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Message |
| william_b_ryan@hotmail.co |
 Posted: Wed Jan 04, 2006 11:12 pm |
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Guest
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"The Fed lends directly to the Treasury any time the Treasury needs the
clearing balances to pay for government expenses."
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Not only is it NOT "any time," I challenge you to identify even a
single instance where the Fed has done so.
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Before the 'private sector' can buy T-Bills, the 'private sector' must
have money for the purchase.
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No, because the "private sector" includes the banking sector, which
purchases the majority of government securities, amd has the ability to
credit deposit balances. |
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| Chas |
| Posted: Fri Jan 06, 2006 2:08 am |
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<william_b_ryan@hotmail.com> wrote in message
news:1136289966.132097.285980@g44g2000cwa.googlegroups.com...
[quote:107f20dd36]
"If necessary, the Treasury could borrow directly from the Fed.
However that option is rarely used and only if needed to cover a
temporary shortage of funds."
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Yes, in continuation of the Mosler party line in support of the banking
fraternity. Perhaps this old fellow will identify a single instance
where this "rarely used" "option" has actually been used to cover a
"temporary shortage of funds," or otherwise.
[/quote:107f20dd36]
During time of War. A high percentage of WWII was financed by printing money
and this action led to the Treasury Accord of the 1950's. |
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| The Trucker |
| Posted: Fri Jan 06, 2006 10:34 pm |
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<william_b_ryan@hotmail.com> wrote in message
news:1136434332.880672.104750@g44g2000cwa.googlegroups.com...
[quote:665b9942c4]"The Fed lends directly to the Treasury any time the Treasury needs the
clearing balances to pay for government expenses."
---------------------------------------------------
-------------------------------------------------
Not only is it NOT "any time," I challenge you to identify even a
single instance where the Fed has done so.
-
Before the 'private sector' can buy T-Bills, the 'private sector' must
have money for the purchase.
---------------------------------------------------
-------------------------------------------------
No, because the "private sector" includes the banking sector, which
purchases the majority of government securities, amd has the ability to
credit deposit balances.
[/quote:665b9942c4]
I will admit that I do not KNOW how the money comes into existence
originally. The problem is that I don't think you KNOW either.
The way it was explained to me is that the FED creates the money
in the accounts of the Treasury, the Treasury spends the money, and
THEN the Treasury sells T-Bills to those entities that were able to
"lasso" these bucks at the end of the day. You are saying that the
Treasury sells T-Bills to banks that are creating money for such
purchases. If that is so then this is quite a scam. The banks are
ripping off the public big time.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org |
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| william_b_ryan@hotmail.co |
| Posted: Tue Jan 10, 2006 6:25 am |
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Guest
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"I see no contradiction here. We merely have two different 'creators'
of the money. In my version the money is created by the Fed and in your
version the money is created by the banks."
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The Fed is a bank and creates money in the same manner as any other
bank. The money created by the Fed is completely fungible in the
clearing system with the money created by any other bank.
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"I say that the creation by the Fed and the subsequent sale of T-Bills
by the Treasury..."
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But this does not correctly describe the process. It is not what
happens. You are apparently influenced, whether you know it or not, by
the multimillionaire currency trader Warren Mosler through his
geriatric conduit to this list, William Hummel, who fallaciously
conflate the Fed with "government," and the "banks" with the "private
sector" in a three sector economy: Government, the Private Sector, and
Consumers.**
The proper demarcation of the modern competitive free enterprise system
is conceptually an economy in three fundamental sectors: Consumers,
Firms and Banks, where the Fed is conceptually a member of the banking
sector, regardless of its titular or putative "ownership." Government
is conceptually a member of the firms sector. The Fed and Government
are not "equals" in their respective sectors, but concertmasters to
their orchestras. So it is not a matter of what you "say" but what
actually "is." And that is a matter of empirical observation.
Mosler and Hummel's theory is straight from the fascist economic
theoreticians of the twenties and thirties, their so-called "state
money" approach that was tested experimentally by the Nazi's at
Theresienstadt
http://www.geocities.com/socredus/theresienstadt.jpg in prototype of
the system of control that would be imposed on peoples in conquered
lands.
The Nazi's "proved" at Theresienstadt that the "state money" approach
will work if imposed. It does not however properly describe the system
we now have, thank God.
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**In elaboration, they see a "vertical" component of money from
"government," and a "horizontal" component from the "banks," where the
horizontal component in "bank" credit necessarily "nets to zero." "Net
financial assets" in the "private sector" therefore derive in their
entirety from government deficit spending, which is complete nonsense.
The theory reflects a profound ignorance of the conventions of
accounting.
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| The Trucker |
| Posted: Tue Jan 10, 2006 9:51 pm |
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<william_b_ryan@hotmail.com> wrote in message
news:1136892343.105377.134550@z14g2000cwz.googlegroups.com...
[quote:42ca9459c1]"I see no contradiction here. We merely have two different 'creators'
of the money. In my version the money is created by the Fed and in your
version the money is created by the banks."
--------------------------------------------
The Fed is a bank and creates money in the same manner as any other
bank. The money created by the Fed is completely fungible in the
clearing system with the money created by any other bank.
-
[/quote:42ca9459c1]
So far, so good. The Fed "loans" the money to the Treasury
by creating a "deposit" in the account of the Treasury. The
Fed holds a note or a bond as an offsetting asset. Money
has been created by the Fed/Treasury.
[quote:42ca9459c1]
"I say that the creation by the Fed and the subsequent sale of T-Bills
by the Treasury..."
--------------------------------------------
But this does not correctly describe the process. It is not what
happens.
[/quote:42ca9459c1]
So where is YOUR data/proof that I am wrong on this?
[quote:42ca9459c1]You are apparently influenced, whether you know it or not, by
the multimillionaire currency trader Warren Mosler through his
geriatric conduit to this list, William Hummel, who fallaciously
conflate the Fed with "government," and the "banks" with the "private
sector" in a three sector economy: Government, the Private Sector, and
Consumers.**
[/quote:42ca9459c1]
I see nothing amiss in that sectioning off of the players.
[quote:42ca9459c1]The proper demarcation of the modern competitive free enterprise system
is conceptually an economy in three fundamental sectors: Consumers,
Firms and Banks, where the Fed is conceptually a member of the banking
sector, regardless of its titular or putative "ownership." Government
is conceptually a member of the firms sector. The Fed and Government
are not "equals" in their respective sectors, but concertmasters to
their orchestras. So it is not a matter of what you "say" but what
actually "is." And that is a matter of empirical observation.
[/quote:42ca9459c1]
And I suppose you are the "emperor" doing these imperial observations:)
[quote:42ca9459c1]Mosler and Hummel's theory is straight from the fascist economic
theoreticians of the twenties and thirties, their so-called "state
money" approach that was tested experimentally by the Nazi's at
Theresienstadt
http://www.geocities.com/socredus/theresienstadt.jpg in prototype of
the system of control that would be imposed on peoples in conquered
lands.
The Nazi's "proved" at Theresienstadt that the "state money" approach
will work if imposed. It does not however properly describe the system
we now have, thank God.
------------------
**In elaboration, they see a "vertical" component of money from
"government," and a "horizontal" component from the "banks," where the
horizontal component in "bank" credit necessarily "nets to zero." "Net
financial assets" in the "private sector" therefore derive in their
entirety from government deficit spending, which is complete nonsense.
The theory reflects a profound ignorance of the conventions of
accounting.
-
[/quote:42ca9459c1]
I'm scratching my head wondering why you think the system is
bad. I see all the Nazi and Fascist name calling but I see nothing
inherently wrong with the system described by Moseler. But like
any other system it can be abused.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org |
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| william_b_ryan@hotmail.co |
| Posted: Wed Jan 11, 2006 5:17 am |
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Guest
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"So far, so good. The Fed 'loans' the money to the Treasury by
creating a 'deposit' in the account of the Treasury. The Fed holds a
note or a bond as an offsetting asset. Money has been created by the
Fed/Treasury."
------------------------------------------------
Except the Fed does not lend directly to the Treasury and never has,
with the sole exception being its secretive conduct during WW2. The
Fed, along with the commercial banks in their collective process of
creating money, purchase Treasury and other securities through the
so-called Wall Street "open market," with the majority of the
securities they purchase being issued by private firms, not government.
So they are effectively lending to firms and government, not just
government, when they purchase securities in creating money. Moreover,
the Fed and other central banks no longer mostly inject money into
their respective systems through the net purchase of their governments'
treasury securities, but through the purchase of "repos," which are
"derivative" securities created by the banks themselves. So the
Moslerite thesis is quite wrong on both these two counts.
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"I'm scratching my head wondering why you think the system is bad. I
see all the Nazi and Fascist name calling but I see nothing inherently
wrong with the system described by Moseler [sic]. But like any other
system it can be abused."
------------------------------------------------
The system described by Mosler is not the system we have. So firstly
they lie about the system that actually exists in their propaganda. It
is the system they would like to have that they are trying to persuade
the authorities to implement. The system they would like to have is a
centralized system of control of the economy from the top, whereas the
one we actually have is adversarial with checks and balances and a
measure of public oversight, much more enabling of personal freedom
though certainly it could be better.
But, all right, count yourself among the Moslerites. You have been
recruited into their stultifying mindset.
Sieg Heil! |
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