figgered it out- why no money is being printed in the US
APPLE CORP has more money than the US Govt.
I, proportionally, have much more money and better credit. THATS scary.
Its taken dense ol A a couple weeks to figure out the logic behind the inescapable obsevation that since there is no inflation in the US, or not a recent large increase, or ANY recent significant increase, that no money is being printed.
Its sure not "dollar bills"
So, where is the "liquidity" coming from?
It ISNT. Ive stated that before, but now, with more solid reasoning behind it.
Usta be, Gold and Silver were what "money" was founded on. Currencies had different and varying values, rate of exchanges among countries even on a gold standard. But, the variableness of the price of Gold, since its inherently valuable in itself, caused such a problem that commodity standards were abandoned, and Govts went to "fiat paper" based on gold (or golf balls, whatever)
Somethings changed according to Friedman, who writes that we are in uncharted economic waters, indicating that fiat doesnt even rule the day now.
The key is the IMFs input to US debt. Hows that relevant if liquidity is created by the Govt printing bills and the Govt issuing bonds to pay for them?
The key is the US dollar now being used as the worldwide standard, and thus the raised eyebrows at the posisbility of that being eliminated. What else if they keep wrecking our economy?
If the dollar, instead of gold, AND BASED ON NOTHING is used as a world standard, then its bad if its value is allowed to change. Its not hard to keep the value of paper constant, just vary the trading prices to do so.
TRADING PRICES. "Value of goods and services"
"World economy"
"Trade deficits"
Issuing "paper fiat money" here would cause inflation and dollar devaluation, which would de-stabilize the reserve currency, the USD.
[EDIT 8/3 - "reserve currency" means WORLD RESERVE showing that such a National issue would have world effects and thats BAD]
Thats bad. So, thats why they havent printed paper dollars (10s, 100s etc) because thats like destabilizing the gold reserves by mining discoveries (which happened in the early 1900s- "cyanide process")
So, that leaves the debt related to, and payable under, WORLD TRADE BALANCES. With our economy sputtering, as well as many other Nations, I assume trading outputs are down everywhere. They have to be here as manufacturing is down.
So its then clear its delusional to pretend that this massive debt is payable in dollars, and with trade down, and a negative trade balance on our side, it wont get any better.
Notice it wasnt Ratings Firm Moodys who objected to Obamas throwing another 2.4 TRILLION dollars under a bus, and your economic future with it, IT WAS THE IMF.
Moodys says "downgrade no matter what" if so, and that leads to higher interest rates on the loans (liar loans) then how do they continue to isolate the dollar from that?
Theres a critical statement to prove my points in the Reuters piece on Japans REAL yen crisis this week (not a fabricated Obama crisis):
"Reinforcing the message, sources familiar with the Bank of Japan's policy thinking told Reuters that if the finance ministry decided to sell yen, the central bank was likely to ease its ultra-loose policy further to amplify the effect of intervention."
Notice two points:
1.) "finance ministry selling yen"
2 .) central bank responding
Those are NOT happening here, regardless of how much smoke is spewed onto how many mirrors, because if so, the Gubmint would be FLUSH with cash and interest rates would be going up a/o inflation would climb, and its not.
They must be "borrowing" trade balances, or ledger entries from other Nations, and thats where the IMF comes in.
The only place I see this going is abandonment of the dollar as the reserve currency, and possibly, as Friedman describes in other countries, elimination of the dollar and replacing it with something else.
Posted by Dave
at 2:24 PM PDT
Updated: Wednesday, 3 August 2011 9:17 AM PDT