4 ms·

Printing money is just taking on debt. Anyone can do it in proportion to their assets and future income. just your interest rates are different. Local governme

Printing money is just taking on debt. Anyone can do it in proportion to their assets and future income. just your interest rates are different. Local governments issuing municipal bonds is essentially printing money.

wizzwizz4 6y ago
Printing money isn't just taking on debt. For fiat currencies, printing money is inflation: a tax on money.
- neilwilson 6y ago
  All money is debt. Government always spends by "printing money". That's how bank payment and clearing works. So if it caused inflation then we'd have loads of it, and we don't. Whether a bank ends up holding reserves, or holding a government bond is just a difference between a floating rate debt receiving the base rate, or a fixed rate debt receiving the bond rate. Just an interest rate and term difference - nothing else. The last year has completely debunked any question that 'creating money' is inflationary. Believing otherwise is up there with anti-vax thinking.
  - wizzwizz4 6y ago
    Creating money is inflationary when it's not backed up by something like bonds (which temporarily destroy money) or taxes (which permanently destroy money).
    - neilwilson 6y ago
      And yet we have 30 years of QE in Japan, and 10 years of QE in the UK and US that debunk that belief as well. If the state creates $100 and you stick it in a drawer, or just leave it in your bank account, where's the inflation coming from? It's 'not spending' that causes deficits in the first place. If everybody spends and never saves then there can be no deficit for any positive tax rate. There is no magic in bonds. It's a myth.
      - wizzwizz4 6y ago
        I was with you until “there is no magic in bonds”; you haven't shown that. Bonds are a way for everyone to know that that money is _staying_ in that drawer.
- astrange 6y ago
  It can be inflationary but it isn’t necessarily - sometimes you don’t have enough users of your currency, because there isn’t enough of it, and it becomes more useful and therefore stronger once you acquire some more users. Even in crypto, Bitcoin is still in its inflationary phase until mining runs out.
deleted 6y ago
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wizzwizz4 6y ago

Printing money isn't just taking on debt. For fiat currencies, printing money is inflation: a tax on money.

neilwilson 6y ago
All money is debt. Government always spends by "printing money". That's how bank payment and clearing works. So if it caused inflation then we'd have loads of it, and we don't. Whether a bank ends up holding reserves, or holding a government bond is just a difference between a floating rate debt receiving the base rate, or a fixed rate debt receiving the bond rate. Just an interest rate and term difference - nothing else. The last year has completely debunked any question that 'creating money' is inflationary. Believing otherwise is up there with anti-vax thinking.
- wizzwizz4 6y ago
  Creating money is inflationary when it's not backed up by something like bonds (which temporarily destroy money) or taxes (which permanently destroy money).
  - neilwilson 6y ago
    And yet we have 30 years of QE in Japan, and 10 years of QE in the UK and US that debunk that belief as well. If the state creates $100 and you stick it in a drawer, or just leave it in your bank account, where's the inflation coming from? It's 'not spending' that causes deficits in the first place. If everybody spends and never saves then there can be no deficit for any positive tax rate. There is no magic in bonds. It's a myth.
    - wizzwizz4 6y ago
      I was with you until “there is no magic in bonds”; you haven't shown that. Bonds are a way for everyone to know that that money is _staying_ in that drawer.
astrange 6y ago
It can be inflationary but it isn’t necessarily - sometimes you don’t have enough users of your currency, because there isn’t enough of it, and it becomes more useful and therefore stronger once you acquire some more users. Even in crypto, Bitcoin is still in its inflationary phase until mining runs out.

deleted 6y ago

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