5 ms·
We also don't usually see a private company literally print money.
by aviv 9y ago
We also don't usually see a private company literally print money.
- Maert 9y agoTo be fair, isn't FED a private, non-federal company? :)
- JumpCrisscross 9y ago> isn't FED a private, non-federal company? No. The Federal Reserve was created by Congress in 1913 [1]. Part of its complexity arises from its need to integrate public monetary policy with private capital markets. [1] https://www.federalreserve.gov/faqs/about_14986.htm https://www.federalreserve.gov/faqs/about_14986.htm
- LargeWu 9y agoIt's quasi-governmental, in that it is chartered and overseen by the federal government, but largely executes policy without the influence of the executive or legislative branches.
- spookthesunset 9y ago> but largely executes policy without the influence of the executive or legislative branches. Which, to be clear, is a good thing otherwise politics would start to win over sound economic policy...
- jobigoud 9y agoBanks are private companies and they create money all the time when they make loans.
- apo 9y agoFor those who don't understand or believe this to be true, listen to the bankers themselves: https://www.monetary.org/wp-content/uploads/2016/03/money-creation-in-the-modern-economy.pdf https://www.monetary.org/wp-content/uploads/2016/03/money-cr...
- tootie 9y agoBanks leverage money, they don't create it. Only the Fed creates it. And the Fed and all it's chartered banks are routinely audited.
- LargeWu 9y agoThere's a major difference between fractional reserve banking and printing money. The former is a well-understood and well-regulated practice that actually drives economic activity. The latter is likely what Bitfinex is doing with Tether, is 100% counter to their stated practices, and serves only to artificially drive up the price of other assets.
- whataretensors 9y ago> The former is a well-understood and well-regulated practice that actually drives economic activity There's a lot of money in convincing people this is true but I have my doubts.
- LargeWu 9y agoCare to enumerate your doubts? It's a pretty well established concept in economics.
- wglb 9y agoNo, the money existed and they transfer that money to the person taking out the loan.
- ric2b 9y agoYou should look up what fractional reverse banking is. You deposit $100 and they lend it out to 10 different people (or more, depends on the legislation limits), effectively creating $900 extra dollars while those 10 loans remain open.