/biz/ - Business & Finance

[Anonymous No.50570586]

>"WE NEED TO END THE FED"
>"WE NEED FREE MARKETS"
>they dont know the fed doesnt print shit and we do, in fact, have free markets

[Anonymous No.50570615]

>>50570586
>believing this
Who do you think requests more money be printed?

[Anonymous No.50570642]

>>50570615
fed hasnt printed a single dollar since 1950.

[Anonymous No.50570699]

>>50570586
they also refuse to accept that government is a phenomenon that emerges from the free market, and maintain a mythical ideal of oppression (because they don't control the market themselves)

[Anonymous No.50570798]

>>50570586
>>50570615
>>50570699
how is the weather in tel aviv?

[Anonymous No.50570868]

All economies are centrally planned
Free market is a myth

[Anonymous No.50570913]

>>50570586
Anon, I'm sorry to break it to you, but you're retarded.

[Anonymous No.50570957]

Money printing is necessary to add liquidity to an ever increasing pool of goods and services. The interest added is and has always been the problem.

[Anonymous No.50570995]

>>50570586
JP MORGAN SHILL BITCH! FED BANKSTER FUCK! STOP MANIPULATIN MY SILVER YOU ANTI-CHRIST WORSHIPPERS!

[Anonymous No.50571101]

>>50570957
And the federal reserve is not a liquidity provider. It hasn't printed a single dollar since the end of WW2.

[Anonymous No.50571190]

>>50571101
https://twitter.com/ftx_app/status/1262175586937720832?s=20&t=9Idj_oLUqwSC6B3IhlskDA

[Anonymous No.50571657]

>>50571190
That's what the federal reserve wants you to think. The fed doesn't print anything. They do QE, which is asset swaps for something called "bank reserves", which banks can't do anything with

[Anonymous No.50571882]

>>50570586
>>50571101
>>50571657
Anglo reasoning. All that shit is invented to obfuscate the fact that they are quite actually, literally, printing free money and to prop up confidence it can continue to do so into perpetuity. Tell you what, how about everyone stops paying taxes and let the free market buy up all treasuries...

>And the federal reserve is not a liquidity provider.

[Anonymous No.50571922]

>>50570586
>>they dont know the fed doesnt print shit and we do, in fact, have free markets

Thinly vailed troll will get them all going.

Well done.

[Anonymous No.50571947]

>>50571657
>straight from the feds mouth
>N-NO THAT'S JUST WHAT THEY WANT YOU TO THINK
keep coping schizo.

[Anonymous No.50571955]

>>50570586
>we do, in fact, have free markets
Sure is great having such wonderful governments around to ensure that our free markets are free in the right ways. Wouldn't want anyone unfairly competing against the megacorps that run the world and get special laws passed to protect them.

[Anonymous No.50572010]

>>50570586
Free market where the banks control the currency, can effectively steal at will by creating debt infinitely, kys jew retard.

[Anonymous No.50572027]

>>50570957
liquidity for the government that is. KYS
>>50570868
the black market disagrees.
>>50570868
for free market to exist there must not be a monopoly on violence

[Anonymous No.50572055]

>>50570699
>things degrade and perish over time
Brilliant realization anon, now tell me why we shouldn't seek to revive or recreate these things we know are great? Or do you believe we'll make some magic system that has eternal lifespan?

[Anonymous No.50572120]

>>50570957
Still sounds like communism to me. Who gets the free money and who decides who gets the free money?

[Anonymous No.50572182]

>>50571657
>ummmm actually bank reserves aren't money
Yeah they are, banks buy assets with their reserves. What you're repeating is a midwit argument that you heard on youtube, it's wrong though. Reserves do go directly into the economy, midwits aren't supposed to know this.

[[e-mail] No.50572199]

I do agree that Fed should go but free marketers seem to ignore that we ended up with a Fed to begin with because the market asked for it. In general, calls to "deregulate" in favor of the free market are really calls to empower the government to the point where it can take away everything the free market already asked for.

I went to the Fed museum at the Fed HQ in Atlanta and they a had a timeline explaining why it didn't work when the Fed was abolished last time. Th main problem was that the state banks which replaced the Fed had no way to know if each other's currency notes were real or not. Basically all of the problems they listed leading to the reestablishment of the Fed after it was abolished the first time are easily remedied with 1990s-level internet infrastructure. My main complaint against people who want a free market is their implication that the market isn't free now. It is free, and it is always free. When they say a free market is an unregulated market (which we do not have), that is stupid because we ended up with all of our current regulations after the market didn't like being unregulated and asked for regulatory structure. Good, new regulations are the answer, not deregulation.

[Anonymous No.50572240]

>>50571882
The banks are the ones printing money. Things are not as bad as you think they are and being based about knowing "how bad things really are" just shows how ignorant you are
My point, anon, is that it is worse than that.

[Anonymous No.50572446]

>>50572199
So what you are saying is that any action towards removing anything bad from society should be avoided since inevitably we'll evolve it again?

[Anonymous No.50572513]

>>50572240
>it's not the banks
>IT'S THE FUCKING GOY-OWNED FEDERAL CREDIT UNIONS
Oven, now.

[Anonymous No.50572602]

>>50572513
I am literally saying it is the banks, not the federal reserve, you stupid, low IQ, redneck.

[Anonymous No.50572630]

>>50570586
>free market
ROFL

[Anonymous No.50572646]

>>50570699
>free market
Never existed in the history of mankind.

[Anonymous No.50572711]

>>50570586
kys retard nigger

[Anonymous No.50572749]

https://www.researchgate.net/publication/265909749_Can_Banks_Individually_Create_Money_Out_of_Nothing_-_The_Theories_and_the_Empirical_Evidence

[Anonymous No.50572960]

>>50572749
Before the financial crisis of 2008, a central bank would typically set policy by picking a target for the interest rate that banks charge each other for over-night loans of reserves—in the US, we would say that the Fed set a target for the federal funds rate.
Suppose the Fed target is 5 percent.
If the economy is on an upswing and the commercial banks spot numerous profitable lending opportunities, they begin advancing more loans to new borrowers. Other things equal, more and more banks would find that they need extra reserves in order to satisfy their reserve requirements (or simply to bolster vault cash to accommodate the increased activity from more customer deposits).
If the Fed didn’t take any action, then the banks’ increased clamoring for reserves would push up the market interest rate on overnight loans of those reserves, perhaps to 6 percent. In other words, in an environment where the banks perceive new lending opportunities, their activity would tend to push the actual federal funds rate above the Fed’s desired target federal funds rate.
In order to maintain its target, the Fed would have no choice but to engage in open market operations, in which it would buy new assets and create more reserves, thus pushing the actual fed funds rate back down to the desired 5 percent target.
This is the kind of mechanism that the authors of the Bank of England study (https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy)) have in mind, in which the central bank passively responds to the banks’ “needs” for reserves.
However, this is largely a matter of semantics. It is still the case that the central bank controls the total quantity of base money, and that the commercial banks can’t create new reserves. The textbook description is still correct: When the fed funds rate is 6 percent and the Fed wants to push it down to 5 percent, the Fed must buy assets and inject new reserves into the system.

[Anonymous No.50572992]

>>50570586
>>50572960

[Anonymous No.50573052]

>>50572120
in a sound economy? whoever is doing productive work that increases the nation competitiveness globalwide, the decision is made by government which is supposed to be elected for the good interest of the nation inhabitants.
So you're an 'entrepeneur' and you want a loan. Well you're not getting shit for your digital online casino or dildo factory. You want to invest in markets? better have a good track record.
Those who do are approved are not required to pay interest back only the principal. No bank or government should be allowed to profit from loans, they should only be a mean to catapult human potential towards its manifestation

[Anonymous No.50573095]

>>50572027
liquidity for the markets brainlet. What do you propose we trade our millions of different goods in? notice increasing technological advances will also massively increase production of such goods and newer to come

[Anonymous No.50573122]

>>50573052
Wow, anon, this is so smart, I really don't see any problem at all with your scheme.
>No bank or government should be allowed to profit from loans, they should only be a mean to catapult human potential towards its manifestation
>What are malinvestments & bubbles

[Anonymous No.50573155]

>>50572960
>>50572992
>in order to satisfy their reserve requirements (or simply to bolster vault cash to accommodate the increased activity from more customer deposits).
You're assuming banks engage in fractional reserve banking, which they are not.

[Anonymous No.50573191]

>>50573155
They were, now you have capital requirements, and even though you can argue about the nuances between the two, the conclusion still holds, ultimately the central bank controls the qty of money.

[Anonymous No.50573229]

>>50573191
They were a 100 years ago. They have capital requirements, which is not necessary for credit creation.

[Anonymous No.50573252]

>>50573122
then goverment takes the loss, and those responsible for the loan decision get replaced by more competent people

[Anonymous No.50573560]

>>50572120
Gold miners decide who gets the newly mined gold

[Anonymous No.50573609]

>>50570586
plebbit invaders go back

[Anonymous No.50573682]

>>50573229
>which is not necessary for credit creation.
Explain why

[Anonymous No.50573744]

>>50571882
who is that whore?

[Anonymous No.50574049]

>>50573682
Deposits are not what's being lent. When you apply for a loan, that is when credit creation happens. You are not loaning deposits and no deposits are required for banks to make you a loan. You're given a loan, which is a liability of the bank to you, and simultaneously, your loan is an asset for the bank, which increases their balance sheet. This is how money is created.
They do not need deposits to loan and besides, there is no such thing as "deposits", this is something of the past
When you deposit money into a bank, you are "lending" your money to the bank.
The bank owes you your "deposit"
You are not depositing anything
If the bank defaults, you can lose your money (but the government insures you)
But you are not depositing anything. There is no money in a vault
Bank owes you money when you deposit, and simultaneously, your "money" is an asset of the bank

In summary: when you get a loan, money is created
No deposits are needed for a bank to give a loan. Fractional reserve banking 101, except eliminate the need for deposits altogether because it is all digital now anyway.

[Anonymous No.50574155]

>>50574049
>You're given a loan
Better phrased as "you are given money", to avoid confusing your liability that you're given with the banks liability
They have created money and have given it to you. They have "lost" money, but in return, they have gained your loan as an asset (which they can repurpose, use as collateral, repackage as an MBS, whatever)
Basic balance sheet manipulation

The loan you owe to the bank is your liability but when you return it, you've removed money from the money supply and the banks have earned interest
So when you apply for loan: money is created. Banks balance sheet increases and money is made
When you pay back loan: money is removed

[Anonymous No.50574358]

>>50574049
>>50574155
I know the basics about this theory, but you are arguing that the central bank has no control whatsoever on the money supply.
I think that your paragraph can be true while not necessarily ultimately disproving the fact that the central bank have an influence on the qty of money
It's not like the commercial banks can't default,
Money begin and end with a loan yes, but that doesn't prevent the quantity of loans being made to be potentially heavily influenced by external artificial factors, such as the policies of the central bank
For you when the fed modify the FFR, it doesn't have any influence on the commercial bank lending whatsoever ? they never lend more or less depending on these policies ?

[Anonymous No.50574448]

>>50571955
Ssshhh this is /biz/ you aren't allowed to talk sense here

[Anonymous No.50574462]

>>50574049
>They do not need deposits to loan
why do they pay interest on deposits if they don't need them? Loosing money for fun?

[Anonymous No.50574486]

>>50574358
>For you when the fed modify the FFR, it doesn't have any influence on the commercial bank lending whatsoever ? they never lend more or less depending on these policies ?
Yes, they don't. The federal funds rate sets the target for the repo market. How overnight repurchases would impact banks's willingness to loan I don't know
If banks are risk averse, they do not lend. The fed's role is to make them less risk averse. The FFR is merely manipulating market sentiments
For example in 2019 the repo rate spiked to 10%, despite the FFR being at what, 1%? Why wouldn't banks lend to each other for 10% even? It just goes to show that the floor the fed sets means little between banks,
But it is completely irrelevant as to whether or not banks give out credit.

[Anonymous No.50574510]

>>50572027
So you think everyone should have equal violence? That's impossible in a free market. Some people are simply able to buy more guns.

[Anonymous No.50574627]

>>50574462
Thy do not need deposits to lend money, anon. When you apply for loans, that is when credit is made
"Deposits" serve a different purpose. When you "deposit" money, you are, once again, expanding the bank's balance sheet, because your money becomes an asset for the bank, and your deposit becomes a liability for them
Banks don't just lend money, but they also invest
Not in loans, but on the open market
That is the purpose of your "deposits"
It expands the bank's balance sheet, which means that the bank has "more assets", which they can use to get access to liquidity via the repo market for example and to conduct normal market operations with
But your deposits aren't needed to give out a loan
They are completely irrelevant in this regard
When you apply for a loan, that is when money is being created. Deposits are not what's being lent out

[Anonymous No.50574714]

>>50570586
>maximum goytardism
into the oven, too

[Anonymous No.50574734]

>>50574486
>Yes, they don't.
I find this hard to believe,
do you have any extensive reading material to share like a book centered on this ?
>How overnight repurchases would impact banks's willingness to loan I don't know
the amount of liquidity that they have access to seems to be pretty important
>If banks are risk averse, they do not lend. The fed's role is to make them less risk averse. The FFR is merely manipulating market sentiments
Aren't you arguing here that the central bank is manipulating the money supply indirectly ?
>For example in 2019 the repo rate spiked to 10%, despite the FFR being at what, 1%?
Seems like it's an exception
>Why wouldn't banks lend to each other for 10% even? [instead of what is dictated by the ffr]
because the supply is fucked up by the fed

[Anonymous No.50574779]

The Fed buys Treasuries with money it made up out of thin air.

[Anonymous No.50574837]

>>50574734
>the amount of liquidity that they have access to seems to be pretty important
They do not lend liquidity though. I thought you agreed, or at least knew about the theory I am talking about?
>Aren't you arguing here that the central bank is manipulating the money supply indirectly ?
That is exactly what I am saying since the start of this thread. Indirectly. Fed can't do shit directly.
>Seems like it's an exception
Fact that it happened is the point and it's a regular occurrence now. Not as high, but still way above the federal reserve's target which again, is the point
>because the supply is fucked up by the fed
Which is you admitting the ffr is meaningless then...?

[Anonymous No.50574854]

>>50574779
>The Federal Reserve purchases Treasury securities held by the public through a competitive bidding process.
https://www.federalreserve.gov/faqs/how-does-the-federal-reserve-buying-and-selling-of-securities-relate-to-the-borrowing-decisions-of-the-federal-government.htm

[Anonymous No.50574860]

>>50574779
Yes, but OP is arguing that this process of artificially continually spiking up the demand for treasuries have no influence at all on the commercial banks lending activities
Because it's true that money is created and destroyed at the beginning and end of a loan.
Do you or anybody else understand the subject well enough to bridge the two (or maybe share some reading material) ?

[Anonymous No.50574894]

>>50572602
I think the Fed does mint coinage though

[Anonymous No.50574942]

>>50574627
ok, and what's stops banks from lending to each other for the sole purpose of ballooning balance sheets?

[Anonymous No.50575038]

>>50574837
>They do not lend liquidity though.
Even between each other ? because with repo I thought that you needed to give up collateral like treasuries
>Indirectly. Fed can't do shit directly.
Ah so you are saying that changing the FFR have *indirectly* an impact of the quantity of lending being made by commercial banks ?
So QE ultimately change the behavior of banks ? (more lending occurring, therefore more creation of money)
>Fact that it happened is the point and it's a regular occurrence now.
Okay but if you change suddenly the ffr you will certainly see the baseline rate also change, even with the instabilities represented by the frequent spikes, you agree ?
>>50574942
also this, interesting

[Anonymous No.50575070]

So when will banks bail in deposits?

[Anonymous No.50575097]

>>50574942
Fear of another 08, which was bank credit and the collateral multiplier being put on steroids
you can only put people in so much debt until it starts to become unproductive
ultimately, money isnt being printed for the sake of it, but the goal is monetary expansion and when one bank shows doubt, less liquidity is available in the repo market and this creates a cascading effect where fewer and fewer banks are left holding the bags and as it comes crashing down you get a bear sterns and lehman brothers
The repo market IS banks ballooning each others balance sheets, lending to each other to fund operations but you cant increase balance sheets for the sake of it. What would be the point of that when you already control the money supply

[Anonymous No.50575108]

>>50570615
Nobody requests shit. Banks print money whenever they make a loan.

[Anonymous No.50575158]

>>50575108
Basically this, if no one is borrowing, spending or if economic activity shrinks, the only thing left for banks to do is to lend each other reserves. Banks still have to pay to fund their operations, and like you, they need to make sure they're not insolvent.

[Anonymous No.50575182]

>>50575038
>Even between each other ? because with repo I thought that you needed to give up collateral like treasuries
Yeah liquidity is important to THAT, but you responded to this:
>How overnight repurchases would impact banks's willingness to loan I don't know
Overnight repurchases have no bearing on whether or not banks are willing to lend to the market. It has a bearing when they lend to each other, of course, repo has a bearing on repo....
>So QE ultimately change the behavior of banks ? (more lending occurring, therefore more creation of money)
Yes. Indirectly, not directly. The FFR does not impact it directly. It is an attempt at making banks less risk averse, affecting their behavior indirectly:
>>50574486 >The fed's role is to make them less risk averse.
>Okay but if you change suddenly the ffr you will certainly see the baseline rate also change
Depends on the degree. 25 basispoints here and there don't mean much, given repo's having issues at 10% even, with or without the fed
>also this, interesting
>>50575097

[Anonymous No.50575183]

The Fed is nothing more than a clearing house. Technically, Congress CAN print money through the treasury, that's what COVID relief was. Congress passed $3T worth of treasury bills/notes and bonds that the treasury auctions off later.

[Anonymous No.50575198]

>>50575183
Congress can't increase the money supply. Only private banks can do that.

[Anonymous No.50575223]

>>50575183
This. Treasury is what matters. The Federal Reserve is the biggest gaslighting I have seen in a long ass time. All started with the GFC. Propaganda on overdrive. Fed hasn't printed shit for almost an entire century.

[Anonymous No.50575376]

>>50575198
The Treasury can continue to pass spending bills since there is such a high demand for dollars. Since treasury bills, notes and bonds for all intensive purposes have been monetized by the foreign dollar market, they are for all intensive purposes, a "money alternative". The US dollar (currency) is a debt of the Federal Reserve, whereas a US Treasury Bond is the debt of the Treasury.

So yes, the US government CAN pass a one-time, $3T dollar spending bill, and then foreign buyers can buy those debts, recycling dollars back into the economy through stupid government programs. They can keep doing this so as long as there is enough demand for US dollar denominated debt out there.

[Anonymous No.50575434]

As for private banks, who control about 98% of the money supply, their "money" is not a liability of the Fed, but their own liability denominated in US dollars. When you have dollars at Chase, you really own "Chase dollars". When you have dollars at "Bank of America", you really have "Bank of America dollars". When you own paper currency, you have a "Federal Reserve dollar"

At the end of the day, debts and credits are cleared at the Fed, any shortfalls or excesses are dealt with at the clearing house.

This also means, that if Chase goes bankrupt, your Chase dollars past the FDIC limit becomes worthless.

[Anonymous No.50575527]

>>50575182
>>50575223
make sense
>It is an attempt at making banks less risk averse, affecting their behavior indirectly
Seems like a recipe for creating bubbles after bubbles.

[Anonymous No.50575542]

Please stop listening to bond shills.

The fed does not buy treasuries from banks on net (banks are not net sellers), hence it is not really buying from people who can accept reserves as payment. Hence the reserves must be converted to deposits by the banks for the scheme to work.

If it were otherwise, the banks are losing deposits and gaining reserves, which by the bond shills own logic are a much more limited form of money and this would not be a sustainable or attractive scheme for the banks to participate in. They'd stop selling the Fed treasuries.

But ofc, they can serve as the middle men converting reserves to deposits as in pic related, so it's no problem. The Fed may not own the printer, but the banks are happy to rent it out to them.

For further viewing, this channel does a good job:
https://www.youtube.com/watch?v=VsNR4yd4oYA

Essentially he is explaining the same transaction of QE which I just did, plus showing how the Fed's balance sheet growth directly feeds money supply growth to explain the widening gap between credit creation and money supply growth.

[Anonymous No.50575568]

>>50570586

[Anonymous No.50575863]

>>50575542
thank you very much for this post anon.

[Anonymous No.50575943]

>>50570586
>zero understanding of the banking system, fractional reserve lending, and QE
The fed, and all its member banks do, in fact, print money through QE and fractional reserve lending respectively. And they should be abolished, but not in favor of muh free market. Also FYI, all you cucks praying for free markets because you think it means you'll "make it" don't realize that without public oversight of many aspects of the markets, you'd be anally raped at every opportunity by monopolies and entities like landlords who know that consumers don't really have a choice but to pay whatever they demand for housing. Imagine being so naive as to imagine a free market wouldn't just have all competition destroyed or consolidated into monopolies that would make life miserable, gouge everyone's wallets when there is no longer feasible competition, make any alternative way of life unimaginable and impossible (we are 80% of the way there already)

[Anonymous No.50576045]

>>50575542
Banks are not using deposits to buy bank reserves. Bank reserves are gotten via a basic asset swap. One asset swapped for another. This only happens when banks have bad assets on their balance sheet which they need to get rid of. A bank would not give pristine treasuries in exchange for bank reserves, and this hasn't ever happened. The idea of QE is to improve banks's balance sheets.

[Anonymous No.50576178]

>>50576045
>Bank reserves are gotten via a basic asset swap.
You mean like pic related ?
>The idea of QE is to improve banks's balance sheets.
In your view to incentive them to make more (riskier) loans than they should ?

[Anonymous No.50576272]

>>50576045

They're matching reserves the Fed gives them with corresponding deposits (which are not loans, they are newly printed money), then crediting those deposits to a non-bank asset holder, thus completing the Fed's payment to the non-bank in exchange for its asset.

They're simply acting as a middlemen to help the Fed get around the fact that it isn't supposed to be printing money. It's money-creation on demand to keep the money supply from contracting, to pump up US asset prices and try to keep us from going into a depression.

[Anonymous No.50576378]

>>50576178
>In your view to incentive them to make more (riskier) loans than they should ?
No, in order for them not to go under. In order to rid them of bad collateral
>You mean like pic related ?
Yes

[Anonymous No.50576444]

>>50576272
Reserve requirements aren't comprised of deposits. The banks are not engaging in fractional reserve banking.

[Anonymous No.50577471]

>>50570586
>Be leaf from Ontario
>Banned from crypto futures trading unless I have at least $5 million on the exchange
Doesn't sound free to me

[Anonymous No.50577548]

>>50570642
>if I say it's true
There is new money printed every year with a new Treasury Secretary signature. Or least upon ever change of Treasurer.

[Anonymous No.50577685]

>>50575376
That's not money creation. US Treasuries are just transfers of purchasing power. The money supply does not increase.