>How do money enter the circulation?

[Anonymous No.55884837]

>These days, money is created when a central bank buys bonds from banks. The banks then lend the money out to borrowers, who spend it, and the money then is used by others, flowing through the economy

so money is literally print out of fucking thin air? and ""banks"" get them for fucking free to buy whatever the fuck they want? why do i have to work so hard for that shit then when some people get billions of cash for fucking free?

[Anonymous No.55884855]

>>55884837
oy vey this thread is full of antisemitism

[Anonymous No.55884867]

>>55884837
Uhm you are supposed to believe the media

[Anonymous No.55885268]

>>55884837
are you seriously just now understanding this? how old are you? It's called a fractional reserve, debt based money banking system. And yes it's completely fraudulent. Government fiat should always be backed by something like gold or silver. But people all accept it so they deserve getting raped collectively.

[Anonymous No.55885304]

>>55885268
>Government fiat should always be backed by something like gold or silver.
No
Gold and Silver are just man made bullshit aswell
There should be NO taxes, and new money should be given to the government as replacement to tax while banks get none

[Anonymous No.55885308]

>>55884837
That's why I hold bitcoin

[Anonymous No.55885339]

>>55885268
remember when fractional reserve banking was required to reserve a fraction of the customer deposits?
>>55885308
>muh digital fiat
you hold bitcoin because you don’t understand the banking system.

[Anonymous No.55885341]

>>55885308
>that why I hold a pump and dump scam bro

[Anonymous No.55885349]

>>55885339
>remember when fractional reserve banking was required to reserve a fraction of the customer deposits?
thought it was 10%, is that not a thing anymore?

[Anonymous No.55885356]

>>55885349
not in usa

[Anonymous No.55885405]

>>55885356
dude wtf hahaha, holy fucking shit. we have to be nearing the end of this scam, surely it can't go on like this much longer.

[Anonymous No.55885521]

>>55884837
Central bank issues bank notes as debt with interest. It’s impossible to pay back the principle and the interest because there isn’t enough existing dollars to do so unless more money is printed but then more debt in created and more interest needs to be paid.

[Anonymous No.55885675]

>>55885356
what the FUCK does this mean and how can i profit from it tell me right NOW

[Anonymous No.55885683]

Critical thinking is racist. Don't be racist!

[Anonymous No.55885707]

>>55884837
It's a literal scam. Using exponential functions and a legal system adamant about defending any amount of personalty is a 100% guarantee method of transferring ownership of everything into the hands of the owning class.
The history of central banking is basically the enslavement of mankind and harnessing our potential for private profit as opposed to unleashing human ingenuity. Hitler and the Natsocs are a chapter in the history of central banking along with Ghaddafi, and Saddam Hussein and now Ukraine.
The only way to oppose economic-power is through collective political power of a body politic. Authoritarianism is the only way to stop these people and hence why society is so hell-bent on self-sabotage. You're a hostage in the middle of a bank-heist and the robbers are content to allow you to binge drink and fuck each other in the ass.

[Anonymous No.55885752]

>>55885268
Being backed doesn't fucking matter. What made hold backed currency attractive was that it forced governments to adhere to the logic of mining gold. If we locked fiat into a set inflation and determined how it went into the system then we'd never have this issue again

[Anonymous No.55885800]

>>55884837
just wait until you find out that private banks create money themselves out of thin air every time they write a loan and lend out money they don’t even have.

[Anonymous No.55885816]

Don't the banks need to have dollars to buy the issued bonds? Isn't the later FED bond-buybacks then zero-sum (not considering the interest)?

I'm a total noob so someone please explain how the absolute/total money supply creation isn't just through debt forgiveness or coin minting

[Anonymous No.55885841]

>>55885816
the fed pays a profit margin to the banks for the bonds. but private/commercial banks are the real creators of money, not central banks.

[Anonymous No.55885894]

>>55885841
Ok, bank has 1 dollar but lets people spend 10. 9 magic jew dollars

[Anonymous No.55885960]

>>55884837
Money is loaned into existence. The money we use is called “demand deposits.” The bank owes you money on-demand. Banks can only create demand deposits by lending. They add a deposit into the borrower’s account, which is a liability to the bank, and they add the present value of the loan to their asset sheet. The difference between the interest they pay on deposits and the interest they get on loans (in present value) is the third part of the balance sheet, shareholder equity.

When you do demand your money, the bank gives you cash. Cash is Federal Reserve notes. That’s a printed receipt for a demand deposit held at a Federal Reserve bank. Those demand deposits are also loaned into existence when the Federal Reserve banks buy Treasury bonds from their primary dealer banks. The Federal Reserve banks credit the dealer banks with demand deposits in their Federal Reserve bank accounts, and add the demand deposit liability and the Treasury asset to their balance sheet.

Because money can only be created by lending, there will always be more total debt in existence than money at any given time. In order to pay this year’s debt, someone somewhere must always borrow more. So the amount of total debt compounds, along with the share of GDP going toward paying interest. Those compounding interest expenses get baked into prices as businesses play catch-up with their ever-rising financing costs. Inflation is the cost of interest being passed down to consumers. It is built into the system structurally and will compound continuously until there’s no longer enough new production to keep up with financing costs.

[Anonymous No.55885969]

>>55885675
it means banks spent all your money. how do you profit? I don’t know. I’m poor

[Anonymous No.55886053]

>>55884837
You need pickaxe to dig for gold. So money is 'created' on the basis you dig gold and use gold to pay back loan.

You need a Van and tools to become an tradesperson. So money is 'created' on the basis you can now go and become economically productive where as previously you'd be sitting on your arse.

You need 80% of your income 'furlough' to do nothing for 2 years because pharma companies claim you're going to die if your country doesn't buy it's untested vaccine after changing the definition of 'vaccine', Your countries population is now indebted to a central bank and pays through inflation on the basis they will have to do something to earn money or be homeless or starve.

Questions?

[Anonymous No.55886062]

>>55884837
>money is created when a central bank buys bonds from banks

what? no. money is created when banks make new loans

[Anonymous No.55886285]

>>55885752
>Being backed doesn't fucking matter.
yeah it does, it's not a coincidence that since ending the gold standard inflation has skyrocketed.

>What made hold backed currency attractive was that it forced governments to adhere to the logic of mining gold.
No, what makes backed currency attractive is the fact that you can't just keep printing money out of thin air because your currency is redeemable for gold or silver.

[Anonymous No.55886335]

>>55886062
>>55886285
>yeah it does, it's not a coincidence that since ending the gold standard inflation has skyrocketed.
Because the people that print the money also print at their whim
>No, what makes backed currency attractive is the fact that you can't just keep printing money out of thin air because your currency is redeemable for gold or silver.
No, because they HAVE printed when the currency was backed and they'll do it again. It doesn't matter what you back currency with. The number one valuable thing of a currency is the model by which the supply increases and how it's distributed. People gravitated towards shiny rocks because we traded in shiny rocks and thus supply was hard to tamper with. That system is incompatible with the world in its current state. Backing the currency is useless when the distributor of the currency controls that circulation and can do what it wants. The absolute best system is a system in which the rules of said currency are set in stone and cannot be modified. At its core, your currency SHOULD reflect the labor of your country and it is backed by the faith that you can turn your labor into currency and exchange it for goods and services. That's the whole point of currency. Going to the gold standard would do us fuck all. Hence why the best system is something like Bitcoin where the rules are set in stone. You can sleep peacefully knowing that your currency won't be turned into firewood because some jew wanted to give money to basketball Americans.

[Anonymous No.55886455]

>>55886335
>The absolute best system is a system in which the rules of said currency are set in stone and cannot be modified.
agreed

>Hence why the best system is something like Bitcoin where the rules are set in stone.
indeed it would be the best, too bad Bitcoin doesn't work as a currency and is a complete failure.

[Anonymous No.55886759]

>>55885960
>>55886062
federal govt spends money into existence:

So what is the purpose of T-securities, the total of which erroneously is called “debt”? T-security accounts”

They allow holders of unused dollars to store them in a safe, interest-paying account, which stabilizes the dollar
They help the Fed control interest rates.

That’s it. The purpose is not to provide the federal government with spending dollars. The government creates all it needs. All federal spending is done with newly created dollars. No spending uses the dollars in T-security accounts.

For this reason, the size of the misnamed “debt” is irrelevant. Whether total deposits equal $100 or $100 TRILLION, the government has the same real ability to return them to depositors.

[Anonymous No.55886824]

>>55886759
You’re not being slick, Schlomo. If the government spent money into existence, instead of borrowing it at interest, we’d have no inflation and no business cycle.

[Anonymous No.55886914]

>>55886824
I don’t know man. it’s genuinely possible that the people on /biz/ are retarded enough to think the federal reserve is a government entity and that they don’t even understand what the national debt means. if this were /pol/ I would be pointing out the long nose with you, but these shitcoin enthusiasts don’t have a fucking clue about real world finances. most of them don’t even know what a recession really is.

[Anonymous No.55886984]

>>55885800
>>55886062
These two are correct.

Money in the modern day is created by private bank loans, with the actual ability to create money limited only by required reserve ratios.

A bank does not actually need 500k to lend you a mortgage, they just write you a loan for 500k and then mark it as a liability on their balance sheet. As long as their assets and liabilities are still above the required reserve ratio they are golden. They are given the ability to print new currency essentially.

This is mostly controlled via the treasury by the office of the comptroller of the currency, which is the office that determines the legality of a banks balance sheet. The OCC is far more ingrained in the market than most people think actually, the OCC is the department that controls investment banks reserves and approves stuff like what risk calculations banks can use to compute exposure via OTC derivatives, as well as enforce the Basel accord on banks.

This is because investment banks are monolithic entities since the mid 90’s that combine the cash reserve power of corporate and retail banking with the cash yield behavior of traditional investment banking.

[Anonymous No.55887038]

>>55884837
>so money is literally print out of fucking thin air? and ""banks"" get them for fucking free to buy whatever the fuck they want?
Its printed by the government. Central banks are also the government
>why do i have to work so hard for that shit then when some people get billions of cash for fucking free?
Because this is what people voted for. Ron Paul only got something like 3% of the vote.

[Anonymous No.55887394]

>>55886984
>This is mostly controlled via the treasury by the office of the comptroller of the currency,

no. the survival constraint of the system is whether the loans get paid back or not. if the bank makes a loan and it does not get paid back the bank can and will go bankrupt. financial institutions tend to extend too much credit that sometimes will not be paid back and that is why we have credit cycles and business cycles. there is no real central control except discipline and constraints imposed through the way the system has evolved.

[Anonymous No.55887424]

>>55885683
Someone tried to fix that.

[Anonymous No.55887444]

>>55884837
Pegged deflationary currencies like gold and bitcoin have two problems that can be devastating to economies.

First is that with every economic cycle wealth will concentrate at some point in the production chain. All market entities want profits, and sucessfull entities human or companies, will accumulate some wealth diluting the circulating supply and increasing value.

Once you have a currency that goes up in value it becomes an ivestment and people will start hoarding it creating a deflationary spiral that tanks the economy ala 1929.

The fundamental issue is that you need a currency to reflect the increases in economic activty so that new technologies and extra work and productivity is properly rewarded. Minimal inflation is healthy for the economy. It makes sure money is not an ivestment and forces people to spend.

The problem is when the people in power decide they can cheat the system by magicking way too much money into existance and pretend there won't be consequences.

[Anonymous No.55887471]

>>55887394
And you wonder why God banned usury. I’d much prefer a system without lending, where equity stakes are the only way to raise capital. That seems intuitively more fair. The financier shares in the marginal risk of the investment. It’s not an all-or-nothing bet on whether the recipient defaults or not. Not only does that prevent credit expansion beyond the demand for spending, which historically causes bank failures, it also ensures a stable-value unit of exchange since the dollar can’t be created for any purpose other than funding new production which was its sole purpose. If every new dollar created by the central government is spent on new production, there are no inflationary nor deflationary pressures. People could only buy what they can actually afford. So after a transitory period of suffering and chaos, we’d settle into a world of fair market value. Imagine a house costing $30k instead of $600k, and a loaf of bread costing $1 instead of $5, people could easily afford the necessities of life without being enslaved by debt. That’s called sovereign fiat, that’s what half the world banded together to defeat through the bloodiest war in history.

[Anonymous No.55887487]

>>55885752
There's no way the people with the keys to the printer can be trusted, they'll just lie about supply, inflation, etc. before actually honoring a consistent policy. The theoretical threat of redemption for backing worked until we reached hilarious insect hive tiers of population and domestication.

[Anonymous No.55887524]

>>55887394
No that’s incorrect anon. The Office of the Comptroller of the Currency is directly in charge of collecting balance sheet information from banks to audit them and ensure that they actually have the cash on hand that they say they have and that the loans are legitimate and not underwater. This includes valuing various assets, and confirming that the asset valuations means the company is solvent, and is not just debiting funds out of thin air to client accounts.

You’re naive, banks are large multinational conglomerates these days that are not beholden to any single person, as most companies are. Any individual cog in a company is extremely willing to sacrifice stability for personal gain, all the way to the top. These systems are necessary to ensure that these companies are not being cannabalized by its constituents.

Look into the formation of Citigroup and how modern banking works, seriously. The OCC and similar audits are necessary, as banks are allowed to create money and could theoretically just debit themselves new electronic funds without any oversight, they can counterfeit

[Anonymous No.55887829]

>>55885268
No more fractional reserve though. 0% holding requirement since CV19. Overnight repo operation only thing keeping the patient alive. China and NWO preparing to harvest the organs asap. Hi-ho!

[Anonymous No.55887857]

>>55887487
Why do you think the Federal Reserve Founding Members robbed, killed, bribed and lied to creating it on Christmas Eve when no Congressmen were around to vote Nay on it? That’s exactly what’s going on right now; they are creating as much money out of thin air as the system can tolerate while not going fully hyper inflational.

[Anonymous No.55887867]

>>55887829
0% reserve requirement is only applicable to regional banks really though, despite the requirement being 0% for GSIB’s they are beholden to far more global requirements and keep 10% on hand with the fed. Look it up.

This is why only regional banks have been collapsing, because they had 0% requirements and heavily over-leveraged

[Anonymous No.55887888]

>>55887857
don’t forget about how all the most important and influential opposition to its creation died on the titanic. kind of like how 3 guys who had 1/4 ownership of a patent died on that missing malaysian flight and wouldn’t you know it was none other than jacob rothschild himself that owned the other 1/4 and became full owner upon the death of the other three. connected? not necessarily. but people do have a habit of dying in tragedies when a certain tribe of long noses are doing shady things. look at how tower 7 went down after ww2 and between it and the pentagon being hit in the perfect spot, well they lost all the evidence of where the missing $2+ trillion from the military budget donald rumsfeld announced the day before went. curious indeed

[Anonymous No.55887893]

>>55887888
>after ww2
I meant 9/11

[Anonymous No.55887896]

>>55884837
That's not how it works. If you follow the accounting behind banking, bank reserves basically don't do anything outside of facilitate transfers and withdrawals of deposits. Money is created either when the government spends it into existence or it's created endogenously in the banking system when a load is made (and, conversely, money is destroyed when a loan is paid off).

[Anonymous No.55887907]

>>55885356
>>55887829
come to think of it I guess they figure they'll have us on CBDCs soon and bankruns will be a thing of the past.

[Anonymous No.55889003]

>>55886455
>too bad Bitcoin doesn't work as a currency and is a complete failure
a radical increase in computing technology would fix that problem. but even if it doesn’t, btc can change the world just by becoming the safest and most liquid asset in the global financial system. it doesn’t have to replace usd. if it can replace US treasuries as the backbone of the monetary system then that will be a monetary and financial revolution the likes of which we haven’t seen. and if computers and internet speeds can do a 1000x in our lifetimes then you will be probably able to have a decentralized PoW btc that can do as many transactions per second as you need.

[Anonymous No.55889501]

>>55889003
none of that is going to happen, Bitcoin is a failure.

[Anonymous No.55889527]

>>55889501
if governments either start failing to pay their debts or start inflating their currency severely in order to pay them, I imagine more and more money would flow into btc. gold has had periods where it goes up like 5-10x during high inflation, and btc is much more volatile than gold.

[Anonymous No.55890038]

>>55884837
The world is tired of our shit too. Expect hyperinflation when the rest of the world sells more us bonds and the US gov will have to monetize the debt.

[Anonymous No.55890147]

>>55884837
Credit, thats why you should keep a few thousands away from the bank

[Anonymous No.55890828]

>>55884855
Fpbp, also checked.

[Anonymous No.55891385]

>>55884855
oy vey anudda shoah

[Anonymous No.55891473]

>>55887857
>while not going fully hyper inflational
yeah, sure, as you said

[Anonymous No.55891582]

>>55891473
>Inflation rate during covid lockdowns
This is why lockdowns happened and why they will happen again.

[Anonymous No.55891601]

>>55889527
Bitcoin is a substitute for the dollar, the dollar is a substitute for gold. When will cryptofags learn.

[Anonymous No.55891630]

>>55884837
Buy gold, mate. The banks do, and they know what's up.

[Anonymous No.55891688]

>>55891582
They printed 1/3 of money circulation in a year, what else could be expected

[Anonymous No.55891939]

>>55891601
>substitute
I think you mean replacement.

[Anonymous No.55892481]

>>55891939
What I'm saying is all money comes from gold. The higher up the ladder you go the less "real" the money is.

[Anonymous No.55892559]

>>55892481
most people can’t even give a useful and accurate definition of what “money” even is so it’s mostly an academic discussion. “how to make money” is not as important as “how to create wealth.”

[Anonymous No.55892577]

>>55891630
Gold is a useless metal the price is based on supply and demand, the same as fiat or something else. At least stocks are productive assets that can't be hyperinflated by gubmints

[Anonymous No.55892656]

>>55892481
actually historically money comes from silver, not gold. great britain has been surpassing silver for almost two centuries. the opium wars between china and britain was because the chinese would only accept silver for trade and the british didn’t have any, so they drugged them up and starved them until the chinese would accept gold. sure, royals throughout history had large stores of gold, but silver was the common money. it was also silver that rome removed from their coinage when they switched from sound money to fiat in order to not have to pay their armies so much

[Anonymous No.55892660]

>>55892656
>surpassing
suppressing

[Anonymous No.55892669]

>>55892577
gold isn’t useless, it’s just too expensive to be used for many applications that people aren’t willing to pay that much for.

[Anonymous No.55892671]

>>55892559
>“how to make money” is not as important as “how to create wealth"
Up for debate

[Anonymous No.55892709]

>>55892669
There are cheaper alternatives available. Its a piece of metal that could be used for certain things but its not the ultimate store of wealth. What is the reason for that apart from "some guy said so"?

[Anonymous No.55892816]

>>55892577
>Gold is a useless metal the price is based on supply and demand
It's only if you we're talking about one country, globally price of gold is pretty isolated for every country

[Anonymous No.55892843]

>>55885675
Buy assets retard

[Anonymous No.55893646]

>>55886824
As you mentioned in your other post, the big problem is creating money without creating value.
It's fine to create 1mm that will build a factory delivering 1mm in new wealth creation.
It's inflationary to create 1mm to bid up existing assets.
This is about wealth creation vs rentier activity.
Rentier activity was a well understood concept in the 19th century.

[Anonymous No.55893841]

can anyone suggest me a book that teaches me how banks work?

[Anonymous No.55893941]

>>55893841
Just read Big Short twice

[Anonymous No.55894061]

Money is not backed by anything anymore. The treasury simply tells the computer, cause you know its mostly digital now, "Hey we need 3 trillion dollars" and poof there it is. Then they divvy it up to all the regional federal reserve branches. Those branches then further splits the money pie to banks in the area. All this is done via computer system. Where do you think the covid dollars came from? A computer at treasury created it.. Same thing as your employer paying you via direct deposit. Their payroll computer says "James V Smith gets paid 3000 a month". 3000 gets dumped into his bank account.

[Anonymous No.55894172]

>>55893841
Human Action by Mises. It isn’t specifically about banking but it is basically the only thing you need to read to understand economics better than the typical econ major. you may need to read it more than once to fully get it.

[Anonymous No.55894188]

Quantitative easing.

[Anonymous No.55894220]

>>55894172
1000 pages seem a lot, what chapters should i focus on?

[Anonymous No.55894226]

>>55894220
been a while since I’ve read it so I can’t help you there. I strongly recommend the entire book. if you can’t read 1000 pages then what makes you think you can do the mental labor necessary to understand the modern banking system?

[Anonymous No.55894294]

>>55894061
You misunderstood the concept of an organic order. Goods ain't appearing out of thin air. Any goods including food are demanding a long technologically-logistical process to create.
>US food consumption rate is more than 302.5 million tons of food annually
To create goods you need to thousands of people are working together

Just by printing out money you ain't created any new goods. The amount of goods remains same. So you got more money to get goods, and that means that only the first ones who'd get that money will be able to get goods at previous price. Others will witness the growth of price and the last ones will be not able to buy anything at the old prices. That's how inflation works.

[Anonymous No.55894320]

>>55894188
>Quantitative easing
Yes, exactly, the Zimbabwe model

[Anonymous No.55894350]

>>55894220
Just keep it simple. Imagine that you're in kindergarten and you have the fake currency, drawn on a paper. The more currecny drawn the less valuabel it is. And the ones who draw currency are the ones who control it and get first benefits from it. The last ones in the chain of currency circulating get the less.

[Anonymous No.55894354]

>>55885268
> It's called a fractional reserve
OP described quantitative easing, not fractional reserve
> Government fiat should always be backed by something like gold or silver
then it wouldnt be fiat
Overall I give your financial knowledge a 5/10. Lurk moar.

[Anonymous No.55894408]

>>55894354
The question was "How do money enter the circulation?", not how "money are created". We all know that fed just priting it. The subtle point is when and how fed implant this money into real economics

[Anonymous No.55894432]

>>55885339
>>55885349
>>55885356
Fractional reserve was never meant to constrain the ability of banks to conjure money from thin air.
It was meant to facilitate transactions of cash from one bank to another and allow customers to make withdrawals.