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The US certainly prints money to pay its bills. The fed prints money and introduces it into the economy by purchasing treasuries. It's exactly the same thing.

by aianus 10y ago

jomamaxx 10y ago
No, dude. Not the same thing at all. In fact - your very statement clearly indicates that it's not the same thing. The US 'gets money' by taxation - and by selling bonds. Some of those bonds are later purchased by the Fed, using money printed by the Fed. That's how money gets into circulation. In short: US currency is backed by US Government bonds. That's the 'asset' that backs US currency. It's not 'money printing' - because the US Government has to issue debt in this case. Someone - somewhere - in the USA, Japan, China etc. has to actually lend the US money - at a certain interest rate in order for the transaction to happen. So the US government does not print money. It just issues debt. The Fed's actions are a totally separate process. Now - when Venezuela 'prints money' - it just does that. It literally just issues currency to itself to pay it's bills. That is completely crazy. And that causes hyperinflation.
- gone35 10y ago
  Nope. You would be surprised, but it is indeed the same thing. See e.g. Sec. 29-2 in [1] (or any other undergraduate econ 101 textbook, for that matter). [1] https://books.google.com/books?id=K-jKAgAAQBAJ https://books.google.com/books?id=K-jKAgAAQBAJ
  - jomamaxx 10y ago
    No. You are 100% wrong. Not believing that there is any sound economic principle to validate your position, I checked your reference: Your reference says nothing other than a few, very basic things about how the Fed is structured. It says absolutely nothing about the difference between 'raising debt + open market bond purchases' (how the fed does it) - vs. the hyperinflationairy issues related to governments that influence their central banks and basically print money. So not only are you wrong - but your borderline lying by posting references that have nothing to do with anything. In summary: aside from taxation, the US government generally can only raise money by issuing debt. They cannot print money willy nilly as they do in places like Brazil.
    - gone35 10y ago
      So not only are you wrong - but your borderline lying by posting references that have nothing to do with anything. I see. Nevermind.

The US certainly prints money to pay its bills. The fed prints money and introduces it into the economy by purchasing treasuries. It's exactly the same thing.

by aianus 10y ago

The US certainly prints money to pay its bills. The fed prints money and introduces it into the economy by purchasing treasuries. It's exactly the same thing.

jomamaxx 10y ago

No, dude. Not the same thing at all. In fact - your very statement clearly indicates that it's not the same thing. The US 'gets money' by taxation - and by selling bonds. Some of those bonds are later purchased by the Fed, using money printed by the Fed. That's how money gets into circulation. In short: US currency is backed by US Government bonds. That's the 'asset' that backs US currency. It's not 'money printing' - because the US Government has to issue debt in this case. Someone - somewhere - in the USA, Japan, China etc. has to actually lend the US money - at a certain interest rate in order for the transaction to happen. So the US government does not print money. It just issues debt. The Fed's actions are a totally separate process. Now - when Venezuela 'prints money' - it just does that. It literally just issues currency to itself to pay it's bills. That is completely crazy. And that causes hyperinflation.

gone35 10y ago
Nope. You would be surprised, but it is indeed the same thing. See e.g. Sec. 29-2 in [1] (or any other undergraduate econ 101 textbook, for that matter). [1] https://books.google.com/books?id=K-jKAgAAQBAJ https://books.google.com/books?id=K-jKAgAAQBAJ
- jomamaxx 10y ago
  No. You are 100% wrong. Not believing that there is any sound economic principle to validate your position, I checked your reference: Your reference says nothing other than a few, very basic things about how the Fed is structured. It says absolutely nothing about the difference between 'raising debt + open market bond purchases' (how the fed does it) - vs. the hyperinflationairy issues related to governments that influence their central banks and basically print money. So not only are you wrong - but your borderline lying by posting references that have nothing to do with anything. In summary: aside from taxation, the US government generally can only raise money by issuing debt. They cannot print money willy nilly as they do in places like Brazil.
  - gone35 10y ago
    So not only are you wrong - but your borderline lying by posting references that have nothing to do with anything. I see. Nevermind.