. All you keep saying is that the Fed gets it from the hard currency supply in circulation or something. But that can't be the case because there is no where near enough M1 money for the Federal Reserve to loan out the billions and trillions it does.
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The Fed cannot create currency Ras. That is my answer. The Fed does not create currency when it issues debt. It’s that simple.

Tlaib proposed fixing/skirting the issue by doubling the hard currency pool. If it were that simple smarter people than her would have done it 10+ years ago.

I’ve answered multiple times. You just reject the answer. Ok 🤷‍♂️
 
#859
#859
NorthDallas40 said:
But like I said it always seems to come back to existing pool of hard currency as compared to total pool of goods and services to buy with the currency.
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And what I am saying is that the inflation that you are saying doesn't exist actually does exist. The "hard currency" or pool of money or whatever term you choose to use isn't flowing into bread, hamburger meat and corn at the grocery stores. Instead, it is in the stock market (inflated asset prices), college tuition and housing bubble. That is where the money velocity is.
 
#860
#860
Rasputin_Vol said:
And what I am saying is that the inflation that you are saying doesn't exist actually does exist. The "hard currency" or pool of money or whatever term you choose to use isn't flowing into bread, hamburger meat and corn at the grocery stores. Instead, it is in the stock market (inflated asset prices), college tuition and housing bubble. That is where the money velocity is.
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That’s your anecdote in the manifestation. I see no Economist agreeing with you.
 
#861
#861
NorthDallas40 said:
The.Fed.Doesnt.Print.Money!
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Technically, I get what you are saying. The Treasury "prints" physical coins and banknotes.

But what you are not understanding is that the Federal Reserve creates money out of thin air and then loans it to the treasure with interest. So yes, you are correct, the Treasury "prints" physical dollars and coins. But the Fed "prints" the IOU or loan to the Treasury to create the money out of nothing.
 
#863
#863
Rasputin_Vol said:
Technically, I get what you are saying. The Treasury "prints" physical coins and banknotes.

But what you are not understanding is that the Federal Reserve creates money out of thin air and then loans it to the treasure with interest. So yes, you are correct, the Treasury "prints" physical dollars and coins. But the Fed "prints" the IOU or loan to the Treasury to create the money out of nothing.
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The Fed issues debt. That isn’t currency. I’ve even given you a simple example of how it does it. I don’t know any other way to get you to absorb it 🤷‍♂️

I reject your notion that debt = currency which is the whole crux of your argument
 
#866
#866
NorthDallas40 said:
Im an engineer like you. This is already more than I ever cared to understand about economics.
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Its not hard from an engineering stand point to comprehend. We live in a finite world, so common sense should say that we should have a finite money supply. That is the only way you can have real price discovery of real world items like meat, eggs, a barrel of oil, etc.

But what we have is a system where we are constantly creating money out of thin air in a finite world.
 
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#868
#868
Rasputin_Vol said:
Its not hard from an engineering stand point to comprehend. We live in a finite world, so common sense should say that we should have a finite money supply. That is the only way you can have real price discovery of real world items like meat, eggs, a barrel of oil, etc.

But what we have is a system where we are constantly creating money out of thin air in a finite world.
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Oh hell no I refuse to attach my engineering field to the “science” of Economics 😳

Ras at the end of the day we’re just debating opposite sides of the Credit Theory of Money. The primary factual statement which is compatible with both sides of that is the Fed cannot print currency. It merely issues debt which expands its balance sheet.

Only the Treasury can create real currency. And if we create too much of it without a corresponding increase in the products pool basic Economy theory says inflation occurs.
 
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#870
#870
Both of you have good points, but most of what you are arguing is in definitions of this and that. But if you keep it up you are going to attract huff. The thing we all have a problem with is that inflated (or deflated) values like in a housing or stock bubble aren't really tangible until there is a transaction. When we talk about millions wiped out in stock market dips - to me that's imaginary money - where was the actual monetary backup in the first place? And more importantly where is the actual asset backing the currency? It's gonna be ugly some day if somebody forces accountability backed by something of value. Only in accounting could you have dual columns to handle the books ... and the definitions to make it look right.
 
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#871
#871
AM64 said:
Both of you have good points, but most of what you are arguing is in definitions of this and that. But if you keep it up you are going to attract huff. The thing we all have a problem with is that inflated (or deflated) values like in a housing or stock bubble aren't really tangible until there is a transaction. When we talk about millions wiped out in stock market dips - to me that's imaginary money - where was the actual monetary backup in the first place? And more importantly where is the actual asset backing the currency? It's gonna be ugly some day if somebody forces accountability backed by something of value. Only in accounting could you have dual columns to handle the books ... and the definitions to make it look right.
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😳 holy hell! I’m out!

Good discussion Ras. But I really don’t have anything more to expand with and I’m admittedly out over my skis on my knowledge of monetary theory. I haven’t rejected your notion that the total valuations in existence far exceeded the actual currency amount in fact I agree with it. I just reject that debt directly equates to hard currency. But debt is very real as we both know and we must service debt with currency or some other asset 🤷‍♂️
 
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#872
#872
NorthDallas40 said:
😳 holy hell! I’m out!

Good discussion Ras. But I really don’t have anything more to expand with and I’m admittedly out over my skis on my knowledge of monetary theory. I haven’t rejected your notion that the total valuations in existence far exceeded the actual currency amount in fact I agree with it. I just reject that debt directly equates to hard currency. But debt is very real as we both know and we must service debt with currency or some other asset 🤷‍♂️
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I took several economics courses because I had to have some non-technical electives, and whether it was the liberal arts or the engineering people some useful stuff like business courses were off limits ... so I decided on economics as a substitute for something more useful. I always left economics class feeling like I fell down the rabbit hole and had been grazing with Alice's bunny. I'm glad economists don't do anything real ... they've screwed up the imaginary monetary world enough as it is.
 
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#873
#873
AM64 said:
I took several economics courses because I had to have some non-technical electives, and whether it was the liberal arts or the engineering people some useful stuff like business courses were off limits ... so I decided on economics as a substitute for something more useful. I always left economics class feeling like I fell down the rabbit hole and had been grazing with Alice's bunny. I'm glad economists don't do anything real ... they've screwed up the imaginary monetary world enough as it is.
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True that. It’s all freaking intangible. Until it goes to hell in a hand basket like now and becomes very tangible.
 
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#874
#874
NorthDallas40 said:
True that. It’s all freaking intangible. Until it goes to hell in a hand basket like now and becomes very tangible.
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The thing I have a hard time with is the stock market in times like this where the world goes crazy and drags that wonderful institution into the whirlpool. First if you accept that the numbers for stocks are based on about a much reality as housing prices in a bubble, then you know the market is going to do some real craziness, so why not just shut it down like governments are doing businesses? If you do it soon enough, then maybe we don't even hear stories about senators using insider information to take their gains out before the market crashes. When the markets are all about individuals trading and playing the lottery, it's one thing; when a huge amount of the money is retirement accounts (whether pension plans or individual retirement accounts) it is a whole different story.
 
#875
#875
So can we officially label the Democratic Party the party of NO? They certainly seem to be playing if I can't have what I want, I'll take my ball, stomp my feet, blame somebody else, and go home. Their attitude pretty much defines legislative blackmail.
 
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