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EurAnalysis Kindergarten 24 replies

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  • #59,461
  • Oct 30, 2012 9:04am Oct 30, 2012 9:04am
Got some youtube videos on debt monetization.

first one

Inserted Video
  • #59,462
  • Edited 9:17am Oct 30, 2012 9:05am | Edited 9:17am
Quoting Halifax
The mechanism for creating money involves issuing Treasuries.

So in order to create more money, you need to create more debt.

What I'm asking, is how do you ever monetize the debt, if creating money to monetize the debt also creates fresh debt?

Money = debt, so how do you create money without creating new debt?

If you issue more debt to pay off old debt, the net effect is zero <- that's what's confusing me a bit.
Monetizing debt does not mean that debt is eliminated. It means that debt is taken out of circulation and replaced with cold hard cash. When the Fed buys US treasuries, it buys them from the market, not from the US treasury. What the market does with the money, is entirely up to them.

ADD: Also regarding the question of reducing value of sovereign debt via QE, it works two ways.

1. Treasury purchases by the Fed, lowers secondary market yields and therefore indirectly the US treasury enjoys lower yields on new debt issues... and since all gains enjoyed by the Fed go right back to the government coffers, those same debt instruments are almost interest free.

2. Those same purchases, because they lower interest rates, compel some market participants to take their capital out of the US to other markets with higher yields, thereby reducing the value of the USD. So when China comes to cash in their US treasuries, they will experience a loss through the exchange rate. So, as long as the future US economic prospects look good, China will be more likely to roll over some or all of that debt into new US treasury bonds at the then lower yield which places further demand for US treasuries and therefore further reduces the yield at treasury auctions. Lower borrowing costs for US = lower budget deficits = lower future funding needs.
Those who say it cannot be done should not interrupt those who are doing it
  • #59,463
  • Oct 30, 2012 9:05am Oct 30, 2012 9:05am
In my charts it stopped to look like a straight triangle and now is compressing triangle below 3125.

Btw, bought few at 1,2902.

T
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"I know one thing, that I know nothing." Sokrates
  • #59,464
  • Oct 30, 2012 9:17am Oct 30, 2012 9:17am
Quoting PipTrapper
Monetizing debt does not mean that debt is eliminated. It means that debt is taken out of circulation and replaced with cold hard cash. When the Fed buys US treasuries, it buys them from the market, not from the US treasury. What the market does with the money, is entirely up to them.

ADD: Also regarding the question of reducing value of sovereign debt via QE, it works two ways.

1. Treasury purchases by the Fed, lowers secondary market yields and therefore indirectly the US treasury enjoys lower yields...
Really thank you for the explanations. I need to read a bit about this as I have no clue about economics.
  • #59,465
  • Oct 30, 2012 9:18am Oct 30, 2012 9:18am
Quoting Tom_D_Trader
In my charts it stopped to look like a straight triangle and now is compressing triangle below 3125.

Btw, bought few at 1,2902.

T
Tom, I think you need to use blue background for your chart. It's the Feng-Shui things.
  • #59,466
  • Oct 30, 2012 9:20am Oct 30, 2012 9:20am
Quoting PipTrapper
Monetizing debt does not mean that debt is eliminated. It means that debt is taken out of circulation and replaced with cold hard cash. When the Fed buys US treasuries, it buys them from the market, not from the US treasury. What the market does with the money, is entirely up to them.
Oh yeah that was stupid, I hate trying to visualize this stuff in my head, thanks.

Sleep time
"Don't Panic..."
  • #59,467
  • Oct 30, 2012 9:22am Oct 30, 2012 9:22am
Quoting Halifax
Oh yeah that was stupid, I hate trying to visualize this stuff in my head, thanks.

Sleep time
Oh don't do that. You are going to have have nightmare of Ben Bernanke. Visualize something else.
  • #59,468
  • Oct 30, 2012 9:33am Oct 30, 2012 9:33am
Quoting Ken A
Oh don't do that. You are going to have have nightmare of Ben Bernanke. Visualize something else.
Yeah. Visualize a pool party instead

http://fabzz.com/wp-content/uploads/...ne-2011-10.jpg
Those who say it cannot be done should not interrupt those who are doing it
  • #59,469
  • Oct 30, 2012 9:35am Oct 30, 2012 9:35am
I'd rather have the $$$$.

Regarding monetizing debts , when the fed buys debts out there, who prints the money?
and where is this recorded?
  • #59,470
  • Oct 30, 2012 9:38am Oct 30, 2012 9:38am
Quoting crustonSt
I'd rather have the $$$$.

Regarding monetizing debts , when the fed buys debts out there, who prints the money?
and where is this recorded?
The Fed prints the money and it is recorded on their balance sheet as assets. Now how faq'd up is that?
Those who say it cannot be done should not interrupt those who are doing it
  • #59,471
  • Oct 30, 2012 9:39am Oct 30, 2012 9:39am
Quoting crustonSt
I'd rather have the $$$$.
First you will need then the rest will come along such as pool party, orgy etc
  • #59,472
  • Oct 30, 2012 9:40am Oct 30, 2012 9:40am
Quoting PipTrapper
The Fed prints the money and it is recorded on their balance sheet as assets. Now how faq'd up is that?
recorded as ASSETS?????
Something does not sound right.
  • #59,473
  • Oct 30, 2012 9:43am Oct 30, 2012 9:43am
Quoting Ken A
First you will need then the rest will come along such as pool party, orgy etc
No orgy for me : being to some neuroscience stuff about sex and brain: chemicals that go from there to your brain. a bit like individual dnas.
So no, I don't want to share the microba from the tons of guys these beautiful ladies have slept with. Just the microba from my only one. I am worth more than that.
  • #59,474
  • Oct 30, 2012 9:44am Oct 30, 2012 9:44am
Quoting PipTrapper
The Fed prints the money and it is recorded on their balance sheet as assets. Now how faq'd up is that?
Do they actually print the money or just registered it in balance sheet?
  • #59,475
  • Oct 30, 2012 9:45am Oct 30, 2012 9:45am
Quoting crustonSt
No orgy for me : being to some neuroscience stuff about sex and brain: chemicals that go from there to your brain. a bit like individual dnas.
So no, I don't want to share the microba from the tons of guys these beautiful ladies have slept with. Just the microba from my only one. I am worth more than that.
OK let's call it something else - fluid exchange.
  • #59,476
  • Oct 30, 2012 9:47am Oct 30, 2012 9:47am
Quoting Ken A
Do they actually print the money or just registered it in balance sheet?
Electronic money doesn't need actual cash note printing, but it's still called "printing"
Those who say it cannot be done should not interrupt those who are doing it
  • #59,477
  • Oct 30, 2012 9:48am Oct 30, 2012 9:48am
Quoting Ken A
OK let's call it something else - fluid exchange.
Man this is serious stuff. And the findings are just really new and very advanced in neurobiology. Each person has very specific Dnas, and even saliva.
You want to keep your brain chemical healthy. No wonder that mental hospitals have a high percentage of former hookers there. Ignorance is not bliss you know. So protect your health.
  • #59,478
  • Oct 30, 2012 9:49am Oct 30, 2012 9:49am
Quoting PipTrapper
Electronic money doesn't need actual cash note printing, but it's still called "printing"
OK.
This really clarifies things.
  • #59,479
  • Oct 30, 2012 9:51am Oct 30, 2012 9:51am
Quoting crustonSt
Man this is serious stuff. And the findings are just really new and very advanced in neurobiology. Each person has very specific Dnas, and even saliva.
You want to keep your brain chemical healthy. No wonder that mental hospitals have a high percentage of former hookers there. Ignorance is not bliss you know. So protect your health.
Oh damn! That should serve as a warning to PT.
  • #59,480
  • Oct 30, 2012 9:52am Oct 30, 2012 9:52am
Quoting Ken A
Oh damn! That should serve as a warning to PT.
Some people have no respect for their own health.
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