REDDIT and the ALIEN Logo are registered trademarks of reddit inc. π Rendered by PID 31190 on r2-app-079388f49709af4af at 2020-12-13 12:27:49.555076+00:00 running 85e58d4 country code: FR. [–]SmartassRemarks 392 points393 points394 points 2 years ago (68 children). Hi, welcome to r/investing. Can you create your own warren-bucks on demand? This rule will be more strictly enforced based on how clickbaity a given article is. It seems more logical that it affects people who have some money in the bank account which can decrease in value. If you can borrow money @ 1% and put it into long term productive use that returns 2%, what is that percentage return? - The US has a LOT of room to tax to increase revenue relative to many countries. [–]paintball6818 2 points3 points4 points 2 years ago (3 children). Why can't Mexico use its own power over it's economy to catapult past the US economically? [–]Pyroteknik 32 points33 points34 points 2 years ago (0 children). 228 points. It's only unlimited I'm nominal terms. Is this because they somehow cut taxes too much? [–]Crentski 5 points6 points7 points 2 years ago (0 children). [–]MasterCookSwag 24 points25 points26 points 2 years ago (38 children). Put your pitchfork down. October 12, 2019 / 0 Comments / in uncategorized / by Bruce Alfredson, CLU, ChFC While the recent Federal ( Read More ) Reserve rate cut dominated the news cycle last week, another development in the fixed income market induced flashbacks to the financial crisis of 2008. In other words, the Fed is expected to maintain a large balance sheet instead of shrinking it back to precrisis levels. The Fed returned $49B in foreign currency to foreign central banks under the Central Bank Liquidity Swap Mechanism. Investors pull money from the US economy (stocks and bonds) and invest it in US-government issues! [–]majorshimo 2 points3 points4 points 2 years ago (0 children). Why? [–]TotoroZoo 1 point2 points3 points 2 years ago (4 children). A constant discussion in central banking circles revolves around the Federal Reserve’s “large balance sheet”. Some how you want that Wealth to move over into the Consumption side, hopefully through competition. The verb Consumption mainly benefits the actor Labor. That money is used to buy real goods and services, and we are now $1mn richer. Please spend less time writing these pamphlets and more of it in economics class, because I don't see self-taught internet-knowledge as the way to go when it comes to economics. dollars)." The money supply can increase, but if demand remains super high then inflation will remain low. Please note that as a topic focused subreddit we have higher posting standards than much of Reddit: 1) Please direct all advice requests and beginner questions to the stickied daily threads. [–]yodelocity 4 points5 points6 points 2 years ago (2 children). [–]sagnessagiel 4 points5 points6 points 2 years ago (1 child). While the federal government does have outstanding debt, it is not the decision of Congress to print new money to repay that debt. Biggest difference is that a fiat currency based economy doesn't have to increase the money that's in circulation. Can you tell me when we actually made payments to reduce it in that timeframe? The fed is mainly unwinding currency The privately owned Federal Reserve does, and loans it to the US government with interest. Loan Defaults (failure) are necessary for the system to continue. No need to write so many paragraphs ranting about stuff I didn't say. If taxes could be paid in anything else -- gold nuggets, ethereum, nice looking sticks -- then the dollar would be worthless. 2009 was a great time. During the the Global Financial Crisis in 2008, people were actually paying the US government for the privilege of lending them money, in other words, for every $100 loaned to America, the US government had to pay back $99.99, because interest rates were negative! In theory it's the same, in practice it's not. You're certainly right - there is a limit to the debt at which faith in the USD wavers, but we've never come close to that limit. What a waste of my time. r/investing does not endorse any recommendation or opinion made by any member, nor do any users or moderators of r/investing advocate the purchase or sale of any security or investment. WTF!? The governments role is to use the supply of money to regulate the economy. It's hard to argue with someone who lacks so many fundamental, basement-level facts. The idea is to motivate people to spend now, rather than later, because generally their money will not be able to buy them as much in the future as it can now. View the total value of the assets of all Federal Reserve Banks as reported in the weekly balance sheet. [–]baked_brotato 37 points38 points39 points 2 years ago (2 children), Wow, what a change of pace from the content I read on wsb, [–]Hold_onto_yer_butts 49 points50 points51 points 2 years ago (0 children). In before the BTC shills downvote and call me an idiot or pretend to be concerned about my "wrong-headed views". But no other country can do what we do. Printing money to get more foreign currency is hard. The government must make interest payments on debt. Is the US special in that it has one of the top valuable currencies in the wotld? So actually, the current monetary regime has only been around for slightly over 40 years. No one will accept it. [–]Hold_onto_yer_butts 3 points4 points5 points 2 years ago (2 children). Individual bonds mature and new bonds must be issued. [–]FercPolo 9 points10 points11 points 2 years ago (2 children). [–]meteoraln 6 points7 points8 points 2 years ago* (10 children). The Federal Reserve’s balance sheet is expanding extraordinarily rapidly and by yearend may exceed $10 trillion. "I'm very concerned about it. Mainly because if those dollars do circulate, it will create a problem.There seems to be a lot of economists thinking it would create hyper inflation. Currently, the Fed is purchasing some $41 billion in assets daily, and central banks around the world are following its lead. There is all of wrong information out there, but I think that the limit of the Fed's balance sheet before it impacts the credit worthy as of the US treasury is the most important. Money does not equal power, although they are closely intertwined. Strictly no self-promotional threads. [–]Heol-DaePark 2 points3 points4 points 2 years ago (0 children). We are not a politics or general "corporate" news forum. It looks like they've tapered about 200B so far not 300B. So while details and approaches are always subject to disagreement and evolution the base facts are pretty well accepted. I completely disagree. It hasn't been for the past 4 weeks. How the hell is the top comment 2800 x3 Gold and this is buried at 9? Because people don't anticipate 1 shell to be worth 2 or 3 coconuts in the future with mild inflation, they won't hang onto shells, so you avoid deflation. And this should hopefully bring us to the next great revelation: to you, money is a store of value. The income dried up, the debt got too big, countries stopped lending to them in fear they wouldn't get their money back. The Federal Reserve prepares this balance sheet report to help fulfill its commitment to transparency about actions taken in connection with two of its key functions—conducting monetary policy to meet its congressional mandate and promoting financial stability. Debt disappears in real terms on its own. Monetary Policy Implementation: Making Better and More Consistent Use of the Federal Reserve's Balance Sheet. But I digress. CoL outpacing average incomes. The cryptocurrency would still … Stuff you can potentially purchase is not the same as the amount of stuff produced in the country. Table 1 of the release covers two pages and presents details on the factors that supply and absorb reserve balances, as well as the level of reserve balances--that is, funds that depository institutions hold on deposit at the Federal Reserve to satisfy reserve requirements and funds held in excess of requirements. If the US were to reduce it's debt it would be more likely to default on it's debt than use a scheme with the Federal Reserve to "print money"because they would position to issue new debt after the hair cuts are given. [–]MostlyFeralCat 14 points15 points16 points 2 years ago* (4 children). I don't see anywhere where they did this. My econ professors were all extremely passionate about their profession. Because you are thinking at a micro level and not at a macro level. This is why economists believe that mild inflation in line with GDP growth is a good thing, [–]PM_ME_YOUR_GITHUBS 10 points11 points12 points 2 years ago (0 children), [–]ChaosRevealed 124 points125 points126 points 2 years ago (46 children). Related data from the Federal Reserve Bank of New York, which executes the swaps, showed the balance on Thursday was lower still at $228.7 billion. It can't without destroying the dollar, which it has been doing since the inception of the federal reserve. These macro trends/forces are very difficult to wrap my head around and hyperinflation as a concept is quite scary. These government also have an unlimited ability to provide funds to other sectors. Anyone Bullish on the Travel Industry for 2021 moving forward? I literally just said wait. Deficit spending is not the equivalent of M1 expansion / contraction. This is a past in the US or Europe, but still a reality today eg in Venezuela, with somewhat different imagery. [–]surg3on 1 point2 points3 points 2 years ago (0 children), That's the kicker though, because the money is not going to the 99.9% there's no inflation. There’s nowhere else for rich people to get a positive ROC. This is the method of default on those debts and it's not a good thing. [–]lol_bitcoin 4 points5 points6 points 2 years ago (1 child). You cant just backtrack all those differences to ideology - somebody can not do math, or has alterior motives. [–]AndrewJamesDrake 10 points11 points12 points 2 years ago (5 children). 3. (Both of these can become problematic in that they can constrain the United States government in the future when it wants to spend money but is required to send out large interest payments instead.). If they print a lot the us dollar loses value compared to other currency (if lots of milk is produced it's cheaper to buy milk - if lots of money is produced they get cheaper (lose value) to buy them wth other currencies, eg Euro, Yen, or even goods). Since 1981, the US has averaged a 3% inflation rate. + pay off as much as possible and be prepared for the contraction when the reserve currency changes. Well as an engineer I can relate to everybody being an expert. The Federal Reserve is preparing to effectively abandon its strategy of pre-emptively lifting interest rates to head off higher inflation, a practice it has followed for more than three decades. [–]Federer2020hype 484 points485 points486 points 2 years ago (161 children). Welcome to the number one reason we haven't had appreciable inflation in the last 20 years, in spite of ridiculously loose fiscal policy. A single drastic political event could threaten to topple the equilibrium at any point. Except most people were not in a position to buy. The problem is there is no conceivable exit strategy. Treasury investors aren't paying attention to ratings agencies. Are you going to get 50% of the U.S. household population that sits at the bottom of the scale, and controls a shade more than 1% of the wealth in the country? If the government suddenly started demanding taxes in that currency, people would be lining up to earn them, because they'd know they can spend them on to other people who also have tax obligations to fulfill. In the Federal Reserve forecast the future is not the Fed’s best subject nor is it humanity’s best subject yet we sit around here listening to people telling us what’s going to happen in March. It did that, but by printing money through quantitative easing. Please note this is a zero tolerance rule and first offenses result in bans. This isn't controversial outside of kids on reddit who think they understand the world because they learned econ on YouTube. They can tax you as much money as they’re giving you. The sum of all assets must always be equal to the sum of all liabilities. The US literally made Haiti pay back it's debt to France. [–]KosherNazi 58 points59 points60 points 2 years ago (6 children). [–]SBInCB 3 points4 points5 points 2 years ago (9 children). So cheaper imports -> deflationary pressure -> the country you imported from puts currency into your government bonds -> low interest rates -> inflationary pressure. Shit...I am hoping a housing market correction before I buy a house. https://www.forbes.com/sites/mikepatton/2016/02/29/u-s-role-in-global-economy-declines-nearly-50/#40807ad25e9e, https://www.statista.com/statistics/203961/wealth-distribution-for-the-us/, countries stopped lending to them in fear they wouldn't get their money back, I'm new to investing, what should I do? Simply put the idea that government debt is comparable to personal debt is a political lie(perhaps unwittingly) sold to scare people in to voting in a given direction. The Federal Reserve is not supporting the mortgage market any more, but is replacing the mortgage-backed securities that are running off the balance sheet by … This is just a restatement of Modern Monetary Theory, which is fringe and has critics on both the right and the left. Classic example of this problem was Greece - it could not print money because it bought into the Euro agreement. Changes in the balance sheet directly contribute to changes in asset prices, especially in the stock market. To date, the US has never failed to make an interest payment on time. [–]HelicopterRides4U 3 points4 points5 points 2 years ago (0 children). -Treasury always has an amount on their balance sheet for the bills and coins they circulate. [–]BoozeoisPig 1 point2 points3 points 2 years ago (0 children). Any other country that attempts to overprint currency will end up like Venezuela or Zimbabwe. At the end some 100$ loan will turn into 110$. It's hard to argue with someone who lacks so many fundamental, basement-level facts. 3when do you see the bubble popping for this era? To the US government, it is not a store of value. Hope he doesn't start wanting to end the Fed and reading up on how Woodrow Wilson started an international banking cartel yada yada yada. Why do you think that is? This inevitability, this unavoidable constant is also partially what gives the dollar stability and gravitas -- people are content to save it, and people are content to use it as a medium of exchange, because it has the ability to pay a debt that no other substance on earth can. The thing that's interesting to you is probably inflation/deflation and the creation of money and why that's done. [–]xcsler_returns 14 points15 points16 points 2 years ago (8 children), There is no amount of spending that maximizes output. USAnia has always been at war with Bitcoinland. That's why FDR or someone tried to switch back to the government printing the money. If coconut production technology continues on pace to 30-40 coconuts by Year 3, better to hoard your shells in anticipation of that since they'll be worth more later instead of using them to buy extra coconuts now. They just hit 1,000,000% inflation. I'm not an engineer so bear with me but it's analogous to someone telling you something like "wood is stronger than steel. Federal Reserve liabilities discusses the key liabilities on the Federal Reserve's balance sheet, including currency and reserve balances. Summary U.S. Federal Reserve balance sheet surges past $6.9 trillion. Because no one is actually loaning the government money. I'm glad someone bothers to point out this Keynesian business. Wages have experienced positive real growth over really any decent timeframe. Not in the way you understand it. Now it's almost $60,000. [–]paintball6818 3 points4 points5 points 2 years ago (0 children). I'm so glad we get the privilege to pay interest on the money we issue; that's a nice racket they've got goin' there. But the fact that the economy is in the right cycle to support a balanced budget strikes me as not guaranteed--sure, sometimes the economy requires a balanced budget. For starters, you're trying to interpret the nations economy through the only economic lens you're familiar with, your own household budget. Open market operations discusses this traditional policy tool, including its evolution during the financial crisis. The total value of the dollar as a currency (or any currency) is worth whatever you can potentially purchase with it. [–]Otiac 4 points5 points6 points 2 years ago (0 children), [–]dasheea 5 points6 points7 points 2 years ago (0 children). Well, that's part two of why comparing government finances to your personal finances is a recipe for paranoia. tax refunds, social programs like food stamps or Medicaid). Consolidated Statement of Condition of All Federal Reserve Banks. Even if they didnt, the marginal utility of each dollar you have is less than the previous. Is this cause for alarm? Devoid of context, none of these things is “good” or “bad” policy, it all has to be relative to the economic context. 4 trillion dollars may sound like a lot, but there are 4,000,000,000,000,000,000 dinosaur-killer sized asteroids in the Universe and any one of them might hit earth. By the time you've faced the drop inflation has probably made up the difference. In Part 1 of this article I detailed the purposeful systematic destruction of global economies, with a bad flu as the catalyst, as part of a plan by the Davos elite to reconstruct the world in a manner most beneficial to these evil men and detrimental to you and me. 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So, yeah, you 're right about the rich get richer, you’re...