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> You know the fed can print money to pay off that debt right? No they can't, and they won't, unless you want the fed to crash the dollar and make it worthless
by throw_m239339 7y ago
> You know the fed can print money to pay off that debt right?
No they can't, and they won't, unless you want the fed to crash the dollar and make it worthless. The money supply is a very tricky thing in that you want enough liquidity so that the market continues working, but too much money supply would make the dollar as worthless as seashells.
- ohithereyou 7y agoThe fed expanded its balance sheet from less than $1 trillion in 2008 to over $4 trillion in 2016, practically dumping $3 trillion into the economy for all intents and purposes. What was the effect of that on crashing the dollar/making it worthless[0]? [0] https://www.cnbc.com/2017/11/24/the-fed-launched-qe-nine-years-ago--these-four-charts-show-its-impact.html https://www.cnbc.com/2017/11/24/the-fed-launched-qe-nine-yea...
- snowwrestler 7y agoThere was extraordinary demand for liquidity during and following the financial crisis. Because the Fed was expanding its balance sheet to meet market demand, it did not crash the value of the dollar.
- deleted 7y ago[deleted]
- selectodude 7y ago>but too much money supply would make the dollar as worthless as seashells. Sure, but what is the number that constitutes "too much"? Right now the M3 money supply is 15.3 trillion dollars and the CPI inflation has been below 4 percent since 1991. In that period the money supply has grown by 12 trillion. If quintupling the money supply in the same period that GDP only doubled doesn't not only not tank the value of the dollar but doesn't even cause serious inflation, I'm curious what would? That's a serious question, by the way - I have a background in economics. This is unprecedented.
- nine_zeros 7y agoYes they can. And they will, considering that the alternative is default and an even massiver crash