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>>>If you actually printed money, which does not have interest to be repaid, then the amount of circulating money would've increased permanently. Therefore, the
by georgeplusplus 3y ago
>>>If you actually printed money, which does not have interest to be repaid, then the amount of circulating money would've increased permanently. Therefore, the expectation is that each printed dollar is worth less.
When banks make a loan they are literally creating new money into existence.
Perhaps you meant Bank Reserves which is the underlying system banks and the fed use and the dollars which is bank customers like you and me use.
- notahacker 3y agoNothing you've said disagrees with the OP. The new "money" is literally credit, which literally is someone else's debt obligation which disappears when repaid.
- epups 3y agoI think it does, actually. Every time I see a comment about "money printing", it makes me think of the author holding the opinion that the government literally created money, as in wealth, out of thin air.
- PeterStuer 3y agoNo, that privilege is reserved for the private banks. In the US the cunningly named FED. Presidents that actually tried changing that ended up killed.
- RandomLensman 3y agoYes, but then the banks need to borrow that money as soon as it moves off the balance sheet.
- chii 3y ago> they are literally creating new money into existence. Debt is new money, but this new money is _different_ from printed money. It's because the debt has to be repaid, which implies you have to have the ability to repay (otherwise who would do the lending?). Therefore, this implies that production increases at a rate that is at least the same as, if not higher, than interest rate charged.
- neilwilson 3y agoIt’s no different from money. It just has a longer duration. Overnight money is repaid every day and replaced with a new loan for the following day. That also happens with so called “debt”. Money and debt are fundamentally the same thing. They are issued by the same entity which has the same lifespan. Necessarily the debt can never be “paid off”. All that happens is the assets are swapped around. Lending happens automatically as a function of accounting for a payment journal. The only people who get excited about it are those who are hard of accounting. Money is debt. Time to accept that.
- chii 3y agoNever denied that money and debt are the same. I am denying that printed money is the same as debt money.
- kelipso 3y agoYou are talking about printed money as in real world coins and paper/cloth cash? That's just not relevant at all in this age.
- chii 3y agono, i'm not talking about physically printed money. I'm talking about generating money not via debt, but via "wishing" it into existance. Banks generate money via debt. This is OK. If the treasury starts printing money - like what Zimbabwe or Venezuela did (or the Weimar Republic[1] pre-WW2) - then you will get rampant inflation. [1] https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic#Hyperinflation https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...
- mejutoco 3y agoI am not so sure debt has to be repaid. Debt is supposed to be repaid, or should be repaid, or comes with great declarations of an intention or obligation of being repaid, but debt can be kept indefinitely. Cases from the top of my head: - IMF lends money to country. Later the country is insolvent, and the credit is renegotiated to a lower amount (same for mortgages) as opposed to getting nothing. - Parents "lend" money to children for house downpayment. Parents died without debt having been paid. - World ends tomorrow by $reason_of_your_choice. All the existing debt gets cancelled. - Friend lends some money to another friend. They fall out and never repay the debt, and everybody lets it go.