Bitcoin Forum
December 10, 2016, 06:34:16 PM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2]  All
  Print  
Author Topic: US Federal Reserve mulls printing more money  (Read 3725 times)
redengin
Newbie
*
Offline Offline

Activity: 25


View Profile
September 23, 2010, 02:16:22 AM
 #21

Quote
The Federal Reserve bank holds large quantities of currency.  The Fed also owns securities and makes loans from which it profits.  There is an awful lot of money available to fulfill demand without having to print more currency.
The Fed uses open market operations to do this.  If the demand for currency increases (bank run) then the Fed offers currency to banks in exchange for securities (treasury notes, bonds, etc.)

The assumption that the Federal Reserve is also the Treasury is the common error.  They are two distinct entities which have different ways to correct the money supply.

That's assuming institutions will buy treasury notes and bonds or will even have the time to do so.  I imagine a modern day bank run (at a national level) could happen in a matter of hours, possibly in a matter of minutes.  If people can't withdraw their funds on the spot, their confidence in the USD will go from 100% to 0% before the teller is able to finish her apology.

What do you believe the motive for a bank run is then?  Aren't people demanding US dollars?  If it gets harder to acquire something in high demand, wouldn't the value go up?  I think you are confusing confidence in the government with confidence in the currency.  Certainly there is a dependency under fiat currency for a strong trusted government, but people should have already priced that into their trust of currency and banking.  Otherwise they would only work for commodities they could take immediate possession of.
1481394856
Hero Member
*
Offline Offline

Posts: 1481394856

View Profile Personal Message (Offline)

Ignore
1481394856
Reply with quote  #2

1481394856
Report to moderator
1481394856
Hero Member
*
Offline Offline

Posts: 1481394856

View Profile Personal Message (Offline)

Ignore
1481394856
Reply with quote  #2

1481394856
Report to moderator
1481394856
Hero Member
*
Offline Offline

Posts: 1481394856

View Profile Personal Message (Offline)

Ignore
1481394856
Reply with quote  #2

1481394856
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481394856
Hero Member
*
Offline Offline

Posts: 1481394856

View Profile Personal Message (Offline)

Ignore
1481394856
Reply with quote  #2

1481394856
Report to moderator
1481394856
Hero Member
*
Offline Offline

Posts: 1481394856

View Profile Personal Message (Offline)

Ignore
1481394856
Reply with quote  #2

1481394856
Report to moderator
hugolp
Hero Member
*****
Offline Offline

Activity: 742



View Profile
September 23, 2010, 09:02:31 AM
 #22

"Bitcoin - only 7200 more bitcoins produced every day"

I LOLed so hard...
hugolp
Hero Member
*****
Offline Offline

Activity: 742



View Profile
September 23, 2010, 09:06:33 AM
 #23

They will default on their promises.  That is why you either want to have your cash in your mattress, or in a very strong bank.

Or, most cynically, put your money in a very weak bank.  If the banks start going down, you want yours to go down first when they're still paying on the 'insurance'.

Default will never ever happen. The USA government will never default on its citizens. It will print away all it needs, which is equivalent to defaulting, but it will never directly default. There is a reason why there has never been a deflationary collapse and the empire collapse are always hyper-inflationary.

The USA would only default on some foreign nation. The event would obviously trigger war, probably IIIWW.
redengin
Newbie
*
Offline Offline

Activity: 25


View Profile
September 23, 2010, 03:57:47 PM
 #24

... just credit backed by credit backed by credit that imploded... but don't worry, you'll lose but we'll bail out our Wall St. friends with your children's future. What a system!

This type of stuff is only going to help drive Bitcoin adoption IMO.

Just so we're clear.  The Fed "bailed out" wall street by loaning them funds or buying up equity.  It didn't just give free money to the troubled companies.  We're all still in the same boat floating on the confidence in the US dollar.  Wall street still has to make good on their bail out debt to work our way out of this- and at the rate that its happening it very well could turn a profit for the Fed.  The Fed recently decided to reinvest that profit in the economy, but when the economy gets on its own legs, those profits will go to the treasury and pay off the government debt.  Certainly this will be a painful slow process, but we're no where near a doomsday scenario of internal default.  The only real risk I see is the one hugolp brings up- that other nations may default (PIIGS), which would strain the markets and increase the credit crunch here in the US. 
nethoncho
Newbie
*
Offline Offline

Activity: 9


View Profile
September 27, 2010, 05:33:47 AM
 #25


 Wall street still has to make good on their bail out debt to work our way out of this- and at the rate that its happening it very well could turn a profit for the Fed.  The Fed recently decided to reinvest that profit in the economy, but when the economy gets on its own legs, those profits will go to the treasury and pay off the government debt.  

When I was your age, I believed in unicorns also.
Do not think for one minute that any money the fed may get from payments on the bail outs will pay off any debt.


1BCepBALaCMsc3pKSdvXfb3HeN89AcTLsA
Anonymous
Guest

September 27, 2010, 08:16:35 AM
 #26

The worlds only superpower would just hold everyone ransomn. They might have to nuke a few other countries to get the point across though.

The US government is a mafia organisation,its no surprise Obama is from Chicago.....this is how the mafia rolls. Angry
Pages: « 1 [2]  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!