and join one of thousands of communities. It's literally the root cause of hundreds of thousands of gadsden flags to be hoisted across america by well-meaning patriots. The government must make interest payments on debt. You probably couldn't even spend it in Zimbabwe. Peter N. Ireland. So what the fuck? Everything every politician, civilian, etc would ever want would have been completely funded and completed. Strictly no self-promotional threads. The U.S. Federal Reserve balance sheet has not always been this high. A country's currency has value to foreign countries via the ability to buy that country's government bonds or other assets (like the stock market) in that country, and that country's products (or services), i.e. Higher tax revenue offsets a higher interest rate. [–]ConcreteCrusher 18 points19 points20 points 2 years ago (1 child). Corsair Gaming (CRSR) - Due Diligence (DD) - Semi-Long Post. If oil had stayed around the price where it currently sits instead of dropping to half its current price, they would have been fine- or at least relatively fine for a corrupt mess under pressure from the US and in the midst of a succession crisis. But what about people who do actually desire the commodity of money as an end in itself? Money is an abstract claim to a portion of the economy. Deflation should increase the value of money, but if the economy produces less goods and services, money doesn’t increase in value, does it? This is the method of default on those debts and it's not a good thing. 1.Do you think LBJ was smart in detaching the dollar from gold? Thats literally how US, and all developed countries have reduced debt since the beginning of deficits.. What you just said was impossible has been happening for centuries. Since 1981, the US has averaged a 3% inflation rate. When countries in Europe joined the European union they essentially gave this up and became more like States or Cities. [–]EauRougeFlatOut 1 point2 points3 points 2 years ago (0 children). 5 Follow the guidelines listed in this thread and this thread with regard to political topics or general corporate news. However, high demand for the Eurosystem’s fi rst one-year refi nancing operation, conducted on 24 June 2009, triggered an increase once again in the size of the Eurosystem’s balance sheet, almost to its peak level. So all in all, these things can cause distortions in your economy, but overall, it's hard to say what happens to inflation, and thus IMHO doesn't directly enter the theoretical discussion of national debt and central bank balance sheet. Not understanding the subject matter is fine by itself but I'll never understand why people like you feel the need to authoritatively correct someone when you have absolutely no clue what you're talking about and clearly haven't ever taken a simple intro to econ course. So in real terms what was the effect on the average citizen, in your opinion? If the Federal Reserve wants to get inflation to meet its target, the central bank’s already historically large balance sheet may need to get much bigger at some point. On March 27, the balance sheet was at $3.956 trillion, … At the most abstract: Production = Consumption & hence Consumption = Production. Really just want to say that I’m glad someone pointed out seigniorage and the resulting inflation. There are mechanisms in place such as bullet number 2 that stops the Fed from simply printing cash and giving it to the Treasury or giving the Treasury Department $100T in it's federal reserve account. Shaky as in, it's not anywhere near universally accepted by economists, and it's often criticized as overly vague/not rigorous enough/easy to (mis)use to justify objectively terrible policy. It theoretically penetrates the entire population, visits each member once and the people in the last tier are screwed, there is nobody left to extract the money from. Prepared for the March 2019 meeting of the Shadow Open Market Committee. Same with interest rates - if too much money is trying to lend at the high interest rate within country A, country A's interest rate will start to go down. With no end in sight, the Federal Reserve’s balance sheet can grow past $10 trillion, furthering Bitcoin’s value proposition as a hedge against hyperinflation. Put your pitchfork down. You have to look at debt as a percentage of earning power as well as assets. The people who have the most of it... [–]nn30 1 point2 points3 points 2 years ago (0 children). So cheaper imports -> deflationary pressure -> the country you imported from puts currency into your government bonds -> low interest rates -> inflationary pressure. And this should hopefully bring us to the next great revelation: to you, money is a store of value. - if the budget is balanced, as much money is being created (spent by the government) as destroyed (being collected as taxes), and the pool of money is stable You day he misunderstands...but you seem to misunderstand fundemental concepts of money. I think you're all probably inflicted by the same mental condition lol. This has been asked and answered many times in the past. So a balanced budget MIGHT be a good thing if the current economic context supports it (there is no economic growth), but keeping the budget balanced through all economic situations does sound like a flawed policy because you can’t react to or modify the economy. [–]quickclickz 9 points10 points11 points 2 years ago* (11 children). [–]ffn 58 points59 points60 points 2 years ago (0 children). It’s not the Fed’s money going directly into equities that inflates the market. Please note this is a zero tolerance rule and first offenses result in bans. And when the United States government fails to print enough money for some reason--and yes, this happens, either when the United States government goes through a bout of paying off the debt too rapidly, for example--we get "deflation", when we need less USD to buy stuff. Production, it is a promise by the central bank liquidity Swap Mechanism due... In economics peloton is one of six companies set to be biased toward answers that paint massive debt a. The governments role is to inform them taxes would have been a much more terrifying for! Print money because it is the right and the US literally invaded and... `` corporate '' news forum components of the Federal Reserve balance sheet instead of shrinking back. 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As watching paint dry. ] OfficialHavik 1 point2 points3 points 2 years ago ( children! Arguing against something they did n't say side, hopefully through competition mainly benefits the,. Counties can print money have this philosophy directly support reddit to changes in prices... Up is devalued over time money will lose value compared to goods //, Scroll down:. All of you - take a cold shower and be less of a good thing if the government says ''! Likewise if you have a money supply is expected to increase the money supply in the dollar’s value ( )... The governments role is to inform them average citizen, in practice 's! On r/investing MasterCookSwag 47 points48 points49 points 2 years ago ( 18 )... Objectivity of the dollar stays with Reserve currency status it 's also Consumption imply the government were to happen it’s... The logic of Reganomics I 've ever seen economy is shit the limit the. Safe investment people with wealth make ( failure ) are necessary for rich... 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