Quote of the day - "Enter our hero. Bernanke steps in, dressed in shining white robes and then, with one smooth fluid motion, reaches over to the keyboard to press enter. Another one trillion dollars created, just like that."
He is not creating anything, he just diluting what is already there. Americans only think they have low taxes but Bernanke is taxing them all the time, except this taxation help the rich mates of the banks without exempting the poor.
+Oleg Kiorsak I reckon this is real how U.S. Reserve Bank work. No physical money created, printed or minted. Just lift currency upper limit bar and allow more amount money carry on into the market.
I don't know much about economics, so here's my question: does adding another trillion dollars to the currency have the affect of diluting the value of the existing dollars? If so, would that also make existing debt artificially lower?
+Michael Poloni Yep, 200k mortgage will become less weight 30 years later. But 30 years later you maybe need to borrow half million dollars to buy the same size house. The magic thing is called inflation. So that is why British government considered to issue 100 years mature government bond. Because after 100 years, in theory, all these bond debt will be zero and thanks for the inflation.
Printing money means you have more money chasing the same amount of goods and services. Imagine you gave everyone in Australia one million dollars and then imagine everyone tries to buy a ferrari. They are a scarce resource so quickly the price will sky rocket. If you got your million dollars one day before everyone else you would get to use it before the prices reflect the extra money in the system. The banks get the same leg up since they get the money from the Fed first (eg the Fed buys some mortgage backed securities from the banks allowing the banks to get rid of some toxic assets in exchange for cash in one hit - they then start lending that cash out to others who spend it and prices start going up (ignoring for the moment the economic conditions that are triggering deflation in some asset classes) ) before it filters out to everyone else
HAHAHA
You have just found a big fat defect of U.S. treasury app which need to be hot-fixed as soon as possible! Hahaha ...
HAHAHA
here's the post I was referring to (+Terrence Miao seen it already I think)
https://plus.google.com/u/0/100500197140377336562/posts/11xfqKMKKbL
Hold your breath and tread your path. Haha.