[late]

Zero Hedge is the best tour guide for describing the upcoming collapse of the USA economy

Again, Zero Hedge is fruit loops...

America has a lot of Casandras, prophets of Doom. I know, I used to be one.

The problem is that the economy kept defying expectations, it still is. We are in a boom that hasn't showed up in the stats because we are in the initial phase..

So, like I said, don't hold yer breath.

[Steve_American]

...snip...

***

1] Steve_American , the two videos you posted offer very little insight in this thread except for one thing: they underline the fact that the USA's social programs (like Social Security) are going to dissappear soon. Same for public education, road maintenance, policing, border control, etc.

2] Countries that go broke can't afford nice things, but I assure you that the rich who are ripping us all off... will be just fine. They know we're going broke, and they are making arrangements to steal as much infrastructure as they can before that happens.

1] If you think Soc. Sec. will disappear soon, you are nuts. At least not until ACC gets really bad.

2] That we can agree on.

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[QatzelOk]

1] If you think Soc. Sec. will disappear soon, you are nuts. At least not until ACC gets really bad...

All social services will dissappear if the country goes broke. Social security, road repairs, health care, public schools, services to the old, the handicapped, the sick, etc.

Bankrupt Western nations will need someone like Hamas to pick up garbage and provide security, while the rich will shoot teargas at you and your homeless family to keep you off their lawns.

[Steve_American]

All social services will dissappear if the country goes broke. Social security, road repairs, health care, public schools, services to the old, the handicapped, the sick, etc.

If it were possible for the US to run out of dollars and be "broke" then you'd be right.

However, the US can never run out of dollars. It creates them whenever it spends money=dollars.

That is all US spending is done by crediting someone's bank account with dollars. Except for a few really small purchases made with petty cash paper dollars and coins. Even petty cash purchases made with debit cards just credit someone's bank account.

I have explained why the US can never run out of dollars. Allen Greenspan in the linked video told you that, in his expert opinion, the US can always create dollars and use them to pay every bill that it owes. Why didn't you understand or believe him?
_______________________________._________________________________________

Add with edit a few min. later.
Note, I agree that private debt is a totally different matter. Too much private debt will cause a recession, which can be a crisis, for example the GFC/2008 was caused by private debt.
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[Puffer Fish]

If it were possible for the US to run out of dollars and be "broke" then you'd be right.

However, the US can never run out of dollars. It creates them whenever it spends money=dollars.

Start another thread. (Or post a link to a past thread)

We've been over this over and over again.

You have your theory, but discussing (debating) whether it's wrong or right takes a long discussion and is very complicated.

There's no sense in derailing other threads (like this one) with that.


I will point out that people like you just want to print more money to solve the problems. But printing more money, if it does result in inflation, just causes interest rates to rise and so makes the debt problem worse.

The reason the Federal Reserve Bank (the U.S. Central Bank) has stopped holding down interest rates is because they are afraid it will contribute to more inflation.
So interest rates are being allowed to rise (not by the Federal Reserve but by the free market). And there's pressure for them to rise because of inflation. Who would lend out money at a lower rate than the inflation rate? You'd be losing wealth if you did that.

[Steve_American]

1] Start another thread. (Or post a link to a past thread)

We've been over this over and over again.

You have your theory, but discussing (debating) whether it's wrong or right takes a long discussion and is very complicated.

There's no sense in derailing other threads (like this one) with that.


I will point out that people like you just want to print more money to solve the problems. But printing more money, if it does result in inflation, just causes interest rates to rise and so makes the debt problem worse.

The reason the Federal Reserve Bank (the U.S. Central Bank) has stopped holding down interest rates is because they are afraid it will contribute to more inflation.
So interest rates are being allowed to rise (not by the Federal Reserve but by the free market). And there's pressure for them to rise because of inflation. 2] Who would lend out money at a lower rate than the inflation rate? You'd be losing wealth if you did that.

1] He started this diversion, by asserting that the US would soon go bankrupt.

2] Bankers who are licensed to create dollars when they make loans can lend at interest rates less than inflation.
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[Crantag]

2] Bankers who are licensed to create dollars when they make loans can lend at interest rates less than inflation.
.

Banks don't have a "license to create dollars". This mischaracterization is typical of your generally shallow knowledge of economics. You are evoking the fractional reserve banking system which allows banks to make loans from deposits up to the reserve requirement set by the Fed. This leads to an expansion of money in circulation on a system-level--not on a transactional level.

[Puffer Fish]

Banks don't have a "license to create dollars". This mischaracterization is typical of your generally shallow knowledge of economics.

Steve_American seems to constantly derail threads with his claims/theory that about banks/government printing dollars. Which seems to inevitably lead to off-topic arguing in all the threads he brings up these claims in.

I've repeatedly told him he should just quickly state his beliefs and post a link to another thread where the debate about those economic beliefs could be carried on, but he has not listened to me.

[Steve_American]

Banks don't have a "license to create dollars". This mischaracterization is typical of your generally shallow knowledge of economics. You are evoking the fractional reserve banking system which allows banks to make loans from deposits up to the reserve requirement set by the Fed. This leads to an expansion of money in circulation on a system-level--not on a transactional level.

Cranag, you have not thought this process through.

A bank has deposits. They are a liability.

The bank finds a credit worth borrower and lends her money by just adding dollars to an account she has at the bank. The bank does not reduce any other figure on its books.

The loan contract she signs becomes an asset of the bank. So, this asse will be balanced by the liabilities from the additional deposits that are usually required to meet the 90% you mentioned.

She usually spends the dollars within a week.

A week later the bank's officers must make sure it has enough deposits to meet the 90% requirement you mentioned. If it doesn't the bank can borrow reserves from another bank (or from the Fed itself), for example the bank where her loan dollars ended up.

So, the act of making the loan has the side effect of adding the loan amount to the gross deposits in the US banking system. This addition can then be used to meet the 90% requirement you mentioned.

Link to the paper from 2014 by Dr. Werner that proved this is so.

https://www.sciencedirect.com/science/a ... 1914001070

Crantag, if you can skip to the last part about the experiment or read the whole thing, I'd be glad to see how you can disagree with the conclusion Dr. Werner and all MMT economists have reached. Really, please, set me straight with your argument or facts.

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[Steve_American]

Steve_American seems to constantly derail threads with his claims/theory that about banks/government printing dollars. Which seems to inevitably lead to off-topic arguing in all the threads he brings up these claims in.

I've repeatedly told him he should just quickly state his beliefs and post a link to another thread where the debate about those economic beliefs could be carried on, but he has not listened to me.

Puffer Fish, I keep track of views in some threads that I post in.

Now this thread has 53382 views. Two or 3 days ago it had 44488 views. That is 8894 views in, at most, 3 days.

This doesn't tell me that I'm derailing the thread. Instead, it seems like it is very popular.
.

[Steve_American]

Puffer Fish, I keep track of views in some threads that I post in.

Now this thread has 53382 views. Two or 3 days ago it had 44488 views. That is 8894 views in, at most, 3 days.

This doesn't tell me that I'm derailing the thread. Instead, it seems like it is very popular.

Now this thread has 57085 views, This is 3703 more than it did about 15 hours ago.

It is a popular thread.

[Steve_American]

@Crantag, Sir, overnight (for me) this thread got almost 7000 views. This means this is a great place for you to convince a lot of viewers that I'm totally wrong.

Don't just assert that I'm wrong, show them where I'm wrong on the facts and so on the conclusions.

In a reply above I outline my opinion on what happens when a loan is made. It contains a few facts and conclusions.

Please, show me where I'm going wrong.
__________________________________.___________________________________


PS -- IMO, the fact that the FDIC insures deposits up to $,250,000 means that a couple can insure IIRC 6 accounts at a bank, so up to $1.5M. And so they can be very confident that they will have access to $750,000 immediately and the rest very soon.

This means that their deposits are in the economy and, as I showed, so are the deposits that were created when loans are made.

This means that the deposits that meet the requirement to make loans are not as a result "frozen" somehow.

This is different from a pawnbroker. When they make loans they reduce their cash on hand, which AFAIK, is what Crantag claims happens with bank loans.
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[QatzelOk]

If it were possible for the US to run out of dollars and be "broke" then you'd be right.

Canada has even more "trees per capital" than the USA does, so we can print even more American dollars than the USA can.

We are going to be so rich. Thanks for reminding how easy wealth is to create out of paper.


Luckily, in 1922, Germany was able to find enough paper to print lots of Marks to keep Germany rich between the two wars that collectively killed 100 million European depositors.

It then tried to "change" the value of its currency with wars, but this ended up bringing on the destruction of many bankrupt European nations.

In the end, the German had to elect a revolutionary who had no choice but to "go off" the usury-currency model.
Of course, paper-money distributors were not amused...

(Question: why not just print more money and pay off creditors?, since this is a magic formula for escaping national bankruptcy)

[Potemkin]

In the end, the German had to elect a revolutionary who had no choice but to "go off" the usury-currency model.
Of course, paper-money distributors were not amused...

Tell me, @QatzelOk, did these “paper-money distributors” have oddly-shaped noses…?

[QatzelOk]

Tell me, @QatzelOk, did these “paper-money distributors” have oddly-shaped noses…?

I have a Palestinian friend who has an "oddly-shaped nose."

But he has no interest in finances, banking, or usury.

I am really concerned about national bankruptcies, and also... Why our media has not reported how serious this is for my entire life.

Leave the Palestinians out of the discussion please. Let's stick to talking about financial health.

[late]

Luckily, in 1922, Germany was able to find enough paper to print lots of Marks to keep Germany rich between the two wars that collectively killed 100 million European depositors.

It then tried to "change" the value of its currency with wars, but this ended up bringing on the destruction of many bankrupt European nations.

In the end, the German had to elect a revolutionary who had no choice but to "go off" the usury-currency model.
Of course, paper-money distributors were not amused...

(Question: why not just print more money and pay off creditors?, since this is a magic formula for escaping national bankruptcy)

I find this fascinating.

Start with Jane Jacobs:

There are no formulas, no numbers at all. It's also a short read. But it is a superb introduction to how economies work. Your library can get you a copy.



There is a lot going on, start with the Lords of Finance:

Your library can get you a copy.

It's annoying that one of our big problems almost no one in this forum knows about:

Your library can get you a copy. I've bought all of them, and more.

[QatzelOk]

I find this fascinating.

Start with Jane Jacobs:

Yes, before noticing Western bankruptcy, it's important to read at least a thousand books that you propose.

Once I'm finished reading those books, I will FINALLY understand how the magic money machine works, and why it's so important to watch sitcoms and other entertainment products instead.

No one has offered any insight in this thread, only obfuscation.

Par for the course. A pickpocket is very slippery and is always ready to provide distractions.

[Crantag]

@Crantag, Sir, overnight (for me) this thread got almost 7000 views. This means this is a great place for you to convince a lot of viewers that I'm totally wrong.

Don't just assert that I'm wrong, show them where I'm wrong on the facts and so on the conclusions.

In a reply above I outline my opinion on what happens when a loan is made. It contains a few facts and conclusions.

Please, show me where I'm going wrong.
__________________________________.___________________________________


PS -- IMO, the fact that the FDIC insures deposits up to $,250,000 means that a couple can insure IIRC 6 accounts at a bank, so up to $1.5M. And so they can be very confident that they will have access to $750,000 immediately and the rest very soon.

This means that their deposits are in the economy and, as I showed, so are the deposits that were created when loans are made.

This means that the deposits that meet the requirement to make loans are not as a result "frozen" somehow.

This is different from a pawnbroker. When they make loans they reduce their cash on hand, which AFAIK, is what Crantag claims happens with bank loans.
.

You said "banks have a license to create dollars". I said this was a misstatement of the systemic process of fractional reserve banking. You then discussed fractional reserve banking as if it was a contradiction to what I had said when it was the same thing I said. Your first statement basically claimed that banks don't mind lending below inflation because they simply can conjure up dollars on a transactional basis. This is somewhat true when you include interbank borrowing and borrowing from the Fed, though banks of course still have to pay interest. I'm not convinced that banks simply don't mind lending below inflation but possibly. Perhaps that's the point you should clarify if you can.

In any case the existence of fractional reserve banking is not a new insight by any means. It's a fundamental aspect of modern banking and monetary regulation.

Your constant fixation on things like view counts and your calls to 'lurkers' is somewhat annoying. I think you are trying to stroke your ego.

[Crantag]

I find this fascinating.

Start with Jane Jacobs:

There are no formulas, no numbers at all. It's also a short read. But it is a superb introduction to how economies work. Your library can get you a copy.



There is a lot going on, start with the Lords of Finance:

Your library can get you a copy.

It's annoying that one of our big problems almost no one in this forum knows about:

Your library can get you a copy. I've bought all of them, and more.

You double posted one link. Just curious what is the third book? (Cities and the Wealth of Nations, Lords of Finance, and (?))? Thanks.

Edit: I see it now. Perhaps you were editing. The Price of Inequality. (I think I've peruved this last one in the past).

[Steve_American]

You said "banks have a license to create dollars". I said this was a misstatement of the systemic process of fractional reserve banking. You then discussed fractional reserve banking as if it was a contradiction to what I had said when it was the same thing I said. Your first statement basically claimed that banks don't mind lending below inflation because they simply can conjure up dollars on a transactional basis. This is somewhat true when you include interbank borrowing and borrowing from the Fed, though banks of course still have to pay interest. I'm not convinced that banks simply don't mind lending below inflation but possibly. Perhaps that's the point you should clarify if you can.

In any case the existence of fractional reserve banking is not a new insight by any means. It's a fundamental aspect of modern banking and monetary regulation.

1] Your constant fixation on things like view counts and your calls to 'lurkers' is somewhat annoying. I think you are trying to stroke your ego.

1] I talk to the lurkers, because I find it annoying to talk to posters here who con't seem to understand how reality works. I answer their questions or refute their points, and they come back with the same assertion as if I had said nothing.

My experience is that I'm the only one on line who ever admits that they or I am wrong. So, if they ignore what I say, then why should I keep talking? My answer is that the other people who read threads may be educated by what I say.

The view counts indicate if there are people reading certain threads. For example, this thread has 1650 views since I posted my last reply above. But, there are also 7 new replies.


As for the rest of your reply, I don't see any part that asserts that I got any fact or conclusion wrong, except my wording that this law authorizes banks to create money while making loans by my saying they are "licensed to create dollars".

So, you just disagreed with my use of the word 'licensed', not with the concept of what the law lets them do.
_____________________________________>_________________________________

Add with an edit.

I have to keep harping on this point because people keep asserting that banks loan out their depositors' money. It sounded like you did this in this thread, IIRC.

Now, you agreed with me on how modern fractional reserve banking works.

Yet, actually you were and are wrong that banks need deposits to make loans, because the loan itself creates deposits in some other bank when the money is spent, and this deposit can be accessed by the 1st bank by borrowing from that bank in the overnight market.
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