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Old 01-17-2009, 02:04 PM
  #11  
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Originally Posted by jungle View Post
Still not "out of thin air", but a debt they have promised to pay with your tax dollars in the future. They still sell this debt on the market in the form of treasuries. Taxpayers are also responsible for the interest, which should be about 600 billion a year on the outstanding debt of 12+ trillion.
But I'm referring to the MONETIZED debt, which is specifically debt that was never sold on a market to an investor, but rather sold to the federal reserve. The FED is purchasing debt, putting dollars in the United States Treasury to spend on bailouts.

How did the federal reserve get those dollars?

The same way I create this message; literally, with a few keyboard strokes and mouse clicks. This is why lack of interest on the part of INVESTORS to buy treasurys will not necessarily force the federal government to curtail spending.

Last edited by RXS676; 01-17-2009 at 02:18 PM.
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Old 01-17-2009, 08:29 PM
  #12  
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Originally Posted by RXS676 View Post
But I'm referring to the MONETIZED debt, which is specifically debt that was never sold on a market to an investor, but rather sold to the federal reserve. The FED is purchasing debt, putting dollars in the United States Treasury to spend on bailouts.

How did the federal reserve get those dollars?

The same way I create this message; literally, with a few keyboard strokes and mouse clicks. This is why lack of interest on the part of INVESTORS to buy treasurys will not necessarily force the federal government to curtail spending.

Not quite that simple, it creates debt for the FED. Debt we will eventually have to pay for through taxes. Much like the excess in social security in earlier years- an IOU was left for the pirated funds-again, we get the bill later.
They can't print money without creating debt.

The FED and foreign buyers will be unable to shoulder much more. The party is ending. Capital is finite.
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Old 01-18-2009, 06:46 PM
  #13  
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The atrophy of wealth... cheap money to bad investments.. liquidating malinvestments... transferring private sector funds to government programs Keynesian style with IOUs......... more of what is to come.... aka economic stimulus and the newer deal

Last edited by ryan1234; 01-19-2009 at 06:34 PM.
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Old 01-19-2009, 06:06 PM
  #14  
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Default printing money

One of the sub-Saharan countries, I don't recall which one, had hyper-inflation and had "upgraded" their basic monetary unit to one billion or trillion--something like that. The deal fell through when the German printing company doing the work discovered that they were to be paid with some of the notes that they were producing.
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