Curiosity about the Dollar

[Sterlino]

Dollar is used in trading between two different countries. Billions of dollars are being transacted all over the world. And this transaction is just by sending an amount as a number from one bank to another bank. Where no one actually sees the paper dollar. The transaction is being completed through digital dollar. So my question is, does the amount of digital dollar that is in all the banks in the world or the amount of digital dollar that is being transacted actually have paper dollar? Has the Central Bank of the United States printed that amount of paper dollar? Or have they also made it valuable to the world by just sending the number with out printing ?

[Accardo]

Printed money can't be close to the number of electronic dollar in circulation, digital transactions are mathematically debit and credit, if I buy a Candie for $5, bank takes out $5 from my balance and credits the seller. No fiat was needed for the transaction, and so is millions of other transactions that went through without needing fiat, so, it's of no use to print more money just to reach a 1:1 ratio of fiat to digital dollars, when they is a lack of demand in fiat.

[philipma1957]

10 to 15%.

Bank in the day a run on a bank would wipe out the physical money.

Google " run on the banks during great depression"

[Alex077]

Dollar is used in trading between two different countries. Billions of dollars are being transacted all over the world. And this transaction is just by sending an amount as a number from one bank to another bank. Where no one actually sees the paper dollar. The transaction is being completed through digital dollar...

No dude, there is no paper note printed against all digital dollar in bank. Most of total dollar in use in world are digital number created by banking system, which is managed through cooperative banking system and Federal Reserve economic activities.

When we deposit $1,000 in bank, that bank does not keep entire amount in vault. According to law, it keep small portion in reserve and lends remaining dollar to someone else. Suppose bank has given loan of $900,  bank will digitally write the amount of $900 to borrower's account. As a result, the deposit amount on computer screen will be $1,900, the original note was only $1,000. In this way, commercial bank create digital dollar by giving loan.

Also, when central bank want to increase money supply in economy, they do not go to press and print new notes. They buy government bonds from commercial bank and with few clicks on computer, they credit or add billion of digital dollar to accounts of commercial bank.

You could read this: Money creation in the modern economy

[vaelix]

Yeah, currency stuff gets complicated pretty fast. The dollar affects way more than just exchange rates.

[Sterlino]

10 to 15%.

Bank in the day a run on a bank would wipe out the physical money.

Google " run on the banks during great depression"

I understand the issue of banks. If banks keep money, they will not make a profit. They give loans at high interest rates, but they keep people's money as deposits on the basis of paying low interest. And when someone wants to return all their money at once, it is not possible for the bank to return it immediately. Because the bank has invested people's money or given loans to others on the basis of interest.

And since the central bank prints money and releases money to the market on the basis of interest through other banks, then the interest rate that is constantly increasing means that the dollar in the market is automatically increasing due to interest, but in reality, the bank is not printing it regularly. So where will the money come from to pay the interest that is constantly increasing?

[pooya87]

You are starting to see the fundamental flaw with fiat currencies and the worst one of them all is the US Dollar which is being printed (digitally) out of thin air. Which is one of the reasons why the US national debt is currently above $40 trillion.

That's the main reason why Satoshi Nakamoto invented Bitcoin, aka the only existing money in the world that also has a capped supply.

[Sterlino]

You are starting to see the fundamental flaw with fiat currencies and the worst one of them all is the US Dollar which is being printed (digitally) out of thin air. Which is one of the reasons why the US national debt is currently above $40 trillion.

That's the main reason why Satoshi Nakamoto invented Bitcoin, aka the only existing money in the world that also has a capped supply.

So in the future, when the government debt the world, including the debt of the USA, continues to increase, as it fall into a system loop due to constant increase of just a few digits. Where inflation will continue to increase.  and the process is little slower so it become visible after a few years. And when inflation become understandable to people, and they feel that the products price is now out of ability to buy then people will naturally start investing in assets like bitcoin or buy and hold stable assets like gold. And the limited supply feature of bitcoin will make people more interested in it in the future.

[Bluedrem]

Printed money can't be close to the number of electronic dollar in circulation, digital transactions are mathematically debit and credit, if I buy a Candie for $5, bank takes out $5 from my balance and credits the seller. No fiat was needed for the transaction, and so is millions of other transactions that went through without needing fiat, so, it's of no use to print more money just to reach a 1:1 ratio of fiat to digital dollars, when they is a lack of demand in fiat.

As always, here is my question, and it confuses me. When electronic currency is traded even after printing paper currency at a certain rate, doesn't the total supply of dollars/euro used as a medium of exchange in that region increase due to the existence of electronic currency alongside paper currency?
If so, it means that electronic currency as a medium of exchange and paper currency as a medium of exchange should lead to more inflation due to the increase in their abundance. If someone could explain this to me a little more.

[bitLeap]

Dollar is used in trading between two different countries. Billions of dollars are being transacted all over the world. And this transaction is just by sending an amount as a number from one bank to another bank. Where no one actually sees the paper dollar. The transaction is being completed through digital dollar. So my question is, does the amount of digital dollar that is in all the banks in the world or the amount of digital dollar that is being transacted actually have paper dollar? Has the Central Bank of the United States printed that amount of paper dollar? Or have they also made it valuable to the world by just sending the number with out printing ?

In short, since 1971 the US has no longer limited its gold reserves to printing dollars. Consequently the risk of inflation and as you doubt it is the loss of public confidence in the dollar. But because the US is a superpower, the center of the world economy, the international financial system, it is not surprising that the digital dollar you have can be realized in the form of physical money by the US, regardless of the amount.

[aoluain]

You are starting to see the fundamental flaw with fiat currencies and the worst one of them all is the US Dollar which is being printed (digitally) out of thin air. Which is one of the reasons why the US national debt is currently above $40 trillion.

That's the main reason why Satoshi Nakamoto invented Bitcoin, aka the only existing money in the world that also has a capped supply.

So in the future, when the government debt the world, including the debt of the USA, continues to increase, as it fall into a system loop due to constant increase of just a few digits. Where inflation will continue to increase.  and the process is little slower so it become visible after a few years. And when inflation become understandable to people, and they feel that the products price is now out of ability to buy then people will naturally start investing in assets like bitcoin or buy and hold stable assets like gold. And the limited supply feature of bitcoin will make people more interested in it in the future.

You would think so!

Why would anyone wait for the future, the Dollar shenanigans started in the early 70's already,
the flaws in the FIAT system have already manifested, they are there to see but its only the
minority who are cognisant of what is going on and thats the way governments like it, keep the
people blind.

[letteredhub]

I think the total current supply of money in any currency that  is usually printed in physical cash is in small portion from the total current cap. Let say the total USD cap in the world is $1 billion both digital and physical cash together, a 20% of that $1 billion is what the government have in print, while the rest exists in digital numbers in banks  ledgers and this are produced through loans and such other financial activities by banks and public corporations.

[Hewlet]

The transaction is being completed through digital dollar. So my question is, does the amount of digital dollar that is in all the banks in the world or the amount of digital dollar that is being transacted actually have paper dollar? Has the Central Bank of the United States printed that amount of paper dollar? Or have they also made it valuable to the world by just sending the number with out printing ?

If you have to print out the value of all the digital dollar and allow it to stay in circulation, eventually, it will be more than those that are willing and that are in regions where the dollar can be used.

Dollar in it digital form is usable by almost everyone across the globe regardless of the exchange rate and the currency they are using. but in it physical form, it is only a limited set of people that can use it. it is the same thing with all the currency of the different part of the world. people are going more towards digital banking and banks can no longer afford to print to many fiat knowing that there is now a better alterative to the use of fiat which has led to a reduction in it demand.

[Floczy]

No...

When you have money in your bank, is not that you have cash sitting somewhere or whatsoever, the bank is basically owing you, and when you need it they will give you cash from source..

So imagine you make a transfer of $1000 to some one that doesn't mean physically dollars bill are moving any where, the dollar bill belongs to banks, and they owe you, naturally it's just in their records and when you need cash they will pay you the cash, ever other transaction is just on numbers or figures reducing or increasing, it's not actually really fait money.

[Doll2233]

Your point is quite valid about how the dollar works in the digital market. The dollar today mostly exist in electronic banks deposits and balances , rather than being on paper notes the digital dollars they do not need any equal amount of physical cash. Whenever any digital transaction is made on international level it is done without moving dollar from one country to another physically rather than the bank transfer is done . Whenever a digital dollar is credited the Federal reserve they do not print physical cash for that . Federal reserves manages Central banks money and the overall monetary system. That is why the amount of dollars that are being held digitally or transfer digitally is way more larger than the physical notes that are circulating. The value of this digital currency comes from having trust in the US economy and financial system and also the global use of dollars for trade and finances

[lombok]

Your point is quite valid about how the dollar works in the digital market. The dollar today mostly exist in electronic banks deposits and balances , rather than being on paper notes the digital dollars they do not need any equal amount of physical cash. Whenever any digital transaction is made on international level it is done without moving dollar from one country to another physically rather than the bank transfer is done . Whenever a digital dollar is credited the Federal reserve they do not print physical cash for that . Federal reserves manages Central banks money and the overall monetary system. That is why the amount of dollars that are being held digitally or transfer digitally is way more larger than the physical notes that are circulating. The value of this digital currency comes from having trust in the US economy and financial system and also the global use of dollars for trade and finances

International financial mechanisms work by harmonizing the interbank balances which are cleanly laid down within communication financial network. This paper free establishment of liquidity proves economic mode of capital governance, which is dependent on the dependability of central banking technological infrastructure.

The proliferation of this intangible form of account is a result of the strategic locations that the issuing nations have taken in establishing world stocks. The high velocity of digital liquidity scales up effortlessly capital flow and is not impeded by geographical space and expensive physical cash transfers.

[IjawMan]

You are starting to see the fundamental flaw with fiat currencies and the worst one of them all is the US Dollar which is being printed (digitally) out of thin air. Which is one of the reasons why the US national debt is currently above $40 trillion.

That's the main reason why Satoshi Nakamoto invented Bitcoin, aka the only existing money in the world that also has a capped supply.

Major part of what has led to an increment in the USA national debt may not be unrelated to the governments character of sponsoring and  exporting conflicts and uprising in periphery countries It requires billions of dollars to have all this working out in many decades. Much of this has been done through diversion of what is designated as foreign aids money.

Great we have Bitcoin with a limited supply capped at $21 million.

[arallmuus]

but in reality, the bank is not printing it regularly. So where will the money come from to pay the interest that is constantly increasing?

Out of thin air. It doesnt matter because most people will never take out 100% of their money from the banks so your interest will be appearing on your sheet balance as a number

Where inflation will continue to increase.  and the process is little slower so it become visible after a few years. And when inflation become understandable to people, and they feel that the products price is now out of ability to buy

Wages will increase as well but yeah most people that live the day by paycheck to paycheck wont really notice the difference. The middle class that have decent savings will notice it first.

then people will naturally start investing in assets like bitcoin or buy and hold stable assets like gold.

Thats the point of having investment, to have your saving in this case assets outgrow the inflation rate therefore your money will be growing as well

[STT]

Ironic thing is Dollar is far more virtual then Bitcoin despite in theory being physical, the vast majority has no link to any real substance and never will.  Its the genius of a debt based value system, alot of the debt wipes out any possible credit so if you balanced it all out the notes would never exist anyway as its not a positive balance so instead its just owed continually forever.

  This is why the Federal reserve fears a deflationary event, it would raise the value of debt as dollars became more scarce it means more dollar demand for less total supply and the theory is this constrains an economy.  It certainly puts pressure on the debtors and it would be a hard time for the biggest debtor which is government, its unlikely to ever happen now as they already know the conclusion.

[RGBTC]

So my question is, does the amount of digital dollar that is in all the banks in the world or the amount of digital dollar that is being transacted actually have paper dollar?

No, the monetary system has evolved, and they call it digital transformation, but I call it catastrophic failure. Digital money in a bank account is a different form of money than the money the Fed prints.

Has the Central Bank of the United States printed that amount of paper dollar? Or have they also made it valuable to the world by just sending the number with out printing ?

Yeah, you are forced to trust computer digits, the laws they create, and the banking system's ability to settle payments for the value of a dollar to exist.

For a nation's economy to function effectively, its citizens must have confidence in its money and payment services.(*)

*) https://www.federalreserve.gov/publications/january-2022-cbdc.htm