bubbleRefuge

10 ms·

91.
by bubbleRefuge 4y ago
100% + I'd expand by saying the Fed uses its operations to control the price of money, which is interest rates, not the supply of money. The supply of money has many factors such as how many loans are created, etc. Taxes paid. etc beyo
92.
by bubbleRefuge 4y ago
Banks in compliance can create loans on demand. They don't need to borrow the funds.
93.
by bubbleRefuge 4y ago
See WW2 for insight.
94.
by bubbleRefuge 4y ago
Central Banks allow us to pay each other and regulate banks to operate in the best interest of the economy by making 'good' loans. You are describing a gold standard or fixed monetary system. These systems have lead to deflationar
95.
by bubbleRefuge 4y ago
100% . Exactly and if "money" lands in the accounts of agents (people, businesses) who do not spend it, its not inflationary. If I have 10 trillion dollars in my account, but I do not use it. Its not inflationary. This is called a
96.
by bubbleRefuge 4y ago
Person A does not need to make a deposit to fund load for Person B. If bank is in compliance they can make the loan.
97.
by bubbleRefuge 4y ago
Additionally, if you take my example above and change bank B to bank A which is completely feasible in the real world, then it is thin air.
98.
by bubbleRefuge 4y ago
Every time a good loan is made. Thats an asset for the bank.
99.
by bubbleRefuge 4y ago
I disagree . And language can get tricky here. You don't need deposit amounts in order to make loans. There is a bunch of gymnastics under the hood of the transaction I described but none of it requires consumer deposits.
100.
by bubbleRefuge 4y ago
see my other reply on the balance sheet operations above.
101.
by bubbleRefuge 4y ago
The accounting is like this. Bank A is in compliance for the current period of time under examination (capital requirments and reserve requirements). Bank A makes a loan L1 to person B. This is a contract. Bank A has an asset in L1 on its
102.
by bubbleRefuge 4y ago
If Banks make bad loans and those loans( or investments) are marked to market bringing the bank out of compliance with Capital requirements, then it gets shutdown.
103.
by bubbleRefuge 4y ago
There is not a dependency on deposits in order create loans. This is false. Banks can make loans to the extend of demand for loans at the banks terms. Deposits have nothing to do with it in terms of funding. The bank must be in compliance
104.
by bubbleRefuge 4y ago
There is allot of financial illiteracy regarding the banking system. For example, heard an NPR reporter this morning talking about a bank not having money to loan because of depositors fleeing. These are vestiges of the Gold standard. There
105.
by bubbleRefuge 4y ago
Its incredible incompetence that the fed doesn't fully guarantee all deposits at FDIC member banks. The liability side of banking is not the place for disciple. MMT founders and Bill Black have been saying this since 2008. Insu
106.
by bubbleRefuge 4y ago
inflation should be a limiting factor instead funding being a limiting factor as it is today. So the focus should be on providing enough production ( ie supply ) in the economy to meet demand. Not necessarily worrying about balances in fed
107.
by bubbleRefuge 4y ago
This is a tragedy. In an world of fiat currency and within the Modern Monetary Theory operational paradigm, the US Federal government can meet all its financial obligations because it is an issuer of currency. So, in this regime, the issue
108.
by bubbleRefuge 4y ago
You can put a customer service password on your tmobile account to avoid anyone calling customer service without that password to make any changes. This is separate from your online portal password.
109.
by bubbleRefuge 4y ago
>The WhatsApp owner had cut more than 11,000 jobs or 13% of its workforce in November, following such tech companies as Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) which have announced thousands of layoffs due to the economic dow
110.
by bubbleRefuge 4y ago
simply stating that increasing federal interest rates will put more money into the private sector from the public sector (deficit spending). This is an income channel which increases aggregate demand which can in of itself increase growth a
111.
by bubbleRefuge 4y ago
For every borrower there is a "saver" on the other side. Any yes they are more wealthy generally. Raising interest rates is welfare for the rich. Nonetheless its allot of deficit spending into the economy which is stimulative espe
112.
by bubbleRefuge 4y ago
I think they are contributing to aggregate demand in the economy at a time when the fed is trying to reduce aggregate demand in the economy. edit: this channel has increased 4X what it was.
113.
by bubbleRefuge 4y ago
Ok. Thank you . He is right about that technically if there is allot of government debt in the economy and the government is net payer of interest, then raising interest rates can cause inflation via more money in pockets leading to more de
114.
by bubbleRefuge 4y ago
yeah. this policy is regressive . no doubt. but people who do have cash are getting more "free money" every month and allot of it. they seem to be spending it into the economy right now. luxury items are created by everyday people
115.
by bubbleRefuge 4y ago
Worked at cruise line company many years ago that had some IBM mainframe developers who I think used COBOL as the programming platform. Given my preconceptions that few engineers had COBOL skills, I assumed that there were making big $&#x2
116.
by bubbleRefuge 4y ago
Point is that more cash is flowing from the Government to the private sector with every increase in interest rates by the fed. This is an indisputable fact. Since federal debt is at an all time high, this policy is pumping allot of money in
117.
by bubbleRefuge 4y ago
Please elaborate instead of being snarky .
118.
by bubbleRefuge 4y ago
The Federal government is a net payer of interest to the private sector on a monthly basis. When interest rates are increased by the fed, this amount increases. Since the amount of outstanding treasuries is at all time highs vs GDP, its sig
119.
by bubbleRefuge 4y ago
having more money available every month doesn't create more spending opportunities ? huh ?
120.
by bubbleRefuge 4y ago
short term treasuries roll over every 3 months.

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