/biz/ - Business & Finance

[Anonymous No.50118374]

some people claimed here that dollars are being "destroyed" by the fed
I suspect this is an attempt of propaganda, and that the actual reality is they slow down the rate at which money is created
destroying money means destroying some dollar forever, until some are created through a different source

so can anyone tell me the truth
is the fed lowering the dollar total supply?

[Anonymous No.50118396]

Yes it's coming down. See?

[Anonymous No.50118402]

sort of not really

credit is being destroyed which can be measured in dollars, but is not in fact actual dollars.

[Anonymous No.50118413]

>>50118374
Banks need to start going insolvent in mass in order for dollars to be destroyed. They are the primary borrower from the fed, the credit issued by the fed is permanently in the system until bank recipients start going under.

[Anonymous No.50118418]

>>50118396
>-1%
>mumus btfo!!!

[Anonymous No.50118717]

>>50118418
this but unironically

[Anonymous No.50118803]

If you have a loan and pay it off, the money created is zero. Money is created when a loan is given out through fractional reserve lending. If they raise interest rates, less people loan, destroying dollars.

Of course if you're based you see that it doesn't really do anything. Well, it does in the short term because people run out of money, we say it creates a recession. But of course it treats the symptom and not the cause since prices eventually adjust and you have a similar economy in the present as you had in the past, after having a shitty period that didn't accomplish anything long term since in order to fix it, you essentially have to take down fractional reserve banking in itself. Once an inbalance of loans comes in, i.e. higher population growth for a period, inflation (as in money growing, not necessarity cpi since you can have a lot of commodities) is inevitable using this system once certain conditions are met

[Anonymous No.50118836]

>>50118803
The money doesn’t net 0 there’s still the interest that was created you fucking idiot. Imagine having an opinion on something and not knowing the basic mechanics of what you’re discussing

[Anonymous No.50118845]

>>50118402
Wrong because credit is actual dollars. Credit is the primary form of money in the US economy currently. Yeah, it wasn't like this back when the country was first founded. Dollars are also credit. They are bank notes (checks) from the Federal Reserve bank. It says so right on them.

[Anonymous No.50118876]

>>50118803
The interest creates new money, defaulting on loans destroys money when the interest paid is less than the initial lent.

[Anonymous No.50118963]

>>50118374
Yes it is true. Money is actually being destroyed. Yes the money destroyed is gone forever until some other money is created. This is not unprecedented at all. This is what Quantitative Tightening is. Contrary to what some say, inflation is a monetary phenomenon and destroying money is the way to fight it.

https://ycharts.com/indicators/us_m1_money_supply

[Anonymous No.50119046]

>>50118413
Banks are normally the borrowers from the Fed, however, this has not been the case during Quantitative Easing. https://www.forbes.com/advisor/investing/quantitative-easing-qe/#:~:text=Quantitative%20easing%20works%20by%20making%20large-scale%20asset%20purchases..,market%20changes%20the%20economy%20%28mostly%29%20for%20the%20better%3A

During QE, the fed buys bonds from the market. These bonds are treasury securities and mortgage bundles from Fannie Mae or Freddie mac or anyone who previously bought from those two entities.

Banks going insolvent does not destroy the money. Actually, going defaulting through insolvency makes the money created via borrowing permanent in the economy.

Also, dollars are destroyed whenever anyone pays down the bonds the Fed bought and the Fed doesn't buy new bonds with the money. The money they pay to the fed simply ceases to exist. The money literally came from thin air to begin with.

[Anonymous No.50119089]

>>50118836
You're the one that doesn't know what you're talking about. Only the loan principle is created money. The interest is not created or destroyed. When you pay interest, the money just recirculates to the paychecks of the bank staffers. It's not like the loan principal being paid back with nets to zero.

[Anonymous No.50119119]

>>50118876
The loans are new money, the interest paid is just existing currency from the economy unless you took out another loan to pay the interest. Defaulting on loans does not destroy money. It actually makes the money permanent in the economy. Sufficient defaulting on loans in aggregate is actually what solved problems like the great depression.

[El Arcón No.50119131]

On Certain Aspects of American Economics Relevant to 2021
http://gg762.net/d0cs/papers/On_Certain_Aspects_of_American_Economics_Relevant_to_2021__v3-20210521.pdf
We discuss contemporary socioeconomic issues in a frame of rhetoric beyond the Overton window. We analyze certain policies such as the minimum wage and federal tax structures. We describe a new set of wage and tax policies called normal policies and argue for their superiority over the comparable policy agenda framed by the Overton window. Coronavirus (COVID), racism, fascism, and nationalism are considered. While war followed by total reformation is certainly the best (only) solution to the present overarching societal malaise, for the purposes of scholarship we approach much of the material herein from a good faith vantage point assuming that the entrenched powers might ever permit any changes for the better to occur.